EXHIBIT 10.71
GAS TRANSPORTATION AND SUPPLY AGREEMENT
Between PANDA-BRANDYWINE, L.P.
and
WASHINGTON GAS LIGHT COMPANY Dated:
November 10, 1994
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 2
Section 1.1 Definitions 2
ARTICLE II CONDITIONS PRECEDENT 7
Section 2.1 Conditions Precedent 7
Section 2.2 Buyer's Conditions Precedent 7
Section 2.3 Seller's Conditions Precedent 7
Section 2.4 Fulfillment of Conditions Precedent 8
Section 2.5 Failure to Fulfill Conditions
Precedent 8
ARTICLE III TERM 8
Section 3.1 Term 8
ARTICLE IV FIRM TRANSPORTATION SERVICE 9
Section 4.1 Firm Transportation Service 9
Section 4.2 Rate
ARTICLE V PEAK PERIOD RELEASE 10
Section 5.1 Peak Period Release 10
Section 5.2 Resolution of Banked Quantities 12
ARTICLE VI MERCHANT SERVICE 14
Section 6.l Merchant Service 14
Section 6.2 Merchant Service Price 14
Section 6.3 Disclaimer of Warranties 15
ARTICLE VII BALANCING SERVICE 15
Section 7.1 Daily Imbalance 15
Section 7.2 Monthly imbalance 16
Section 7.3 Imbalance Make-Up 18
ARTICLE VIII TESTING PERIOD SERVICE 18
Section 8.1 Testing Period Service 18
ARTICLE IX NOMINATIONS 18
Section 9.1 Monthly Estimates 18
Section 9.2 Daily Nomination 19
Section 9.3 Intraday Nomination Changes 19
Section 9.4 Predetermined Allocation 19
ARTICLE X QUALITY AND PRESSURE 20
Section 10.1 Delivery Pressure 20
Section 10.2 Physical Quality of Gas 20
Section 10.3 Failure to Conform to Quality
Specifications 20
ARTICLE XI MEASUREMENT 20
Section 11.1 Measurement 20
ARTICLE XII MEASURING EQUIPMENT 21
Section 12.1 Ownership and Operation 21
Section 12.2 Check Meters 22
Section 12.3 Access to Meters and Records 22
Section 12.4 Measurement Equipment Failures 22
Section 12.5 Accuracy of Measuring Equipment 23
Section 12.6 Correction of Errors 23
Section 12.7 Preservation of Records 24
ARTICLE XIII BILLING AND PAYMENT 24
Section 13.1 Billing 24
Section 13.2 Payment 24
Section 13.3 Billing Disputes 25
Section 13.4 Verification 25
Section 13.5 Correction of Errors 25
Section 13.6 Non-Business Days 26
ARTICLE XIV NOTICES 26
Section 14.1 Notices 26
ARTICLE XV POSSESSION AND RESPONSIBILITY 27
Section 15.1 Possession and Responsibility 27
ARTICLE XVI WARRANTY OF TITLE 27
Section 16.1 Warranty of Title 27
ARTICLE XVII FORCE MAJEURE 28
Section 17.1 Effect of Force Majeure 28
Section 17.2 Force Majeure Termination 29
Section 17.3 Settlement of Strikes, Lockouts, or
Other Labor Disputes 29
ARTICLE XVIII TRANSFER AND ASSIGNMENT 30
Section 18.1 Assignments 30
ARTICLE XIX DEFAULT AND REMEDIES 30
Section 19.1 Definition of Event of Default 31
Section 19.2 Remedies for Event of Default 32
Section 19.3 Seller's Failure to Deliver 33
Section 19.4 Exclusion of Certain Damages 34
ARTICLE XX INDEMNIFICATION 34
Section 20.1 Indemnification 34
Section 20.2 Notice and Legal Defense 34
Section 20.3 Failure to Defend Action 34
Section 20.4 Indemnification Amount 35
ARTICLE XXI FACILITIES CONSTRUCTION 35
Section 21.1 WGL Facilities 35
ARTICLE XXII WEATHER PREDICTIONS 35
Section 22.1 Weather Predictions 35
ARTICLE XXIII MISCELLANEOUS PROVISIONS 36
Section 23.1 Regulation 36
Section 23.2 Binding Effect 36
Section 23.3 Nonwaiver of Defaults 36
Section 23.4 Written Amendments 36
Section 23.5 Choice of Law 36
Section 23.6 Severability and Renegotiation 36
Section 23.7 Other Agreements 37
Section 23.8 No Third Party Beneficiary 37
Section 23.9 Priority 37
Section 23.10 Captions 37
Section 23.11 Survival 37
Section 23.12 Further Assurances 37
Section 23.13 Counterparts 37
THIS GAS TRANSPORTATION AND SUPPLY AGREEMENT
("Agreement"), is made and entered into this 10th day of
November, 1994, by and between Panda-Brandywine, L.P., a
Delaware limited partnership ("Buyer"), and Washington
Gas Light Company, a District of Columbia corporation
and a Virginia corporation ("Seller"). Buyer and Seller
are sometimes referred to herein individually as a
"Party" and together as "Parties".
WITNESSETH
WHEREAS, Seller, a gas distribution company
subject to regulation by the Maryland Public Service
Commission, owns and operates natural gas distribution
Facilities in the states of Maryland and Virginia and
the District of Columbia; and
WHEREAS, Buyer intends to construct, own and
operate an approximately 230 MW (net) natural gas and
oil-fired cogeneration facility to be located in Prince
George's County, Maryland (the "Brandywine Facility");
and
WHEREAS, Buyer has contracted for firm
transportation service on the interstate pipelines
of Columbia Gas Transmission Corporation and CLNG;
and
WHEREAS, Buyer has requested Seller to provide
transportation service, whereby Seller will transport to
the Brandywine Facility on a firm basis certain
quantities of natural gas owned by Buyer and delivered
to Seller through the interstate pipeline facilities of
CLNG; and
WHEREAS, Buyer has requested Seller to provide a
merchant service, whereby Seller will sell and Buyer
will purchase certain quantities of natural gas
nominated by Buyer in addition to the quantities of
natural gas transported by Seller on behalf of Buyer;
and
WHEREAS, Seller has agreed to provide
transportation service and merchant service to Buyer;
and
WHEREAS, Buyer has agreed to release or sell to
Seller quantities of natural gas for resale by seller
during certain peak periods of natural gas usage; and
WHEREAS, Seller has agreed, in order to provide
Buyer with transportation service and merchant
service, to construct at its own expense certain
facilities necessary to provide such services.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements contained herein, the
sufficiency of which is hereby acknowledged, and
intending to be legally bound, Buyer and Seller hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions: For purposes of this
Agreement, except where another meaning is expressly
stated, the following capitalized words shall have the
following meanings:
(a) "Air Permit Restrictions" means the limits
on Buyer's ability to burn fuel oil at the Brandywine
Facility, set forth in the certificate of public
convenience and necessity issued to Buyer by the
Maryland Public Service Commission in Case No. 8488,
as such limits may be amended from time to time.
(b) "Average Daily Temperature" means the
average of the hourly temperatures measured during a
Day at the Washington National Airport Station of the
National Weather Service.
(c) "Agreement" a means this Gas Transportation
and Supply Agreement, between Buyer and Seller, as it
may be amended, supplemented or modified from time to
time.
(d) "Banked Quantity" means the Quantity of Gas
released by Buyer to Seller during a Peak Period
Release and credited to Buyer's account pursuant to
Section 5.1.
(e) "Brandywine Facility" means the
approximately 230 MW (net) natural gas and oil-fired
cogeneration facility Buyer intends to construct, own
and operate in Prince George's County, Maryland,
including any and all appurtenant facilities necessary
to receive Gas delivered by Seller under this
Agreement.
(f) "British thermal unit" or "Btu" means the
amount of heat required to raise the temperature of one
(1) pound of water one (1) degree Fahrenheit from sixty
(60) degrees Fahrenheit to sixty-one (61) degrees
Fahrenheit.
(g) "Buyer" means Panda-Brandywine, L.P., its
successors and permitted assignees.
(h) "Buyer's Lenders" means the lenders or other
entities providing financing for the construction and
operation of the Brandywine Facility.
(i) "Carry-over Quantity" means that portion
of a Monthly Imbalance that is (i) not subject to cash-
out pursuant to Section 7.2(b) and (c), and (ii) that
may be made-up pursuant to Section 7.3.
(j) "Commencement Date" means the Day on which
Buyer commences commercial operation of the Brandywine
Facility in accordance with the Power Purchase
Agreement, dated August 9, 1991, between Buyer and
Potomac Electric Power Company, as such agreement may
be amended from time to time.
(k) "Commodity Fee" has the meaning set forth in
Section 6.2.
(l) "Contract Year" means the twelve (12) Month
period beginning on the first Day of the first Month
following the Commencement Date (provided, however, if
the Commencement Date occurs on the first Day of a
Month, the first Contract Year shall begin on the
Commencement Date), and on each succeeding anniversary
of such Day.
(m) 'CLNG" means Columbia LNG Corporation, or
its successor Cove Point LNG Limited Partnership, or a
successor or assignee of either of them to the pipeline
and Gas liquefaction facilities currently owned by
Columbia LNG Corporation.
(n) "CLNG Pressure Deficiency" shall have the
meaning set forth in Section 4.1.
(o) "Cubic Foot" means a quantity of Gas that
occupies one (1) cubic foot when such Gas is at a
temperature of sixty (60) degrees Fahrenheit and at an
absolute pressure of fourteen and seventy-three one-
hundredths (14.73) pounds per square inch.
(p) "Daily Balancing Fee" has the meaning set
forth in Section 7.1.
(q) "Daily Delivery Quantity" means the Quantity
of Gas Seller actually delivered to Buyer and Buyer
actually received at the Delivery Point during a Day
pursuant to Article IV (including any Quantity of Gas
Seller delivers to the Delivery Point during such Day
allowing Buyer to makeup an imbalance pursuant to
Section 7.3), less the Daily Merchant Quantity, and
less any Quantity of Gas Seller actually delivered to
Buyer at the Delivery Point during such Day pursuant to
Option 3 in Section 5.2.
(r) "Daily Imbalance" means a Daily Negative
Imbalance or a Daily Positive Imbalance.
(s) "Daily Merchant Quantity" means, for any
Day, the Quantity of Gas that Seller sold and actually
delivered and Buyer purchased and actually received
during a Day at the Delivery Point in accordance with
Article VI.
(t) "Daily Negative Imbalance" shall have the
meaning set forth in Section 7.1(a).
(u) "Daily Positive Imbalance" shall have the
meaning set forth in Section 7.1(a).
