Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
R2002-0194 12-09-02
RESOLUTION NO. R2002-194 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, APPROVING AND AUTHORIZING RENEWAL OF A ELECTRICITY SUPPLY AGREEMENT WITH H-GAC ENERGY PURCHASING CORPORATION. WHEREAS, H-GAC Energy Purchasing Corporation (the "Corporation") is a non- profit political subdivision corporation, as defined in Chapter 303 of the Texas Local Government Code (to be codified effective September 1,2001, as Chapter 304); and WHEREAS, the Corporation is authorized to negotiate on behalf of its members for the purchase of electricity, make contracts for the purchase of electricity, purchase electricity, and take any other action necessary to purchase electricity for use in the public facilities of the political subdivisions represented by it; and WHEREAS, the City of Pearland (the "City") previously adopted a resolution authorizing participation in the Corporation; and WHEREAS, the Corporation has negotiated and contracted with a Retail Electric Provider ("REP") and has entered into a contract with TXU Energy; and WHEREAS, the Corporation has received and distributed to its members the proposed cost analysis for Fiscal Year 2003, which is incorporated herein by reference; and BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section '1. That the renewal of the Electricity Supply Agreement with H-GAC Energy Purchasing Corporation made a part thereof is hereby approved and adopted. RESOLUTION NO. R2002-194 PASSED, APPROVED and ADOPTED this the 9th day of December A.D., 2002. TOM REID MAYOR ATTEST: APPROVED AS TO FORM: CITY ATTORNEY TRANSACTION CONFIRMATION FOR THE SUPPLY OF ELECTRICITY Transaction Confirmation #: I-G6QXI BUYER: Phone: The City of Pearland SELLER: TXU Energy Retail Company LP 3519 Liberty Drive 1601 Bryan Street Pearland, Texas 77581 Dallas, Texas 75201 Attention: Contract Administration, 10 01SE 281-652-1668 Fax: 281-652-1707 Phone: 214 812 4380 Fax: 214 812 8908 I. AGREEMENT TERM The Primary Term for each Premise, identified in Exhibit A, shall commence II. PAYMENT TERMS/METHOD III. INITIAL DEPOSIT AMOUNT IV. BILL TO: V. STANDARD SERVICES VI. CUSTOM SERVICES VII. SPECIAL PROVISIONS VIH. COST PER KWH IX. MONTHLY CONTRACT USAGE TOLERANCES X. BASE CONTRACT upon the date of the first reading of the meter(s) on each respective Premise by the TDSP on or after 01/01/2003, or as soon thereafter as practicable, and shall end for each Premise upon the date of the first reading of the respective Premise meter(s) by the TDSP on or after 12/31/2003. Net 30 Days. Via Hard Copy (One-site-l-invoice). No initial deposit required. The City of Pearland 3519 Liberty Drive pearland, Texas 77581 Arm: Accounts Payable Phone: 281-652-1668 Fax: 281-652-1707 Toll bee number (800) 725-7920 for 24 hour emergency outage and customer service, available 7:00 a.m. to 7:00 p.m. on normal business days; Assigned customer service representative, billing analyst, and assigned professional account manager. Access to the TXU Energy Gateway web portal. Not Applicable: Aggregation Fee of $0.00045 per kWh actually consumed by Buyer will be collected by Seller on behalf of and paid to HGAC Energy Purchasing Corporation. See attached Price Sheet. 25 % per month for excess usage and 25 % per month for under usage (see section IV, Calculation and Payment &Charges in the Base Contract for Supply of Electricity) THE BASE CONTRACT FOR THE SUPPLY OF ELECTRICITY ("BASE CONTRACT"), SEPARATELY EXECUTED BY BUYER AND SELLER, IS PART OF THE AGREEMENT TO WHICH THIS TRANSACTION CONFIRMATION APPLIES. BUYER ACKNOWLEDGES THAT IT HAS RECEIVED THE BASE CONTRACT AND IN THE EVENT THAT BUYER HAS NOT PREVIOUSLY EXECUTED THE BASE CONTRACT BY SIGNING THIS TRANSACTION CONFIRMATION, BUYER AGREES TO BE BOUND BY THE BASE CONTRACT AS PROVIDED BY SELLER. Buyer Legal Name: The City of Pearland a Texas political subdivision By: (General Partner or Agent name, if applicable) Officer' s PrintEd i~'-ame."~ -:.:_ Bill Eisen Title: City Manager Date: 12-10-02 Form Nme/Version: TRANSACTION CONFIRMATION 061002 Seller Legal Name: TXU Energy Retail Company LP, a Texas Limited Partnership By: TXU Energy Retail Management Company LLC~ its General Partner t // Title: REGEiVI D City of Pearland (1 year).BCTCPS.BBC.C.121002.doc DEC 1 3 2002 'TXU · CONTRACTS ADMINISTRATION CONFIDENTIAL Transaction Confirmation #: Account Name: Plan Type: Price Sheet - Flat Price 1-G6QXI The City of Pearland FLAT TXU This Price Sheet is only valid in association with and shall remain subject to the Base Contract for Supply of Electricity ("Terms") and Transaction Confirmation for Supply of Electricity referenced above and is contingent upon Buyer and Seller's acceptance of the Transaction Confirmation. This Price Sheet is applicable to the Customer ESI number(s) identified on Exhibit A. Monthly Prices shall equal the sum of (i) the Monthly Standing Charge set forth in Exhibit A; plus (ii) the applicable per kWh charges set forth below for the electricity; plus (iii) all costs and expenses of any nature whatsoever that are charged by the Transmission and Distribution Service Provider ("TDSP") for the transmission and/or distribution of the electricity, as well as any other charges of the TDSP that are attributable to the Customer Accotmt numbers, including, without limitation, charges for reactive power; plus (iv) the Aggregation Fee; plus (v) all other tariffs, rates, riders, fees, costs, and charges, including, without limitation, installed capacity type charges (and any direct and indirect costs resulting therefxom or associated therewith), charged or required by the TDSP or another party, that are mandated, levied, assessed, allowed, or approved by the Texas Public Utility Commission and/or any other governmental or regulatory authority(ies), on or with respect to the acquisition, sale, delivery, and purchase of the electricity; plus (vi) all federal, state, and local taxes, of any nature whatsoever, imposed by any governmental and/or regulatory authority(ies), on or with respect to the acquisition, sale, delivery, and purchase of the electricity, including Seller's Texas Gross Receipts Tax and Public Utility Commission Assessment on the sale of electricity to Buyer; plus (vii) the Over Capacity Charge set forth below, if applicable. Charge Amount (i) Monthly Standing Charge per service $ 0.00 per service point point (ii) All kWh $ 0.0464520 per kWh (iii) TDSP Delivery Charges (iv) Aggregation Fee ** (v) Tariffs, rates, riders, fees, and charges other than those included in TDSP delivery charges above (vi) All applicable taxes $ 0.0154974 per kWh for delivery, excluding reactive power, based upon current estimate;* Monthly price will be based upon actual charges. $0.00045 per kWh To be determined, varies by service point To be determined, varies by jurisdiction (vii) Over Capacity Charge $ 0.00 per kW The costs and expenses charged by the TDSP for delivery services may fluctuate during the Agreement Term, as will other applicable taxes, tariffs, riders, fees, and charges. * For reference proposes only. This is the current estimate of the average TDSP standard delivery costs, excluding charges for reactive power, special metering, or other miscellaneous TDSP charges. **Aggregation Fee of $0.00045 per kWh actually consumed by Buyer will collected by Seller on behalf of and paid to HGAC Energy Purchasing Corporation. Form Name/Version: PRICE SHEET FLAT PRICE 060302 City of Pearland (1 year).BCTCPS,BBC.C. 121002.doc CONFIDENTIAL TXU.Energy BASE CONTRACT FOR SUPPLY OF ELECTRICITY This Base Contract for the Supply of Electricity (~Base Contract"), and (i) any other attachments, exhibits or appendices to this Base Contract (including Exhibit uA"), together with (ii) any Transaction Confirmation for Supply of Electricity ("Transaction Confirmation") (including, as appropdata, one or more Price Sheets) as may be hereafter agreed to (collectively the "Agreement"), is entered into by and between TXU ENERGY RETAIL COMPANY LP, a Texas limited partnership (~Seller") and THE CITY OF PEARLAND, a Texas Political Subdivision ("Buyer'), and shall constitute the agreement for the supply of electricity to each Point of Delivery designated by an Electric Service Identifier (hereinafter individually an "ESl ID" or collectively the ~ESI IDs~) of Buyer set forth in Exhibit ~A" attached hereto. A "PHce Sheet(s)" is a document(s) containing a description of the method for determining charges payable by Buyer to Seller for electricity supplied pursuant to this Agreement for specified ESI IDs. ^ condition precedent for the effectiveness of this Agreement shall be the execution of a separate Transaction Confirmation and the appropriate Price Sheet(s), and agreement by the Parties on the terms · contained in Exhibit ~A" to this Base Contract. Seller and Buyer may hereinafter be referred to individually as a "Party" and collectively as the "Parties". The applicable Tariff(s) for Retail Delivery Service (the "Tariff") of the appropriate transmission and distribution utility (the "TDSP") serving Buyer's Premises is incorporated herein to the same extent as if fully set forth, and the Parties acknowledge that as a matter of law they are bound by the terms and conditions of the Tadff. All capitalized terms not defined herein shall have the meaning as set forth in the Tariff. The pro-forma Tariff, as adopted by lhe Public Utility Commission of Texas (the "PUCT"), may currently be found at the PUCT's website at www. puc.state.tx.us, as Appendix IV of the Substantive Rules Applicable to Electric Service Providers. I. SUBJECT MATTER AND QUANTITY. Seller shall sell and cause delivery of, to the Seller Point of Delivery, and Buyer shall purchase and receive, at the TDSP Point of Delivery for each ESI ID, and for use only at the associated Premise(s), all of Buyer's non-residential electricity requirements for the Premise(s). A "Premise" is a tract of land or real estate or related commonly used tracts, including buildings and other appurtenances thereon, Which is listed on Exhibit "A." A Premise may have one or more TDSP Points of Delivery. "Seller Point of Delivery" herein shall mean the point where Seller's supplier's conductors are connected to the TDSP's conductors. "TDSP" herein shall mean a transmission and/or distribution provider under the jurisdiction of the Public Utility Commission of Texas ("PUCT") that owns and maintains a transmission or distribution system for the delivery of energy; including a Municipally owned utility or Rural Electric Cooperative. "TDSP Point of Delivery" herein shall mean the point where TDSP's conductors are connected to Buyer's conductors at or near Buyer's Premises. I1. PERFORMANCE ASSURANCE AND CREDIT REQUIREMENTS. [This Article has been deleted intentionally.] III. TERM. The "Agreement Term" shall be the time period, as referred to in the Transaction Confirmation, during which the prices contained in the Price Sheet(s) are and shall remain in force. IV. CALCULATION AND PAYMENT OF CHARGES. 4.1 For each Transaction Confirmation then in effect, Seller will invoice Buyer for electricity delivered to the Pramise(s) during each monthly billing cycle of the Agreement Term, and for any other amounts due from Buyer to Seller hereunder in accordance with the applicable Price Sheet; provided, however, in the event Buyer's aggregated consumption under any Transaction Confirmation in any calendar month exceeds the aggregated calendar-month quantities listed in the applicable Exhibit "A-l" by more than the pementage specified in such Transaction Confirmation, Seller shall have the option to price such excess quantities at 105.0% of the then current Retail Market Price. Provided such is not the result of a force majeure event or Seller's default hereunder, if Buyer's aggregated consumption under any Transaction Confirmation in a month is less than the aggregated calendar-month quantities listed in the applicable Exhibit 'A-l" by more than the percentage specified in such Transaction Confirmation, then, in addition to paying in accordance with the applicable Price Sheet for those quantities actually taken, Buyer agrees to pay Seller the positive amount, if any, calculated as follows: [(100% minus the percentage specified in such Transaction Confirmation) multiplied by (the aggregated quantities on the applicable Exhibit "A-I"j for the applicable month minus the aggregated quantities consumed by Buyer under such Transaction Confirmation during the month), the "Shortfall Quantity"] multiplied by [(the contracted price from the applicable Price Sheet) minus (95% of the then current Retail Market Price for the Shortfall Quantity)]. "Retail Market Price" for purposes of this Section 4.1 only shall be: the weighted average of the ERCOT market cleadng pdce for energy for all congestion zones in the applicable month; plus la) all charges associated with (i) Ancillary Services, (ii) Line Losses, (iii) UnaccoUnted for Energy, and (iv) ERCOT administration fees; and lb) any new charges established by the Independent System Operator that load serving Qualified Scheduling Entities are required to pay. For purposes of this paragraph 4.1, Seller reserves the dght to allocate measured consumption to the calendar month for any ESI IDs not installed with an interval demand recorder ("IDR"). city of Peafland (1 year).ecTCP$.BBC.C.'121002.doc CONFIDENTIAL Page 1 of 8 4.2 In the event that an IDR must be installed at any Point of Delivery in order to provide multi-part pricing, if such IDR has not been installed pdor to the commencement of the Agreement Term, Seller reserves the dght to calculate prices based upon the appropriate deemed Icad profile (as obtained by Seller from the PUCT) until such IDR can be installed. 