FW: ADDENDUM TO GISB as of 10-20-00.doc

Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax 713-646-3490

----- Forwarded by Debra Perlingiere/HOU/ECT on 05/30/2001 03:36 PM -----

=09Judy Thorne/ENRON@enronXgate
=0905/30/2001 09:19 AM
=09=09=20
=09=09 To: Debra Perlingiere/HOU/ECT@ECT
=09=09 cc:=20
=09=09 Subject: FW: ADDENDUM TO GISB as of 10-20-00.doc

Debra,

Please review the following Addendum from El Paso and work with Harry Grego=
ry=20
to come to agreeable terms. His phone number is 713-420-3821.

Thanks,
Judy

-----Original Message-----
From: "Gregory, Harry" <Harry.Gregory@ElPaso.com<@ENRON=20
[mailto:IMCEANOTES-+22Gregory+2C+20Harry+22+20+3CHarry+2EGregory+40ElPaso+2=
Eco
m+3E+40ENRON@ENRON.com]=20
Sent: Wednesday, May 30, 2001 9:14 AM
To: 'judy_thorne@enron.com'
Subject: ADDENDUM TO GISB as of 10-20-00.doc

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

EXHIBIT =01&B=018
GUARANTY

=20
This GUARANTY is made by El Paso Energy Corporation (hereinafter referred t=
o=20
as the "Guarantor") having principal offices at 1001 Louisiana, Houston,=20
Texas 77002. Guarantor enters into this Guaranty in consideration of its=
=20
wholly owned subsidiary, El Paso Merchant Energy, L.P., (the "Buyer"),=20
entering into one or more contracts for the purchase or sale of natural gas=
=20
(the =01&Contracts=018) from (the "Seller"). Pursuant to the ter=
ms of=20
the Contracts, the Guarantor hereby unconditionally guarantees prompt payme=
nt=20
to the Seller of such sums up to an aggregate limit of $ U. S.=20
Dollars that now are or may hereafter become due and payable to Seller,=20
including interest and expenses of all collection and reasonable counsel's=
=20
fees incurred by Seller by reason of the default of Buyer.
=20
This Guaranty shall remain in full force and effect until the earlier of: 1=
)=20
the termination of the Contracts, 2) , or =
3)=20
thirty (30) days after Seller=01,s receipt of written notice of revocation =
of=20
this Guaranty from Guarantor. Termination of this guaranty shall not=20
eliminate Guarantor's liability occurring under the Contracts entered into=
=20
prior to such termination, including any subsequent interest or late charge=
s;=20
provided however, termination of this Guaranty shall relieve Guarantor of a=
ny=20
liability for transactions occurring after such termination including any=
=20
subsequent interest or late charges.
=20
The Guarantor waives notice of acceptance of this Guaranty, notice of=20
transactions with Buyer or the amounts and terms thereof, notice of all=20
defaults or disputes with Buyer, and of the settlement or adjustment of suc=
h=20
defaults or disputes. The Guarantor, consents to and waives notice of all=
=20
change of terms, the withdrawal or extension of credit or time to pay, the=
=20
release of the whole or any part of the indebtedness, the settlement or=20
compromise of differences, the acceptance or release of security, the=20
acceptance of notes, or any other form of obligation for Buyer's=20
indebtedness, and the demand, protest, and notice of protest of such=20
instruments or their endorsements.
=20
The obligation of the Guarantor is a primary and an unconditional obligatio=
n=20
and covers all obligations of Buyer to Seller that arise under the=20
Contracts. This obligation shall be enforceable before or after proceeding=
=20
against Buyer or against any security held by Seller and shall be effective=
=20
regardless of the solvency or insolvency of Buyer at any time, the extensio=
n=20
or modification of the indebtedness of Buyer by operation of law, or the=20
subsequent incorporation, reorganization, merger, or consolidation of Buyer=
=20
or any other change in the composition, nature, personnel, or location of=
=20
Buyer.
=20
The Guarantor in executing this Guaranty represents and warrants to Seller=
=20
the following: =20
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1)the Guarantor is a corporation duly organized and existing in=
=20
good standing and has full power and authority to make and deliver this=20
Guaranty;=20
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2)the execution, delivery, and performance of the Guaranty by t=
he=20
Guarantor has been duly authorized by all necessary action of its principal=
s=20
and does not and will not violate the provision of, or constitute default=
=20
under, any presently applicable law or its organizational instruments or an=
y=20
agreement presently binding on it; and=20
=20
3)this Guaranty has been duly executed and delivered by the=20
authorized officers of the Guarantor and constitutes its lawful, binding, a=
nd=20
legally enforceable obligation.
=20
This Guaranty supersedes and terminates all prior guaranties issued by=20
Guarantor on behalf of Buyer.
=20
IN WITNESS WHEREOF, this Guaranty has been duly executed by El Paso Energy=
=20
Corporation this 1ST day of , 200 .
=20
=20
"GUARANTOR"
=20
=20
By: =20
Name: C. Dana Rice
Title: Vice President & Treasurer
=20
=20
=20
=20
=20
=20
=20
=20
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******************************************************************
This email and any files transmitted with it from the ElPaso=20
Corporation are confidential and intended solely for the=20
use of the individual or entity to whom they are addressed.=20
If you have received this email in error please notify the=20
sender.
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