(v) "Daily Receipt Quantity" means the Quantity
of Gas CLNG actually delivered during a Day at the
Receipt Point for Buyer's account during a Day pursuant
to Article IV (including any Quantity of Gas CLNG
delivers to the Receipt Point during such Day allowing
Buyer to make-up an imbalance pursuant to Section
7.3), and less any Banked Quantity arising from a Peak
Period Release elected by Seller during such Day
pursuant to Section 5.1.
(w) "Daily Transportation Quantity" means, for
any Day, a Quantity of Gas equal to the sum of (i) the
Daily Delivery Quantity, plus (ii) any Quantity of Gas
actually delivered by Seller at the Delivery Point
during such Day in accordance with Option 3 in Section
5.2.
(x) "Day" means a period of twenty-four (24)
consecutive hours beginning at 8:00 a.m. EST on a
calendar day and ending at 8:00 a.m. EST on the next
calendar day.
(y) "Delivery Point" means the point of
interconnection between the WGL Facilities and the
Brandywine Facility.
(z) "Dekatherm" or "Dth" means a Quantity of
Gas equal to one (1) MMBtu.
(aa) "Event of Default" shall have the meaning
set forth in Section l9.1(a).
(bb) "Excessive Monthly Imbalance" shall have
the meaning set forth in Section 7.2.
(cc) "F" means Fahrenheit.
(dd) "FERC" means the Federal Energy Regulatory
Commission, or its successor agency.
(ee) "Force Majeure" shall have the meaning set
forth in Section 17.1.
(ff) "Gas" means natural gas meeting the
quality specifications set forth in Article X.
(gg) "Gas Supply Contract" means any natural
gas supply agreement entered into by Buyer providing
for the sale and delivery of gas, on a firm basis, to
Buyer.
(hh) "Heating Value of Gas" shall have the
meaning set forth in the effective FERC Gas Tariff of
CLNG.
(ii) "Imbalance Tolerance Levels shall have the
meaning set forth in Section 7.2.
(jj) "Mcf" means 1,000 Cubic Feet of Gas.
(kk) "Merchant Fee" shall have the meaning set
forth in Section 6.2.
(ll) Merchant Service Price" shall have the
meaning set forth in Section 6.2.
(mm) "Minimum Pressure" means 375 psig.
(nn) MMBtu" means one million (1,000,000) Btu.
(oo) "Month" means the period beginning at
5:00 a.m. EST on the first day of a calendar month
and ending at 8:00 a.m. on the first day of the next
calendar month.
(pp) "Monthly Delivery Quantity" means the
sum of (i) the sum of each Daily Delivery Quantity
during a Month, plus (ii) any carry-over Quantity
arising from a prior Month's Negative Monthly
Imbalance that is not made-up by Buyer pursuant
to Section 7.3. A Quantity of Gas received by Buyer
at the Delivery Point to make-up, pursuant to
Section 7.3, a Daily Positive Imbalance incurred
during such Month or a carry-over Quantity
arising from Positive Monthly Imbalance during the
prior Month shall, in no event, be considered part of
a Monthly Delivery Quantity.
(qq) "Monthly Imbalance" shall have the
meaning set forth in Section 7.2.
(rr) "Monthly Receipt Quantity" means the sum
of (i) the sum of each Daily Receipt Quantity
during a Month, plus (ii) any carry-over Quantity
arising from a prior Month's Positive Monthly
Imbalance that is not made-up by Buyer pursuant to
Section 7.3. A Quantity of Gas delivered at the
Receipt Point for Buyer's account to make-up,
pursuant to Section 7.3, a Daily Negative
Imbalance incurred during such Month or a carry-
over Quantity arising from Negative Monthly Imbalance
during the prior Month shall, in no event, be
considered part of a Monthly Receipt Quantity.
(ss) "Negative Monthly Imbalance" shall have
the meaning set forth in Section 7.2.
(tt) "Nominated Daily Merchant Quantity" means
the Quantity of Gas Buyer nominates in accordance
with Article IX for sale and delivery at the Delivery
Point by Seller during a Day in accordance with this
Agreement..
(uu) "Nominated Daily Delivery Quantity" means
the Quantity of Gas Buyer nominates in accordance
with Article IX for transportation and delivery at
the Delivery Point by Seller during a Day in
accordance with this Agreement, including any
Quantity of Gas to be delivered in accordance with
Option 3 in Section 5.2.
(w) "Nominated Daily Receipt Quantity" means
the Quantity of Gas Buyer nominates in accordance
with Article IX for receipt by Seller at the Receipt
Point during a Day in accordance with this Agreement.
(ww) "Peak Period Release" shall have the
meaning set forth in Section 5.1.
(xx) "Positive Monthly Imbalance" shall have
the meaning set forth in Section 7.2.
(yy) "Psig" means pounds per square inch
gauge.
(zz) "Quantity of Gas" means a volume of Gas
expressed in Dekatherms as determined under Section
11.1
(aaa) "Receipt Point" means the point of
interconnection between the WGL Facilities and the
interstate pipeline facilities of CLNG at the White
Plains meter station in ▇▇▇▇▇▇▇ County, Maryland, or
some other point mutually agreed to by Buyer and
Seller.
(bbb) "Seller" means Washington Gas Light
Company, its successors and permitted assignees.
(ccc) "Transportation Rate" shall have the
meaning set forth in Section 5.2.
(ddd) "WGL Facilities means the facilities of
Seller that are necessary for Seller to provide Buyer
with the services set forth in this Agreement,
including gas distribution facilities that Seller
must construct at its sole expense from the
interstate pipeline of CLNG to the Brandywine
Facility and the metering, regulating and appurtenant
facilities to be constructed by Seller at its sole
expense on the site of the Brandywine Facility, as
such facilities are described in the report Seller
must provide under Section 21.1.
ARTICLE II
CONDITIONS PRECEDENT
Section 2.1 Conditions Precedent: The
obligations of Buyer and Seller under this Agreement shall be
subject to the fulfillment of the conditions precedent set forth
in Section 2.2 and Section 2.3.
Section 2.2 Buyer's Conditions Precedent:
Buyer shall endeavor in good faith to fulfill the
following conditions precedent by the dates set forth
below, unless the Parties mutually agree to waive
fulfillment of any of the conditions precedent or
mutually agree to a different date by which each such
condition must by fulfilled.
(a) Buyer shall have made arrangement for or
closed on financing for the construction of the
Brandywine Facility, on terms and conditions
satisfactory to Buyer in its sole discretion, no
later than June 1, 1997.
(b) The Maryland Public Service Commission
shall have issued a final and non-appealable order
approving any amendment or modification to the certificate of
public convenience and necessity issued by the
Maryland Public Service Commission authorizing Buyer
to construct and operate the Brandywine Facility as
may be necessary to reflect the entering into of this
Agreement, on terms and conditions satisfactory to
Buyer in its sole discretion, no later than April 1,
1995.
(c) Columbia Gas Transmission Corporation shall
have received and accepted all necessary FERC
approvals to construct the facilities necessary to
provide to Buyer 24,000 Dth per day of firm
transportation service, which approvals shall be
final and non-appealable, and such facilities shall
be operational, no later than June 1, 1997.
(d) CLNG and Buyer shall have entered into a
firm transportation agreement obligating CLNG to
provide Buyer with 24,000 Dth per day of firm
transportation service and CLNG shall have received
and accepted all necessary FERC approvals to provide
such service to Buyer, which approvals shall be final
and non-appealable, no later than June 1, 1997.
Section 2.3 Seller's Conditions Precedent:
Seller shall endeavor in good faith to fulfill each
of the following conditions precedent by the dates
set forth below, unless Buyer waives fulfillment of
either of the conditions precedent or the Parties
mutually agree to a different date by which such
conditions must by fulfilled.
(a) The Maryland Public Service Commission
shall have issued a final and non-appealable order
approving this Agreement, on terms and conditions
reasonably satisfactory to Buyer and Seller, no later
than April 1, 1995.
(b) Seller shall have commenced construction
of the WGL Facilities no later than six (6) Months after
Seller receives notice from Buyer that Buyer has
commenced construction of the Brandywine Facility.
Section 2.4 Fulfillment of Conditions
Precedent: Upon fulfillment of each of the conditions
precedent in Section 2.2 and Section 2.3, the Party
responsible for the fulfillment of the condition
shall notify the other Party in writing of the
fulfillment of the condition. With respect to the
condition precedent set forth in Section 2.3(a),
Seller shall promptly provide Buyer with a copy of
any order issued by the Maryland Public Service
Commission approving the Agreement and shall notify
Buyer whether it accepts the order. Buyer shall
review the order and shall notify Seller within
twenty (20) Days of Buyer's receipt of such order
whether it finds the terms and conditions of such
order reasonably satisfactory and whether it accepts
the order. If Buyer determines that the order is
unsatisfactory, Buyer shall provide Seller with the
reasons for its determination. If Buyer fails to
notify Seller that it accepts the order within such
20-Day notice period, Buyer shall be deemed to have
accepted the order. If either Buyer or Seller does
not accept the order, Seller shall use its best
efforts to obtain an amendment or modification to
such order to make the terms and conditions of such
order reasonably satisfactory to both Buyer and
Seller.
Section 2.5 Failure to Fulfill Conditions
Precedent: If the conditions precedent in Section 2.2
and Section 2.3 are not fulfilled or waived in a
timely manner, either Party may terminate this
Agreement by providing the other Party with forty-
five (45) Days prior written notice of its intent to
terminate this Agreement. Unless the condition for
which such notice of termination is given is
fulfilled within such 45-Day notice period, this
Agreement shall terminate and neither Party shall
have any further obligations or liabilities under
this Agreement.
ARTICLE III
TERM
Section 3.1 Term: This Agreement shall become
effective on the date first written above and shall
continue in full force and effect for a primary term
of twenty-five (25) Contract Years, and for
additional terms of one (1) Contract Year thereafter
unless and until terminated by either Party upon six
(6) Months' prior written notice to the other Party
to be given no later than the end of the sixth Month
after the commencement of any additional Contract
Year term.
ARTICLE IV
Section 4.1 Firm Transportation Service:
Subject to the terms and conditions of this
Agreement, commencing on the Commencement Date and on
every Day thereafter during the effectiveness of this
Agreement, Seller shall receive at the Receipt Point
a Quantity of Gas up to the Nominated Daily Receipt
Quantity and shall transport and deliver at the
Delivery Point a Quantity of Gas up to the Nominated
Daily Delivery Quantity, all on a firm basis;
provided, however, during any period in which the
pressure on the CLNG pipeline system at the Receipt
Point is less than 500 psig (a "CLNG Pressure
Deficiency"), Seller shall, using its best efforts,
deliver at the Delivery Point as much Gas as is
possible during the Day, up to the Nominated Daily
Delivery Quantity, at no less than the Minimum
Pressure; and provided further, if Seller is unable
to deliver any portion of the Nominated Daily
Delivery Quantity at the Delivery Point due to a CLNG
Pressure Deficiency, Buyer shall not incur a Daily
Imbalance due to Seller's failure to deliver the
Nominated Daily Delivery Quantity.
