Message-ID: <14462742.1075842419965.JavaMail.evans@thyme> Date: Wed, 30 May 2001 08:36:00 -0700 (PDT) From: debra.perlingiere@enron.com To: majed.nachawati@enron.com Subject: FW: ADDENDUM TO GISB as of 10-20-00.doc Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Debra Perlingiere X-To: Majed Nachawati X-cc: X-bcc: X-Folder: \Debra_Perlingiere_Dec2000_June2001_2\Notes Folders\Sent X-Origin: PERLINGIERE-D X-FileName: dperlin.nsf Debra Perlingiere Enron North America Corp. Legal Department 1400 Smith Street, EB 3885 Houston, Texas 77002 dperlin@enron.com Phone 713-853-7658 Fax 713-646-3490 ----- Forwarded by Debra Perlingiere/HOU/ECT on 05/30/2001 03:36 PM ----- =09Judy Thorne/ENRON@enronXgate =0905/30/2001 09:19 AM =09=09=20 =09=09 To: Debra Perlingiere/HOU/ECT@ECT =09=09 cc:=20 =09=09 Subject: FW: ADDENDUM TO GISB as of 10-20-00.doc Debra, Please review the following Addendum from El Paso and work with Harry Grego= ry=20 to come to agreeable terms. His phone number is 713-420-3821. Thanks, Judy -----Original Message----- From: "Gregory, Harry" @ENRON=20 [mailto:IMCEANOTES-+22Gregory+2C+20Harry+22+20+3CHarry+2EGregory+40ElPaso+2= Eco m+3E+40ENRON@ENRON.com]=20 Sent: Wednesday, May 30, 2001 9:14 AM To: 'judy_thorne@enron.com' Subject: ADDENDUM TO GISB as of 10-20-00.doc ADDENDUM (Special Provisions =01) Exhibit =01&B=018) For the Base Contract for Short-Term Sale and Purchase of Natural Gas between El Paso Merchant Energy, L.P. and ___________________________________ Dated ______________ =20 A. In Section 1.2 insert =01&a recorded=018 before the word telephone on t= he=20 second line. Insert the word =01&recorded=018 before the word telephonic o= n the=20 fifth line. Add the following sections as 1.4 and 1.5: =20 1.4 Company shall at its expense, maintain equipment necessary t= o=20 regularly record Transactions on Transaction Tapes and retain Transaction= =20 Tapes in such manner as to protect its business records from improper acces= s;=20 provided Company shall not be liable for any malfunction of equipment or th= e=20 operation thereof in respect of any Transaction WITHOUT REGARD TO THE CAUSE= =20 OR CAUSES RELATED THERETO, INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE OF= =20 ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE= =20 OR PASSIVE. No Transaction shall be invalidated should a malfunction occur= =20 in equipment regularly utilized for recording Transactions or retaining=20 Transaction Tapes or the operation thereof, and in such event, the=20 Transaction shall be evidenced by the written and computer records of the= =20 parties concerning the Transaction made contemporaneously with the telephon= e=20 conversation. =20 1.5 The parties agree not to contest or assert a defense to the=20 validity or enforceability of telephonic Transactions entered into in=20 accordance with this Contract under laws relating to (a) whether certain=20 agreements are to be in writing or signed by the party to be thereby bound = or=20 (b) the authority of any employee of the party if the employee name is stat= ed=20 in the Transaction Tape. =20 B. Replace Section 2.25 as follows: =20 2.25 =01&Transaction Confirmation=018 means a written verificati= on of a=20 Transaction which either Buyer or Seller shall, from time to time pursuant = to=20 the terms of this Contract, submit the Daily Contract Quantity, Delivery=20 Point(s), Price, Contract Period, and Receipt/Delivery Obligation. Company= =20 will only transmit Transaction Confirmations for Transactions that have a= =20 term exceeding one calendar Month. =20 Add the following at the end of Section 2: =20 2.27 =01&Buyer=018 shall mean the party that agrees to purchase Gas as= =20 evidenced by the Transaction Confirmation. =20 2.28 =01&Company=018 shall mean El Paso Merchant Energy, L.P.