4.3 To the fullest extent allowed by law, in the event, for any reason whatsoever, Seller is ever determined to be, or has been, Buyer's electricity supplier for a period after the expiration or termination of a Transaction Confirmation, but before the beginning of a replacement Transaction Confirmation or the switch to another supplier, then Seller may charge, and Buyer agrees to pay, for all such electricity so delivered to each ESI ID dudng each such billing cycle, a price per kWh equivalent to, at Seller's option for each billing cycle, (i) Seller's then current "standard list price offer," or (ii) the monthly retail market rate for the applicable ERCOT congestion zone [i.e., the product of (a) the average of the ERCOT market clearing prices of energy (adjusted to a per kWh basis) for the applicable ERCOT congestion zone for each on-peak hour of each week-day of the calendar month in which the applicable billing cycle began (provided that no market cleadng price is to be valued at less than $20/MWh ($O.02/kWh) for purposes of this calculation), and (b) 130%]. 4.4 In the event that Buyer changes any point of delivery to a different delivery service voltage level than the voltage level in place at the time the applicable Pdce Sheet became effective, Seller retains the dght to adjust the contracted pdce from the applicable Price Sheet for that ESI ID(s) accordingly. Buyer will not install baseload generation to service the Premise(s) without providing Seller written notification at least 120 calendar days pdor to the anticipated date that the generation will come on line. 4.5 Buyer shall pay the invoiced amount on or before the due date which shall be specified in Article II of the Transaction Confirmation, or Buyer shall notify Seller on or before such invoice due date if Buyer disputes any part of the invoice together with Buyer's reasons (however, Buyer's payment of an invoice and/or failure to dispute an invoice by the due date, in and of itself, shall not constitute a waiver by Buyer of Buyer's right to contest later the correctness of such invoice), but the undisputed portion shall remain due and payable on the due date. All past due amounts (including any disputed amounts withheld which are subsequently found to have been payable), shall accrue interest at a rate equal to (i) one percent (1%) per month, or (ii) the highest rate allowed by law, whichever is the lesser, from the date such payment was due until the same is paid. 4.6 In the event that Buyer gives notice of a disputed invoice as set forth in Section 4.5 above, the Parties shall, for a period of thirty calendar days following Seller's receipt of that notice, pursue diligent, good faith efforts to resolve the dispute. Following resolution of the dispute, any amount found payable, including interest shall be paid within thirty calendar days. 4.7 If Buyer notifies Seller in writing of a justifiable concem regarding the accuracy of an invoice hereunder, Seller shall make available to Buyer during normal business hours the records in Seller's possession reasonably necessary for Buyer to verify the accuracy of its bill. Provided, however, neither Party may request any adjustment or correction of any statement or payment unless written notice of such request for adjustment or correction is furnished within twenty-four months of the payment due date for which such adjustment or correction is requested. It is understood and agreed that information and records in Seller's possession that are provided pursuant to this section 4.7 constitute proprietary and confidential information of Seller, the release of which could hinder or harm Seller's competitive position; therefore, such information and records are not intended to constitute public information under the Texas Public Information Act and shall not be released by Buyer, unless determined otherwise by the Texas Attorney General or a court of competent jurisdiction. However, nothing in this section shall require Buyer to bdng a legal challenge in any court to seek to overturn a ruling by the Texas Attorney General's Office or a court requiring disclosure pursuant to the provisions of the Public Information Statutes, but Buyer (i) shall cooperate and assist Seller in the event Seller should bdng such a challenge and (ii) make no disclosure until when and if Seller's challenge has been finally denied. All information and records provided hereunder constitutes the property of Seller, and such information and records, and copies thereof, as well as all notes taken therefrom, shall be returned to Seller promptly after the resolution of any invoice accuracy concerns. 4.8 Payments may be made by check, wire transfer, direct debit or electronic data interchange (on terms reasonably acceptable to both Parties), and notwithstanding anything to the contrary contained herein, must be received by the receiving Party on or before the end of the time period specified in Article II of the Transaction Confirmation. The address to which payments are to be made shall be as set forth in the Transaction Confirmation.' For Buyer to pay Seller other than by check, Buyer needs to obtain required information/agreements with Seller. 4.9 Buyer agrees that it shall abide and be bound by the Agreement through the end of the Agreement Term and shall not, during the Agreement Term, claim any right to pridng based upon the Pdce to Beat. "Price to Beat" shall mean a price for electricity, as determined pursuant to the Public Utility Regulatory Act, Section 39.202, charged by an affiliated retail electric provider to eligible · customers. However, in the event that Buyer, as a matter of law, should ever have the right to claim Price to Beat and thereby terminates this Agreement, Buyer agrees to pay to Seller, the positive amount, if any, calculated as follows: (all quantities of electricity attributable to all Premises from the date of termination of this Agreement through the end of the Agreement Term) multiplied by (the contracted price from the applicable Price Sheet minus 95.0% of the then current retail market value for such quantities). 4.10 In the event Buyer ever takes electricity exceeding the Maximum kW for any Premise(s), each time it does so Buyer shall pay the Over Capacity Charges as stated in the applicable Pdce Sheet. "Maximum kW" for each Premise, if any, will be set forth on Exhibit "A', and shall be recorded at the TDSP Point of Delivery. CONFIDENTIAL City of Pearland (1 year).BCTCPS.BBC.C.121002.doc Page 2 of 8 4.11 Buyer represents and warrants that as a political subdivision of the State of Texas it is exempt from state sales taxes pursuant to section 151.309 of the Texas Tax Code. (Information pertaining to such exemption -shall be provided to Seller as requested.) Therefore, Seller, to the extent that it is not required to pay such taxes, will not flow through to Buyer the costs of such taxes hereunder. V. METERING EQUIPMENT. The supply of electricity to Buyer at the TBSP Point(s) of Delivery shall be measured by the TBSP, or its successor, utilizing its Metering Equipment in accordance with its Tadff. Unless the accuracy of the Metedng Equipment is disputed by notice given by either Party to the other, the Metering Equipment shall be deemed to be accurate. If notice is given (unless otherwise agreed), Seller shall request the TDSP to examine Metedng Equipment in accordance with the Tadff. If such test by the TDSP finds that the Metedng Equipment was inaccurate, suitable adjustment shall be made in the accounts rendered by Seller, and, within a reasonable period following that determination, the Metedng Equipment shall be re-calibrated or replaced by the TDSP or its successor. If such test finds the Metedng Equipment to be accurate within the said limits, the Metering Equipment shall be deemed to be accurate and the cost of moving, testing, and replacing the Metedng Equipment shall be paid by the Party who issued the notice. If it is discovered that any reading of the Metering Equipment or translation of the readings into charges have been incorrect, then the amount of money due to and Eom Seller shall be paid forthwith. If appropriate meter reading personnel cannot gain access to read the Metedng Equipment, or the Metering Equipment fails to register correctly the amount of electricity supplied, or the readings are not communicated to Seller by the TDSP in time for whatever reason, Seller shall reasonably estimate the quantity of the electricity consumed and Buyer shall pay the charges for the estimated amounts subject to any adjustments which may be necessary following the reading. Buyer shall notify Seller of any dispute or query regarding the Metering Equipment made by the TDSP. Seller is not responsible for damage to the Metering Equipment unless caused by Seller's negligence. VI, BUYER'S ELECTRICITY NEEDS. 6.1 Both Parties will work in good faith during the Agreement Term to reasonably accommodate and assist Buyer with the management of its electricity needs at the Premises. For example, if Buyer desires to add or delete existing Premises, or to extend the Agreement Term, both Parties will work in good faith to mutually agree upon the terms and conditions that are economically viable to both Parties. However, notwithstanding the previous language, nothing contained herein shall be construed as to deny or diminish the economic benefit of this Agreement to either Party, and neither Party shall be under any obligation whatsoever to agree to a modification that would have such result. In the event that the TDSP experiences difficulties which cause interruptions in service to Buyer, Seller will take reasonable actions in working with the TDSP and Buyer in an attempt to have service restored to the Buyer. 6.2 In the event Buyer reduces its operations at one or more Premise(s), Buyer shall have the dght to delete the quantities of electricity attributable to the reduction in operations at such Premise(s) from the effective date of the reduction through the end of the Agreement Term (the "Reduced Operations Liquidated Quantities") from this Agreement without terminating the Agreement. If Buyer desires to exercise such right with regard to such Premise(s), Buyer shall notify Seller in writing at least thirty calendar days prior to the effective date. Upon the exercise of such right, the Parties agree to settle with regard to such Reduced Operations Liquidated Quantities as follows: (A) in the event the retail market value of the Reduced Operations Liquidated Quantities, as reasonably determined by Seller, is greater than the pdce Buyer would have paid for the Reduced Operations Liquidated Quantities as calculated on the applicable Price Sheet (the "Unpurchased Price'), then Seller shall give Buyer credit against future pumhases under this Agreement in the amount equal to: the Reduced Operations Liquidated Quantities multiplied by ninety-five percent (95.0%) of (such retail market value minus the Unpurchased Price); (B) in the event the Unpurchased Price is more than the retail market value of the Reduced Operations Liquidated Quantities, as reasonably determined by Seller, then Buyer shall pay to Seller the amount equal to: the Reduced Operations Liquidated Quantities multiplied by one hundred five percent (105.0%) of (Unpurchased Price minus such retail market value). Buyer shall pay such amount, if any, to Seller within thirty calendar days of the date of liquidalion. Exhibit "A" shall be modified to reflect the deletion of the liquidated quantities, and all other terms and conditions of this Agreement shall remain in full force and effect. 6.3 In the event Buyer sells, closes, or leases a particular Premise, without selling, closing, or leasing all of the Premises, Buyer shall have the right to delete that particular Premise and the quantities of electricity attributable to that Premise through the end of the Agreement Term (the "Liquidated Quantities") from this Agreement without terminating the Agreement (a "Premise Buyout Option"). If Buyer desires to exercise a Premise Buyout Option with regard to a Premise, Buyer shall notify Seller in wdting at least thirty calendar days prior to the effective date. Upon the exercise of a Premise Buyout Option, in the event a new owner of the applicable Premise (i) is willing to sign a new contract with Seller upon the same terms and conditions as Buyer's contract, (ii) is deemed creditworthy by Seller, and (iii) the new owner and Seller can legally enter into such a contract in accordance with the rules and regulations of the PUCT, then the Premise will be deleted from this Agreement and neither Party will owe any compensation to the other. In the event that the new owner (i) is unwilling to sign a contract with Seller upon the same terms and conditions, (ii) is not reasonably deemed creditworthy by Seller, or (iii) the new owner and Seller cannot legally enter into the contract, then Buyer agrees to pay Seller the positive amount, if any, calculated as follows: the Liquidated Quantities multiplied by (the pdce that Buyer would have paid for the Liquidated Quantities through the end of the Agreement Term according to the applicable Pdce Sheet, minus 95% of the then current retail market price). Buyer shall pay such amount, if any, to Seller within thirty days of the date of liquidation. Exhibit "A" shatl be modified to reflect the deletion of such Premise and its Liquidated Quantities, and all other terms and conditions of this Agreement shall remain in full force and effect with respect to the remaining Premises. VII. BUYER'S REMEDIES PRIOR TO TERMINATION In the event that during the Agreement Term, Seller ever should fail to deliver sufficient quantities of electricity to the TDSP for delivery to Buyer, or fail to schedule the delivery of electricity to Buyer by the TDSP, Buyer and Seller recognize that (i) the TDSP, per the City of Pearland (1 year).BCTCPS.BBC.C.121002.doc CONFIDENTIAL Page 3 of 8 TDSP's Tariff responsibilities, nevertheless is obligated to deliver sufficient electricity to satisfy Buyer's needs and (ii) Seller shall settle with ERCOT, at no cost or expense to Buyer, with respect to the purchase of electricity to cover any such failure. VIII, TERMINATION OF AGREEMENT. 