Section 4.2 Rate
(a) Subject to the terms of this Agreement,
Buyer shall pay Setter the Transportation Rate for
each Dekatherm of Gas Seller actually transports and
delivers to Buyer and Buyer actually receives at the
Delivery Point during each Month in accordance with
this Article IV.
(b) The Transportation Rate shall equal $0.05
per Dth, plus the amount of any excise, use, gross
receipts, franchise or other similar tax which Seller
shall be required to pay or collect by the State of
Maryland for the transportation service provided by
Seller to Buyer under this Agreement. Any such tax
payable by Buyer under this Section 4.2 shall be
calculated with reference to the Quantity of Gas
actually transported by Seller and received by Buyer
under this Agreement.
(c) The amount payable by Buyer each Month for
transportation service provided by Seller under this
Agreement shall be determined by multiplying the
Transportation Rate by the Daily Transportation
Quantity for each Day during such Month.
ARTICLE V
PEAK PERIOD RELEASE; BANKED QUANTITIES
Section 5.l Peak Period Release
(a) (i) Subject to the restrictions set forth
in Section 5.1(c), commencing on the Commencement
Date and during the effectiveness of this Agreement,
Seller may elect that Buyer release for Seller's
resale during a Day the Quantity of Gas Buyer has
scheduled and confirmed for delivery and actually
received at the Receipt Point during such Day, up to
24,000 Dth of Gas per Day (such red ease, a "Peak
Period Release". Seller shall notify Buyer twentyfive
(25) hours in advance of a potential Peak Period Red
easel Such notice shall include the predicted
duration and the Quantity of Gas Seller may require
Buyer to release during such Peak Period Release. To
the extent that the Quantity of Gas Seller has
specified in such notice exceeds the Quantity of Gas
Buyer has previously scheduled and confirmed for
delivery at the Receipt Point curing such Day, Buyer
shall nominate in accordance with the terms of the
Gas Supply Contracts) the full Quantity of Gas
requested by Seller in such notice to be delivered at
the Receipt Point during such Day, up to 24,000 Dth
of Gas per Day.
(ii) Seller's actual election of a Peak Period
Release, on the Day specified by Seller in the notice
required in Section 5.1(a)(i), shall be effective
during the Day for such Peak Period Release upon
Seller providing Buyer with no less than one (1)
hour's prior notice. Such notice shall indicate the
duration of the Peak Period Release (consistent with
the terms of this Agreement) and the Quantity of Gas
Seller requests Buyer to release. If Buyer makes
arrangements for the delivery of a Quantity of Gas to
the Receipt Point during a Day in reliance on
Seller's prediction of a Peak Period Release set
forth in the notice provided to Buyer under Section
5.1(a)(i) and Seller does not actually elect a Peak
Period Release during such Day, at Buyer's election
such Quantity of Gas shall be either (A) stored on
Seller's distribution system as a Daily Positive
Imbalance that shall not be subject to any fees or
charges by Seller as either a Daily Imbalance or an
Excessive Monthly Imbalance (as those terms are
defined in this Agreement), or (B) transported by
Seller for delivery at the Delivery Point. Seller
shall indemnify and hold Buyer harmless from any and
all imbalance penalties, fees or charges that may be
assessed Buyer by its pipeline transporters to the
extent Se1ler's actual election of a Peak Period Red
ease differs from the predicted Peak Period Release
set forth in the notice required under Section
5.1(a)(i).
(b) During any Peak Period Release, Buyer
shall cause to be delivered at the Receipt Point the
Quantity of Gas Buyer has scheduled and confirmed for
delivery at the Receipt Point during the Day of the
Peak Period Release, and Buyer shall not take
delivery at the Delivery Point of such Quantity of
Gas. Seller shall credit to Buyer's account the
Quantity of Gas released to Seller during a Peak
Period Release (such Quantity of Gas, a "Banked
Quantity"). Buyer assumes no liability to Seller if a
third-party gas supplier or pipeline transporter
fails to deliver the Quantity of Gas Seller has
requested be released during a Peak Period Release,
and Buyer agrees to pursue in good faith on behalf of
Seller any right or cause of action Buyer may have
against such third-party gas supplier or pipeline
transporter when such failure prevents or impairs
Seller's receipt of such Quantity of Gas. If Buyer
fails to pursue in good faith any right or cause of
action against a third-party gas supplier or pipeline
transporter as set forth in the previous sentence,
Buyer's rights to pursue such cause of action shall
be subrogated to Seller and Seller may also pursue
its rights and remedies as set forth in Article XIX.
Seller shall be liable for and shall indemnify and
hold Buyer harmless from the imposition of any and
all penalties that may be assessed by any Gas
transporter arising from or out of Seller's election
of a Peak Period Release.
(c) Seller's right to request a Peak Period
Release shall be limited as follows:
(i) Seller may elect a Peak Period Release
only during the Months of December, January and
February of each calendar year, and may elect only up
to five (5) Days of Peak Period Release in each of
such Months.
(ii) Seller may elect no more than two (2)
Days of Peak Period Release in any seven (7) Day
period during the Months in which Setter may elect a
Peak Period Release.
(iii) Seller may elect a Peak Period Release
only on a Day for which the Average Daily Temperature
is predicted to be 20 degrees F or below.
(iv) Except as limited by Section 5.1(f),
Seller may not elect a Peak Period Release if Buyer
determines, in its sole discretion, that use of fuel
oil at the Brandywine Facility during such Peak
Period Release in lieu of the Quantity of Gas to be
red eased by Buyer will result in Buyer's violation
of the Air Permit Restrictions.
(d) Buyer's release of a Quantity of Gas to
Seller during a Peak Period Release shall be subject
to the following:
(i) In accordance with Section 15.1, Seller
shall be deemed to be in possession-and control of
any Quantity of Gas released by Buyer to Seller
during a Peak Period Release.
(ii) Seller shall be responsible for any and
all taxes that may arise as a result of Buyer's
release of a Quantity of Gas to Seller during a Peak
Period Release and Seller's possession and control of
possession and control of
ARTICLE IV
FIRM TRANSPORTATION SERVICE
Section 4.1 Firm Transportation Service:
Subject to the terms and conditions of this
Agreement, commencing on the Commencement Date and on
every Day thereafter during the effectiveness of this
akes with respect to the quality of Gas it delivers to the
Receipt Point set forth in Section 10.2 and with
respect to title set forth in Section 16.1, BUYER
MAKES NO WARRANTIES (WHETHER EXPRESSED, IMPLIED OR
STATUTORY) WITH RESPECT TO SUCH QUANTITY OF GAS
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE.
(e) Each Month during the effectiveness of
this Agreement, Buyer shall provide Seller with a
report setting forth the number of hours during the
prior Month that Buyer operated the Brandywine
Facility using fuel oil.
(f) On any Day during which the Average Daily
Temperature is less than 30 degrees F and Buyer has not
delivered or caused to be delivered at the Receipt
Point a Quantity of Gas for transportation by Seller
that is sufficient to meet the Gas supply
requirements at the Brandywine Facility during such
Day, Seller may permit Buyer to incur a Daily
Negative Imbalance pursuant to Article VII to the
extent necessary to meet the Gas supply requirements
at the Brandywine Facility. To the extent that Seller
permits Buyer to incur a Daily Negative Imbalance
pursuant to this Section 5.1(f), Buyer shall be
prohibited, during the current Contract Year, from
exercising its rights under Section 5.1(c)(iv) to
prevent Seller from requesting a Peak Period Release
up to the Quantity of Gas constituting the Daily
Negative Imbalance incurred by Buyer pursuant to this
Section 5.1(f). Nothing in this Section 5.1(f) shall
in any way limit or remove the restrictions on
Seller's right to request a Peak Period Release set
forth in Sections 5.1(c)(i), (ii) or (iii) or alter
or modify Buyer's right to resolve a Banked Quantity
pursuant to Section 5.2.
Section 5.2 Resolution of Banked Quantities
(a) Any Banked Quantity shall remain credited
to Buyer's account until Buyer exercises one of three
options for reducing a Banked Quantity, set forth in
this Section 5.2(a). Buyer shall elect an option or
options for reducing a Banked Quantity and exercise
such option or options by the March 31 following the
Day in which the Banked Quantity is credited to
Buyer's account. If Buyer does not take delivery at
the Delivery Point of a Quantity of Gas pursuant to
Option 3 below by such March 31, Buyer shall elect
either of the payment options set forth below (either
Option 1 or Option 2), and Seller shall credit such
amounts to the next invoice that Seller provides
Buyer pursuant to Section 13.1 Banked Quantities
shall be resolved in the order in which such
Quantities of Gas are credited to Buyer's account.
Option 1: Buyer may elect to receive
payment from Seller for some or all of a Banked
Quantity in an amount equal to the product of (A)
l.5, multiplied by (B) the Commodity Fee in effect
during the Peak Period Release from which such Banked
Quantity arose or, if a Commodity Fee His not in
effect during such Peak Period Red ease, the sum of
(x) the price as first published in the Month during
which the Peak Period Release occurred as the n
Louisiana Index" price for Columbia Gulf Transmission
Company as listed under "Prices of Spot Gas Delivered
to Pipeline" (per MMBtu dry) in Inside FERC's Gas
Market Report by ▇▇▇▇▇▇-▇▇▇▇, Inc. (or, if such index
price shall no longer be published, such replacement
index price that provides an index price that is
comparable in all material respects to the "Louisiana
Index" price and that is agreed to by the Parties),
plus (y) the sum of the maximum interruptible
transportation rates set forth in the effective FERC
Gas Tariffs of Columbia Gulf Transmission Company (or
its successor), Columbia Gas Transmission Corporation
(or its successor) and CLNG applicable to the
interruptible transportation of Gas on Columbia Gull
from Rayne, Louisiana to ▇▇▇▇▇, Kentucky, on Columbia
Gas Transmission from ▇▇▇▇▇, Kentucky to Loudoun,
Virginia and on CLNG from Loudoun, Virginia to the
Receipt Point, and multiplied by (C) the Banked
Quantity for which Buyer has elected such payment.
Option 2: Buyer may elect to receive payment
from Seller for some or all of a Banked Quantity in
an amount equal to the product of (A) the actual cost
of fuel oil per Btu during the Day of the Peak Period
Release from which such Banked Quantity arose,
multiplied by (B) the Banked Quantity for which Buyer
has elected such Payment. Buyer shall provide Seller
with documentation demonstrating the actual cost of
fuel oil Buyer incurred during such Peak Period
Release.