=20 (=01&Company=018). =20 2.29 =01&Contract Period=018 means the term of any particular=20 Transaction agreed to by the parties as specified in the Transaction=20 Confirmation. =20 2.30 =01&Counterparty=018 shall mean ___________________________= ______. =20 2.31 =01&Credit Support Document=018 shall mean, as to a party (=01&the= First=20 Party=018), a guaranty, hypothecation agreement, margin or security agreeme= nt or=20 document, or any other document containing an obligation of a third party= =20 (=01&Credit Support Provider=018) or of the First Party in favor of the oth= er party=20 supporting any obligations of the first party under this Contract. =20 2.32 =01&Eligible Collateral=018 shall mean (i) cash or (ii) a L= etter of=20 Credit from a financial institution acceptable by the (=01&Beneficiary Part= y=018). =20 2.33 =01&Futures Contract=018 shall mean the standardized contra= ct for=20 the purchase or sale of Gas that is traded for future delivery under the=20 applicable trading board=01,s regulations. =20 2.34 =01&Guarantor=018 means, as to Company, El Paso Energy Corp= oration,=20 and as to Counterparty, _____________________________ [if applicable]. =20 2.35 =01&Letter of Credit=018 means one or more irrevocable, transferab= le=20 standby letters of credit from a major U.S. commercial bank or a foreign ba= nk=20 with a U.S. branch office, with such bank having a credit rating of at leas= t=20 =01&A-=018 from S&P or =01&A3=018 from Moody=01,s. =20 2.26 =01&Material Adverse Change=018 shall mean=20 ________________________________[if applicable]. =20 2.37 =01&NYMEX=018 shall mean the New York Mercantile Exchange. =20 2.38 =01&Termination Payment=018 shall mean ____________________= ____[if=20 applicable]. =20 2.39 =01&Price=018 shall mean the amount or pricing mechanism agreed to= by the=20 parties as specified in the Transaction Confirmation. =20 2.40 =01&Primary in-path=018 shall mean Firm Transportation serv= ice=20 obtained directly from the respective Transporter. This term specifically= =20 excludes=01&Secondary=018 and/or =01&Released=018 firm transportation as th= ose terms are=20 commonly used in the natural gas industry. =20 2.41 Receipt/Delivery Obligation=018 shall mean one of EFP, Firm= or=20 Swing as set forth in the Transaction Confirmation for a particular=20 Transaction. =20 2.42 =01&Rounding Amount=018 shall be___________________ [if app= licable]. =20 2.43 =01&Seller=018 shall mean the party that agrees to sell Gas as evi= denced=20 by the Transaction Confirmation. =20 2.44 =01&Tax=018 shall mean any tax levied, assessed or claimed to be d= ue by=20 any Federal, State, County, Tribal, or Municipal Government or any other=20 governmental agency having jurisdiction to do so. =20 2.45 =01&Termination Payment Threshold=018 shall mean=20 ____________________________. [if applicable] =20 2.46 =01&Transaction=018 means a particular, specifically agreed= -to=20 purchase or sale of Gas for delivery or receipt to be performed under this= =20 Contract, as evidenced by a Transaction Confirmation or by a recorded oral= =20 telephone conversation where an offer was made by a party and accepted by t= he=20 other party. =20 2.47 =01&Transaction Tape=018 shall be defined as a cassette tap= e(s) of=20 telephone recordings maintained by Company and/or the Counterparty for=20 verification and/or evidentiary purposes. =20 C. The following paragraphs will be added to Section 5:=20 =20 5.2 All gas delivered by Seller shall meet the quality and heat=20 specification of the pipeline system and/or facilities which shall receive= =20 the Gas at the Delivery Point(s) set forth in the Transaction Confirmation.= =20 The unit of quantity measurements for purposes of this contract shall be on= e=20 MMBtu Dry. =20 5.3 BTU and volume measurements shall be made at the pressure and=20 temperature basis of the measuring pipeline in accordance with the provisio= ns=20 of such pipeline=01,s then effective FERC Gas Tariff, or in event such pipe= line=20 is not subject to FERC regulation, the applicable Gas transportation=20 regulations or contract provisions of such pipeline. =20 D. Add the following language after the first sentence of Section 6,=20 designated as Buyer Pays At and After Delivery Point: =20 All such Taxes shall be paid by Seller directly to the taxing authority=20 unless Buyer is required by law to collect and remit such Taxes, in which= =20 event Buyer shall withhold from payments to Seller an amount required to be= =20 collected and remitted by