BASE AGREEMENT for Natural Gas Purchase Transactions Between AQUILA ENERGY
MARKETING CORPORATION a Delaware corporation with offices at 0000 Xxxxx 000xx
Xxxxxx Xxxxx, Xxxxxxxx 00000-0000 Telephone: (000) 000-0000 Fax: (402) 498-
4543 and XXXXXX OIL COMPANY a Colorado corporation with offices at 000 00XX Xx.,
Xxxxx 0000 Xxxxxx, XX 00000 Telephone: (000) 000-0000 Fax: (000) 000-0000
Dated: September 1, 1999
Agreement No: 5908-01
BASE AGREEMENT
PART I
(Agreement No. 5908-01)
This Agreement is made and entered into as of the 1st day of September,
1999, (the "Effective Date") by and between AQUILA ENERGY MARKETING CORPORATION
("Aquila") and XXXXXX OIL COMPANY ("Counterparty") (Aquila and Counterparty
sometimes individually referred to as "Party" and collectively as "Parties").
ARTICLE 1. SCOPE OF AGREEMENT
1.1 This Agreement applies to and governs all Transactions entered into between
the Parties prior to and after the Effective Date, except those Transactions
that have been performed in full prior to the Effective Date.
1.2 The Parties acknowledge and agree that every Transaction incorporates Part
II of this Agreement attached hereto.
1.3 All Transactions are entered into in reliance on the fact that this Base
Agreement and all such Transactions form a single agreement between the Parties,
and the Parties would not otherwise enter into any Transactions.
ARTICLE 2. TRANSACTION DETAILS
2.1 The Parties acknowledge and agree that Transactions will be formed and
effectuated in a recorded telephone conversation between the Parties ("Oral
Transaction"). The oral offer and acceptance between the Parties forms a binding
agreement between the Parties, enforceable from the moment that the
Parties have orally agreed upon all of the essential provisions. A tape of the
Oral Transaction (the "Transaction Tape") is agreed by the Parties to be a
document under which the Transaction is evidenced in tangible form. Each Party
consents to the recording of conversations by its employees which occur while
discussing or entering into Transactions under this Agreement. Each Party may
maintain recording equipment and facilities at its offices, and will retain any
Transaction Tapes in confidence, secured from improper access. The Transaction
Tape, and the terms and conditions described therein, shall be the controlling
evidence of the Parties' agreement with respect to a particular Transaction in
the event a Confirmation Letter is not fully executed by both Parties. Upon
full execution of a Confirmation Letter, such executed Confirmation Letter shall
be the controlling evidence of the Parties' agreement with respect to
the particular Transaction referenced in such Confirmation Letter.
2.2 For each specifically agreed to purchase or sale of Gas for delivery or
receipt to be performed under this Agreement, including Oral Transactions
("Transaction"), Buyer and Seller must agree upon at least the following
essential provisions:
(a) the Period of Delivery;
(b) the Transaction type (i.e., whether Firm Service, EFP Service,
Interruptible Service, or Base Load Service);
(c) the Delivery Point(s);
(d) the Contract Price;
(e) the Contract Quantity; and
(f) Transporter(s).
The foregoing provisions, and any related details of the Transaction, will be
included in all Confirmation Letters.
ARTICLE 3. TERM
3.1 Unless terminated earlier pursuant to any other provision of this Agreement,
the term of this Agreement shall be for a period commencing on the Effective
Date, through the later of September 9, 2000, or the termination of that Credit
Agreement dated September 9, 1999 between Aquila Energy Capital Corporation and
Xxxxxx Oil Company, and continuing month-to-month thereafter until terminated by
either Party upon thirty (30) Days prior written notice to the other; provided,
however, that if one or more Transactions are in effect, termination under this
Article 3 shall not be effective for such Transaction(s) until the expiration of
the Period of Delivery of such Transaction(s).
ARTICLE 4. NOTICES AND COMMUNICATIONS
4.1 Any notice required or permitted to be given by one Party to the other
pursuant to this Agreement shall be in writing (unless otherwise provided) and
may be delivered by hand, transmitted by telecopy or sent by U.S. mail addressed
in accordance with the particulars for notices set forth in Section 4.2 below.
A Party shall have the right to change any of the particulars of its address by
giving a notice in accordance with this Article 4. Any payment required to be
made pursuant to this Agreement shall be made at the address and in the manner
provided herein.
4.2
(i) TO BUYER PAYMENT BY WIRE
Aquila Energy Marketing Corporation The Northern Trust Company
0000 Xxxxx 000xx Xxxxxx, Xxxxx 000 ABA # 000-000-000
Xxxxx Xxxxxxxx 00000-0000 For the Account of Aquila
Energy Marketing Corporation
Account #: 80330
Reason for Notice Attention Telephone No. Facsimile No.
___________________ ______________________ _____________ _____________
Statements/Payments Accounting Department 402-498-4490 402-498-4276
Contractual Contract Administration 000-000-0000 000-000-0000
Operation/Nominations Volume Administration 402-498-4490 402-498-4586
(ii) TO PAYMENT BY WIRE
Xxxxxx Oil Company Bank One, Colorado, N.A.
000 00xx Xx., Xxxxx 0000 ABA# 000000000
Xxxxxx, XX 00000 for credit to: Xxxxxx Oil Company
Acct# 1190795730
Reason for Notice Attention Telephone No. Facsimile No.
___________________ ________________ _____________ _____________
Statements/Payments Xx Xxxxx (000) 000-0000 (000) 000-0000
Contractual Xxxxx Xxxxxxxxxx (000) 000-0000 (000) 000-0000
Operation/Nominations Xxxxx Xxxxxxxxxx (000) 000-0000 (000) 000-0000
ARTICLE 5. MISCELLANEOUS
5.1 The interpretation and performance of this Agreement and all Transactions
shall be governed by and construed in accordance with the laws of the State of
Nebraska without regard to principles of conflict of laws.
ARTICLE 6. SPECIAL PROVISIONS
Section 15.2 is hereby amended in the following manner: ", agents," is hereby
added in the third and seventh lines of this Section immediately following the
word "employees".
Section 16.1 is hereby amended in the following manner: The phrase "tenth
(10th)" in the first line thereof is hereby deleted and replaced with "fifteenth
(15th)".