Option 3: Buyer may elect to have Seller
transport and deliver at the Delivery Point, in
accordance with Section 4.l, a Quantity of Gas equal
to the product of (A) 1.5, multiplied by (B) the
Banked Quantity for which Buyer has elected such
delivery.
(b) If Buyer selects Option 3 for the delivery
of a Banked Quantity, Seller shall deliver such
Banked Quantity at the Delivery Point for Buyer as
part of the Nominated Daily Delivery Quantity
submitted by Buyer pursuant to Article IX; provided,
however, Seller shall not be required to deliver such
Banked Quantity to Buyer at any time during a Day
when the Average Daily Temperature is below 21 degrees F.
ARTICLE VI
MERCHANT SERVICE
Section 6.1 Merchant Service: Subject to
the terms and conditions of this Agreement,
commencing on the Commencement Date and on every Day
thereafter during the effectiveness of this
Agreement, Seller shall sell and deliver at the
Delivery Point and Buyer shall purchase and receive a
Quantity of Gas up to the Nominated Daily Merchant
Quantity. Seller's obligation to sell and deliver a
Quantity of Gas to Buyer pursuant to this Section 6.1
shall be on a best efforts basis from each April 1
through the next following October 31 during the
effectiveness of this Agreement, and shall be on an
as available basis from each November 1 through the
next following March 31 during the term of this
Agreement.
Section 6.2 Merchant Service Price
(a) Subject to the terms and conditions of
this Agreement, Buyer shall pay Seller the Merchant
Service Price for each Dekatherm of Gas Seller
actually sells and delivers to Buyer and Buyer
actually receives at the Delivery Point during each
Month in accordance with this Article VI. Buyer shall
be responsible for the payment of all taxes arising
from the sale of a Quantity of Gas to Buyer at the
Delivery Point. Seller shall be responsible for the
payment of all taxes, royalties, overriding
royalties, fees and other costs arising prior to the
sale of a Quantity of Gas to Buyer at the Delivery
Point. The Merchant Service Price shall be determined
as follows:
Merchant Service Price = (Merchant Fee + Commodity
Fee)
WHERE:
(i) The Merchant Fee shall equal $0.05.
(ii) The Commodity Fee for each Month during
the effectiveness of this Agreement shall be
determined as follows: At least five (5) Days prior
to the beginning of each Month, Seller and Buyer
shall negotiate in good faith to agree on a Commodity
Fee to be effective during the next Month. If Seller
and Buyer are unable to agree on a Commodity Fee for
the next Month, no Commodity Fee shall be effective
for such Month and Buyer shall not be permitted to
receive merchant service from Setter during such
Month.
(b) The amount payable by Buyer each Month for
merchant service provided by Setter under this
Agreement shall be determined by multiplying the
Merchant Service Price by the Daily Merchant Quantity
for each Day during such Month.
Section 6.3 Disclaimer of Warranties: Except
for the warranty Seller makes with respect the
quality of Gas it delivers at the Delivery Point set
forth in Section 10.2 and with respect to title set
forth in Section 16.1, SELLER MAKES NO WARRANTIES
(WHETHER EXPRESSED, IMPLIED OR STATUTORY) WITH
RESPECT TO ANY QUANTITY OF GAS SOLD TO BUYER PURSUANT
TO THIS ARTICLE VI INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND IMPLIED WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE.
ARTICLE VII
BALANCING SERVICE
Section 7.1 Daily Imbalance
(a) Commencing on the Commencement Date and
on every Day thereafter during the effectiveness of
this Agreement, on any Day in which the Daily Receipt
Quantity is greater than the Daily Delivery Quantity'
Buyer shall have incurred a "Daily Positive
Imbalance." On any Day in which the Daily Receipt
Quantity is less than the Daily Delivery Quantity,
Buyer shall have incurred a "Daily Negative
Imbalance" (a Daily Positive Imbalance or a Daily
Negative Imbalance shall also be a "Daily Imbalance");
provided, however, during any Day on which Buyer
has elected to receive merchant service from Seller
pursuant to Article VI, Buyer shall not be deemed to
have incurred a Daily Negative Imbalance on such Day.
(b) For each Dekatherm of Gas constituting
a Daily Imbalance, Buyer shall pay Seller a "Daily
Balancing Fee" of $0.025 per Dth. On any Day in which
the Average Daily Temperature is greater than or
equal to 30 degrees F. Buyer shall have the right,
without restriction, to incur either a Daily Negative
Imbalance or a Daily Positive Imbalance. On any Day
in which the Average Daily Temperature is greater
than or equal to 20 degrees F and less than 30
degrees F. Buyer shall have the right to incur a
Daily Negative Imbalance only to the extent Gas is
available on the gas distribution system of Seller to
accommodate such Daily Negative Imbalance. Otherwise,
there shall be no restriction on Buyer's right to
incur a Daily Imbalance. In no event shall Buyer be
subject to the payment of the Daily Imbalance Fee for
any Daily Imbalance that is the result of an event of
Force Majeure or caused by Seller's failure to
perform under the terms of this Agreement.
Section 7.2 Monthly Imbalance
(a) Commencing on the Commencement Date and
for each Month thereafter during the effectiveness of
this Agreement, during any Month in which the Monthly
Receipt Quantity is greater than the Monthly Delivery
Quantity, Buyer shall have incurred a "Positive
Monthly Imbalance." During any Month in which the
Monthly Receipt Quantity is less than the Monthly
Delivery Quantity, Buyer shall have incurred a
Negative Monthly Imbalance. N A Positive Monthly
Imbalance or a Negative Monthly Imbalance shall be
the Buyer's "Monthly Imbalance."
(b) Commencing on the Commencement Date and
for each Month thereafter during the effectiveness of
this Agreement, during any Month in which Buyer's
Monthly Imbalance exceeds a quantity that is 10% of
the greater of (i) the Monthly Receipt Quantity or
(ii) the Monthly Delivery Quantity (such quantity,
the "Imbalance Tolerance Level"), the Quantity of Gas
constituting the portion of the Monthly Imbalance
that exceeds the Imbalance Tolerance Level (the
"Excessive Monthly Imbalances) shall be "cashed-out"
by the Parties as set forth in this Section 7.2.
Notwithstanding the above, upon mutual agreement of
the Parties, Buyer may carry-over into the next
Month, pursuant to Section 7.2(e), its entire Monthly
Imbalance in lieu of cashing-out an Excessive Monthly
Imbalance pursuant to this Section 7.2. If the
Parties cannot so agree, the Excessive Monthly
Imbalance shall be cashed-out pursuant to this
Section 7.2.
(c) An Excessive Monthly Imbalance shall be
cashed-out as fo1lows:
(i) If the Buyer experienced a Positive
Monthly Imbalance during the Month, Seller shall pay
Buyer an amount equal to the product of (A) the
Excessive Monthly Imbalance, multiplied by (B) the
Commodity Fee in effect during such Month. If a
Commodity Fee is not in effect for such Month, the
price at which a Positive Monthly Imbalance is cashed-
out shall equal the sum of (A) the price as first
published in the Month during which the Buyer
experienced the Positive Monthly Imbalance as the
"Louisiana Index" price for Columbia Gulf
Transmission Company as listed under "Prices of Spot
Gas Delivered to Pipeline" (per MMBtu dry) in Inside
FERC's Gas Market Report by ▇▇▇▇▇▇-▇▇▇▇, Inc. (or, if
such index price shall no longer be published, such
replacement index price that provides an index price
that is comparable in all material respects to the
"Louisiana Index" price and that is agreed to by the
Parties), plus (B) the sum of the maximum
interruptible transportation rates set forth in the
effective FERC Gas Tariffs of Columbia Gulf
Transmission Company (or its successor), Columbia Gas
Transmission Corporation (or its successor) and CLNG
applicable to the interruptible transportation of Gas
on Columbia Gulf from Rayne, Louisiana to ▇▇▇▇▇,
Kentucky, on Columbia Gas Transmission from ▇▇▇▇▇,
Kentucky to Loudoun, Virginia and on CLNG from
Loudoun, Virginia to the Receipt Point. Seller shall
credit any amount due Buyer under this Section 7.2(c)
in the invoice next sent to Buyer pursuant to Section
13.1.
(ii) If the Buyer experienced a Negative
Monthly Imbalance during the Month, Buyer shall pay
Setter an amount equal to the product of (A) the
Excessive Monthly Imbalance, multiplied by (B) the
Commodity Fee in effect during such Month. If a
Commodity Fee is not in effect for such Month, the
price at which a Negative Monthly Imbalance is cashed-
out shall equal the sum of (A) the price first
published in the Month during which the Buyer
experienced the Negative Monthly Imbalance as the
"Louisiana Index" price for Columbia Gulf
Transmission Company as listed under "Prices of Spot
Gas Delivered to Pipeline" (per MMBtu dry) in Inside
FERC's Gas Market Report by ▇▇▇▇▇▇-▇▇▇▇, Inc. (or, if
such index price shall no longer be published, such
replacement index price that provides an index price
that is comparable in all material respects to the
"Louisiana Index" price and that is agreed to by the
Parties), plus (B) the sum of the maximum
interruptible transportation rates set forth in the
effective FERC Gas Tariffs of Columbia Gulf
Transmission Company (or its successor), Columbia Gas
Transmission Corporation (or its successor) and CLNG
applicable to the interruptible transportation of Gas
on Columbia Gulf from Rayne, Louisiana to ▇▇▇▇▇,
Kentucky, on Columbia Gas Transmission from ▇▇▇▇▇,
Kentucky to Loudoun, Virginia and on CLNG from
Loudoun, Virginia to the Receipt Point.
(d) Any Excessive Monthly Imbalance that is
cashed-out shall be removed from Buyer's account for
the purpose of determining a future Daily Imbalance
or Monthly Imbalance. In no event shall any portion
of an Excessive Monthly Imbalance resulting from an
event of Force Majeure or caused by Seller's failure
to perforate under the terms of this Agreement be
cashed-out pursuant to this Section 7.2.
(e) For any portion of Buyer's Monthly
Imbalance that is less than or equal to the Imbalance
Tolerance Level or for any Excessive Monthly
Imbalance that is not cashed-out pursuant to Section
7.2(c) due to the Parties' mutual agreement pursuant
to Section 7.2(b), Buyer may carry-over the Quantity
of Gas constituting such Monthly Imbalance (the
"carry-over Quantity") into the next Month without
being subject to the monthly cash-out set forth in
this Section 7.2 and may attempt to make-up such
carry-over Quantity in accordance with Section 7.3.