Buyer. =20 Add the following language to the end of Section 6 as a new paragraph= : =20 =20 In the event a national energy, BTU, consumption, or use tax shall be=20 imposed, both Buyer and Seller shall work to reasonably apportion said Tax,= =20 taking into account the ability of either party to pass through all or a pa= rt=20 of such tax provided, however, that no Tax whether existing or future shall= =20 render either party economically incapable of continuing its performance=20 hereunder. =20 E. Replace the first sentence of Section 7.1 to read as follows: =20 On or before the 10th Day of the following Month,Seller sha= ll=20 invoice Buyer for Gas delivered and received in the preceding Month and for= =20 any other applicable charges, providing documentation acceptable in industr= y=20 practice to support the amount charged. Add as Section 7.5: =20 7.5 Either party may withhold payments due to its election to exercis= e=20 its right to offset an equivalent amount due such party under any agreement= =20 between the parties negotiated and finalized for the sole purpose of the sa= le=20 and/or purchase of natural gas so long as the payment withheld is due to a= =20 netting of current production Month payments which are due on the same=20 calendar Day, in which case the party owing the greater aggregate amount=20 shall pay to the other party the difference in the amounts owed. Upon eith= er=20 party=01,s request, Buyer and/or Seller shall provide support documentation= in=20 order to determine the final settlement amount due for each production=20 Month. Each party shall exercise reasonable efforts to provide support=20 documentation that is inclusive of volume and price [by location] data for= =20 the applicable production Month. =20 F. Add to the end of Section 8.2:=20 =20 In the event of any claim or litigation, at any time, concerning Seller=01,= s=20 title to the leases, wells, Gas produced or liquid hydrocarbons recovered= =20 from the Gas sold here under or the proceed from the sale thereof, Buyer=20 shall be entitled to suspend payments to Seller until such claims or=20 litigation of title is resolved to Buyer=01,s satisfaction. =20 G. Add the following language to the end of Section 9.1: =20 =20 Notices of interruption to Firm obligations may be provided verbally,=20 effective immediately and, upon request, confirmed in writing. =20 H. Delete Section 10 in its entirety and replace with the following: =20 10.1 Events of Default. In the event (each a =01&Default=018) either p= arty=20 (the =01&Defaulting Party=018) =20 (i)enters into Bankruptcy;=20 =20 (ii)has a liquidator, administrator, receiver, trustee, conservator or=20 similar official appointed with respect to it or any substantial portion of= =20 its property or assets; =20 (iii)fails to make, when due, any payment required pursuant to this Contrac= t=20 if such failure is not remedied within three (3) Business Days after writte= n=20 notice of such failure is given to the Defaulting Party by the other party= =20 (=01&Non-Defaulting Party=018) and provided the payment is not the subject = of a=20 good faith dispute;=20 =20 (iv)fails to provide adequate assurance of its ability to perform all of it= s=20 outstanding material obligations to the Non-Defaulting Party under the=20 Contract or otherwise within a period not to exceed forty-eight (48) hours= =20 (but at least one (1) Business Day) of a demand therefor when the=20 Non-Defaulting Party has reasonable grounds for insecurity;=20 =20 (v) suffers the occurrence of a Material Adverse Change; provided,= =20 such Material Adverse Change shall not be considered an Event of Default if= =20 the Defaulting Party establishes and maintains for so long as the Material= =20 Adverse Change is continuing, Eligible Collateral to the Non-Defaulting Par= ty=20 in form and amount acceptable to the Non-Defaulting Party; =20 =20 (vi) or the Guarantor of the Defaulting Party fails to perform any=20 covenant set forth in the Guaranty Agreement it delivered in respect of thi= s=20 Contract; or if any representation or warranty made by such Guarantor in sa= id=20 Guaranty Agreement shall prove to have been false or misleading in any=20 material respect when made or when deemed to be repeated; or if the Guarant= y=20 Agreement expires or is terminated or in any way ceases to guarantee the=20 obligations of the Defaulting Party under this Contract; or if such Guarant= or=20 enters into Bankruptcy; =20 (vii) fails to establish, maintain, extend or increase Eligible=20 Collateral when required pursuant to this Contract; then the Non-Defaulting= =20 Party shall be entitled to exercise the remedies as set forth in this Secti= on=20 10.