8.1 Events of Default. A matedal breach of this Agreement includes: (a) the failure of either Party to make any payment due to the other Party pursuant to the terms hereof; (b) the failure of a Party to comply with any other material term of this Agreement; (c) a Party becomes or declares that it is insolvent or bankrupt, or becomes or declares that it is the subject of any proceedings, or takes any action whatsoever, relating to its bankruptcy, liquidation or insolvency, or is not generally paying its debts as they become due; (d) a Party fails to comply with any federal, state or local law, regulation, rule or order that causes a material adverse effect upon this Agreement, either Party or either Party's performance of its obligations described in this Agreement; (e) if Buyer enters into another electricity supply agreement for any Premise(s) with another retail energy provider that covers any period during the Agreement Term; or (f) if Buyer sells, leases, closes or otherwise conveys or assigns any Premise(s) in which the electricity sold hereunder is utilized, without the prior written consent of Seller in accordance with Sections 6.1,6.3, or 14.2 hereof. If either Party commits a matedal breach of this Agreement, the non-breaching Party shall give written notice to the breaching Party that describes the breach in reasonable detail ("Original Notice"). The non-breaching Party may, in its sole discretion, and without prejudice to any other rights under this Agreement, at law, or in equity, terminate this Agreement (i) thirty calendar days after providing a notice of such breach in the event the breach pertains to item (a) in this paragraph above and the breaching Party fails to cure the breach before the end of such time period, or (ii) effective immediately in the event the breach pertains to items (c), (e), or (f) in this paragraph above, or (iii) thirty calendar days after providing a notice of such breach if the breaching Party fails to cure any breach other than one related to (a), (c), (e), (f), or (g) above (the "Early Termination Date"). 8.2 Remedies Upon Termination. (a) If Seller terminates this Agreement due to a material breach by Buyer as described in this Article VIII, Seller shall transfer Buyer to the POLR. Upon termination of this Agreement by Buyer due to a material breach of Seller, Buyer shall have the dght to select any other REP as its electricity provider. (b) Pursuant to the revised PUCT rules that forbid a retail electric provided from switching a delinquent paying customer to the POLR and notwithstanding anything in the Agreement to the contrary, Seller shall have the right to order the TDSP to disconnect electric service to Buyer's Premise(s) if the Agreement is terminated pursuant to item (a) in Section 8.1 (with the requisite notice and opportunity to cure) due to a material breach of Buyer in failing to make payment due to Seller. However, Seller shall not have the right to order the TDSP to disconnect electric service (i) for the non-payment of amounts that are subject to a bona fide dispute under the Agreement, (ii) pdor to termination of the Agreement or (iii) for a termination of the Agreement due to a material breach reason other than non-payment. 8.3 Calculation of Seller's Damages. In the event that this Agreement is terminated by Seller pursuant to Section 8.1, the ParlJes agree, that in addition to all amounts Buyer may owe Seller pdor to the termination, Seller's damages shall be the positive amount, if any, calculated as follows: (all remaining unpurchased quantities of electricity reflected on Exhibit "A" for all ESI IDs through the end of the Agreement Term) multiplied by (the price that Buyer would have paid for the unpurchased quantities through the end of the Agreement Term according to the applicable Price Sheet, minus the current retail market value for the unpurchased quantities at the lime of termination); plus (all reasonable direct costs and expenses incurred by Seller). Such amount shall be immediately due and payable within thirty calendar days following such termination. The current retail market value in this instance shall mean the price that Seller would reasonably be able to obtain from a bona-fide third party if entedng into a contract with another customer with similar pdcing factors as Buyer for the unpurchased quantities, and for the remaining term after the Early Termination Date through the end of the Agreement Term. Seller shall have a duty to use commercially reasonable efforts to mitigate its damages. 8.4 Calculation of Buyer's Damages. In the event that this Agreement is terminated by Buyer pursuant to Section 8.1, the Parties agree, that in addition to all amounts Seller may owe Buyer prior to the termination, Buyer's damages shall be the positive amount, if any, calculated as follows: (all remaining unpurchased quantities of electricity reflected on Exhibit "A' for all ESl IDs through the end of the Agreement Term) multiplied by (the current retail market value for the unpurchased quantities at the time of termination, minus the price that Buyer would have paid for the unpurchased quantities through the end of the Agreement Term according to the applicable Price Sheet); plus (all reasonable direct costs and expenses incurred by Buyer); minus all amounts Buyer may owe Seller for electricity consumed by Buyer pdor to the Early Termination Date. Such amount shall be immediately due and payable within thirty calendar days following such termination. The current retail market value in this instance shall mean the pdce Buyer would have to pay if entering into a commercially competitive contract with another REP for the same quantities and ESl IDs, and for the remaining term after the Eady Termination Date through the end of the Agreement Term. The price offered by the POLR, or any REP's standard list price offer, shall not be used to calculate Buyer's damages. Buyer shall have a duty to use commercially reasonable efforts to mitigate its damages. 8.5 Non-appropriation. Buyer and Seller agree that in the event that Buyer is not able.to allot or appropriate sufficient funds, for Buyer's fiscal year(s) subsequent to the initial fiscal year during the term of this Agreement, to continue the purchase of the total quantity of electricity covered by the Agreement and has no legally available funds for the purchase of services to perform functions similar to those performed under this Agreement, Buyer may terminate this Agreement at the end of Buyer's then current fiscal year by giving ninety (90) days wdtten notice to Seller and enclosing therewith a sworn statement that the foregoing conditions exist. In this sole event, Buyer shall not be obligated to make contract payments beyond the end of the then current fiscal year. Furthermore, Buyer covenants and represents to Seller that: city of Pearland (1 year).BCTCPS.BBC.C.'I21002.doc CONFIDENTIAL Page 4 of 8 (a) Buyer has budgeted and has available for the current fiscal year sufficient funds to comply with its obligations under this Agreement; (b) There are no cimumstances presently affecting Buyer that could reasonably be expected to adversely affect its ability to budget funds for the payment of all sums due under this Agreement; (c) Buyer believes that funds can be obtained in amounts sufficient to make all contract payments during the full term of this Agreement and intends to make all required contract payments for the full term of this Agreement; (d) Buyer covenants that it will do all things within its power to obtain, maintain and properly request and pursue funds from which contract payments may be made, specifically including in its annual budget requests amounts sufficient to make contract payments for the full term of this Agreement; (e) Buyer will not give pdority in the appropriation of funds for the acquisition or use of additional energy services; (f) If any funds are appropriated for electricity costs, such funds shall be applied first to the cost of electricity to be provided pursuant to this Agreement and that any such funds shall not be used to pay for electdc power from any other electric power provider for the accounts covered in this Agreement; and (g) Buyer agrees to notify Seller in writing of such non-appropriation at the earliest practicable time subsequent to the failure to appropriate. As of the termination date under this Section 8.5, Seller shall have no further duty to supply electricity to Buyer and shall move service for Buyer's Premises to the POLR on the date of termination for non-appropriation. IX. FORCE MAJEURE. If either Party is unable to perform its obligations, in whole or in part, due to an event of fome majeure as defined herein, then the obligations of the affected Party (other than the obligations to pay any amounts adsing pdor to the rome majeure event) shall be suspended to the extent made necessary by such event. The term "Force Majeure" shall mean any act or event that is beyond the claiming Party's control (and which could not be reasonably anticipated and prevented through the use of reasonable measures), including, without limitation, the failure of the TDSP to receive, transport or deliver, or otherwise perform, unless due to the failure of the Party claiming Fome Majeure to perform such Party's obligations hereunder, and an event of Force Majeure of Seller's suppliers. The Party suffedng the event of Force Majeure shall give wdtten notice of such event of Force Majeure in reasonably full particulars to the other Party, as soon as reasonably possible. Any such event of Force Majeure shall, so far as possible, be remedied with all reasonable dispatch. It is understood and agreed that the settlement of strikes or lockouts will be entirely within the discretion of the Party having the difficulty, and that the above requirement of the use of diligence in restoring normal operating conditions will not require the settlement of strikes or lockouts by acceding to the terms of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty. Neither financial distress nor the inability of either Party to make a profit or avoid a financial loss shall be deemed a Force Majeure event, nor shall (i) changes in the market pdces of fuel, energy, or electricity, or (ii) a Party's financial inability to perform its obligations under this Agreement, constitute an event of Force Majeure hereunder. X. WARRANTIES AND LIMITATIONS OF LIABILITIES. 10.1 Seller hereby warrants to Buyer that at the time of delivery of electricity hereunder it will have good title and/or the right to sell such electricity, and that such electricity will be free and clear of all liens and adverse claims. Title will pass to Buyer at the TDSP Point of Delivery. EXCEPT AS PROVIDED FOR IN THE FIRST SENTENCE OF THIS PARAGRAPH, SELLER EXPRESSLY DISCLAIMS AND MAKES NO WARRANTIES, WHETHER WRITTEN OR VERBAL, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS, IMPLIED, OR STATUTORY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 10.2 UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, ANY LIABILITY UNDER THIS AGREEMENT WILL BE LIMITED TO DIRECT ACTUAL DAMAGES AS THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. NEITHER PARTY WILL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, INCLUDING LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, WHETHER IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISIONS OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT. THE LIMITATIONS IMPOSED ON REMEDIES AND DAMAGE MEASUREMENT WILL BE WITHOUT REGARD TO CAUSE, INCLUDING NEGLIGENCE OF ANY PARTY, WHETHER SOLE, JOINT, CONCURRENT, ACTIVE OR PASSIVE; PROVIDED NO SUCH LIMITATION SHALL APPLY TO DAMAGES RESULTING FROM THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF ANY PARTY. Xl. NOTICES. All notices required or permitted under this Agreement shall be in wdting and shall be deemed to be delivered when deposited in the United States mail (first class as to all notices other than disconnection, termination and/or matedal breach notices, and registered or certified as to all disconnection, termination and/or material breach notices), postage prepaid, when deposited with an overnight delivery service, prepaid to the applicable Buyer's address shown in the Transaction Confirmation, and Seller's address as shown in the Transaction Confirmation, or to such address as either Party may from time to time designate as the address, or in the case of hand delivery, when delivered to a representative of either Party by a representative of the other Party. XlI. APPLICABLE LAW AND REGULATIONS, 12.1 This Agreement is subject to all applicable laws, regulations, rules and orders, except both Parties agree that it is their intention to agree to terms and conditions different from those set forth in the "Customer Protection Rules for Retail Electric Service" as amended, or as may be amended in the future (the "Customer Rules") currently beginning with Section 25.471 of the PUCT's Substantive Rules city of Pearland (1 year).BCTCP$.BBC.C.121002.doc CONFIDENTIAL Page 5 of 8 Applicable to Electric Service Providers. In the event that there is any conflict between the terms contained in this Agreement and the Customer Rules, this Agreement shall control. The Parties expressly acknowledge that certain terms and conditions addressed in the Customer Rules may not be provided for or referred to in this Agreement, and, in such event, it is the intent of the Parties that such terms and conditions are not applicable to the Parties. 