Section 7.3 Imbalance make-up: Subject to the
limitations in this Section 7.3, during any Day of a
Month, Buyer may make-up all or any portion of a
Daily Imbalance incurred during such Month or ail or
any portion of a carry-over Quantity from the prior
Month by adjusting the Nominated Daily Receipt
Quantity relative to the Nominated Daily Delivery
Quantity. On any Day during which the Average Daily
Temperature is greater than or equal to 30 degrees F,
Buyer shall have the right without restriction to
make-up any imbalances in accordance with this
Section 7.3. On any Day during which the Average
Daily Temperature is less than 30 degrees F or
greater than 20 degrees F, Buyer shall have the right
to make-up in accordance with this Section 7.3 any
Daily Positive Imbalance or any carry-over Quantity
arising from a Positive Monthly Imbalance only to the
extent Gas is available on the gas distribution
system of Seller, as determined by Seller in its sole
discretion, to enable Buyer to exercise such make-up
rights. Any imbalance that is made-up by Buyer
pursuant to this Section 7.3 shall be removed from
Buyer's account for the purpose of determining a
future Daily Imbalance or Monthly Imbalance.
ARTICLE VIII
TESTING PERIOD SERVICE
Section 8.1 Testing Period Service: Prior to
the Commencement Date, but no earlier than February
1, 1996 or the date Buyer commences testing of the
Brandywine Facility, at the request of Buyer, Seller
shall, on an as available basis, receive a Quantity
of Gas at the Receipt Point for Buyer' s account and
sham 1 transport and deliver at the Delivery Point
such Quantity of Gas for Buyer's use in testing the
Brandywine Facility. The rate for such transportation
service shall be the Transportation Rate. In
addition, at the request of Buyer in its sole
discretion and in lieu of the transportation service
available to Buyer in this Section 8.1, Seller shall
sell and deliver, on an as available basis, and Buyer
shall purchase and receive at the Delivery Point a
Quantity of Gas for Buyer's use in testing the
Brandywine Facility. The price for any Gas Seller
sells and delivers and Buyer purchases and receives
under this Section 8.1 shall be the Merchant Service
Price. Buyer shall provide Seller with thirty (30)
Days' prior written notice of Buyer's commencement of
testing at the Brandywine Facility.
ARTICLE IX
NOMINATIONS
Section 9.1 Monthly Estimates: Commencing
on the Commencement Date and during the effectiveness
of this Agreement, five (5) Days prior to each Month,
Buyer shall submit to Setter estimates of the
Nominated Daily Receipt Quantity, the Nominated Daily
Delivery Quantity (which shall include, as indicated
separately by Buyer, any Quantity of Gas to be
delivered at the Delivery Point by the Seller
pursuant to Option 3 in Section 5.2) and the
Nominated Daily Merchant Quantity, that Buyer desires
Seller to receive, transport, sell or deliver (as the
case may be) during each Day of the following Month.
Buyer shall not be bound by the estimates submitted
to Seller pursuant to this Section 9.1.
Section 9.2 Daily Nomination:
Commencing on the Commencement Date and for each Day
during the effectiveness of this Agreement, by S:00
a.m. of each Day, Buyer shall submit to Seller the
Nominated Daily Receipt Quantity, the Nominated Daily
Delivery Quantity (which shall include, as indicated
separately by Buyer, any Quantity of Gas nominated by
Buyer to be delivered at the Delivery Point by the
Seller pursuant to Option 3 in Section 5.2) and the
Nominated Daily Merchant Quantity that Buyer desires
Setter to receive, transport, sell or deliver (as the
case may be) during such Day. Such nomination shall
also indicate an estimate of the Quantity of Gas
Buyer intends to make-up in accordance with Section
7.3. Seller shall confirm such daily nomination by
facsimile to Buyer. Buyer shall endeavor in good
faith to submit nominations that accurately reflect
Buyer's estimates of the Quantity of Gas Buyer
expects to use at the Brandywine Facility. If Buyer
fails to submit a nomination to Seller in accordance
with this Article IX, Seller shall deem Buyer's
nomination for that Day to be equal to the last
effective nomination Buyer provided to Seller. Buyer
may designate an agent to submit nominations on its
behalf in accordance with this Article IX.
Section 9.3 Intraday Nomination Chances:
During each Day, Buyer may submit to Seller a change
to the nomination effective for such Day. Any such
nomination change shall be effective no later than
one (1) hour after Buyer submits such nomination
change to Seller.
Section 9.4 Predetermined Allocation: With
each nomination Buyer submits to Seller pursuant to
Section 9.2, Buyer shall indicate the method Seller
shall utilize for al locating Gas among the Daily
Delivery Quantity, the Daily Merchant Quantity, and
any Quantity of Gas delivered at the Delivery Point
during such Day pursuant to Option 3 in Section 5.2,
such allocation to be based on the total Quantity of
Gas delivered by Seller at the Delivery Point during
such Day.
ARTICLE X
QUALITY AND PRESSURE
Section 10.1 Delivery Pressure: Any Quantity of
Gas delivered by Seller at the Delivery Point for the
account of Buyer shall be delivered at a pressure of no
less than the Minimum Pressure.
Section 10.2 Physical Quality of Gas: All Gas
delivered at the Receipt Point for Buyer's account and
delivered by Seller at the Delivery Point shall
substantially conform to the quality specifications set
forth in the effective FERC Gas Tariff of CLNG, as the
same may be amended from time to time.
Section 10.3 Failure to Conform to Quality
Specifications
(a) If the Gas delivered by or on behalf of
Buyer at the Receipt Point fails to conform to the
quality specifications set forth in Section 10.2,
Seller shall have the right, upon reasonable prior
written notice to Buyer, to discontinue acceptance of
Buyer's Gas. Such notice must specify the manner in
which the quality of the Gas fails to conform to the
specifications set forth in this Agreement.
(b) If the Gas delivered by Seller at the
Delivery Point fails to conform to the quality
specifications set forth in Section 10~2, Buyer shall
have the right to discontinue acceptance of deliveries
of Gas. Buyer shall provide written notice to Seller as
soon as practicable after such discontinuance of the
acceptance of Gas. Such notice must specify the manner
in which the quality of Gas fails to conform to the
specifications set forth in this Agreement.
ARTICLE XI
MEASUREMENT
Section 11.l Measurement
(a) The Heating Value of Gas delivered by Seller
on behalf of Buyer at the Delivery Point shall be
determined by Seller in accordance with the applicable
measurement provisions set forth in CLNG's then-
effective FERC Gas Tariff, as amended or modified from
time to time, and shall be based on the measurements
made by Seller's measuring equipment at
the Receipt Point"
(b) The Quantity of Gas delivered by Seller at
the Delivery Point shall be measured at the Delivery
Point in a manner consistent with the applicable
measurement provisions set forth in CLNG's then-
effective FERC Gas Tariff, as amended or modified from
tine to time, and shall be based upon the Heating Value
of Gas determined pursuant to Section 11.1.
ARTICLE XII
MEASURING EQUIPMENT
Section 12.1 Ownership and Operation
(a) Seller shall install, own, maintain, and
operate, at no additional expense to Buyer, at or near
the Receipt Point a measuring station, conforming with
those in general use in the natural gas industry,
properly equipped with displacement, turbine or orifice
meters, Gas samplers, chromatography, and other
equipment necessary to measure the Quantity of Gas and
the Heating Value of Gas received at the Receipt Point;
provided, however, Seller may utilize measurements made
by CLNG for Gas delivered by CLNG to the Receipt Point
in lieu of installing, owning, maintaining and
operating a measuring station for measuring Gas
received at the Receipt Point. Orifice meters shall be
installed and operated in accordance with the
specifications recommended in Gas Measurement Committee
Report No. 3 of the American Gas Association, as
amended from time to time and applied in a practical
manner. Displacement or turbine meters, if used, shall
be installed and Gas volumes computed, in accordance
with specifications recommended by the American Gas
Association, applied in a practical manner, or, in the
absence of such specifications, in accordance with
generally accepted industry practices.
(b) Seller shall install own, maintain, and
operate, at no additional expense to Buyer, at the
Delivery Point a measuring station, conforming with
those in general use in the natural gas industry,
containing the equipment necessary to measure the
Quantity of Gas delivered at the Delivery Point. Buyer
shall provide Seller with a location on the site of the
Brandywine Facility to construct such measuring
station. Orifice meters shall be installed and operated
in accordance with the specifications recommended in
Gas Measurement Committee Report No. 3 of the American
Gas Association, as amended from time to time and
applied in a practical manner. Displacement or turbine
meters, if used, shall be installed and Gas volumes
computed, in accordance with specifications recommended
by the American Gas Association, applied in a practical
manner, or, in the absence of such specifications, in
accordance with generally accepted industry practices.
Section 12.2 Check Meters
(a) Buyer may install, operate, and maintain at
the Delivery Point its own check measuring equipment at
no additional expense to Seller except as specifically
provided herein. The installation and operation of any
check measuring equipment by Buyer shall not interfere
with the operation of Seller's measuring equipment that
is located at the Delivery Point.
(b) Buyer may connect to any electronic real-
time information regarding total receipts and
deliveries that Seller obtains with respect to the
measurement of Gas at the Receipt Point and the
Delivery Point. In such case, the construction,
ownership, cost and expense of such connection shall be
borne (i) by Buyer, for that portion of the connection
located on the site of the Brandywine Facility, and
(ii) by Setter, for the remaining portion of the
connection. Setter, at no expense to Buyer except as
specifically provided herein, may connect to any
electronic real-time information Buyer obtains
regarding total receipts and deliveries at Buyer' s
check meter on Buyer's Plant property; provided,
however, such connection shall not interfere with the
operation of Buyer's check measuring equipment.
Section 12.3 Access to Meters and Records:
Seller and Buyer shall be given prior notice of and
shall have the right to be present at the time of any
installation, reading, cleaning, changing, repairing,
inspecting, testing, calibrating or adjusting done in
connection with the other Party's equipment used in
measuring the Quantity of Gas and the Heating Value of
Gas received or delivered at the Receipt Point or
Delivery Point. The records from this equipment shall
remain the property of their owner, but upon request,
each Party shall submit to the other Party copies of
the requested records and charts, together with
calculations therefrom, for inspection and
verification, and copying, subject to return within ten
(10) Days after receipt.
Section 12.4 Measurement Equipment Failures
(a) Subject to the provisions of Section
12.4(b), with respect to Seller's measurement equipment
at the Receipt Point and at the Delivery Point, in the
event Seller's measurement equipment is out of service
or registering inaccurately, the Quantity of Gas
received or delivered at the Receipt Point or Delivery
Point shall be determined, unless mutually agreed
otherwise: (i) by using the registration of any check
meter or other equipment if installed and accurately
registering; (ii) in the absence of such registrations,
by correcting the error if the percentage of error is
ascertainable by calibration, test or mathematical
calculation; or (iii) in the absence of both such
registrations and percentages of error, by estimating
the Quantity of Gas or the Heating Value of Gas
delivered to the Receipt Point or Delivery Point by
receipts or deliveries during periods under similar
conditions when the meter-was registering accurately.