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
AQUILA ENERGY MARKETING CORPORATION XXXXXX OIL COMPANY
By: ___________________________________ By: ______________________
Title: ________________________________ Title: ___________________
BASE AGREEMENT
PART II
The terms and conditions of this Part II are incorporated into and made a
part of that certain Base Agreement for Natural Gas Purchase and Sale
Transactions between the Parties dated September 1, 1999
General Terms and Conditions
Table of Contents
ARTICLE 7 DEFINITIONS 2
ARTICLE 8 PURPOSE AND PROCEDURES 5
ARTICLE 9 OBLIGATIONS AND DELIVERIES 5
ARTICLE 10 TRANSPORTATION AND DELIVERY POINTS 7
ARTICLE 11 QUALITY AND MEASUREMENT 8
ARTICLE 12 PROCESSING 8
ARTICLE 13 DEFAULTS AND REMEDIES 8
ARTICLE 14 TAXES 10
ARTICLE 15 TITLE 11
ARTICLE 16 BILLING AND PAYMENT 11
ARTICLE 17 REPRESENTATIONS AND WARRANTIES 12
ARTICLE 18 LIABILITY AND INDEMNIFICATION 12
ARTICLE 19 ASSIGNMENTS 13
ARTICLE 20 SERVICES 13
ARTICLE 21 MISCELLANEOUS 13
EXHIBIT A FIRM SERVICE CONFIRMATION i
EXHIBIT B BASELOAD SERVICE CONFIRMATION iii
EXHIBIT C INTERRUPTIBLE SERVICE CONFIRMATION v
EXHIBIT D EFP SERVICE CONFIRMATION vi
ARTICLE 7. DEFINITIONS
7.1 "Actual Quantity" means the quantity of Gas which actually flowed under a
transportation service agreement as designated by Buyer's or Buyer's Customer's
Transporter in the Transporter's statement to its shipper under such agreement.
7.2 "Affiliate" means, with respect to any person, any other person (other than
an individual) that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such person.
For purposes of the foregoing definition, "control" means the direct
or indirect ownership of more than fifty percent (50%) of the outstanding
capital stock or other equity interests having ordinary voting power.
7.3 "Alternate Reference Price" means the alternative index or methodology for
determining the Reference Price determined in accordance with Section 9.9.
7.4 "Balancing Penalty" or "Penalties" means scheduling and imbalance charges,
penalties, fees, or cash-outs contained in a Transporter's tariff, or in the
tariff of any applicable local distribution company, which may be assessed
against a shipper for failure to satisfy the Transporter's balance and
nomination requirements, or both.
7.5 "Base Load Service" ("BLS") means that the Parties have agreed to make and
accept deliveries of Gas on a non-interruptible basis, subject only to
applicable Force Majeure and to interruption of transportation by either Buyer's
or Seller's Transporter(s).
7.6 "Btu" means British Thermal Unit. "MMBtu" means one million British
Thermal Units.
7.7 "Business Day" means any Day on which Federal Reserve member banks in New
York City are open for business; and a Business Day shall open at 8:00 a.m. and
close at 5:00 p.m. Central Prevailing Time("CPT").
7.8 "Buyer" means the Party to a Transaction hereunder who is obligated to
purchase and receive from Seller, or cause to be received, Gas during a Period
of Delivery.
7.9 "Buyer's Transporter(s)" means the gathering system(s) and transportation
system(s) and companies owning those systems that move the Gas from the Delivery
Point(s) to Buyer or to Buyer's customer(s).
7.10 "Claims" means all claims or actions, threatened or filed and whether
groundless, false or fraudulent, that directly or indirectly relate to the
subject matter of an indemnity, and the resulting losses, damages, expenses,
attorneys fees and court costs, whether incurred by settlement or otherwise, and
whether such claims or actions are threatened or filed prior to or after the
termination of this Agreement.
7.11 "Confirmation Letter" means a written notice confirming the essential
provisions of a Transaction and substantially in the forms set forth as Exhibits
"X," "X," "C," or "D", as applicable.
7.12 "Confirmed Quantity" means the quantity of Gas (expressed as MMBtu's per
day) which has been Nominated for transportation and confirmed by the
Transporter(s).
7.13 "Contract Price" means the price in $U.S. per MMBtu (unless otherwise
provided for) to be paid by Buyer to Seller for the purchase of Gas pursuant to
the terms of a Transaction.
7.14 "Contract Quantity" means the Daily Contract Quantity multiplied by the
number of Days in the Period of Delivery.
7.15 "Daily Contract Quantity" means that quantity of Gas on a daily basis that
Seller agrees to sell and deliver, or cause to be delivered to Buyer, and that
Buyer agrees to purchase and receive, or cause to be received, from Seller
pursuant to the terms of a Transaction.
7.16 "Day" or "Gas Day" means a period of twenty-four (24) hours, beginning at
7:00 a.m. CPT on any calendar Day, or at such other beginning and ending times
as are required in order to correspond to Transporter(s)' tariffs.
7.17 "Delivery Point" means the agreed point of delivery and receipt of Gas
pursuant to a Transaction.
7.18 "EFP Service" ("EFP") means the Parties have agreed to make and accept
deliveries of Gas on a non-interruptible basis subject only to applicable Force
Majeure; and the Parties have also assumed equal and opposite positions in
Natural Gas Future Contracts.
7.19 "FERC" means the Federal Energy Regulatory Commission or any successor
thereto.
7.20 "Firm Service" ("FS") means that the Parties have agreed to make and
accept deliveries of Gas on a non-interruptible basis subject only to applicable
Force Majeure.
7.21 "Force Majeure" means an event not anticipated as of the Effective Date,
which is not within the reasonable control of the Party affected by such event
(the "Affected Party"), which partially or entirely prevents the Affected
Party's performance and which by the exercise of due diligence the Affected
Party is unable to overcome. Force Majeure may include, but is not restricted
to: acts of God; fire; civil disturbance; sabotage; action or restraint by court
order or public or governmental authority (so long as the Affected Party has not
applied for or assisted in the application for, and has opposed where and to the
extent reasonable, such government action); provided, that (i) the loss of
Buyer's markets or Buyer's inability economically to use or resell Gas purchased
hereunder; (ii) the loss of Seller's supply or Seller's ability to sell Gas to a
market at a more advantageous price; (iii) regulatory or contractual
disallowance of the pass-through of the costs of Gas or other related costs;
(iv) increases or decreases in Gas supply due to allocation or reallocation of
production by well operators, pipelines, or other parties; (v) planned
maintenance of a pipeline or appurtenant facilities; and (vi) unless the Parties
specifically agree that Gas is to be sourced from a specific individual well,
lack of pressure or failure of specific, individual xxxxx or appurtenant
facilities in the absence of a Force Majeure event broadly affecting other xxxxx
in the same geographic area, shall not constitute events of Force Majeure.
Interruption by a Transporter shall not be deemed to be Force Majeure unless (a)
the Party contracting with such Transporter shall have made arrangement with
such Transporter for the firm transportation, as defined under the Transporter's
tariff, of the Gas to be delivered or received hereunder and (b) such
interruption is due to a force majeure event as defined under the
Transporter's tariff.