12.2 In the event a judicial decision, order, new law or regulation, or a change in any taw or regulation, requires a change in the method by which prices are calculated under this Agreement, or materially and directly affects a Party's ability to perform its obligations hereunder, then the Party that is negatively affected shall have the right to notify the other Party, within thirty calendar days after becoming aware of such detrimental change. The Parties shall use their best efforts to negotiate a modification to the terms of this Agreement so as to mitigate the impact of the event. If, atter twenty calendar days beyond the date of notice, the Parties have been unable to negotiate a mutually satisfactory modification to the terms of this Agreement, either Party shall have the right to terminate this Agreement upon ten calendar days prior written notice to the other Party. If such right to terminate is not exemised within forty-five calendar days after the date of the original notice hereunder, then the right to terminate this Agreement shall be waived with respect to the particular event. In the event of a termination pursuant to this Section 12.2, the Parties agree to settle as follows: (a) in the event the retail market value of all remaining quantities of electricity reflected on Exhibit "A" after such termination date through the end of the Agreement Term (Uthe Liquidated Quantities"), as reasonably determined by Seller, is greater than the pdce Buyer would have paid for the Liquidated Quantities as calculated on the applicable Price Sheet (the "Unpurchased Price"), then Seller shall pay to Buyer the amount equal to: the Liquidated Quantities multiplied by (such retail market value minus the Unpurchased Price); (b) in the event the Unpurchased Price is more than the retail market value of the Liquidated Quantities, as reasonably determined by Seller, then Buyer shall pay to Seller the amount equal to: the Liquidated Quantities multiplied by (the Unpurchased Price minus such retail market value). 12.3 Seller agrees to maintain all necessary certifications and comply with all necessary requirements in order to maintain its status as an authorized REP. 12.4 In the event Buyer utilizes, under the provisions of Article IX, Article Xll, or in any other manner, its inherent powers as a political subdivision of the State of Texas in order to circumvent in any way the terms and provisions of this Agreement or the intent of this Agreement, it shall be responsible for contract damages caused by such action. Xlll. RESPONSIBILITY. 13.1. Buyer assumes full responsibility for electric energy on Buyer's side of the TDSP Point of Delivery, and agrees, to the fullest extent allowed by law, to and shall hold harmless Seller, its parent company and all of its affiliates, and all of their respective officers, directors, shareholders, associates, employees, servants, and agents (hereinafter collectively referred to as "Seller Group"), from and against all claims, losses, expenses, damages, demands, judgments, causes of action, and suits of any kind (hereinafter collectively referred to "Claims"), including Claims for personal injury, death, or damages to property, occurring on Buyer's side of the TDSP Point of Delivery, arising out of or related to the electdc power and energy and/or Buyer's performance under this Agreement. 13.2 Seller assumes full responsibility for electric energy on Seller's side of the Seller Point of Delivery, and agrees to and shall hold harmless Buyer, its officials, associates, employees, servants, and agents (hereinafter collectively referred to as "Buyer Group"), from and against all Claims, including Claims for personal injury, death, or damages to property occurring on Seller's side of the Seller Point of Delivery, arising out of or related to the electdc power and energy and/or Seller's performance under the Agreement. XlV. MISCELLANEOUS. 14.1 Choice of Law / Venue. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PRINCIPLES WHICH OTHERWISE MIGHT BE APPLICABLE. THE PARTIES RECOGNIZE THAT THIS AGREEMENT IS PERFORMABLE IN PART IN DALLAS COUNTY. 14.2 Assi.qnment. In the event that Buyer conveys legal title to all of the Premises to the same entity, Buyer may request from Seller the right to assign its rights and obligations under the Agreement to the new owner of the Premises, and in such event, Seller shall not unreasonably withhold its consent. Any purported assignment without Seller's pdor written consent shall be null and void. Buyer shall not have any right whatsoever to assign this Agreement to any party that is not the owner of all of the Premises, and any purported assignment shall be null and void. Seller may not assign this Agreement to another party, without the prior written consent of Buyer, which consent shall not be unreasonably withheld. Any purported assignment without Buyer's prior written consent shall be null and void. This Agreement shall inure to and be binding upon the Parties hereto, and their respective successors and assigns. 14.3 Entirety of Agreement. It is the intention of the Parties that the Agreement shall contain all terms, conditions, and protections in any way related to, or adsing out of, the sale and purchase of the electricity, and supersedes all pdor agreements, whether written or oral. This Agreement may not be modified or amended except in writing, duly executed by the Parties hereto. 14.4 Counterparts. This Agreement may be executed in multiple original counterparts, all of which shall constitute one and the same Agreement. 14.5 Duty of Good Faith. Both Parties shall have a duty of good faith and fair dealing with regard to this Agreement 14.6 Waiver of Rights. A waiver by either Party of any breach of this Agreement, or the failure of either Party to enforce any of the city of Pearland ('1 year).BCTCPS. BBC.C.'I21002.doc CONFIDENTIAL Page 6 of 8 terms and provisions of this Agreement, will not in any way affect, limit or waive that Party's right to subsequently enforce and compel strict compliance with the same or other terms or provisions of this Agreement. Except to the extent necessary to enforce Seller's rights under this Agreement, nothing in this Agreement shall constitute or be interpreted to constitute a waiver of Buyer's statutory and common-law immunity defenses, including sovereign and/or govemmental immunity and qualified and/or official immunity; it being intended that such immunities shall in all respects (except as provided above) be preserved. 14.7 Third Party Rights. Nothing in this Agreement shall create, or be construed as creating, any express or implied rights in any person or entity other than the Parties. 14.8 Survival. No termination or cancellation of this Agreement will relieve either Party of any obligations under this Agreement that by their nature survive such termination or cancellation, including, but not limited to, all warranties, obligations to hold harmless, obligations to pay for electricity taken, and obligations for any breaches of contract. 14.9 Further Assurances. Buyer and Seller agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. 14.10 Confidentiality. Seller acknowledges that Buyer is a governmental body that is subject to public information laws, including Chapter 552 of the Texas Government Code, which requires Buyer to release any information that is defined as or deemed to be public (the "Public Information Statutes"). Subject to any Public Information Statute or related order, rule or regulation requiring disclosure, Buyer agrees to keep all terms and provisions of this Agreement, and any information and records in Seller's possession that are provided under this Agreement, confidential and not to disclose the terms of the same to any third parties without the pdor written consent of Seller. It is understood and agreed that the foregoing constitutes proprietary and confidential information of Seller, the release of which could hinder or harm Seller's competitive position, and therefore is not intended to constitute public information under the Texas Public Information Act and shall not be released by Buyer, unless determined otherwise by the Texas Attorney General or a court of competent jurisdiction. However, nothing in this section shall require Buyer to bring a legal challenge in any court to seek to overturn a ruling by the Texas Attorney General's Office or a court requiring disclosure pursuant to the provisions of the Public Information Statutes, but Buyer (i) shall cooperate and assist Seller in the event Seller should bdng such a challenge and (ii) make no disclosure until when and if Seller's challenge has been finally denied. 14.11 Forward Contract. This Agreement and the transactions hereunder will constitute "forward contracts" as defined in Section 101(25) of the U. S. Bankruptcy Code ("Bankruptcy Code"). The Parties agree that (I) Seller is a "forward contract merchant" as defined in Section 101(26) of the Bankruptcy Code, (ii) the termination dghts of the Parties will constitute contractual rights to liquidate transactions, (iii) any payment related hereto will constitute a "settlement payment" as defined in Section 101 (51A) of the Bankruptcy Code, and (iv) Sections 362, 546, 553, 556, and 560 of the Bankruptcy Code shall apply to the Parties. 14.12Authorization. At such time as a Transaction Confirmation [including applicable Pdce Sheet(s)] are executed pursuant to this Agreement, Buyer authorizes Seller to become Buyer's retail electric provider for the duration of the Agreement Term set forth in the Transaction Confirmation. Buyer authorizes Seller to act as Buyer's agent for the sole purpose to effect any change, if necessary, and Buyer shall direct its current retail electric provider to work with Seller to make this change happen. Buyer represents to Seller that Buyer is legally authorized to change the retail electric provider for all of the Premises and that Buyer's aggregated electric loads covered by this contract have an aggregated peak demand greater than one megawatt. 14.13 Severability. If any portion of this Agreement, or application thereof to any person or circumstance, shall be held legally invalid, the remainder shall not be affected and shall be valid and enforced to the fullest extent permitted by law or equity. 14.12 A.q.qre.qator Fees. Seller shall bill and collect from Buyer for HGAC Energy Purchasing Corporation (~HGAC') Aggregation Fees with respect to the purchase of Electricity under these terms and conditions (~Aggregation Fees"). Seller shall remit all Aggregation Fee collections received during each calendar month to HGAC on or before the twentieth (20th) business day of the following calendar month. Payments received from Buyer shall be deemed to be payments of Seller and TDSP charges then due, then of Aggregation Fees. 14.13 A.qgregator Review. Buyer understands and acknowledges that any deviations from the standard terms and conditions negotiated by HGAC on behalf of Buyer shall be subject to the pdor review and consent of HGAC. 14.14 Aggregated Pricing. Buyer understands and agrees that as a Member of HGAC, Seller may base the indicative price on the attached price sheet upon assumptions as to the aggregated load and associated load factor of all HGAC Members of the applicable pdcing group. A condition precedent to the effectiveness of this Agreement is the satisfaction of certain load and load factor criteria as agreed to between Seller and HGAC. In the event that such cdteda are not satisfied, then Seller shall not sign this Agreement and it shall be null and void ab initio. city of Pearland ('~ year).BCTCPS.BBC.C.121002.doc CONFIDENTIAL Page 7 of 8 The Parties have this Base Contract for Supply of Electricity document, acknowledging their agreement to its provisions as of ]-2-10 , 200~signed THECITY OF PEARLAND a Texas political subdivision Name: Bill Ei~en Title: City Manager Date: 12-10-07 "Burr" TXU ENERGY RETAIL COMPANY a Texas limited partnership By: TXU Energy Retail Management Company LLC Its General Partner., Name: /' ~'~m ~-~m. Title: -_~_n', 0 Date: I "'~' ! J~ "Seller" Version State/Local Government 091902 city of Pearland (1 year).BCTCPS.BBC.C.121002.doc CONFIDENTIAL Page 8 of 8 C3 Z O. o D- 0 0 0 0 0 0 0 0 0 (D (D (D (J ~. r'K n,' ~ n,' o o n,' ~ n,' . · ~.~ ,, w w w w w co w c~ w ill W 0 0 CD 0 0 0 0 0 CD Z ~ Z ~ Z ~o Z oo z ~o Z oo Z o) Z ~o Z ~ Z ~ Z 0 0 0 0 0 c::, 0 c:, 0 Z Z Z Z Z Z Z Z Z 0 0 0 0 0 0 0 0 0 I.IJ o 0 n"' 0 0 I-. 0 I.- ID Ll.I g 5 r~ o 0 '~ 0 0 0 cc, ',~ o ~ 5 00 U.I 0 0 n" 0 o 0 "ID ~ ,-.