(b) In the event there is a discrepancy between
the Quantity of Gas measured by Seller's measurement
equipment at the Delivery Point and the Quantity of Gas
measured by Buyer's check meter on the site of the
Brandywine Facility (if such check meter is installed),
the Parties shall promptly seek to determine the
correct Quantity of Gas. Until such discrepancy is
corrected, unless otherwise agreed, the Quantity of Gas
delivered at the Delivery Point shall be determined:
(i) by using Buyer's check meter if Buyer's check meter
is accurate and Seller's meter is not accurate; (ii)
by using Seller's meter if such meter is accurate and
Buyer's check meter is not accurate; or (iii) by using
Seller's meter if both meters are determined to be
accurate; and (iv) by using Buyer's check meter for any
time period prior to verification and correction of
such meters for any circumstances not covered by (i) and
(iii) above.
Section 12.5 Accuracy of Measuring Equipment:
The accuracy of Seller Is measuring equipment and
Buyer's check meter on the site of the Brandywine
Facility shall be verified at reasonable intervals;
provided, however, neither Party shall be required to
verify the accuracy of its equipment more frequently
than once in any thirty (30) Day period. In the event
either Party shall notify the other that it desires a
special test of any measuring equipment, the Parties
shall cooperate to secure a prompt verification of the
accuracy of such equipment. The cost of any special
test, if requested, shall be paid for by the requesting
Party if the measuring equipment tested is found to be
in error by less than two percent (2%).
Section 12.6 Correction of Errors
(a) If testing indicates that Seller's measuring
equipment, or Buyer's Delivery Point check meter, is in
error such equipment shall be adjusted immediately to
record accurately and any previous recordings from the
equipment shall be corrected to zero (O) error for any
period that is known definitely or agreed upon, but in
case the period is not known definitely or agreed upon,
corrections shall be for a period extending for one-
half of the time elapsed since the date of the last
test.
(b) If a test of Seller's measuring equipment
demonstrates an inaccuracy of two percent (2%) or more,
adjustment of payments made by Buyer to Seller during
the period of inaccuracy shall be as follows:
(i) If the metering equipment registers a
Quantity of Gas greater than is actually delivered to
Buyer at the Delivery Point, Seller shall make a refund
to Buyer for the amount which has been charged in
excess of that which would have been charged had the
meter registered with 100 percent accuracy. The refund
will be computed upon the assumption that the meter was
registering 100 percent prior to the beginning of the
period of inaccuracy or the period of adjustment as
determined in Section 12.6(a). The actual error of the
meter, and not the difference between the allowable
error and the error as found, shall be used as the
basis for calculating the refund.
(ii) If the metering equipment registers a
Quantity of Gas less than actually delivered to Buyer
at the Delivery Point, Seller may ▇▇▇▇ Buyer one half
of the unbilled undercharge for a period of twelve
months, unless the meter has been tested within that
twelve month period, in which event Seller may ▇▇▇▇
Buyer one half of the unbilled undercharge for the
period since the meter was last tested.
Section 12.7 Preservation of Records: Each Party
shall preserve for a period of at least three (3)
years, or such longer period as is required by any
governmental authority having jurisdiction, all test
data, charts, and other similar records.
ARTICLE XIII
BILLING AND PAYMENT
Section 13.1 Billing: Seller shall present to
Buyer on or before the fifteenth (15th) Day following a
Month in which Gas was delivered to Buyer under this
Agreement a statement showing (i) the Quantity of Gas
and the Heating Value of Gas received at the Receipt
Point and delivered at the Delivery Point on behalf of
Buyer on each Day during such Month, separately for the
Daily Receipt Quantity, the Daily Delivery Quantity,
the Daily Merchant Quantity, any Banked Quantity
credited to Buyer's account and any Quantity of Gas
delivered by Seller to Buyer at the Delivery Point
pursuant to Option 3 in Section 5.2, (ii) the
quantities of Gas in Mcf received at the Receipt Point
and delivered at the Delivery Point on behalf of Buyer
on each Day during such Month, separately for the Daily
Receipt Quantity, the Daily Delivery Quantity, the
Daily Merchant Quantity, for any Banked Quantity
credited to Buyer's account and any Quantity of Gas
delivered by Seller to Buyer at the Delivery Point
pursuant to Option 3 in Section 5.2, and (iii) the
total amounts and charges due and payable by Buyer.
Section 13.2 Payment: Subject to the provisions
of Section 13.5, within forty-eight (4%) hours after
Buyer receives a draw from Buyer's Lenders following
receipt-of Seller's statement (but no later than five
(5) Days after the end of the Month in which Seller's
statement was delivered to Buyer) or on or before the
last day of the Month in which Seller's statement is
received by Buyer if Buyer is no longer drawing funds
from Buyer's Lenders, Buyer shall pay to Seller by wire
transfer to an account identified by Seller the amount
due pursuant to such statement and this Agreement for
transportation service and merchant service performed
during the preceding Month. The account number for
Seller shall be such account number as reflected on
Seller's invoice from time to time. If presentation of
a ▇▇▇▇ to Buyer is delayed beyond the fifteenth (15th)
Day of a Month as required in Section 13.1, then the
payment date shall be postponed by a period equal to
the number of Days elapsed between the fifteenth (15th)
Day of the Month and the Day on which the ▇▇▇▇ was
actually presented, unless Buyer is responsible for
such delay in which case payment shall be due as set
forth above. If Buyer fails to pay the undisputed
portion of any amount when due, interest on the unpaid
amount shall accrue from the date such payment was due
at a rate equal to two percent (2%) above the prime
interest rate of Chase Manhattan Bank, N.A. (New York)
or its successor bank, in effect on the first business
Day of the Month for which interest is being
calculated.
Section 13.3 Billing Disputes: If Buyer in good
faith disputes the amount of a ▇▇▇▇ issued by Seller,
or any part of it, Buyer shall pay such amount as is
undisputed and shall notify Seller of the amount in
dispute and the reasons for that dispute not later than
the date payment of the undisputed amount is due. In
the event such good faith dispute is resolved by the
Parties, Buyer shall pay Seller any additional amounts
due. Buyer's withholding of payment of amounts which it
disputes in good faith until final resolution of such
dispute shall not constitute a payment default under
l9.1(a)(i).
Section 13.4 Verification: Seller and Buyer
shall have the right to examine at any reasonable time
the books, records, and charts of the other Party to
the extent necessary to verify the accuracy of any
statement, chart or computation made under or pursuant
to the provisions of this Agreement.
Section 13.5 Correction of Errors In the event
either Party determines that there is an error in the
amount billed in any statement rendered by Seller, the
error shall be adjusted within thirty (30) Days of the
Day on which a final determination of whether an error
has occurred has been made. If the error resulted in an
overcharge and the ▇▇▇▇ has been paid, Seller shall
refund the amount of the overcharge, with interest at a
rate equal to two percent (2%) above the prime interest
rate of Chase Manhattan Bank, N.A. (New York) or its
successor bank, in effect on the first business Day of
the Month for which interest is being calculated, from
the time the overcharge or undercharge was paid to the
date of refund. If the error resulted in an undercharge
and the ▇▇▇▇ has been paid, Buyer shall pay the amount
of the undercharge upon notice from Seller.
Notwithstanding the above, in no event shall Seller or
Buyer be liable to the other Party for errors
determined to have occurred in any ▇▇▇▇ or statement
that was originally issued more than twenty-four (24)
Months prior to the Day on which the error was
determined.
Section 13.6 Non-Business Days: If a payment
date under this Article XIII falls on a Day that is not
a Day on which Seller is open for business, then the
payment date shall be the next Day Seller is open for
business after the date that the payment is otherwise
due.
ARTICLE XIV
NOTICES
Section 14.1 Notices: All notices including,
without limitation, communications, statements, and
nominations that are required or permitted under this
Agreement shall be in writing except as otherwise
provided for in this Agreement or as otherwise agreed
to by the Parties. Notice or communication shall be
deemed effective upon receipt. Notice may be
accomplished by personal service, telegram, telecopier,
overnight courier or U.S. mail and shall be sent to the
Parties at the following addresses:
Seller:
Washington Gas Light Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Buyer: Panda-Brandywine, L. P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Fuel Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Either Party may change its address from time to time
by giving written notice of such change to the other
Party. Any notice or communication given or delivered
under this Agreement by mail shall be deemed received
by the addressee at the end of the third (3rd) business
Day after the date of mailing by prepaid mail in the
U.S. mail; provided, however, at any time when there is
a strike affecting delivery of U.S. mail, all such
deliveries shall be made by hand, overnight courier or
telecopier. If any such notice, communication,
statement or nomination is delivered by hand, overnight
courier or telecopier to the addressee, it shall be
deemed to have been received by the addressee as soon
as such delivery or transmission has been effected.
ARTICLE XV
POSSESSION AND RESPONSIBILITY
Section 15.1 Possession and Responsibility: As between
the Parties, Buyer shall be deemed to be in exclusive
control and possession of the Gas to be received,
transported, and delivered by Seller pursuant to
Article IV prior to receipt by Seller at the Receipt
Point and after receipt by Buyer of such Gas at the
Delivery Point. Otherwise Seller shall be deemed to be
in exclusive control and possession of the Gas,
including with respect to any Banked Quantity until
reduced by Buyer pursuant to Section 5.2. The Party
that has exclusive control and possession of the Gas
shall have sole responsibility for any event or
occurrence regarding the Quantity of Gas in that
Party's exclusive control and possession, and shall
indemnify, defend and hold harmless the other Party
with regard to such event or occurrence in accordance
with Article XX hereof, except to the extent of the
fault, negligence or willful misconduct of the other
Party, or except to the extent the other Party fails to
comply with the terms of this Agreement.
ARTICLE XVI
WARRANTY OF TITLE
Section 16.1 Warranty of Title
(a) Buyer warrants for itself, its agents and
its principals that at the time of delivery of its Gas
to Seller at the Receipt Point, Buyer shall have good,
valid, and legal title to the Gas, or the right to
deliver or cause to be delivered such Gas, free and
clear of all liens, encumbrances, security interests,
charges, and other adverse claims. Buyer agrees to pay
or cause to be paid to the entities entitled all
royalties, overriding royalties or like charges and
remove hi adverse claims in respect of Buyer's Gas or
the value thereof.