=20 =20 In no event shall amounts actually recovered by a Non-Defaulting Party unde= r=20 one subsection of this Section 10 be recovered under another subsection. =20 10.2 Liquidation. Notwithstanding and in addition to any other= =20 provisions of the Contract, and except as provided below, in the Event of= =20 Default, the Non-Defaulting Party shall have the right, upon at least five= =20 (5) Business Days prior written notice, to liquidate and terminate any or a= ll=20 Transactions then outstanding between the parties (except to the extent tha= t=20 in the good faith opinion of the Non-Defaulting Party certain of such=20 Transactions may not be closed out and liquidated under applicable law) at= =20 any time and from time to time, and shall calculate, in a commercially=20 reasonable manner, a Settlement Amount for each Firm Transaction(s) as of t= he=20 time of its termination or as soon thereafter as is reasonably practicable= =20 and shall net such Settlement Amount(s) in the manner provided for in Secti= on=20 10.2.2. This remedy of liquidation and termination shall not be available= =20 when a party hereto fails to deliver or receive Gas due under a Firm=20 Transaction, the exclusive remedy for which is set forth in Section 3. =20 10.2.1=01&Settlement Amount(s)=018 shall mean, with respect to a Firm Trans= action=20 and the Non-Defaulting Party, the losses and costs (or gains), expressed in= =20 U.S. Dollars, which the Non-Defaulting Party incurs as a result of the=20 liquidation, including, but not limited to, losses and costs (or gains) bas= ed=20 upon the then current replacement value of such Firm Transaction together= =20 with, at the Non-Defaulting Party=01,s option, but without duplication, all= =20 losses and costs which the Non-Defaulting Party incurs as a result of=20 maintaining, terminating, obtaining or re-establishing any hedge or related= =20 trading positions. The Settlement Amount shall be due to or from the=20 Non-Defaulting Party as appropriate. =20 10.2.2The Non-Defaulting Party shall set off (i) all such Settlement Amount= s=20 that are due to the Defaulting Party, plus (at the Non-Defaulting Party=01,= s=20 election) any or all other amounts due to the Defaulting Party under the=20 Contract against (ii) all such Settlement Amounts that are due to the=20 Non-Defaulting Party, plus (at the Non-Defaulting Party=01,s election) any = or=20 all other amounts due to the Non-Defaulting Party under the Contract, so th= at=20 all such amounts shall be netted to a single liquidated amount payable by o= ne=20 party to the other. A party with a payment obligation shall pay such amoun= t=20 to the other party within one (1) Business Day of such netting. =20 10.2.3 If an event of Default occurs, notwithstanding any contrary provisio= n=20 of this Section 10.2, where a Default specified in Section 10.1(i) or (ii) = is=20 governed by a system of laws which does not permit the liquidation of=20 Transactions to take place on or after the occurrence of the relevant Defau= lt=20 in accordance with the terms of this Section 10.2, the liquidation of all= =20 outstanding Transactions shall automatically and without any notification= =20 requirements take place at a time immediately preceding the occurrence of= =20 such Default. =20 10.3 Set Off of Accounts. If a Default occurs, as an alternative to= =20 its rights under Section 10.2 and without prejudice to exercise of its righ= ts=20 under Section 10.2 at any time, the Non-Defaulting Party may from time to= =20 time set off any or all amounts which the Defaulting Party owes to the=20 Non-Defaulting Party (whether under this Contract or otherwise and whether = or=20 not then due) against any or all amounts which it owes to the Defaulting=20 Party (whether under this Contract or under any other agreements between th= e=20 parties and whether or not then due).