- ~ Z o o "r' "'iD r~ ~ Z ~ Z ~ Z o Z © F- (/3 0 ~ o 0 ,- o3 Z 03 Z W ~ o o~ Z ~ Z ~ Z C~ U] ~ Z c~ Z 0 n, co 7 o0 Z o -,- g 0 r~ in ~ Z Z Z ~ 5 ~0 Z ~ Z (J W n~ w W ~ E ® O I-- 0 Z o o o 8 o ~ Z ~ Z c~ Z o ~ n ~o Z n, z LU Z ~[~ F- ~ 5 *o Z ~ Z o 0 o ~o Z ~ Z O~ Z oO Z ~ Z ~ Z W LLI 0 0 ~ 5 oO Z '-" Z o ,,5 r~ LIJ ~ Z ~ Z o 5 ~0 Z Z 0 Q 0 n~ ~ Z w ,_1 Z n 0 _l ~° Z ~_ Z ,~-a° Z Z Z Z Z ~ Z ~ Z ~5 ~5 o ~ o ~ o 0 0 0 0 0 0 LIJ LIJ LU LM W 8 g ° o o ~ · . q q q . g >. g >- @ >. g >- g >- ~ >. ~ z "0 z ~ z ~ z ~ z ~ z CD 0 0 0 0 0 Z Z Z Z Z Z 0 o o o 0 o I-- H- I-- I-- I-- ~ ~ 'o o o o o ~ z ~ z J z J z ~ ~ o~ o~ ~ o o~ ~ o ~ o ~ o ~ o o '-r 0 co < fl.. 0 0 0 0 0 0 !lJ l. LI iii LI.I u~ UJ LU ¢o 0 n' 0 n- L~ 0 0 0 0 0 0 0 0 ~: ~ ~ E 0 0 0 0 · Z Z Z Z ~ ~o,_ Z ,-"° Z ~ Z ,-c° Z ~ Z ,-~° z ~ Z ,-°° Z ,-°° Z o o o o o o o o o Z Z Z Z Z Z Z Z Z 0 0 0 0 0 0 0 0 0 I-- I'- ~'- I-- I-- I'- I-- F- ~-' ~ ~ ~ ~ 0 0 0 0 0 0 '- 0 0 Z q 5 ~-- o o Z Z W F- o Z Z '" 5 n, ~. n Z 5 ~o fl- o T n Z W n t~ ~ Z .J 133 Z n ,o z o I-- © U.I I-- Z LU F-- "' eq n~ LU ~ Z Z 0 n ~ Z o ~ Z w · J Z O~ Z tU I-- Z W n tU Z fl. ~ z w n -J Z 5 ~ IJ.J (.O t,- '-r o (D .-r -ID Z ILl n D. ~ Z ~ Z ~o Z ~o Z ~ o ~ Z o LU 1',,- ~o Z ~ Z o 0 n' LLI 0 c~ Z o o o · 1- n 0 Z ~ 5 o~ Z Z Z oo Z Z 0 ~ Z ~ 5 UJ 8. ~ Z 0 UJ ~ >- Z ~ Z o ~ W ~ Z ~ Z 0 LLI o~ Z o (..3 o) (.9 o a. ~ O~ n,' Ltl 3: (.9 Z Z q 5 o ~ Z 0 0 rW 0 ~o Z ~0 Z 0 (D ~O Z n,' m Z ~ 5 n~ ~ n rw o o ~ Z r'W O LI.] Z ~ 5 ~ Z 0 0 r," 13.1 o ~ Z c~ Z Q I.-- m oq ~o Z Z O= fl. 0 Z U.I 0 8 fl. NAtbr TXU TXU Energy 1601 Bryan Street Dallas, TX 75201-3411 December 18, 2002 The City of Pearland 3519 Liberty Drive Pearland, Texas 77581 Attention: Bill Eisen /Certify) Zda,,,d Subject: Execution of Electricity Supply Agreement, Number K# 1-G6QXI Dear Mr. Bill Eisen, TXU Energy Retail Company LP (TXU) would like to thank you for the opportunity to continue a long-term business relationship between our companies. TXU hereby returns a fully executed original Agreement (Transaction Confirmation, Price Sheet, Base Contract and Exhibit A/A-1) for your records. If you should have any further questions regarding the Agreement, please contact the undersigned name for immediate attention. For any other questions regarding your account, please contact your Sales Account Manager, Greg Pendley at 713-243-6255. Thank you for choosing TXU as your Retail Electric Provider to meet your electric energy needs. Sincerely, ogiar Debbie L. Johnson Contracts Administrator TXU Energy Phone: (214) 812-2647 E-mail: djohns23@txu.com Enclosures cc: G Pendley 0 0)cn irk 030-4042-555.17 010-3393-555.17 010-3391-555.17 010-3390-555.17 010-3380-555.17 010-3370-555.16 010-2290-555.17 010-2260-555.17 010-2230-555.17 010-2220-555.17 010-2210-555.17 010-1110-555.17 Aquatics 17,000 1 c Service Cenl EMS 12,000 Po Custodi ft Stations/Water Wells 734,000 0) m lecreal I Service 1 I Shelter 10,000 1 tenance CT ll R oo O T ihts 275,000 Fri W t 0 1 o0 aQ TXU 'ew TXU Energy BASE CONTRACT FOR SUPPLY OF ELECTRICITY This Base Contract for the Supply of Electricity ("Base Contract"), and (i) any other attachments, exhibits or appendices to this Base Contract (including Exhibit 'A"), together with (ii) any Transaction Confirmation for Supply of Electricity ("Transaction Confirmation") (including, as appropriate, one or more Price Sheets) as may be hereafter agreed to (collectively the 'Agreement'), is entered into by and between TXU ENERGY RETAIL COMPANY LP, a Texas limited partnership ("Seller") and [Etta ER >Ifi aEG;t�}ME ]N�sERQ'. RERE], a [STAT 1N WH....ttf le : ttTEFVF xl IVIEWI SER HERE] RE] (Buyer") and shall constitute the agreement for the supply of electricity to each Point of Delivery des gnated by an Electric Service Identifier (hereinafter individually an 'ESI ID" or collectively the ESI IDs ) of Buyer set forth in Exhibit "A' attached hereto. A "Pr ce Sheet(s)" is a document(s) containing a description of the method fo determining charges payable by Buyer to Seller for electricity supplied pursuant to this Agreement for specified ESI IDs. A condition precedent for the effectiveness of this Agreement shall be the execution of a separate Transaction Confirmation and the appropnate Price Sheet(s) and agreement by the Parties on the terms contained in Exhibit "A" to this Base Contract. Seller and Buyer may hereinafter be referred to individually as a "Party' and collectively as the "Parties". The applicable Tariff(s) for Retail Delivery Service (the Tanff) of the appropriate transmission and distribution utility (the "TDSP") serving Buyer's Premises is incorporated herein to the same extent as if fully set forth, and the Parties acknowledge that as a matter of law they are bound by the terms and conditions of the Tanff All capitalized terms not defined herein shall have the meaning as set forth in the Tanff. The pro -forma Tariff, as adopted by the Public Utility Commission of Texas (the "PUCT ), may currently be found at the PUCT's website at www.puc.state tx.us, as Appendix IV of the Substantive Rules Applicable to Electric Service Providers. I. SUBJECT MATTER AND QUANTITY. Seller shall sell and cause delivery of, to the Seller Point of Delivery, and Buyer shall purchase and receive, at the TDSP Point of Delivery for each ESI ID, and for use only at the associated Premise(s), all of Buyer's non-residential electricity requirements for the Premise(s). A "Premise is a tract of land or real estate or related commonly used tracts, including buildings and other appurtenances thereon, which is listed on Exhibit "A." A Premise may have one or more TDSP Points of Delivery. `Seller Point of Delivery" herein shall mean the point where Seller's supplier's conductors are connected to the TDSP's conductors. 'TDSP' herein shall mean a transmission and/or distnbution provider under the jurisdiction of the Public Utility Commission of Texas (' PUCT") that owns and maintains a transmission or distribution system for the delivery of energy, including a Municipally owned utility or Rural Electric Cooperative. "TDSP Point of Delivery' herein shall mean the point where TDSP's conductors are connected to Buyer's conductors at or near Buyer's Premises. II. PERFORMANCE ASSURANCE AND CREDIT REQUIREMENTS. [This Article has been deleted intentionally] III. TERM. The "Agreement Term" shall be the time period, as referred to in the Transaction Confirmation, during which the prices contained in the Price Sheet(s) are and shall remain in force. IV CALCULATION AND PAYMENT OF CHARGES. 4.1 For each Transaction Confirmation then in effect, Seller will invoice Buyer for electricity delivered to the Premise(s) during each monthly billing cycle of the Agreement Term, and for any other amounts due from Buyer to Seller hereunder in accordance with the applicable Pnce Sheet; provided, however, in the event Buyer's aggregated consumption under any Transaction Confirmation in any calendar month exceeds the aggregated calendar -month quantities listed in the applicable Exhibit 'A-1" by more than the percentage specified in such Transaction Confirmation Seller shall have the option to price such excess quantities at 105.0% of the then current Retail Market Price. Provided such is not the result of a force majeure event or Seller's default hereunder, if Buyer's aggregated consumption under any Transaction Confirmation in a month is less than the aggregated calendar -month quantities listed in the applicable Exhibit "A-1' by more than the percentage specified in such Transaction Confirmation, then, in addition to paying in accordance with the applicable Price Sheet for those quantities actually taken, Buyer agrees to pay Seller the positive amount, if any, calculated as follows [(100% minus the percentage specified in such Transaction Confirmation) multiplied by (the aggregated quantities on the applicable Exhibit "A-1 j for the applicable month minus the aggregated quantities consumed by Buyer under such Transaction Confirmation during the month), the "Shortfall Quantity] multiplied by [(the contracted price from the applicable Price Sheet) minus (95% of the then current Retail Market Price for the Shortfall Quantity)]. "Retail Market Price" for purposes of this Section 4.1 only shall be: the weighted average of the ERCOT market cleanng pnce for energy for all congestion zones in the applicable month; plus (a) all charges associated with (i) Ancillary Services, (ii) Line Losses, (ill) Unaccounted for Energy, and (iv) ERCOT administration fees and (b) any new charges established by the Independent System Operator that load serving Qualified Scheduling Entities are required to pay. For purposes of this paragraph 4.1, Seller reserves the right to allocate measured consumption to the calendar month for any ESI IDs not installed with an interval demand recorder (" IDR"). [F#E;t3A1i11E:JNSERTED:BEREj CONFIDENTIAL Page 1 of 8 4.2 In the event that an IDR must be installed at any Point of Delivery in order to provide multi -part pricing, if such IDR has not been installed prior to the commencement of the Agreement Term Seller reserves the right to calculate prices based upon the appropriate deemed load profile (as obtained by Seller from the PUCT) until such IDR can be installed. 4.3 To the fullest extent allowed by law, in the event, for any reason whatsoever Seller is ever determined to be, or has been, Buyer's electricity supplier for a period after the expiration or termination of a Transaction Confirmation, but before the beginning of a replacement Transaction Confirmation or the switch to another supplier then Seller may charge, and Buyer agrees to pay, for all such electricity so delivered to each ESI ID during each such billing cycle, a pnce per kWh equivalent to at Seller's option for each billing cycle (i) Seller's then current "standard list price offer;' or (ii) the monthly retail market rate for the applicable ERCOT congestion zone the product of (a) the average of the ERCOT market clearing prices of energy (adjusted to a per kWh basis) for the applicable ERCOT congestion zone for each on -peak hour of each week -day of the calendar month in which the applicable billing cycle began (provided that no market clearing price is to be valued at less than $20/MWh ($0.02/kWh) for purposes of this calculation), and (b) 130%] 4.4 In the event that Buyer changes any point of delivery to a different delivery service voltage level than the voltage level in place at the time the applicable Pnce Sheet became effective, Seller retains the right to adjust the contracted price from the applicable Price Sheet for that ESI ID(s) accordingly. Buyer will not install baseload generation to service the Premise(s) without providing Seller written notification at least 120 calendar days prior to the anticipated date that the generation will come on line. 4.5 Buyer shall pay the invoiced amount on or before the due date which shall be specified in Article II of the Transaction Confirmation, or Buyer shall notify Seller on or before such invoice due date if Buyer disputes any part of the invoice together with Buyer's reasons (however, Buyer's payment of an invoice and/or failure to dispute an invoice by the due date, in and of itself, shall not constitute a waiver by Buyer of Buyer's right to contest later the correctness of such invoice), but the undisputed portion shall remain due and payable on the due date. All past due amounts (including any disputed amounts withheld which are subsequently found to have been payable), shall accrue interest at a rate equal to (i) one percent (1%) per month or (ii) the highest rate allowed by law, whichever is the lesser from the date such payment was due until the same is paid. 4.6 In the event that Buyer gives notice of a disputed invoice as set forth in Section 4.5 above, the Parties shall, for a period of thirty calendar days following Seller's receipt of that notice, pursue diligent, good faith efforts to resolve the dispute. Following resolution of the dispute, any amount found payable, including interest shall be paid within thirty calendar days. 4.7 If Buyer notifies Seller in writing of a justifiable concern regarding the accuracy of an invoice hereunder, Seller shall make available to Buyer during normal business hours the records in Seller's possession reasonably necessary for Buyer to venfy the accuracy of its bill. Provided, however, neither Party may request any adjustment or correction of any statement or payment unless written notice of such request for adjustment or correction is furnished within twenty-four months of the payment due date for which such adjustment or correction is requested. It is understood and agreed that information and records in Seller's possession that are provided pursuant to this section 4.7 constitute proprietary and confidential information of Seller, the release of which could hinder or harm Seller's competitive position; therefore, such information and records are not intended to constitute public information under the Texas Public Information Act and shall not be released by Buyer, unless determined otherwise by the Texas Attorney General or a court of competent jurisdiction. However nothing in this section shall require Buyer to bring a legal challenge in any court to seek to overturn a ruling by the Texas Attorney General s Office or a court requiring disclosure pursuant to the provisions of the Public Information Statutes, but Buyer (i) shall cooperate and assist Seller in the event Seller should bring such a challenge and (ii) make no disclosure until when and if Seller's challenge has been finally denied. All information and records provided hereunder constitutes the property of Seller and such information and records and copies thereof, as well as all notes taken therefrom, shall be retumed to Seller promptly after the resolution of any invoice accuracy concerns. 4.8 Payments may be made by check, wire transfer, direct debit or electronic data interchange (on terms reasonably acceptable to both Parties) and notwithstanding anything to the contrary contained herein, must be received by the receiving Party on or before the end of the time period specified in Article II of the Transaction Confirmation. The address to which payments are to be made shall be as set forth in the Transaction Confirmation. For Buyer to pay Seller other than by check, Buyer needs to obtain required information/agreements with Seller. 4.9 Buyer agrees that it shall abide and be bound by the Agreement through the end of the Agreement Term and shall not, during the Agreement Term, claim any right to pncing based upon the Price to Beat. "Price to Beat shall mean a price for electricity, as determined pursuant to the Public Utility Regulatory Act, Section 39.202 charged by an affiliated retail electric provider to eligible customers. However in the event that Buyer, as a matter of law, should ever have the right to claim Price to Beat and thereby terminates this Agreement, Buyer agrees to pay to Seller, the positive amount, if any, calculated as follows (all quantities of electricity attributable to all Premises from the date of termination of this Agreement through the end of the Agreement Term) multiplied by (the contracted pnce from the applicable Price Sheet minus 95.0% of the then current retail market value for such quantities). 4.10 In the event Buyer ever takes electricity exceeding the Maximum kW for any Premise(s), each time it does so Buyer shall pay the Over Capacity Charges as stated in the applicable Price Sheet. "Maximum kW" for each Premise if any will be set forth on Exhibit 'A', and shall be recorded at the TDSP Point of Delivery. [FuiNi ME:INSERTEDMERE] CONFIDENTIAL Page 2 of 8 4.11 Buyer represents and warrants that as a political subdivision of the State of Texas it is exempt from state sales taxes pursuant to section 151.309 of the Texas Tax Code. (Information pertaining to such exemption shall be provided to Seller as requested.) Therefore, Seller, to the extent that it is not required to pay such taxes, will not flow through to Buyer the costs of such taxes hereunder. V. METERING EQUIPMENT. The supply of electricity to Buyer at the TDSP Point(s) of Delivery shall be measured by the TDSP, or its successor, utilizing its Metenng Equipment in accordance with its Tariff. Unless the accuracy of the Metering Equipment is disputed by notice given by either Party to the other, the Metenng Equipment shall be deemed to be accurate. If notice is given (unless otherwise agreed), Seller shall request the TDSP to examine Metering Equipment in accordance with the Tariff. If such test by the TDSP finds that the Metering Equipment was inaccurate, suitable adjustment shall be made in the accounts rendered by Seller, and, within a reasonable penod following that determination, the Metenng Equipment shall be re -calibrated or replaced by the TDSP or its successor. If such test finds the Metering Equipment to be accurate within the said limits the Metenng Equipment shall be deemed to be accurate and the cost of moving, testing, and replacing the Metering Equipment shall be paid by the Party who issued the notice. If it is discovered that any reading of the Metering Equipment or translation of the readings into charges have been incorrect, then the amount of money due to and from Seller shall be paid forthwith. If appropriate meter reading personnel cannot gain access to read the Metering Equipment, or the Metering Equipment fails to register correctly the amount of electricity supplied, or the readings are not communicated to Seller by the TDSP in time for whatever reason, Seller shall reasonably estimate the quantity of the electricity consumed and Buyer shall pay the charges for the estimated amounts subject to any adjustments which may be necessary following the reading. Buyer shall notify Seller of any dispute or query regarding the Metering Equipment made by the TDSP. Seller is not responsible for damage to the Metering Equipment unless caused by Seller's negligence. VI. BUYER'S ELECTRICITY NEEDS. 61 Both Parties will work in good faith during the Agreement Term to reasonably accommodate and assist Buyer with the management of its electricity needs at the Premises. For example, if Buyer desires to add or delete existing Premises, or to extend the Agreement Term both Parties will work in good faith to mutually agree upon the terms and conditions that are economically viable to both Parties However, notwithstanding the previous language, nothing contained herein shall be construed as to deny or diminish the economic benefit of this Agreement to either Party, and neither Party shall be under any obligation whatsoever to agree to a modification that would have such result. In the event that the TDSP experiences difficulties which cause interruptions in service to Buyer, Seller will take reasonable actions in working with the TDSP and Buyer in an attempt to have service restored to the Buyer. 6.2 In the event Buyer reduces its operations at one or more Premise(s), Buyer shall have the right to delete the quantities of electricity attributable to the reduction in operations at such Premise(s) from the effective date of the reduction through the end of the Agreement Term (the "Reduced Operations Liquidated Quantities") from this Agreement without terminating the Agreement. If Buyer desires to exercise such right with regard to such Premise(s), Buyer shall notify Seller in writing at least thirty calendar days prior to the effective date. Upon the exercise of such right, the Parties agree to settle with regard to such Reduced Operations Liquidated Quantities as follows (A) in the event the retail market value of the Reduced Operations Liquidated Quantities, as reasonably determined by Seller, is greater than the price Buyer would have paid for the Reduced Operations Liquidated Quantities as calculated on the applicable Price Sheet (the 'Unpurchased Price"), then Seller shall give Buyer credit against future purchases under this Agreement in the amount equal to the Reduced Operations Liquidated Quantities multiplied by ninety-five percent (95.0%) of (such retail market value minus the Unpurchased Price) (B) in the event the Unpurchased Price is more than the retail market value of the Reduced Operations Liquidated Quantities, as reasonably determined by Seller, then Buyer shall pay to Seller the amount equal to the Reduced Operations Liquidated Quantities multiplied by one hundred five percent (105.0%) of (Unpurchased Price minus such retail market value). Buyer shall pay such amount if any, to Seller within thirty calendar days of the date of liquidation. Exhibit "A" shall be modified to reflect the deletion of the liquidated quantities, and all other terms and conditions of this Agreement shall remain in full force and effect. 6.3 In the event Buyer sells, closes, or leases a particular Premise, without selling, closing or leasing all of the Premises, Buyer shall have the right to delete that particular Premise and the quantities of electricity attributable to that Premise through the end of the Agreement Term (the ' Liquidated Quantities') from this Agreement without terminating the Agreement (a "Premise Buyout Option"). If Buyer desires to exercise a Premise Buyout Option with regard to a Premise, Buyer shall notify Seller in writing at least thirty calendar days prior to the effective date. Upon the exercise of a Premise Buyout Option in the event a new owner of the applicable Premise (i) is willing to sign a new contract with Seller upon the same terms and conditions as Buyer's contract, (ii) is deemed creditworthy by Seller, and (iii) the new owner and Seller can legally enter into such a contract in accordance with the rules and regulations of the PUCT, then the Premise will be deleted from this Agreement and neither Party will owe any compensation to the other. In the event that the new owner (i) is unwilling to sign a contract with Seller upon the same terms and conditions, (ii) is not reasonably deemed creditworthy by Seller or (iii) the new owner and Seller cannot legally enter into the contract, then Buyer agrees to pay Seller the positive amount, if any, calculated as follows: the Liquidated Quantities multiplied by (the price that Buyer would have paid for the Liquidated Quantities through the end of the Agreement Term according to the applicable Price Sheet minus 95% of the then current retail market pnce) Buyer shall pay such amount, if any, to Seller within thirty days of the date of liquidation. Exhibit A" shall be modified to reflect the deletion of such Premise and its Liquidated Quantities, and all other terms and conditions of this Agreement shall remain in full force and effect with respect to the remaining Premises. VII. BUYER S REMEDIES PRIOR TO TERMINATION In the event that during the Agreement Term Seller ever should fail to deliver sufficient quantities of electricity to the TDSP for delivery to Buyer, or fail to schedule the delivery of electricity to Buyer by the TDSP, Buyer and Seller recognize that (i) the TDSP, per the wThistAME:IINSERTEDHERE] CONFIDENTIAL Page 3 of 8 TDSP's Tariff responsibilities, nevertheless is obligated to deliver sufficient electricity to satisfy Buyer's needs and (ii) Seller shall settle with ERCOT, at no cost or expense to Buyer, with respect to the purchase of electricity to cover any such failure. VIII. TERMINATION OF AGREEMENT. 8 1 Events of Default. A material breach of this Agreement includes: (a) the failure of either Party to make any payment due to the other Party pursuant to the terms hereof; (b) the failure of a Party to comply with any other material term of this Agreement; (c) a Party becomes or declares that it is insolvent or bankrupt, or becomes or declares that it is the subject of any proceedings, or takes any action whatsoever, relating to its bankruptcy, liquidation or insolvency, or is not generally paying its debts as they become due; (d) a Party fails to comply with any federal, state or local law, regulation, rule or order that causes a material adverse effect upon this Agreement, either Party or either Party's performance of its obligations described in this Agreement; (e) if Buyer enters into another electricity supply agreement for any Premise(s) with another retail energy provider that covers any penod during the Agreement Term; or (f) if Buyer sells, leases, closes or otherwise conveys or assigns any Premise(s) in which the electricity sold hereunder is utilized, without the prior written consent of Seller in accordance with Sections 6.1, 6.3, or 14 2 hereof. If either Party commits a material breach of this Agreement, the non -breaching Party shall give written notice to the breaching Party that describes the breach in reasonable detail ("Original Notice"). The non -breaching Party may in its sole discretion, and without prejudice to any other rights under this Agreement at law or in equity, terminate this Agreement (i) thirty calendar days after providing a notice of such breach in the event the breach pertains to item (a) in this paragraph above and the breaching Party fails to cure the breach before the end of such time period, or (ii) effective immediately in the event the breach pertains to items (c), (e) or (f) in this paragraph above or (iii) thirty calendar days after providing a notice of such breach if the breaching Party fails to cure any breach other than one related to (a), (c), (e), (f), or (g) above (the 'Early Termination Date") 8 2 Remedies Upon Termination. (a) If Seller terminates this Agreement due to a material breach by Buyer as described in this Article VIII, Seller shall transfer Buyer to the POLR. Upon termination of this Agreement by Buyer due to a material breach of Seller, Buyer shall have the right to select any other REP as its electncity provider. (b) Pursuant to the revised PUCT rules that forbid a retail electric provided from switching a delinquent paying customer to the POLR and notwithstanding anything in the Agreement to the contrary Seller shall have the right to order the TDSP to disconnect electric service to Buyers Premise(s) if the Agreement is terminated pursuant to item (a) in Section 8.1 (with the requisite notice and opportunity to cure) due to a material breach of Buyer in failing to make payment due to Seller. However, Seller shall not have the right to order the TDSP to disconnect electric service (i) for the non-payment of amounts that are subject to a bona fide dispute under the Agreement, (ii) prior to termination of the Agreement or (iii) for a termination of the Agreement due to a material breach reason other than non-payment. 8.3 Calculation of Seller's Damages. In the event that this Agreement is terminated by Seller pursuant to Section 8.1, the Parties agree, that in addition to all amounts Buyer may owe Seller prior to the termination, Seller s damages shall be the positive amount, if any, calculated as follows (all remaining unpurchased quantities of electricity reflected on Exhibit "A" for all ESI IDs through the end of the Agreement Term) multiplied by (the pnce that Buyer would have paid for the unpurchased quantities through the end of the Agreement Term according to the applicable Price Sheet, minus the current retail market value for the unpurchased quantities at the time of termination); plus (all reasonable direct costs and expenses incurred by Seller). Such amount shall be immediately due and payable within thirty calendar days following such termination. The current retail market value in this instance shall mean the price that Seller would reasonably be able to obtain from a bona -fide third party if entering into a contract with another customer with similar pricing factors as Buyer for the unpurchased quantities, and for the remaining term after the Early Termination Date through the end of the Agreement Term. Seller shall have a duty to use commercially reasonable efforts to mitigate its damages. 8.4 Calculation of Buyer's Damages. In the event that this Agreement is terminated by Buyer pursuant to Section 8.1, the Parties agree, that in addition to all amounts Seller may owe Buyer pnor to the termination, Buyer's damages shall be the positive amount, if any, calculated as follows (all remaining unpurchased quantities of electricity reflected on Exhibit 'A" for all ESI IDs through the end of the Agreement Term) multiplied by (the current retail market value for the unpurchased quantities at the time of termination minus the price that Buyer would have paid for the unpurchased quantities through the end of the Agreement Term according to the applicable Pnce Sheet); plus (all reasonable direct costs and expenses incurred by Buyer) minus all amounts Buyer may owe Seller for electricity consumed by Buyer pnor to the Early Termination Date. Such amount shall be immediately due and payable within thirty calendar days following such termination. The current retail market value in this instance shall mean the pnce Buyer would have to pay if entering into a commercially competitive contract with another REP for the same quantities and ESI IDs, and for the remaining term after the Early Termination Date through the end of the Agreement Term The pnce offered by the POLR, or any REP's standard list price offer, shall not be used to calculate Buyer's damages. Buyer shall have a duty to use commercially reasonable efforts to mitigate its damages. 8.5 Non-appropriafon. Buyer and Seller agree that in the event that Buyer is not able to allot or appropriate sufficient funds, for Buyer's fiscal year(s) subsequent to the initial fiscal year during the term of this Agreement, to continue the purchase of the total quantity of electncity covered by the Agreement and has no legally available funds for the purchase of services to perform functions similar to those performed under this Agreement, Buyer may terminate this Agreement at the end of Buyer's then current fiscal year by giving ninety (90) days written notice to Seller and enclosing therewith a swom statement that the foregoing conditions exist. In this sole event, Buyer shall not be obligated to make contract payments beyond the end of the then current fiscal year. Furthermore, Buyer covenants and represents to Seller that: FARM* INSERTED.HERE) CONFIDENTIAL Page 4 of 8 (e) (f) (g) Buyer has budgeted and has available for the current fiscal year sufficient funds to comply with its obligations under this Agreement There are no circumstances presently affecting Buyer that could reasonably be expected to adversely affect its ability to budget funds for the payment of all sums due under this Agreement; Buyer believes that funds can be obtained in amounts sufficient to make all contract payments during the full term of this Agreement and Intends to make all required contract payments for the full term of this Agreement; Buyer covenants that it will do all things within its power to obtain, maintain and properly request and pursue funds from which contract payments may be made, specifically including in its annual budget requests amounts sufficient to make contract payments for the full term of this Agreement; Buyer will not give pnority in the appropriation of funds for the acquisition or use of additional energy services; If any funds are appropriated for electricity costs such funds shall be applied first to the cost of electricity to be provided pursuant to this Agreement and that any such funds shall not be used to pay for electric power from any other electric power provider for the accounts covered in this Agreement and Buyer agrees to notify Seller in writing of such non -appropriation at the earliest practicable time subsequent to the failure to appropriate. As of the termination date under this Section 8.5, Seller shall have no further duty to supply electricity to Buyer and shall move service for Buyer's Premises to the POLR on the date of termination for non -appropriation. IX. FORCE MAJEURE. If either Party is unable to perform its obligations, in whole or in part, due to an event of force majeure as defined herein, then the obligations of the affected Party (other than the obligations to pay any amounts arising prior to the force majeure event) shall be suspended to the extent made necessary by such event. The term "Force Majeure" shall mean any act or event that is beyond the claiming Party's control (and which could not be reasonably anticipated and prevented through the use of reasonable measures) including, without limitation, the failure of the TDSP to receive, transport or deliver or otherwise perform, unless due to the failure of the Party claiming Force Majeure to perform such Party's obligations hereunder, and an event of Force Majeure of Seller's suppliers. The Party suffering the event of Force Majeure shall give written notice of such event of Force Majeure in reasonably full particulars to the other Party, as soon as reasonably possible. Any such event of Force Majeure shall, so far as possible, be remedied with all reasonable dispatch. It is understood and agreed that the settlement of strikes or lockouts will be entirely within the discretion of the Party having the difficulty, and that the above requirement of the use of diligence in restoring normal operating conditions will not require the settlement of strikes or lockouts by acceding to the terms of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty. Neither financial distress nor the inability of either Party to make a profit or avoid a financial loss shall be deemed a Force Majeure event nor shall (i) changes in the market prices of fuel energy, or electncity or (ii) a Party's financial inability to perform its obligations under this Agreement, constitute an event of Force Majeure hereunder. X. WARRANTIES AND LIMITATIONS OF LIABILITIES. 10.1 Seller hereby warrants to Buyer that at the time of delivery of electricity hereunder it will have good title and/or the right to sell such electricity, and that such electricity will be free and clear of all liens and adverse claims. Title will pass to Buyer at the TDSP Point of Delivery EXCEPT AS PROVIDED FOR IN THE FIRST SENTENCE OF THIS PARAGRAPH, SELLER EXPRESSLY DISCLAIMS AND MAKES NO WARRANTIES WHETHER WRITTEN OR VERBAL, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS IMPLIED, OR STATUTORY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 10.2 UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN ANY LIABILITY UNDER THIS AGREEMENT WILL BE LIMITED TO DIRECT ACTUAL DAMAGES AS THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. NEITHER PARTY WILL BE LIABLE FOR CONSEQUENTIAL INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, INCLUDING LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, WHETHER IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISIONS OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT. THE LIMITATIONS IMPOSED ON REMEDIES AND DAMAGE MEASUREMENT WILL BE WITHOUT REGARD TO CAUSE INCLUDING NEGLIGENCE OF ANY PARTY WHETHER SOLE, JOINT, CONCURRENT, ACTIVE OR PASSIVE; PROVIDED NO SUCH LIMITATION SHALL APPLY TO DAMAGES RESULTING FROM THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF ANY PARTY. XI. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed to be delivered when deposited in the United States mail (first class as to all notices other than disconnection, termination and/or material breach notices, and registered or certified as to all disconnection, termination and/or material breach notices), postage prepaid, when deposited with an overnight delivery service, prepaid to the applicable Buyer's address shown in the Transaction Confirmation and Seller's address as shown in the Transaction Confirmation, or to such address as either Party may from time to time designate as the address, or in the case of hand delivery, when delivered to a representative of either Party by a representative of the other Party. XII. APPLICABLE LAW AND REGULATIONS. 12.1 This Agreement is subject to all applicable laws regulations, rules and orders, except both Parties agree that it is their intention to agree to terms and conditions different from those set forth in the "Customer Protection Rules for Retail Electric Service" as amended, or as may be amended in the future (the "Customer Rules") currently beginning with Section 25.471 of the PUCT's Substantive Rules [FREHAMEINSERTED:HEREI CONFIDENTIAL Page 5 of 8 Applicable to Electric Service Providers. In the event that there is any conflict between the terms contained in this Agreement and the Customer Rules, this Agreement shall control. The Parties expressly acknowledge that certain terms and conditions addressed in the Customer Rules may not be provided for or referred to in this Agreement, and, in such event, it is the intent of the Parties that such terms and conditions are not applicable to the Parties. 12.2 In the event a judicial decision, order, new law or regulation, or a change in any law or regulation, requires a change in the method by which prices are calculated under this Agreement, or materially and directly affects a Party's ability to perform its obligations hereunder, then the Party that is negatively affected shall have the right to notify the other Party, within thirty calendar days after becoming aware of such detrimental change. The Parties shall use their best efforts to negotiate a modification to the terms of this Agreement so as to mitigate the impact of the event. If after twenty calendar days beyond the date of notice the Parties have been unable to negotiate a mutually satisfactory modification to the terms of this Agreement, either Party shall have the right to terminate this Agreement upon ten calendar days prior written notice to the other Party. If such right to terminate is not exercised within forty-five calendar days after the date of the original notice hereunder, then the nght to terminate this Agreement shall be waived with respect to the particular event. In the event of a termination pursuant to this Section 12 2, the Parties agree to settle as follows: (a) in the event the retail market value of all remaining quantities of electricity reflected on Exhibit 'A' after such termination date through the end of the Agreement Term ("the Liquidated Quantities' ), as reasonably determined by Seller, is greater than the price Buyer would have paid for the Liquidated Quantities as calculated on the applicable Price Sheet (the "Unpurchased Price") then Seller shall pay to Buyer the amount equal to: the Liquidated Quantities multiplied by (such retail market value minus the Unpurchased Price); (b) in the event the Unpurchased Price is more than the retail market value of the Liquidated Quantities, as reasonably determined by Seller then Buyer shall pay to Seller the amount equal to: the Liquidated Quantities multiplied by (the Unpurchased Price minus such retail market value). 12 3 Seller agrees to maintain all necessary certifications and comply with all necessary requirements in order to maintain its status as an authorized REP. 12.4 In the event Buyer utilizes, under the provisions of Article IX, Article XII, or in any other manner, its inherent powers as a political subdivision of the State of Texas in order to circumvent in any way the terms and provisions of this Agreement or the intent of this Agreement, it shall be responsible for contract damages caused by such action. XIII RESPONSIBILITY. 13 1. Buyer assumes full responsibility for electric energy on Buyer's side of the TDSP Point of Delivery and agrees, to the fullest extent allowed by law, to and shall hold harmless Seller, its parent company and all of its affiliates, and all of their respective officers, directors shareholders, associates employees, servants, and agents (hereinafter collectively referred to as "Seller Group') from and against all claims, losses, expenses, damages, demands, judgments, causes of action, and suits of any kind (hereinafter collectively referred to "Claims"), including Claims for personal injury, death, or damages to property, occurring on Buyer's side of the TDSP Point of Delivery, arising out of or related to the electric power and energy and/or Buyer's performance under this Agreement 13.2 Seller assumes full responsibility for electric energy on Seller's side of the Seller Point of Delivery, and agrees to and shall hold harmless Buyer, its officials, associates, employees servants, and agents (hereinafter collectively referred to as "Buyer Group") from and against all Claims, including Claims for personal injury, death, or damages to property occurring on Seller's side of the Seller Point of Delivery, arising out of or related to the electric power and energy and/or Seller's performance under the Agreement. XIV. MISCELLANEOUS. 14.1 Choice of Law / Venue. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PRINCIPLES WHICH OTHERWISE MIGHT BE APPLICABLE THE PARTIES RECOGNIZE THAT THIS AGREEMENT IS PERFORMABLE IN PART IN DALLAS COUNTY. 14.2 Assignment. In the event that Buyer conveys legal title to all of the Premises to the same entity, Buyer may request from Seller the right to assign its rights and obligations under the Agreement to the new owner of the Premises and in such event, Seller shall not u nreasonably withhold its consent. Any purported assignment without Seller's prior written consent shall be null and void. Buyer shall n ot have any right whatsoever to assign this Agreement to any party that is not the owner of all of the Premises, and any purported assignment shall be null and void. Seller may not assign this Agreement to another party, without the pnor written consent of Buyer, which consent shall not be unreasonably withheld. Any purported assignment without Buyer s pnor written consent shall be null and void This Agreement shall inure to and be binding upon the Parties hereto, and their respective successors and assigns. 14.3 Entirety of Agreement. It is the intention of the Parties that the Agreement shall contain all terms, conditions, and protections in any way related to or arising out of, the sale and purchase of the electricity, and supersedes all prior agreements, whether written or o ral. This Agreement may not be modified or amended except in writing, duly executed by the Parties hereto. 14.4 Counterparts. This Agreement may be executed in multiple original counterparts, all of which shall constitute one and the same Agreement 14.5 Duty of Good Faith. Both Parties shall have a duty of good faith and fair dealing with regard to this Agreement 14.6 Waiver of Rights. A waiver by either Party of any breach of this Agreement, or the failure of either Party to enforce any of the W AME:INSERTED:HEREj CONFIDENTIAL Page 6 of 8 terms and provisions of this Agreement, will not in any way affect, limit or waive that Party's right to subsequently enforce and compel strict compliance with the same or other terms or provisions of this Agreement Except to the extent necessary to enforce Seller's rights under this Agreement, nothing in this Agreement shall constitute or be interpreted to constitute a waiver of Buyer's statutory and common-law immunity defenses, including sovereign and/or govemmental immunity and qualified and/or official immunity; it being intended that such immunities shall in all respects (except as provided above) be preserved. 14.7 Third Party Rights. Nothing in this Agreement shall create, or be construed as creating, any express or implied rights in any person or entity other than the Parties. 14.8 Survival. No termination or cancellation of this Agreement will relieve either Party of any obligations under this Agreement that by their nature survive such termination or cancellation, Including, but not limited to, all warranties, obligations to hold harmless, obligations to pay for electricity taken, and obligations for any breaches of contract. 14.9 Further Assurances. Buyer and Seller agree to provide such information, execute and deliver any Instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, in order to give full effect to this Agreement and to carry out the intent of this Agreement. 14.10 Confidentiality. Seller acknowledges that Buyer is a governmental body that is subject to public information laws, including Chapter 552 of the Texas Government Code which requires Buyer to release any information that is defined as or deemed to be public (the "Public Information Statutes"). Subject to any Public Information Statute or related order, rule or regulation requiring disclosure, Buyer agrees to keep all terms and provisions of this Agreement, and any information and records in Seller's possession that are provided under this Agreement confidential and not to disclose the terms of the same to any third parties without the prior written consent of Seller. It is understood and agreed that the foregoing constitutes proprietary and confidential information of Seller, the release of which could hinder or harm Seller's competitive position, and therefore is not intended to constitute public information under the Texas Public Information Act and shall riot be released by Buyer, unless determined otherwise by the Texas Attorney General or a court of competent jurisdiction. However, nothing in this section shall require Buyer to bring a legal challenge in any court to seek to overturn a ruling by the Texas Attorney General's Office or a court requiring disclosure pursuant to the provisions of the Public Information Statutes, but Buyer (i) shall cooperate and assist Seller in the event Seller should bring such a challenge and (ii) make no disclosure until when and if Seller s challenge has been finally denied. 14.11 Forward Contract. This Agreement and the transactions hereunder will constitute "forward contracts" as defined in Section 101(25) of the U. S. Bankruptcy Code ("Bankruptcy Code' ). The Parties agree that (I) Seller is a "forward contract merchant" as defined in Section 101(26) of the Bankruptcy Code, (il) the termination nghts of the Parties will constitute contractual rights to liquidate transactions, (iii) any payment related hereto will constitute a "settlement payment" as defined in Section 101 (51A) of the Bankruptcy Code, and (iv) Sections 362, 546, 553, 556, and 560 of the Bankruptcy Code shall apply to the Parties. 14.12Authorization. At such time as a Transaction Confirmation [including applicable Price Sheet(s)] are executed pursuant to this Agreement, Buyer authorizes Seller to become Buyer's retail electric provider for the duration of the Agreement Term set forth in the Transaction Confirmation. Buyer authorizes Seller to act as Buyer s agent for the sole purpose to effect any change, if necessary, and Buyer shall direct its current retail electric provider to work with Seller to make this change happen. Buyer represents to Seller that Buyer is legally authorized to change the retail electric provider for all of the Premises and that Buyer's aggregated electric loads covered by this contract have an aggregated peak demand greater than one megawatt 14.13 Severability If any portion of this Agreement, or application thereof to any person or circumstance, shall be held legally invalid, the remainder shall not be affected and shall be valid and enforced to the fullest extent permitted by law or equity. 14.12 Aggregator Fees. Seller shall bill and collect from Buyer for HGAC Energy Purchasing Corporation ("HGAC") Aggregation Fees with respect to the purchase of Electricity under these terms and conditions ("Aggregation Fees"). Seller shall remit all Aggregation Fee collections received during each calendar month to HGAC on or before the twentieth (20th) business day of the following calendar month. Payments received from Buyer shall be deemed to be payments of Seller and TDSP charges then due then of Aggregation Fees. 14.13 Aggregator Review. Buyer understands and acknowledges that any deviations from the standard terms and conditions negotiated by HGAC on behalf of Buyer shall be subject to the pnor review and consent of HGAC. 14.14 Aggregated Pricing. Buyer understands and agrees that as a Member of HGAC, Seller may base the indicative pnce on the attached price sheet upon assumptions as to the aggregated load and associated load factor of all HGAC Members of the applicable pncing group. A condition precedent to the effectiveness of this Agreement is the satisfaction of certain load and load factor criteria as agreed to between Seller and HGAC In the event that such criteria are not satisfied, then Seller shall not sign this Agreement and it shall be null and void ab initio [FfE.fi11>:1JIE>fFlSERTEi3 f1EREJ CONFIDENTIAL Page 7 of 8 The Parties have signed this Base Contract for Supply of Electricity document, acknowledging their agreement to its provisions as of 200_, IiR><Vtt15fH>F Sr tE]ILt L r By: Name: Title: Date: "Buyer" Version State/Local Government 091902 AME:[NSERTED!HIERE] Page 8 of 8 TXU ENERGY RETAIL COMPANY a Texas limited partnership By: TXU Energy Retail Management Company LLC Its general partner By: Name: Title: Date: "Seller" CONFIDENTIAL TRANSACTION CONFIRMATION FOR THE SUPPLY OF ELECTRICITY Transaction Confirmation #: DMINSEtt BUYER: U?m!l 7 IMP SELLER: TXU Energy Retail Company LP :.:.....::. E] :1 1601 Bryan Street ]Il' _(?j?I#1TjtS] Dallas, Texas 75201 Phone: CIIc] Fax* Phone: Attention: 214 812 4380 Contract Administration, Fax. 214 10 812 015E 8908 I. AGREEMENT TERM The Primary Term for each Premise, identified in Exhibit A shall commence upon the date of the first reading of the meter(s) on each respective Premise by and the shall TDSP end on or for after each [STDA:1M], ........ Premise .............. upon . the or date as soon of ... thereafter the . ............. .............. first r: . as reading practicable, of the respective Premise meter(s) by the TDSP on or after [.l i r ]. II. PAYMENT TERMS/METHOD ' ] Days Via (ME T O t'Yiv . III. INITIAL DEPOSIT AMOUNT No initial deposit required. IV. BILL TO: U`.El' 1 EG] .I> RTl3: EIEI'] ' lYS E$ ] E1'kl [FJ V. STANDARD SERVICES Toll free number (800) 725-7920 for 24 hour emergency outage and customer service, available 7:00 a.m. to 7:00 p.m. on normal business days Assigned customer service representative, billing analyst, and assigned professional account manager. Access to the TXU Energy Gateway web portal. VI. CUSTOM SERVICES Not Applicable, Fee $0.00045 kWh by Buyer VII SPECIAL PROVISIONS Aggregation of per actually consumed will collected Corporation. by Seller on behalf of and paid to HGAC Energy Purchasing VIII. COST PER KWH See attached Price Sheet. ......................................... IX MONTHLY CONTRACT USAGE W ?L ] % per month for excess usage and TOLERANCES [SST t3h kW % per month for under usage (see section IV, Calculation and Payment of Charges in the Base Contract for Supply of Electricity) X. BASE CONTRACT THE BASE CONTRACT FOR THE SUPPLY OF ELECTRICITY ("BASE CONTRACT"), SEPARATELY EXECUTED BY BUYER AND SELLER, IS PART OF THE AGREEMENT TO WHICH THIS TRANSACTION CONFIRMATION APPLIES. BUYER ACKNOWLEDGES THAT IT HAS RECEIVED THE BASE CONTRACT AND IN THE EVENT THAT BUYER HAS NOT PREVIOUSLY EXECUTED THE BASE CONTRACT BY SIGNING THIS TRANSACTION CONFIRMATION, BUYER AGREES TO BE BOUND BY THE BASE CONTRACT AS PROVIDED BY SELLER. (OR) THE BASE CONTRACT FOR THE SUPPLY OF ELECTRICITY ("BASE CONTRACT"), PREVIOUSLY EXECUTED BY BUYER ON ......................... . / l(} T IS HEREBY PART OF THE AGREEMENT TO WHICH THIS TRANSACTION CONFIRMATION APPLIES. Buyer Legal Name: Seller Legal Name* %r,(;A i1$ i i lism TXU Energy Retail Company LP, ......tip a [SI A l l ] [I 13frt<lli+t' i. a Texas Limited Partnership By: (General Partner or Agent name, if applicable) By: its TXU General Energy Partner Retail Management Company LLC, Buyer Signature: Seller Signature: [RI NANME1NSERTED:Wile] co Officer's Printed Name: Officer's Printed Name: Title: Title: Date: Date: Form NameNersion: TRANSACTION CONFIRMATION 061002 IE#EENAME 1NSERT$0£HEREj CONFIDENTIAL Transaction Confirmation 11: Account Name. Plan Type: FLAT Price Sheet — Flat Price ramW.` T4A.0 TXU Energy This Price Sheet is only valid in association with and shall remain subject to the Base Contract for Supply of Electricity ("Terms") and Transaction Confirmation for Supply of Electricity referenced above and is contingent upon Buyer and Seller's acceptance of the Transaction Confirmation. This Price Sheet is applicable to the Customer ESI number(s) identified on Exhibit A. Monthly Prices shall equal the sum of (i) the Monthly Standing Charge set forth in Exhibit A; plus (ii) the applicable per kWh charges set forth below for the electricity; plus (iii) all costs and expenses of any nature whatsoever that are charged by the Transmission and Distribution Service Provider ("TDSP") for the transmission and/or distribution of the electricity as well as any other charges of the TDSP that are attributable to the Customer Account numbers, including, without limitation, charges for reactive power; plus (iv) the Aggregation Fee; plus (v) all other tariffs, rates, riders, fees, costs, and charges, including, without limitation, installed capacity type charges (and any direct and indirect costs resulting therefrom or associated therewith), charged or required by the TDSP or another party, that are mandated, levied, assessed, allowed, or approved by the Texas Public Utility Commission and/or any other governmental or regulatory authoiity(ies), on or with respect to the acquisition, sale, delivery, and purchase of the electricity; plus (vi) all federal, state, and local taxes, of any nature whatsoever imposed by any governmental and/or regulatory authority(ies), on or with respect to the acquisition, sale, delivery, and purchase of the electricity, including Seller's Texas Gross Receipts Tax and Public Utility Commission Assessment on the sale of electricity to Buyer; plus (vii) the Over Capacity Charge set forth below, if applicable Charge Amount (i) Monthly Standing Charge per service point $ 0.00 per service point (ii) All kWh $[hs..TVPRI] per kWh s sinbIt1 "T#} P I3EI I I :G2I E ] per kWh for delivery, (iii) TDSP Delivery Charges excludmg will be based reactive upon power, actual charges. based upon current estimate;* Monthly price (iv) Aggregation Fee ** $0 00045 per kWh (v) Tariffs rates, riders, fees, and To be determined, by than those included in varies service point charges other TDSP delivery charges above (vi) All applicable taxes To be determined, varies by jurisdiction (vii) Over Capacity Charge $ [QVEItACTHl] per kW The costs and expenses charged by the TDSP for delivery services may fluctuate during the Agreement Term, as will other applicable taxes, tariffs, riders, fees, and charges. * For reference purposes only This is the current estimate of the average TDSP standard delivery costs, excluding charges for reactive power, special metering, or other miscellaneous TDSP charges. **Aggregation Fee of $0.00045 per kWh actually consumed by Buyer will collected by Seller on behalf of and paid to HGAC Energy Purchasing Corporation. Form Name/Version: PRICE SHEET FLAT PRICE 060302 [RLENAME:3NSERTED: HEREJ CONFIDENTIAL