(b) Seller warrants for itself, its agents and
its principals that at the time of sale and delivery of
Gas to Buyer at the Delivery Point pursuant to Article
VI, Seller shall have good, valid, and legal title to
the Gas, or the right to sell and deliver such Gas,
free and clear of all liens, encumbrances, security
interests, charges, and other adverse claims. Seller
agrees to pay or cause to be paid to the entities
entitled all royalties, overriding royalties or like
charges and remove all adverse claims in respect of
Seller's Gas or the value thereof. Seller hereby
warrants to Buyer that at the time of Seller's
redelivery of Gas transported on behalf of Buyer
pursuant to Article IV, including redelivery of any
Quantity of Gas at the Delivery Point pursuant to
Option 1 in Section 5.1, Seller will have the good
right to deliver or redeliver such Gas, and that such
Gas shall be free and clear of all liens, encumbrances,
security interests, charges and other adverse claims.
(c) Each Party agrees, with respect to the Gas
delivered or redelivered by it, to indemnify the other
against all suits, actions, debts, accounts, damages,
costs (including reasonable attorney's fees), losses
and expenses arising from or out of any adverse claims of any and
all persons to or against said Gas.
ARTICLE XVII
FORCE MAJEURE
Section 17.1 Effect of Force Manure
(a) If either Party is rendered wholly or
partially unable to perform its obligations under this
Agreement because of an event of Force Majeure, that
Party shall be excused from whatever performance is
affected by the event of Force Majeure to the extent so
affected; provided, that such Party shall comply with
the provisions of this Section 17.1. Under the terms of
this Agreement, Force Majeure shall mean any act of
God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, wars,
blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods,
washouts, arrests and restraints of governments and
people, civil disturbances, explosions, breakage or
accident to machinery or lines of pipe, the necessity
for making repairs to or alterations of machinery or
lines of pipe, freezing of machinery or lines of pipe
due to abnormally cold weather, partial or entire
failure of Buyer's Gas supply due to an event of force
Majeure, failure of any third party pipeline
transporter to transport under a firm transportation
agreement the Gas that would be received at the Receipt
Point prior to delivery to Seller at the Receipt Point
due to an event of force Majeure, inability to obtain
materials, equipment, supplies , permits or labor, the
binding future order of any court or administrative
body of applicable jurisdiction which materially
adversely affects either Party's ability to perform
under this Agreement, or any other cause, whether of
the kind herein enumerated or otherwise, and whether or
not caused or occasioned by or happening on the account
of, the act or omission of one of the Parties or some
person or concern not a Party to this Agreement, not
within the reasonable control and without the fault or
negligence of the Party claiming the event of Force
Major.
(b) The non-performing Party claiming-suspension
of its obligations under this Agreement due to an event
of Force Majeure, as soon as practicable after learning
of the occurrence of the inability to perform due to an
event of Force Majeure, shall provide written notice to
the other Party giving the particulars of the
occurrence, including an estimation of its expected
duration and probable impact on the performance of its
obligations under this Agreement, and shall continue to
furnish timely regular reports with respect thereto
during the period of Force Majeure.
(c) The non-performing Party shall exercise all
reasonable efforts to continue to perform its
obligations under this Agreement and to remedy its
inability to so perform.
(d) The non-performing Party shall provide the
other Party with prompt notification of the cessation
of the event of Force Majeure giving rise to the excuse
from performance.
(e) No obligation of either Party that arose
prior to the occurrence of the event of Force Majeure
shall be excused as a result of that occurrence.
Section 17.2 Force Manure Termination: In the
event that Buyer is unable to utilize the
transportation service or merchant service under this
Agreement for a period of three-hundred and sixty-five
(365) consecutive Days or longer, due to an event of
Force Majeure declared by a Party, the Party not
claiming Force Majeure may terminate this Agreement on
thirty (30) Days' prior written notice to the other
Party.
Section 17.3 Settlement of Strikes Lockouts or
Other Labor Disputes: Nothing in this Article XVII
shall require the settlement of any strike, walkout,
lockout or other labor dispute on terms that, in the
sole judgment of the Party involved in the dispute, are
contrary to that Party's interest. It is understood and
agreed that the settlement of strikes, walkouts,
lockouts or other labor disputes shall be entirely
within the discretion of the Party having the
difficulty.
ARTICLE XVIII
TRANSFER AND ASSIGNMENT
Section 18.1 Assignments
(a) Except as specified in Section l8.1(b), the
rights and obligations of the Parties to this Agreement
may not be assigned by either Party except upon the
express written consent of the other Party, which
consent shall not be unreasonably withheld. In the
event that an assignment is made and consented to, the
assigning Party shall be released and discharged from
all obligations to the other Party under this Agreement
thereafter arising, such assignee shall be substituted
in place of the assigning Party herein, and the
assigning Party shall remain liable for all obligations
to the other Party hereunder arising and accruing
hereunder prior to the effectiveness of such
assignment.
(b) Either Party may assign its rights and
interests under this Agreement, without the consent of
the other Party but upon written notice to the other
Party, to any person or entity that succeeds by
purchase, merger, or consolidation to the assets of the
assigning Party substantially or in its entirety. Buyer
may assign to any person, without the consent of Setter
but upon written notice to the Seller, its duties
relating to the administration of this Agreement,
including but not limited to submitting nominations to
Seller pursuant to Article IX. Buyer shall have the
right, without the consent of Seller but upon written
notice to Seller, to assign all of its rights and
interests (but not its obligations) under this
Agreement to Buyer's Lenders as security for Buyer's
obligations under the terms of financing provided by
Buyer's Lenders. Seller acknowledges that upon an event
of default by Buyer under the terms of such financing,
any of Buyer's Lenders may (but shall not be obligated
to) assume or cause its designee or a new lessee or
purchaser of the Brandywine Facility to assume, all of
the interests, rights, and obligations of Buyer
thereafter arising under this Agreement. If the rights,
obligations and interests of Buyer in this Agreement
shall be assumed, sold or transferred as provided for
herein, Buyer shall be released and discharged from and
the assuming party shall be bound by and assume the
terms and conditions of this Agreement and any and all
obligations to Seller arising or accruing under this
Agreement from and after the date of such assumption,
and Seller shall continue this Agreement with the
assuming party as if such person had thereafter been
named as the contracting party under this Agreement;
provided/ however, if any of Buyer's Lenders assumes
this Agreement as provided herein they shall not be
liable for the performance of such obligations
hereunder except to the extent of their interest in the
Brandywine Facility.
ARTICLE XIX
DEFAULT AND REMEDIES, FAILURE TO DELIVER
Section 19.1 Definition of Event of Default
(a) An Event of Default under this Agreement
shall be deemed to exist upon the occurrence of any one
or more of the following events:
(i) The unexcused failure by either Party to
make payment of any amounts due to the other Party
under this Agreement and that failure continues for a
period of thirty (30) Days after written notice of
nonpayment; or
(ii) The unexcused failure by Seller to
receive, transport, sell or deliver any Quantity of Gas
in accordance with this Agreement for twenty (20) Days
during any Contract Year, except during a Peak Period
Release or as a result of Force Majeure; or
(iii) The unexcused failure by either Party to
perform fully any other material provision of this
Agreement and (A) such failure continues for a period
of sixty (60) Days after written notice of non-
performance from the other Party or (B) if within such
60-Day period the non-performing Party commences and
proceeds with due diligence to cure the failure and the
failure is not cured within one hundred and eighty
(80) Days or the period of time agreed to by the
Parties in writing as being necessary for the Party to
cure the failure with all due diligence; or
(iv) If by order of a court of competent
jurisdiction, a receiver or liquidator or trustee of
either Party or of any of the property of either Party
shall be appointed and such receiver or liquidator or
trustee shall not have been discharged within a period
of sixty (60) Days; or, if by decree of such a court,
either Party shall be adjudicated bankrupt 'or
insolvent or any substantial part of the property of
such Party shall have been sequestered or, such decree
shall have continued undischarged and unstayed for a
period of sixty (60) Days after the entry thereof; or,
if a petition to declare bankruptcy or to reorganize
either Party pursuant to any of the provisions of the
Federal Bankruptcy Code, as it now exists or as it may
hereafter be amended or pursuant to any other similar
state statute applicable to such Party, as now or
hereafter in effect, shall be filed against such Party
and shall not be dismissed within sixty (60) Days after
such filing; or
(v) If either Party shall file a voluntary
petition in bankruptcy under any provision of any
Federal or state bankruptcy law or shall consent to the
f fling of any bankruptcy or reorganization petition
against it under any similar law; or without limitation
of the generality of the foregoing, if either Party
shall file a petition or answer or consent seeking
relief or assisting in seeking relief in a proceeding
under any of the provisions of the Federal Bankruptcy
Code, as it now exists or as it may hereafter be
amended or pursuant to any other similar state statute
applicable to such Party, as now or hereafter in
effect, or an answer admitting the material allegations
of a petition filed against it in such a proceeding;
or, if either Party shall make a general assignment for
the benefit of its creditors; or, if either Party shall
admit in writing its inability to pay its debts
generally as they become due; or if either Party shall
consent to the appointment of a receivers), trustee (s)
or Liquidator(s) of its or of all or of any part of its
property.
(b) If both Parties reasonably agree that an
Event of Default has occurred, then the non-defaulting
Party may proceed to exercise any remedy provided under
this Agreement or existing at law or in equity. If one
Party believes in good faith that no Event of Default
has occurred and promptly informs the Party asserting
the existence of the Event of Default of this belief,
then the Parties shall enter negotiations in an attempt
to resolve the dispute; provided, however, if the non-
defaulting Party believes in good faith that a
negotiated resolution to the dispute is unlikely, then
that Party may proceed to exercise any and all remedies
available under this Agreement or existing at law or in
equity; and provided, further, nothing contained in
this Section l9.1(b) shall be deemed to extend the cure
periods set forth in Section 19.1(a).
Section 19.2 Remedies for Event of Default:
During any Event of Default, the Party not in default
shall have the right, subject to the cure periods set
forth in Section l9.1(a):
(a) To suspend service under this Agreement for
thirty (30) Days upon written notice to the defaulting
Party and, after such 30-Day suspension period, to
terminate this Agreement upon thirty (30) Days' written
notice to the defaulting Party; provided, however, such
termination shall not be effective if the Event of
Default is cured prior to the end of such 30-Day notice
period; and
(b) To pursue any other remedy provided under
this Agreement or now or hereafter existing at law or
in equity or otherwise/except as expressly limited by
this Agreement; provided, however, in the case of an
Event of Default by Buyer hereunder, Seller shall
provide Buyer's Lenders with notice of such Event of
Default at the same time such notice is provided to
Buyer pursuant to Article XIV hereof and Buyer's
Lenders each shall have the right (but not the
obligation), within the time periods for cure set forth
in Section 19.1(a) hereof, (i) to cure the Event of
Default on behalf of Buyer or (ii) to cure the Event of
Default on behalf of Buyer and to assume or cause its
designee or a lessee or purchaser of the Brandywine
Facility to assume all of the rights and obligations of
Buyer under this Agreement arising after the date of
such assumption.