7.22 "Gas" or "Natural Gas" means any mixture of Hydrocarbons or of Hydrocarbons
and non-combustible gases in a gaseous state consisting essentially of methane.
7.23 "Gas Daily" means the publication Gas Daily* published by FT Energy or any
successor thereto.
7.24 "Gas Daily Price" means, for the purpose of determining the payment owed
by a Party to the other Party for failure to deliver or receive Gas, as set
forth in Article 9, the daily Midpoint price listed in Gas Daily under the table
"Daily Price Survey" for production from the same region and pipeline as the
Delivery Point(s) specified in the relevant Transaction(s).
7.25 "Hydrocarbons" means liquid and liquefiable components other than methane
contained in the Gas, including but not limited to ethane, propane, normal
butane, iso-butane and natural gasoline.
7.26 "Incremental Costs" means additional Transportation Costs and reservation
charges for unutilized firm transportation.
7.27 "Initial Nomination Quantity" means the first of the month Nomination as
communicated to Seller by Buyer pursuant to Section 9.2.
7.28 "Interruptible Service" ("IS") means that the Parties have agreed to make
and accept deliveries of Gas on an interruptible basis, and that deliveries of
Gas may be interrupted by either Party upon giving the notice required by
Section 9.2 of this Agreement.
7.29 "Natural Gas Futures Contract" means a standardized contract for the
purchase or sale of Natural Gas which is traded for future delivery under the
provisions of NYMEX rules and regulations.
7.30 "Nomination(s)" means a request(s) sent to the Transporter(s) for the
quantity of Gas which the Seller/Buyer wants transported.
7.31 "NYMEX" means the New York Mercantile Exchange or any successor thereto.
7.32 "Period of Delivery" means the period of time measured from the date
physical delivery of Gas is to commence to the date physical delivery is to
terminate under a Transaction.
7.33 "Process" or "Processing" means the extraction of Hydrocarbons from the
Gas.
7.34 "Reference Price" means, for any Transaction, the price of Gas agreed to by
the Parties in the Transaction. If the Reference Price is based upon a
published index, and if there is no single price published for a particular Day,
but there is published a range of prices under the table and listing which
includes the Delivery Point, then the Reference Price shall be the arithmetic
average of the high and low prices so set forth. In the event that no price or
range of prices is published for that particular Day, then the Reference Price
shall be the arithmetic average of the following:
(a) the prices (determined as stated above) for the first Day immediately
preceding the Day in which the default occurred for which a Reference Price can
be determined; and
(b) the price (determined as stated above) for the Day immediately following
the Day in which such default occurred for which a Reference Price can be
determined.
7.35 "Regulatory Approval" means all current and future valid and applicable
state and federal regulatory authorizations, consents, or approvals required for
the Transaction to occur.
7.36 "Seller" means the Party to a Transaction hereunder who is obligated to
sell and deliver to Buyer, or cause to be delivered, Gas during a Period of
Delivery.
7.37 "Seller's Transporter(s)" means the gathering system(s), transportation
system(s) and companies owning those systems that move the Gas from its source
of supply to the Delivery Point(s).
7.38 "Taxes" means any or all ad valorem, property, occupation, severance,
generation, first use, conservation, Btu or energy, transmission, utility, gross
receipts, privilege, sales, use, excise and other taxes, governmental charges,
licenses, fees, permits and assessments, other than taxes based on net
income or net worth. "New Taxes" means (i) any Taxes enacted and effective
after the Effective Date, including without limitation, that portion of any
Taxes or New Taxes that constitutes an increase, or (ii) any law, rule, order or
regulation, or interpretation thereof, enacted and effective after the Effective
Date resulting in the application of any Taxes to a new or different class of
parties.
7.39 "Transportation Costs" means gathering rates and fuel, transportation and
applicable surcharges, or each of them, as charged by either Seller's
Transporter(s) or Buyer's Transporter(s) at the time Gas flows under any
Transaction.
7.40 "Transporter(s)" means Buyer's Transporter(s) or Seller's Transporter(s)
or both.
ARTICLE 8. PURPOSE AND PROCEDURES
8.1 Service Classifications. The terms of this Agreement shall, unless
specifically agreed otherwise, apply to and be incorporated in the following
Transactions: (i) Interruptible Service ("IS"), (ii) Base Load Service ("BLS"),
(iii) Firm Service ("FS"), or (iv) EFP Service ("EFP"). Some provisions of
this Agreement will apply only to certain types of Transactions. Those
provisions will be indicated at the beginning of the relevant paragraph by use
of initials to designate the Transaction type, e.g. (IS), (BLS), (FS), or (EFP).
8.2 Confirmation Procedure. During the term of this Agreement, Aquila and
Counterparty may notify each other that Gas is available for purchase or sale.
If the Parties agree to the terms of a Transaction, Aquila will prepare and send
to the Counterparty, by facsimile or other mutually acceptable means, a
Confirmation Letter containing the terms agreed upon by the Parties. The
Confirmation Letter for each Transaction shall be substantially in the forms
attached hereto as Exhibits "A" through "D," as applicable. No Confirmation
Letter shall be necessary for Transactions having a Period of Delivery of less
than one (1) calendar month, unless requested by either Party, in which case
Aquila will prepare and send to the Counterparty, by facsimile or other mutually
acceptable means, a Confirmation Letter containing the terms agreed upon by the
Parties. The failure of Aquila to issue, or of the Parties to execute or the
Counterparty to object to, a Confirmation Letter shall not invalidate the
terms of any Oral Transactions entered into between the Parties under this
Agreement. The failure of the Counterparty to notify Aquila of any disagreement
with the Confirmation Letter by 5:00 p.m. CPT on the second Business Day after
transmittal of the Confirmation Letter shall be deemed to be acceptance
by such Party of the terms of such Confirmation Letter and such Confirmation
Letter shall be deemed to be fully executed.
8.3 Notice of Curtailment or Interruption. Each Party shall immediately
contact the other Party in the event of curtailment or interruption of the
purchase or sale of Gas hereunder. Each Party shall contact the other Party
with as much advance notice as possible regarding any such impending
curtailment or interruption.
8.4 No Obligation to Enter into Transactions. Nothing contained in this
Agreement shall be construed as requiring either Party to enter into any
Transactions hereunder. Neither Party shall be obligated hereunder unless
and until the essential provisions of a Transaction referred to in Section 2.2
have been agreed upon pursuant to the procedures in Article 8.
ARTICLE 9. OBLIGATIONS AND DELIVERIES
9.1 Seller's and Buyer's Obligations. With respect to each Transaction and
subject to the terms of this Agreement, Seller shall sell and deliver, or cause
to be delivered, and Buyer shall purchase and receive, or cause to be received,
at the Delivery Point the Contract Quantity, and Buyer shall pay Seller
the Contract Price. Seller shall be responsible for any costs or charges
imposed on or associated with the delivery of the Contract Quantity up to the
Delivery Point. Buyer shall be responsible for any costs or charges imposed on
or associated with the Contract Quantity at and from the Delivery Point.
9.2 Nominations. At least two (2) Business Days prior to the earlier of
Seller's or Buyer's Transporter(s') first of the month Nomination deadline each
month during a Period of Delivery, Buyer shall notify Seller orally and in
writing of the Initial Nomination Quantity for the upcoming month. To the
extent allowed by any Transaction, any changes to the Initial Nomination
Quantity during the month shall be communicated as herein provided one (1)
full Business Day prior to the earlier of Buyer's or Seller's Transporter(s')
daily Nomination deadline. Any Nomination quantity which deviates from the
Contract Quantity shall not relieve Seller of its obligation to make delivery
of the Contract Quantity, unless otherwise agreed to by Buyer. The Parties
shall cooperate to ensure that Nominations are timely made to Seller's
Transporter(s) and Buyer's Transporter(s) and that such Nominations reflect the
actual expected deliveries that will be made and accepted. Seller shall be
responsible for Nominations and confirmations upstream of the Delivery Point
(s) and Buyer shall be responsible for Nominations and confirmations downstream
of the Delivery Point(s).
9.3 Delivery Information. At the time Buyer notifies Seller of the Initial
Nomination Quantity pursuant to Section 9.2, and as necessary during a Period
of Delivery, Seller shall provide Buyer with the following information (if
relevant to the Transaction): (i) meter location(s) and number(s) and valid
transportation agreement number(s); (ii) the priority status or ranking of the
Gas pursuant to an operators' balancing agreement, a pre-determined allocation
or other allocation determinant; (iii) identification of an operator contact;
(iv) location of xxxxx by county and state; and (v) all data required by Buyer's
Transporter(s) to flow Gas.
9.4 Imbalances and Penalties. If either Party becomes aware of any reason why
delivery of the Confirmed Quantity may not be made or accepted, that Party shall
notify the other Party as soon as practicable in order to meet any Nomination
deadlines imposed by the Transporter(s). The Parties will cooperate to ensure
that corrected Nominations are provided to Seller's Transporter(s) and Buyer's
Transporter(s) in a form acceptable to such Transporter(s) in order to meet any
Nomination deadlines. Transporter imbalances and any Balancing Penalties
resulting from failure to timely communicate Nominations or to make delivery or
accept delivery of the Confirmed Quantity shall be the responsibility of the
Party whose failure caused the imbalance or Balancing Penalty. Without limiting
the responsibility and liability imposed by this Section 9.4, however, both
Parties shall cooperate to avoid imbalances and to correct any imbalances which
may occur. Payment for any Balancing Penalties shall be in accordance with the
procedures set forth in Article 16. If a Transporter imbalance is caused by
either Party and such imbalance is not subject to a cash-out mechanism, the
Party causing such imbalance shall nonetheless be liable for all direct actual
damages incurred by the other Party as a result thereof.
9.5 Title, Risk of Loss and Indemnity. As between the Parties, Seller shall
be deemed to be in exclusive control (and responsible for any damages or injury
caused thereby) of the Gas prior to the Delivery Point and Buyer shall be deemed
to be in exclusive control (and responsible for any damages or injury caused
thereby) of the Gas at and from the Delivery Point. Seller warrants that it
will deliver to Buyer the Confirmed Quantity free and clear of all liens, Claims
and encumbrances arising prior to the Delivery Point. Title to and risk of loss
related to the Contract Quantity shall transfer from Seller to Buyer at the
Delivery Point. Seller and Buyer shall each indemnify, defend and hold harmless
the other Party from any Claims arising from any act or incident occurring when
title to the Gas is vested in the indemnifying Party.
9.6 Force Majeure. (FS)(EFP)(BLS) If either Party is rendered unable by Force
Majeure to carry out, in whole or in part, its obligations under a Transaction
and such Party gives written notice and full details of the event to the other
Party as soon as practicable after the occurrence of the event, then during the
pendency of such Force Majeure but for no longer period, the obligations of the
Party affected by the event (other than the obligation to make payments then due
or becoming due with respect to performance prior to the event and except for
Balancing Penalties assessed by a Transporter during the continuance of the
Force Majeure event) shall be excused to the extent required. The Party
affected by the Force Majeure shall remedy the Force Majeure with all reasonable
dispatch; provided, however, that nothing herein shall require Seller to
deliver, or Buyer to receive, Gas at points other than the Delivery Point.
9.7 (FS)(BLS)(EFP) Failure to Deliver/Receive.
(a) Unless excused by Force Majeure or Buyer's failure to perform, if Seller
fails to deliver all or part of the Confirmed Quantity pursuant to a
Transaction, Seller shall pay Buyer, on the date payment would otherwise be due
to Seller, an amount for each MMBtu of such deficiency equal to the positive
difference, if any, obtained by subtracting the Contract Price from the Gas
Daily Price.
(b) Unless excused by Force Majeure or Seller's failure to perform, if Buyer
fails to receive all or part of the Confirmed Quantity pursuant to a
Transaction, Buyer shall pay Seller, on the date payment would otherwise be due
to Seller, an amount for each MMBtu of such deficiency equal to the positive
difference, if any, obtained by subtracting the Gas Daily Price from the
Contract Price.
(c) In addition to the remedies set forth in Section 9.7(a) and (b) above, the
non-performing Party shall also be responsible for Incremental Costs and
Balancing Penalties, if any; provided, Incremental Costs and Balancing Penalties
shall not be recovered twice.
9.8 (IS) Failure to Deliver/Receive. A Party may be excused from delivering or
receiving the Contract Quantity, in whole or in part, for any reason without
liability unless otherwise provided in the Transaction, provided notice is
provided to the other Party in time for the other Party to comply with
nomination deadlines of Transporter(s).
9.9 Alternate Reference Price. If any or all of the indices used to determine
the Reference Price are not available in the future for the determination of the
Reference Price, and if the publication reporting the Reference Price prior to
its unavailability has suggested an alternate index or methodology for
determining the Reference Price, then the Alternate Reference Price shall be
that suggested by such publication. If none is suggested, then the Parties
agree to promptly and in good faith negotiate an Alternate Reference Price.
If the Parties do not agree on a substitute methodology or index by the end of
the first month for which the Reference Price could not be determined, then each
Party shall in good faith prepare a list of up to five alternate published
reference postings or prices representative of spot prices for Gas delivered in
the same geographic area. Each list shall be set forth in that Party's priority
order with the highest priority index listed first. Each Party shall submit
its list to the other within ten (10) days after the end of the first month for
which the price could not be determined as set forth above. The first listed
index appearing in Aquila's list that also appears in Counterparty's list shall
constitute the Alternate Reference Price. If either Party fails to provide a
list of that Party's alternative published references within such ten-day
period, such Party's list shall not be considered, and the first listed index
appearing in the other Party's submitted list shall constitute the Alternate
Reference Price. From and after the date the indices used to determine the
Reference Price are no longer available ("Renegotiation Date"), until the
Alternate Reference Price is determined, the Reference Price shall be deemed
to be the average of the Reference Price(s) in effect during the twelve
(12) months preceding the month in which the Renegotiation Date occurred, which
price shall be effective until the effective date of the Alternate Reference
Price determined as set forth above. Upon determination of a new Alternate
Reference Price, the Reference Price accordingly will be adjusted retroactively
to the Renegotiation Date.
ARTICLE 10. TRANSPORTATION AND DELIVERY POINTS
10.1 Responsibility and Delivery Points. Seller is responsible for arranging
and paying for all transportation of Gas prior to the Delivery Point(s). Buyer
is responsible for arranging and paying for all transportation of Gas after the
Delivery Point(s). The Delivery Point(s) shall be as agreed by the Parties in
the applicable Transaction.
ARTICLE 11. QUALITY AND MEASUREMENT
11.1 Compliance with Quality Specifications. Gas delivered by Seller at the
Delivery Points shall comply with the Gas quality specifications required by
Buyer's Transporter(s) at the Delivery Point(s). Buyer's Transporter(s')
measurements at the Delivery Point(s) shall be considered definitive, as will
the heating value determined by the instruments used for such purposes by such
Transporter(s).
11.2 Analysis of Gas. Seller shall provide, when available and requested, an
analysis of the Gas delivered to Buyer which shall show the components of the
Gas (and the percentages thereof each component bears to the whole stream), the
Btu content of the Gas, and any information necessary to determine whether
Buyer's Transporter's standards have been met. Such analysis shall be at no
cost to Buyer.
ARTICLE 12. PROCESSING
12.1 Processing. As between the Parties to this Agreement, Seller shall have
the sole and exclusive right, but not the obligation, to Process the Gas to
remove any Hydrocarbons prior to making delivery at the Delivery Point(s). Any
Hydrocarbons removed by Seller shall be Seller's sole responsibility and any
Transportation Costs and plant thermal reduction shall be borne by Seller and
Seller shall indemnify, defend and hold Buyer harmless therefrom. If Seller
waives its right to Process the Gas prior to making delivery, then Buyer may so
Process and any Transportation Costs and plant thermal reduction shall be borne
by Buyer and Buyer shall indemnify, defend and hold Seller harmless therefrom.
Any waiver by Seller pursuant to this Section 12.1 shall be in writing, shall
be effective only for the period of time as stated in the waiver and shall be
irrevocable by Seller for the stated period. After accepting delivery of Gas,
Buyer shall have the same Processing rights and responsibilities that were
accorded to Seller prior to the Delivery Point(s).
ARTICLE 13. DEFAULTS AND REMEDIES
13.1 Events of Default. In the event either Party ("Defaulting Party") or any
Party guaranteeing its obligations hereunder ("Guarantor"):
(a) fails to make, when due, any payment to the other Party ("Non-Defaulting
Party") under this Agreement (which shall not include a delay in payment that is
cured within two (2) Business Days of a demand for corrective action); or
(b) fails to perform its obligations to the Non-Defaulting Party under this
Agreement (which shall not include any failure of performance that is cured
within ten (10) Business Days of a demand for corrective action); or
(c) fails to deliver any collateral or comply with or perform its obligations
under any security agreement or other credit support document, provided to the
other Party, including but not limited to any Events of Default or Termination
Events under the Credit Agreement between Aquila Energy Capital Corporation and
Xxxxxx Oil Company dated September 9, 1999 ("Related Agreement") (after giving
effect to any applicable notice or grace period); or
(d) defaults under any derivative transaction undertaken in connection with this
Agreement including but not limited to any Events of Default or Termination
Events of the ISDA Master Agreement between Aquila Risk Management Corporation
and Xxxxxx Oil Company dated September 1, 1999 ("Derivative Agreement") (after
giving effect to any applicable notice or grace period); or
(e) files a petition or otherwise commences, authorizes, or acquiesces in the
commencement of a proceeding or cause under any bankruptcy or similar law for
the protection of creditors or have such petition filed or proceeding commenced
against it; or
(f) otherwise becomes bankrupt or insolvent (however evidenced); or
(g) makes an assignment or any general arrangement for the benefit of creditors;
or
(h) is dissolved or has a resolution passed for its winding up or liquidation
(other than pursuant to a consolidation, acquisition, amalgamation or merger);
or
(i) is unable to pay its debts as they fall due; or
(j) transfers all or substantially all of its assets or merges into or
consolidates with any entity (i) where the creditworthiness of the resulting
entity is materially weaker than that of such party immediately before such
transfer, merger or consolidation or (ii) where the merging party's obligations
are not assumed by operation of law or written instrument; or
(k) is proved to have made a materially incorrect or misleading representation
or warranty under the Agreement; or
(l) fails to provide adequate security for or assurance of its ability to
perform its obligations under any Transaction within one (1) Business Day of a
reasonable request by the other Party;
then, upon the occurrence and continuance of any such event (each an "Event of
Default"), the Non-Defaulting Party shall have the right to withhold or suspend
its performance under all or any Transactions and establish a date (which date
shall be between three (3) and ten (10) Business Days after the Non-Defaulting
Party provides written notice thereof to the Defaulting Party and in any event,
no later than ten (10) Business Days after the discovery of the Event of
Default) ("Early Termination Date") (provided, however, in the case of an Event
of Default under clauses (e) through (i) above, an Early Termination Date shall
be deemed to have occurred immediately prior to such event and no prior notice
shall be required) upon which the Non-Defaulting Party may terminate and
liquidate any and all outstanding Transactions under this Agreement. Upon the
designation or occurrence of an Early Termination Date, the Parties' obligations
under the Transactions and this Agreement shall terminate, except that the
Parties shall be liable for the obligations contained in Sections 13.2, 13.3 and
18.3 below.
13.2 Net Settlement Amount. In the event of termination and liquidation
pursuant to Section 13.1, the Non-Defaulting Party shall compute the Net
Settlement Amount (as defined in this Section 13.2) calculated as set forth
below and shall notify the Defaulting Party of the Net Settlement Amount. For
each such Transaction, if the Contract Price for such Transaction exceeds the
market price per unit for comparable transactions as determined by the Non-
Defaulting Party in a commercially reasonable manner ("Market Price") on the
date of default, an amount equal to the difference between the two prices
multiplied by the quantity of undelivered Gas, which the Parties committed to
deliver or take under such Transaction, discounted to present value in a
commercially reasonable manner by the Non-Defaulting Party ("Transaction
Settlement Amount") shall be credited to the Seller. If the Market Price
exceeds the Contract Price, the Transaction Settlement Amount for such
Transaction shall be credited to the Buyer and calculated in the same manner.
The Non-Defaulting Party shall set off or aggregate, as appropriate, all
Transaction Settlement Amounts, as so discounted, and any or all other amounts
owing between the Parties under any Transaction hereunder or under any Related
Agreement or Derivative Agreement so that all such amounts are aggregated and/or
netted to a single liquidated amount payable by one Party to the other (the "Net
Settlement Amount"). The Non-Defaulting Party may include in its calculation of
the Net Settlement Amount any other damages, losses and expenses incurred by it
as a result of such close-out and liquidation, including without limitation any
damages, losses and expenses incurred in obtaining, liquidating or employing
commercially reasonable xxxxxx related to the Transactions that are being
liquidated, all as determined in good faith in a commercially reasonable manner
by the Non-Defaulting Party. Payment of the Net Settlement Amount shall be due
within five (5) Business Days of the Early Termination Date. The remedy under
this Section 13.2 is in addition to any other rights or remedies available to
the Non-Defaulting Party under this Agreement or under law. The Parties agree
that Transactions under this Article 13 constitute "forward contracts"
within the meaning of the United States Bankruptcy Code.
13.3 Other Events. In the event Buyer is regulated by a federal, state or local
regulatory body or authority, and such body or authority shall disallow all or
any portion of any costs incurred or yet to be incurred by Buyer under any
provision of this Agreement, such action shall not operate to excuse Buyer from
performance of any obligation nor shall such action give rise to any right of
Buyer to any refund or retroactive adjustment of the Contract Price provided in
any Transaction. Notwithstanding the foregoing, if a Party's activities
hereunder become subject to regulation of any kind whatsoever under any law
to a greater or different extent than that existing on the Effective Date (the
"Regulated Party") and such regulation either (i) renders this Agreement illegal
or unenforceable or (ii) materially adversely affects the business of the
Regulated Party, with respect to its financial position or otherwise, then in
the case of (i) above, either Party, and in the case of (ii) above, only the
Regulated Party, shall at such time have the right to establish an Early
Termination Date in the manner provided in Section 13.1 upon which any and all
outstanding Transactions under this Agreement will terminate and be
liquidated; provided, notwithstanding the rights of the Parties to establish an
Early Termination Date as above stated, the Regulated Party shall be treated
like a Defaulting Party and shall be liable for payment of the Net Settlement
Amount which shall be calculated by the other Party as provided in Section 13.2
as if the other Party were the Non-Defaulting Party.
13.4 Reservation of Rights. To the extent not prohibited by applicable law, in
the event of termination and liquidation pursuant to Section 13.1, the Non-
Defaulting Party shall have a general right of set-off with respect to all
amounts owed by each Party to the other Party (whether under this Agreement, or
a Related Agreement, Derivative Agreement or otherwise, and whether or not then
due and payable), provided that any amount not then due and payable, which is
included in such setoff, shall, if appropriate, be discounted to present value
in a commercially reasonable manner by the Non-Defaulting Party. Each Party
reserves to itself all other rights, counterclaims and other defenses which it
is or may be entitled to arising with respect to the other Party under this
Agreement or any contract or under law.
ARTICLE 14. TAXES
14.1 Taxes. The Contract Price shall include full reimbursement for, and
Seller is liable for and shall pay, or cause to be paid, or reimburse Buyer if
Buyer has paid, all Taxes applicable to a Transaction arising prior to the
Delivery Point, including any Taxes imposed or collected by a taxing authority
with jurisdiction over Seller. If Buyer is required to remit such Tax, the
amount shall be deducted from any sums due to Seller. Seller shall indemnify,
defend and hold harmless Buyer from any Claims for such Taxes. The Contract
Price does not include reimbursement for, and Buyer is liable for and shall
pay, cause to be paid, or reimburse Seller if Seller has paid, all Taxes
applicable to a Transaction arising at and from the Delivery Point, including
any Taxes imposed or collected by a taxing authority with jurisdiction over
Buyer. Buyer shall indemnify, defend and hold harmless Seller from any Claims
for such Taxes. Either Party, upon written request of the other, shall provide
a certificate of exemption or other reasonably satisfactory evidence of
exemption if either Party is exempt from Taxes, and shall use reasonable efforts
to obtain and cooperate with obtaining any exemption from or reduction of any
Tax. Each Party shall use reasonable efforts to administer this Agreement and
implement the provisions in accordance with the intent to minimize Taxes.
14.2 New Taxes. If a New Tax is imposed for which Buyer or Seller is
responsible, (i) if such New Tax can be passed by Buyer to another person or
entity, Buyer shall pay, cause to be paid or reimburse the Seller for such New
Tax; (ii) if (i) does not apply, the Party affected by the New Tax ("New Tax
Affected Party") may require the other Party to enter into good faith
negotiations to apportion liability for the New Tax equitably between the
Parties. If, after fifteen (15) Business Days the Parties are not able to
resolve the issue, the New Tax Affected Party may terminate such "New Tax
Affected Transaction," upon thirty days written notice. Unless otherwise
agreed the New Tax Affected Transaction shall be liquidated as though the New
Tax Affected Party has defaulted on the New Tax Affected Transaction without
taking into effect the impact of the New Tax.
ARTICLE 15. TITLE
15.1 Warranty. Seller warrants title to all Gas delivered by it, that it has
the right to sell and/or deliver such Gas to Buyer, and that at the Delivery
Point(s) such Gas shall be free and clear of all liens, encumbrances and claims
whatsoever. Seller shall defend, indemnify and hold Buyer harmless from any
adverse Claim, expense, cost, interest, penalty, fine, court cost, reasonable
attorney fees or other damage relating to any of the warranties expressed
herein.
15.2 Title Transfer. Title to, possession and risk of loss of all Gas shall
pass at the Delivery Point(s). Seller shall indemnify, release, defend and hold
Buyer, its partners, and its and their officers, directors, employees,
affiliates and assigns harmless from and against all suits, liabilities,
actions, debts, accounts, damages, costs, losses and expenses which attach or
occur prior to delivery, including Claims by any third party or parties for any
royalties, license fees, or charges applicable to such Gas or to the delivery
thereof. Buyer shall indemnify, release, defend and hold Seller, its partners,
and its and their officers, directors, employees, affiliates and assigns
harmless from and against all suits, liabilities, actions, debts, accounts,
damages, costs, losses and expenses which attach or occur upon or after
delivery, including Claims by any third party or parties for any royalties,
license fees or charges applicable to such Gas or to the delivery thereof.
15.3 Claims Against Title. If at any time any Claims are made relating to
Seller's ability to transfer good title to Buyer, Buyer may withhold payment,
without interest, of sums reasonably related to such Claim, until such Claim is
finally determined or until Seller furnishes Buyer a bond, in form and with
sureties acceptable to Buyer conditioned to hold Buyer harmless from any such
Claim(s).
ARTICLE 16. BILLING AND PAYMENT
16.1 Billing and Payment. On or before the tenth (10th) day following a month
in which Gas was delivered by Seller to Buyer, Seller shall deliver to Buyer an
invoice for the preceding month specifying the Delivery Point(s), showing the
total quantity of Gas delivered and the amount due. If an Actual Quantity that
is necessary to derive the invoice amount is not available by the contractual
billing date, Seller shall prepare the statement based on Seller's best estimate
of that quantity. The estimated quantity, if any, will then be corrected to the
Actual Quantity on the following month's invoice or as soon thereafter as the
necessary information is available. On or before the later of the tenth (10th)
day following receipt by Buyer of Seller's invoice or the first Business Day
following the twenty-fourth (24th) Day of the month, Buyer will pay to Seller
the undisputed amount of Seller's invoice. If Buyer disputes, in good faith,
any portion of Seller's invoice, Buyer shall notify Seller in writing of the
reasons therefor and the Parties shall negotiate to resolve such dispute. If it
is determined that any disputed amount is owing to Seller, then Buyer shall pay
such amount, plus interest at the rate specified in Section 16.2 from the date
the payment was originally due.
16.2 Interest. If Buyer fails to pay all of the amount of any invoice when
that amount becomes due, Buyer shall pay Seller a late charge on the unpaid
balance that shall accrue on each calendar day from the due date at a rate equal
to the then-effective monthly prime commercial lending rate per annum
announced by the Chase Manhattan Bank from time to time plus two percent (2%),
provided that for any period that such late charge exceeds any applicable
maximum rate permitted by law, the late charge shall equal said applicable
maximum rate. The late charge provided for by this Section 16.2 shall be
compounded monthly. If either principal or late charges are due, any payments
thereafter received shall first be applied to the late charges due, then the
previously outstanding principal due and lastly, to the most current principal
due. Seller shall have the right to suspend provision of Gas hereunder without
notice if any xxxx remains unpaid for two (2) Business Days after the due date
thereof. Suspension of provision of Gas under this Section 16.2 shall be in
addition to any and all other remedies available in this Agreement.
16.3 Inspection of Records. Each Party will have the right at reasonable hours
and upon reasonable notice to examine the books, records and charts of the other
Party to the extent reasonably necessary to verify the accuracy of any invoice,
payment, measurement, calculation, or determination made pursuant to the
provisions of this Agreement. If any such examination reveals, or if either
Party discovers, any error or inaccuracy in its own or the other Party's
invoice, payment, calculation, measurement or determination, then proper
adjustment and correction thereof will be made as promptly as practicable
thereafter; provided, however, that no adjustments or corrections will be made
with respect to errors or inaccuracies unless reasonably specific written notice
of such error or inaccuracy is given to the other Party within two (2) years of
the date of such erroneous or inaccurate invoice, payment, calculation,
measurement or determination; provided further that no interest shall accrue
on the payment of any such errors or inaccuracies from the date of the original
error to the date the corrected amount is due.
16.4 Payment Netting. If Buyer and Seller are each required to pay an amount to
the other under this Agreement in the same month, such amounts with respect to
each Party may be aggregated and the Parties may discharge their obligations to
pay through netting, in which case the Party, if any, owing the greater
aggregate amount shall pay to the other Party the difference between the amounts
owed. If either Party elects to net amounts due, then such Party must notify
the other Party of such election at least three (3) days prior to effecting the
netting.
ARTICLE 17. REPRESENTATIONS AND WARRANTIES
17.1 Necessary Authorizations. Each Party represents that it has all necessary
corporate, legal and other authority, including Regulatory Approval, to enter
into this Agreement and any Transaction made in accordance with the terms of
this Agreement, and to perform each and every duty and obligation imposed
herein, and that this Agreement, and any Transaction made in accordance with the
terms of this Agreement, when executed by the duly authorized representatives of
each Party, represents a valid, binding and enforceable legal obligation of each
Party. Neither Party to this Agreement or any Transaction entered into
hereunder shall be required to investigate the authority of the person executing
this Agreement or any Transaction entered into hereunder as a condition to
enforcing the terms of this Agreement or any Transaction. No future assignment
will in any way operate to enlarge, alter or change any obligation of the non-
assigning Party under this Agreement.
ARTICLE 18. LIABILITY AND INDEMNIFICATION
18.1 Limitation of Remedies. For breach of any provision of this Agreement for
which an express remedy or measure of damages is provided herein, the breaching
Party's liability shall be limited as set forth in such provision, as the sole
and exclusive remedy, and all other remedies or damages at law or in equity are
waived. If no remedy or measure of damages is expressly provided, the breaching
Party's liability shall be limited to direct, actual damages only, as the sole
and exclusive remedy, and all other remedies or damages are waived. Unless
expressly provided in this Agreement, neither Party shall be liable to the other
for consequential, incidental, punitive or indirect damages, or lost profits, in
tort, contract or otherwise. To the extent any payment required to be made
pursuant to this Agreement constitutes liquidated damages, the Parties
acknowledge that the damages are difficult or impossible to determine and that
such payment constitutes a reasonable estimate of the amount of damages.
18.2 Limitation of Liability. Neither Party shall be liable to the other Party
for losses or damages which result from (i) an event of Force Majeure preventing
performance under this Agreement; or (ii) Claims made against such other Party
by third parties due to the performance or non-performance of this Agreement,
whether such Claims arise in contract, tort or otherwise; or (iii) the death of
or bodily injury to such other Party's employees, contractors or agents or
damage to such other Party's property due to the performance or non-performance
of this Agreement.
18.3 Indemnification. Each Party shall indemnify and hold the other Party
and its directors, officers, agents, employees and contractors harmless from and
against any and all Claims, damages, costs (including attorneys' fees), fines,
penalties, liabilities, actions or proceedings in tort, contract or otherwise
which the indemnified Party may be required to pay to, or which are asserted
or brought by, the indemnifying Party's employees, contractors or agents or
third parties providing services to or receiving services from the indemnifying
Party, arising from or claimed to have arisen from the performance or non-
performance of this Agreement by the indemnifying Party.
ARTICLE 19. ASSIGNMENTS
19.1 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of, and may be performed by, the successors and assigns of the Parties;
provided, however, neither Party may assign, pledge or otherwise transfer its
rights under this Agreement to any other entity without the written consent of
the other Party, which consent shall not be unreasonably withheld except that
either Party may assign its rights under this Agreement to an Affiliate.
Furthermore, no assignment, pledge, or other transfer of this Agreement by
either Party shall operate to release the assignor, pledgor, or transferor from
any of its obligations under this Agreement unless: (i) the other Party consents
in writing to such assignment, pledge, or transfer and releases, in writing, the
assignor, pledgor, or transferor from any of its obligations hereunder; (ii) the
assignment, pledge, or other transfer is to an Affiliate of the assignor,
pledgor, or transferor and the assignee, pledgee, or transferee assumes, in
writing, all of the obligations of the assignor, pledgor, or transferor under
this Agreement, provided that such assignee, pledgee, or transferee demonstrates
to the satisfaction of the other Party financial capacity at least equal to that
of the assignor, pledgor, or transferor; or (iii) such transfer is incident to a
merger or consolidation with, or transfer of all, or substantially all, of the
assets of the transferor to another person, business, joint venture, trust,
corporation, company, governmental body or entity which shall as a part of such
succession, assume all of the obligations of the assignor, pledgor, or
transferor under this Agreement. Either Party may assign its rights to receive
payment under this Agreement without having to first obtain the consent of the
other Party.
ARTICLE 20. SERVICES
20.1 Services. If indicated on a rider to any Confirmation Letter or to this
Agreement, Aquila may provide certain services incidental to the underlying
sale/purchase of Gas on behalf of Counterparty. Such services may include those
related to transportation and gathering of the Gas, disbursements of payment to
interest owners, tax filing and payment, storage, resale services and imbalance
trading. Provisions of such services may include designation of Aquila as agent
to perform Nominations, balancing, payment, storage, resale services and other
operational functions pursuant to any gathering, transportation or storage
agreements, or any of them, of Counterparty. If so elected, an agency
agreement or other appropriate document shall be attached to and made a part
of the Confirmation Letter. In the event any of the provisions of the agency
agreement or such other document are inconsistent with or in addition to the
provisions of a Transaction, the provisions of the agency agreement shall
prevail.
20.2 Obligations of Counterparty. Aquila shall be provided with all necessary
information to enable it to act on behalf of Counterparty in performing any
services as agreed by the Parties. Necessary information may include but not
be limited to the following: accurate and timely information relating to Gas
quantities; timely notification of any changes to expected deliveries of Gas;
notification of any operational changes of which Counterparty is made aware
which would affect the delivery of Gas hereunder; any information necessary to
remit payment to the gatherer and transporting pipeline; and any information
necessary to remit tax payments, fees or assessments to a taxing authority or
royalty payments to royalty interest owners.
ARTICLE 21. MISCELLANEOUS
21.1 Confidentiality. Neither Party shall disclose the terms of any
Transaction to any third party (other than such Party's employees, lenders,
counsel, accountants or other advisors) except in order to comply with any
applicable law, order, regulatory or exchange rule. Each Party shall notify the
other Party of any proceeding of which it is aware that may result in disclosure
and shall use reasonable efforts to prevent or limit such disclosure.
21.2 Entire Agreement. This Agreement, the Credit Agreement dated September 9,
1999 between Aquila Energy Capital Corporation and Xxxxxx Oil Company, the ISDA
Master Agreement dated September 1, 1999 between Aquila Risk Management
Corporation and Xxxxxx Oil Company, all Confirmation Letters, the Exhibits
hereto and all Transactions, constitute the entire agreement between the Parties
relating to the subject matter hereof and supersedes any other agreements,
written or oral, between the Parties concerning such subject matter.
21.3 No Waiver. No waiver by either Seller or Buyer of any default by the
other under this Agreement shall operate as a waiver of any future default,
whether of a like or different character or nature. Either Party's payment of
money, waiver of any breach, or failure to enforce any of the terms, covenants,
conditions or other provisions of this Agreement at any time shall not in any
way affect, limit, modify or waive that Party's right thereafter to enforce or
compel strict compliance with every term, covenant, condition or other provision
hereof, any course of dealing or custom of the trade notwithstanding.
21.4 Amendments. No amendment of the terms and provisions of this Agreement
shall be or become effective except by written amendment executed by the
Parties.
21.5 Severability. Should any provision of this Agreement for any reason be
declared invalid or unenforceable by final and applicable 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 effect as
if this Agreement had been executed without the invalid portion. In the event
any provision of this Agreement is declared invalid, the Parties shall promptly
renegotiate to restore this Agreement as near as possible to its original intent
and effect.
21.6 Survival. The provisions of this Agreement shall survive the termination
of this Agreement for so long as is necessary to complete all business
transactions, payment obligations or indemnification obligations outstanding
between the Parties related to this Agreement. Confidentiality provisions shall
survive the termination of this Agreement for a period of one (1) year after the
date of termination.
21.7 Counterparts. This Agreement may be executed in several counterparts, and
all such counterparts shall constitute one Agreement binding on both Parties
hereto and shall have the same force and effect as an original instrument.
21.8 Construction. The language used in this Agreement is the product of both
Parties' efforts and each Party hereby irrevocably waives the benefit of any
rule of contract construction which disfavors the drafter of a contract or the
drafter of specific language in a contract.
21.9 Imaged Agreement. Any original executed Agreement, Confirmation Letter or
other related document may be photocopied and stored on computer tapes and disks
(the "Imaged Agreement"). The Imaged Agreement, if introduced as evidence on
paper, the Confirmation Letter, if introduced as evidence in automated facsimile
form, the Transaction Tape, if introduced as evidence in its original form and
as transcribed onto paper, and all computer records of the foregoing, if
introduced as evidence in printed format, in any judicial, arbitration,
mediation or administrative proceedings, will be admissible as between the
Parties to the same extent and under the same conditions as other business
records originated and maintained in documentary form. Neither Party shall
object to the admissibility of the Transaction Tape, the Confirmation Letter or
the Imaged Agreement (or photocopies of the transcription of the Transaction
Tape, the Confirmation Letter or the Imaged Agreement) on the basis
that such were not originated or maintained in documentary form under either
the hearsay rule, the best evidence rule or other rule of evidence.
General Terms and Conditions