=20 =20 10.4 Collateral Requirement/Termination Payment Threshold. If a= t=20 any time and from time to time during the term of this Contract (and=20 notwithstanding whether an Event of Default has occurred) the Settlement=20 Amount that would be owed to a party in respect of all Transactions then=20 outstanding should exceed the Posting Party's Termination Payment Threshold= ,=20 such party (=01&Beneficiary Party=018), on any Business Day, may request th= e other=20 party (=01&Posting Party=018) to deliver Eligible Collateral in an amount a= t least=20 equal to the Settlement Amount in excess of the Termination Payment Thresho= ld=20 (rounding upwards for any fractional amount in increments equal to the=20 Rounding Amount). Eligible Collateral must be delivered within two (2)=20 Business Days of the date of such notice provided that notice be given befo= re=20 12:00 Noon Central Time. On any Business Day (but no more frequently than= =20 weekly with respect to Letters of Credit and daily with respect to cash), t= he=20 Posting Party, at its sole cost, may request that such Eligible Collateral = be=20 reduced correspondingly to the amount of such excess Settlement Amount=20 (rounding downward for any fractional amount in increments equal to the=20 Rounding Amount). =20 =20 10.5 Security. In order to secure all payment obligations of=20 Counterparty to Company hereunder, Counterparty shall cause its Guarantor t= o=20 execute and deliver to Company the Guaranty Agreement substantially in the= =20 form attached as EXHIBIT =01&C=018. In order to secure all payment obligat= ions of=20 Company to Counterparty hereunder, El Paso Energy Corporation shall execute= =20 and deliver to Counterparty the Guaranty Agreement substantially in the for= m=20 attached as EXHIBIT =01&C=018. =20 I. Replace Section 11.3 with the following: =20 11.3 The term Force Majeure as used herein specifically excludes the=20 following occurrences or events: (i) the loss, interruption, or curtailmen= t=20 of interruptible transportation on any Transporter necessary to make or=20 accept delivery of Gas hereunder, unless and to the extent the same event= =20 also curtails primary, in-path, firm transportation at the same point; (ii)= =20 loss of markets or either parties=01, inability to economically use or rese= ll=20 Gas purchased under this Contract; (iii) the depletion of Seller's reserves= ;=20 (iv) loss of Seller=01,s supplies unless such loss is occasioned by or lack= of=20 pressure or failure of specific, individual wells or appurtenant facilities= =20 in the absence of a Force Majeure event broadly affecting other wells or=20 facilities in the entire geographic area or; (v) economic hardship. This= =20 Section 11.3 is only applicable to Firm and EFP Transactions. =20 Add as Section 11.6: =20 11.6 This Section shall apply only to EFP Transactions. Force Majeure= =20 shall also include the inability to transact futures trading for any reason= =20 beyond the reasonable control of Buyer, including without limitation closin= g=20 of the NYMEX or applicable futures trading board, any refusal by the NYMEX = or=20 applicable futures trading board to allow trading during normal trading=20 hours; failure of telecommunications lines or of computer or other equipmen= t=20 utilized in trading; and other such causes. =20 Add as Section 11.7: =20 11.7 This Article 11 shall not apply to any Swing Transaction except fo= r=20 penalties as described in 11.1. =20 J. The following paragraph replaces Section 12:=20 =20 The term of this Contract shall be month-to-month until=20 terminated on thirty (30) days advance written notice by either party;=20 provided, however, that the provisions hereof shall survive termination of= =20 this Contract and continue to apply to any Transactions entered into betwee= n=20 Counterparty and Company prior to the date of termination of this Contract= =20 until such time as any and all such Transactions are completed or=20 terminated. Notwithstanding the foregoing, the representations, warranties= ,=20 and indemnities set forth in this Contract will survive termination of this= =20 Contract. =20 K. The following paragraphs will be added to Section 13: =20 13.9 Any controversy or claim arising out of or relating to this Contra= ct=20 or the breach thereof shall be settled by binding arbitration by three (3)= =20 arbitrators in Houston, Texas, in accordance with the American Arbitration= =20 Association Commercial Arbitration rules. Judgment upon the award rendered= =20 by the arbitrators may be entered in any court having jurisdiction thereof.= =20 The prevailing party shall be entitled to its reasonable attorneys=01, fees= . =20 Any monetary award shall accrue interest from the date of the breach to the= =20 date of any judgment entered on the award at the prime commercial rate=20 charged on the date of the breach by CitiBank, N.A. New York, New York, plu= s=20 two (2) percent or at the maximum legal rate, whichever is less. If a part= y=20 files a complaint in any court with respect to any matter subject to=20 arbitration hereunder, the defendant in such court action shall be entitled= =20 to recover its reasonable attorneys=01, fees in connection with the court= =20 action. This arbitration provision shall survive termination of this=20 Contract. =20 13.10 SELLER AND BUYER CERTIFY THAT THEY ARE NOT =01&CONSUMERS= =018=20 WITHIN THE MEANING OF THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTI= ON=20 ACT, SUBCHAPTER E OF CHAPTER 17, SECTIONS 17.41 ET SEQ., AMENDED (THE=20 =01&DTPA=018). THE PARTIES COVENANT, FOR THEMSELVES DTPA IS APPLICABLE, (A= ) THE=20 PARTIES ARE =01&BUSINESS CONSUMERS=018 THEREUNDER, (B) EACH PARTY HEREBY WA= IVES AND=20 RELEASES ALL OF ITS RIGHTS AND REMEDIES THEREUNDER (OTHER THAN SECTION=20 17.5555, TEXAS BUSINESS AND COMMERCE CODE) AS APPLICABLE TO THE OTHER PARTY= =20 AND ITS SUCCESSORS AND ASSIGNS, AND (C) EACH PARTY SHALL DEFEND AND INDEMNI= FY=20 THE OTHER FROM AND AGAINST ANY AND ALL OF THEIR AFFILIATES BASED IN WHOLE O= R=20 IN PART ON THE DTPA, ARISING OUT OF OR IN CONNECTION WITH THE TRANSACTION= =20 CONFIRMATION(S) SET FORTH IN THIS CONTRACT. =20 13.11 DISCLAIMER OF WARRANTIES. THERE ARE NO WARRANTIES WHICH= =20 EXTEND BEYOND EXPRESS WARRANTY OF TITLE SET FORTH HEREIN. IN PARTICULAR,= =20 THERE ARE NO OTHER EXPRESS WARRANTIES AND NO IMPLIED WARRANTIES, INCLUDING= =20 ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. =20 13.12 The terms of this Contract and any Transaction Confirmation(s)= =20 thereof shall not be disclosed to any person or party except when the=20 disclosure is (i) required by law; (ii) requested by Buyer=01,s or Seller's= =20 independent public accountants; (iii) required pursuant to a loan Contract;= =20 (iv) required to be disclosed in connection with the prosecution or defense= =20 of any litigation; or (v) is otherwise agreed in writing to be disclosed. =20 13.13 UCC - Except as otherwise provided for herein, the provisions of th= e=20 Uniform Commercial Code (=01&UCC=018) of the state whose laws shall govern = this=20 Contract shall be deemed to apply to all Transactions. EXCEPT AS EXPRESSLY= =20 SET FORTH HEREIN, SELLER EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR=20 WARRANTY REGARDING THE GAS IT SELLS TO BUYER HEREUNDER, WRITTEN OR ORAL,=20 EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR=20 WARRANTY WITH RESPECT TO CONFORMITY TO MODELS OR SAMPLES, MERCHANTABILITY, = OR=20 FITNESS FOR A PARTICULAR PURPOSE.. =20 13.14 NOTWITHSTANDING ANY OTHER PROVISIONS HEREIN, THE PARTIES= =20 HERETO WAIVE ANY AND ALL RIGHTS, CLAIMS OR CAUSES OF ACTION ARISING UNDER= =20 THIS AGREEMENT FOR INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR FOR LOS= T=20 PROFITS. THIS PROVISION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT. =20 EXHIBIT =01&B=018 GUARANTY =20 This GUARANTY is made by El Paso Energy Corporation (hereinafter referred t= o=20 as the "Guarantor") having principal offices at 1001 Louisiana, Houston,=20 Texas 77002. Guarantor enters into this Guaranty in consideration of its= =20 wholly owned subsidiary, El Paso Merchant Energy, L.P., (the "Buyer"),=20 entering into one or more contracts for the purchase or sale of natural gas= =20 (the =01&Contracts=018) from (the "Seller"). Pursuant to the ter= ms of=20 the Contracts, the Guarantor hereby unconditionally guarantees prompt payme= nt=20 to the Seller of such sums up to an aggregate limit of $ U. S.=20 Dollars that now are or may hereafter become due and payable to Seller,=20 including interest and expenses of all collection and reasonable counsel's= =20 fees incurred by Seller by reason of the default of Buyer. =20 This Guaranty shall remain in full force and effect until the earlier of: 1= )=20 the termination of the Contracts, 2) , or = 3)=20 thirty (30) days after Seller=01,s receipt of written notice of revocation = of=20 this Guaranty from Guarantor. Termination of this guaranty shall not=20 eliminate Guarantor's liability occurring under the Contracts entered into= =20 prior to such termination, including any subsequent interest or late charge= s;=20 provided however, termination of this Guaranty shall relieve Guarantor of a= ny=20 liability for transactions occurring after such termination including any= =20 subsequent interest or late charges. =20 The Guarantor waives notice of acceptance of this Guaranty, notice of=20 transactions with Buyer or the amounts and terms thereof, notice of all=20 defaults or disputes with Buyer, and of the settlement or adjustment of suc= h=20 defaults or disputes. The Guarantor, consents to and waives notice of all= =20 change of terms, the withdrawal or extension of credit or time to pay, the= =20 release of the whole or any part of the indebtedness, the settlement or=20 compromise of differences, the acceptance or release of security, the=20 acceptance of notes, or any other form of obligation for Buyer's=20 indebtedness, and the demand, protest, and notice of protest of such=20 instruments or their endorsements. =20 The obligation of the Guarantor is a primary and an unconditional obligatio= n=20 and covers all obligations of Buyer to Seller that arise under the=20 Contracts. This obligation shall be enforceable before or after proceeding= =20 against Buyer or against any security held by Seller and shall be effective= =20 regardless of the solvency or insolvency of Buyer at any time, the extensio= n=20 or modification of the indebtedness of Buyer by operation of law, or the=20 subsequent incorporation, reorganization, merger, or consolidation of Buyer= =20 or any other change in the composition, nature, personnel, or location of= =20 Buyer. =20 The Guarantor in executing this Guaranty represents and warrants to Seller= =20 the following: =20 =20 1)the Guarantor is a corporation duly organized and existing in= =20 good standing and has full power and authority to make and deliver this=20 Guaranty;=20 =20 2)the execution, delivery, and performance of the Guaranty by t= he=20 Guarantor has been duly authorized by all necessary action of its principal= s=20 and does not and will not violate the provision of, or constitute default= =20 under, any presently applicable law or its organizational instruments or an= y=20 agreement presently binding on it; and=20 =20 3)this Guaranty has been duly executed and delivered by the=20 authorized officers of the Guarantor and constitutes its lawful, binding, a= nd=20 legally enforceable obligation. =20 This Guaranty supersedes and terminates all prior guaranties issued by=20 Guarantor on behalf of Buyer. =20 IN WITNESS WHEREOF, this Guaranty has been duly executed by El Paso Energy= =20 Corporation this 1ST day of , 200 . =20 =20 "GUARANTOR" =20 =20 By: =20 Name: C. Dana Rice Title: Vice President & Treasurer =20 =20 =20 =20 =20 =20 =20 =20 =20 =20 =20 =20 ****************************************************************** This email and any files transmitted with it from the ElPaso=20 Corporation are confidential and intended solely for the=20 use of the individual or entity to whom they are addressed.=20 If you have received this email in error please notify the=20 sender. ****************************************************************** - header.htm