Section 19.3 Seller's Failure to Deliver
(a) If on any Day, Seller fails to receive,
transport, sell or deliver a Quantity of Gas in
accordance with the terms of this Agreement for any
reason, except during a Peak Period Release or as a
result of Force Majeure, Seller shall pay to Buyer as
liquidated damages an amount equal to either of the
following:
(i) On any Day during which Buyer's use of fuel
oil at the Brandywine Facility in lieu of the Quantity
of Gas Seller fails to receive, transport, deliver or
sell under this Agreement would not violate the Air
Permit Restrictions, or on any Day during which Buyer
is able to obtain a replacement supply of Gas for the
full Quantity of Gas Seller fails to receive,
transport, deliver or sell, the difference between (x)
the total cost Buyer reasonably incurs to purchase and
transport replacement fuel (either Gas or fuel oil) to
the Brandywine Facility for use at the Brandywine
Facility during such Day, and (y) the total cost Buyer
would have incurred for the Quantity of Gas Seller
failed to receive, transport, sell or deliver in
accordance with the terms of this Agreement; or
(ii) On any Day during which Buyer's use of fuel
oil at the Brandywine Facility in lieu of the Quantity
of Gas Seller fails to receive, transport, sell or
deliver would violate the Air Permit Restrictions, or
during which Buyer is unable to obtain replacement fuel
(either Gas or fuel oil), the total reduction in
payments due to Buyer from Potomac Electric Power
Company, pursuant to that certain Power Purchase
Agreement, dated August 9, 1991, between Seller and
Potomac Electric Power Corporation (as such agreement
may be amended from time to time), as a result of
Buyer's failure to deliver capacity or energy to
Potomac Electric Power Company during the period of
Seller's failure to receive, transport, sell or deliver
a Quantity of Gas.
(b) Buyer's remedy of liquidated damages under
this Section 19.3 shall be in addition to such other
remedies available to Buyer hereunder if Seller's
failure to receive, transport, sell or deliver a
Quantity of Gas under this Agreement constitutes an
Event of Default, including commencing an action before
the Maryland Public Service Commission; provided,
however, such other remedies available to Buyer shall
not include an action to recover the costs Buyer incurs
to construct its own pipeline in lieu of receiving
service from Seller hereunder.
Section 19.4 Exclusion of Certain Damages:
Neither Party shall be liable to the other Party for
special, incidental, consequential or punitive damages
arising out of or related to this Agreement.
ARTICLE XX
INDEMNIFICATION
Section 20.1 Indemnification: Each Party
hereto shall indemnify and hold the other Party, its
affiliates, successors and assigns, and the officers,
directors, employees, agents, representatives,
contractors and stockholders of each of them, harmless
from and against all damages, losses or expenses
suffered or paid as a result of any and all claims,
demands, suits, causes of action, proceedings,
judgments, and liabilities, including reasonable
attorneys' fees incurred in litigation or otherwise,
assessed, incurred or sustained by or against any such
Party with respect to or arising out of a willful or
negligent act or failure to act or of a breach of this
Agreement by the indemnifying Party, its successors and
assigns, or any of their officers, directors,
employees, contractors, agents or representatives,
except to the extent that any such damages, losses or
expenses are the result of a willful or negligent act
or the failure to act or of a breach of the terms of
this Agreement by the indemnified Party, its successors
and assigns or any of their officers, directors,
employees, contractors, agents or representatives.
Section 20.2 Notice and Legal Defense:
Promptly after receipt by a Party of any claim or
notice of the commencement of any action,
administrative or legal proceeding or investigation as
to which the indemnity provided for in Section 20.1
hereof may apply, the indemnified Party shall notify
the indemnifying Party in writing of this fact. The
indemnifying Party shall assume the defense thereof
with an attorney designated by that Party and
satisfactory to the indemnified Party. However, the
indemnifying Party may not settle or compromise any
claim or lawsuit without the prior consent of the
indemnified Party if such settlement or compromise (a)
requires the indemnified Party to forego or relinquish
any rights or make any unindemnified payment; or (b)
subjects the indemnified Party to any injunction. The
indemnified Party shall have the right, at its sole
option and expense, to retain counsel to represent its
interests in defending the claim or lawsuit.
Section 20.3 Failure to Defend Action: Should
a Party be entitled to indemnification under Section
20.1 hereof as a result of a claim by a third party and
the indemnifying Party fails to assume the defense of
that claim, the indemnified Party may at the expense of
the indemnifying Party contest (or, with the prior
written consent of the indemnifying Party, settle) the
claim; Provided, however, the indemnified Party may,
without the consent of the indemnifying Party (with the
indemnifying Party remaining obligated to indemnify the
indemnified Party under Section 20.1) choose not to
contest such claim if, in the written opinion of the
indemnified Party's attorney, such claims) is
meritorious.
Section 20.4 Indemnification Amount: In the
event that a Party is obligated to indemnify and hold
the other Party and its successors and assigns harmless
under Section 20.1, the amount owing to the indemnified
Party shall be the amount of such Party's actual out-of-
pocket loss and expenses net of any net insurance or
other actual recovery but shall not include any
special, incidental, consequential or punitive damages.
ARTICLE XXI
FACILITIES CONSTRUCTION
Section 21.1 GAL Facilities: Upon Seller's
receipt of notice from Buyer that Buyer has commenced
construction of the Brandywine Facility, Seller shall
construct, at its sole expense and in accordance with
Section 2.3(b), the WGL Facilities. Within four (4)
months of Sellers receipt of such notice, Seller shall
provide Buyer with a report describing, with
particularity, the facilities to be constructed, their
location, their physical characteristics, and the time
schedule Seller shall follow for the construction,
testing and completion of the WGL Facilities. Once
Seller has commenced construction of the WGL
Facilities, Seller shall provide Buyer with a Monthly
progress report concerning the construction of the WGL
Facilities until the WGL Facilities are operational.
Seller shall complete construction of and put into
operation the WGL Facilities no later than twelve (12)
Months following receipt of Buyer's notice required by
this Section 21.1, but in any event no later than
February 1, 1996, provided, Buyer is making reasonable
progress toward completion of construction of the
Brandywine Facility. If Buyer significantly changes the
date by which it will commence testing of the
Brandywine Facility (which date is currently scheduled
to be February 1, 1996), Buyer and Seller shall meet to
negotiate a change in the date by which Seller must
complete construction and put into operation the WGL
Facilities, which date shall correspond to the date
Buyer will commence testing of the Brandywine Facility.
ARTICLE XXII
WEATHER PREDICTIONS
Section 22.1 Weather Predictions: On each Day,
by 8:00 a.m. EST, Seller shall provide Buyer with the
weather prediction Seller is then relying on to plan
its Gas supply needs for its distribution customers for
the next Day.
ARTICLE XXIII
MISCELLANEOUS PROVISIONS
Section 23.1 Regulation
(a) This Agreement and the respective
obligations of the Parties hereto are subject to all
present and future valid laws, orders, rules and
regulations by governmental authorities having
jurisdiction over the Parties, this Agreement or any
provision hereof. Neither Party shall be held in
default for failure to perform hereunder if such
failure is due to compliance with laws, orders, rules
or regulations of any such governmental authorities.
(b) This Agreement is subject to the approval
of the Maryland Public Service Commission, on terms and
conditions reasonably acceptable to both Parties.
Section 23.2 Binding Effect: The terms and
provisions of this Agreement and the respective rights
and obligations hereunder of Buyer and Seller shall be
binding upon and inure to the benefit of their
respective successors and permitted assigns.
Section 23.3 Nonwaiver of Defaults: No waiver
by Seller or Buyer of any default by the other under this
Agreement in the performance of any provisions of this
Agreement shall operate or be construed as a waiver of
any future default or defaults, whether of a similar or
different character.
Section 23.4 Written Amendments: No modification of the terms
and provisions of this Agreement shall be or become effective except
by written amendment executed by the Parties.
Section 23.5 Choice of Law: This Agreement
shall be governed by and construed in accordance with the
laws of the State of Maryland, other than such laws
governing choice of laws.
Section 23.6 Severability and Renegotiation:
Should any provision of this Agreement for any reason
be declared invalid or unenforceable by final and non-
appealable order of any court or regulatory body having
jurisdiction, such decision shall not affect the
validity of the remaining portions, and the remaining
portions shall remain in force and effect as if this
Agreement had been executed without the invalid or
unenforceable portion. In the event any provision of
this Agreement is declared invalid or unenforceable,
the Parties shall promptly negotiate in good faith a
new provisions) to eliminate the invalidity or
unenforceable provision and to restore this Agreement
as near as possible to its original intent and effect.
Section 23.7 Other Agreements: This Agreement
contains the entire agreement and understanding of the
parties relating to the transportation and sale of Gas
and supersedes any and ail oral or written agreements
and understandings that may have been made previously
that relate to the subject matter herein.
Section 23.S No Third Party Beneficiary: No
customer of Seller other than Buyer shall have any
rights under this Agreement.
Section 23.9 Priority: Notwithstanding
anything that may be contained in this Agreement, if there is a
conflict between the provisions of this Agreement and
an effective tariff of Setter, to which this Agreement
is or may become subject, the provisions of this
Agreement shall control unless the Maryland Public
Service Commission orders otherwise.
Section 23.10 Captions: All indices, titles,
subject headings, section titles, and similar items are
provided for the purpose of reference and convenience
and are not intended to be inclusive, definitive or to
affect the meaning, content or scope of this Agreement.
Section 23.1l Survival: Any provisions) of
this Agreement that expressly or by implication comes into
or remains in force following the termination or
expiration of this Agreement shall survive the
termination or expiration of this Agreement.
Section 23.12 Further Assurances: The Parties
shall execute such additional documents including,
without limitation, a reasonable consent to assignment
or similar document required by Buyer's Lenders, and
shall cause such additional action to be taken as may
be reasonably required or, in the good faith and
prudent judgment of any Party, may be necessary or
desirable to effect or evidence the provisions of this
Agreement and the transactions contemplated hereby.
Section 23.13 Counterparts: This Agreement
may be executed in any number of counterparts, and each
counterpart shall have the same force and effect as the
original instrument.
IN WITNESS WHEREOF, the Parties hereto have
caused this Agreement to be signed by their duly
authorized officers as of the day and year first above
written.
ATTEST: WASHINGTON GAS LIGHT COMPANY
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TITLE: Senior Vice President
ATTEST PANDA-BRANDYWINE, L.P.
BY: Panda Brandywine
Corporation its sole
general partner
BY: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman