Exhibit 10(l)

EXCHANGE AGREEMENT

 

This Exchange Agreement ("Agreement") made and entered into as of this 28th day
of June, 2000, by and between CoEnergy Trading Company, a Michigan corporation
("CTC"), and The Peoples Gas Light and Coke Company, an Illinois corporation
("Customer").

INTRODUCTION

Customer desires to deliver volumes of natural gas to CTC during the term of the
Agreement and cause equal volumes of natural gas to be redelivered by CTC on a
firm basis to Customer's city gate.

Subject to the terms and conditions hereinafter set forth, CTC is willing to
engage in this exchange of natural gas with Customer and to provide the services
herein described.

Therefore, in consideration of the mutual benefits to be derived from this
arrangement, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 "Business Day" shall mean any day except Saturdays, Sundays and federal bank
holidays, and each such Business Day shall commence at 8:00 a.m. Central Time
and end at 5:00 p.m. Central Time.

1.2 "Central Time" shall mean the prevailing time in the Central Time Zone.

1.3 "Contract Quantity" shall mean the maximum quantity of natural gas that may
be accounted for in the Exchange Account on any Day, and such quantity shall be
one million (1,000,000) MMBtu.

1.4 "Delivery MDQ" shall mean the maximum quantity of gas that Customer may
deliver to CTC at the Point of Delivery on any Day. The Delivery MDQ shall be
ten thousand (10,000) MMBtu.

1.5 "Delivery Period" shall mean the period commencing July 1, 2000 and ending
October 31, 2000 inclusive of the commencement and ending dates, during the term
of this Agreement.

1.6 "Exchange Account" shall mean, for administrative purposes, the account in
which the balance of Customer's deliveries to CTC, net of redeliveries by CTC to
Customer, shall be maintained.

1.7 "Gas Day" or "Day" shall mean a period of twenty-four (24) consecutive hours
beginning and ending at 9:00 a.m. Central Time, or as redefined by the
Transporter in Transporter's Tariff.

1.8 "Point of Delivery" shall mean the point or points at which Customer
delivers or causes to be delivered gas to CTC.

1.9 "Point of Redelivery" shall mean the point or points at which CTC delivers
natural gas or causes natural gas to be redelivered to Customer at Customer's
distribution system, or a mutually agreed upon redelivery point.

1.10 "Redelivery MDQ" shall mean the maximum quantity of natural gas that CTC
may redeliver to Customer at the Point of Redelivery on any Day. The Redelivery
MDQ shall be twenty thousand (20,000) MMBtu.

1.11 "Redelivery Period" shall mean the period commencing November 1, 2000 and
ending March 31, 2000 inclusive of the commencement and ending dates, during the
term of this Agreement.

1.12 "Transporter" shall mean the interstate pipeline or the local distribution
company through which natural gas is delivered to or away from the Point of
Delivery, and to or away from the Redelivery Point.

1.13 "Transporter's Tariff" shall mean the Transporter's FERC Gas Tariff, as
revised from time to time, on file with the Federal Energy Regulatory
Commission, or the local distribution company's tariff, as revised from time to
time, on file with the state public utility commission.

ARTICLE II

DELIVERIES AND REDELIVERIES

2.1 During the Delivery Period, Customer shall deliver to CTC, and CTC shall
cause to be received from Customer for credit to the Exchange Account any
quantity of natural gas, equal to the quantity Customer nominates up to and
including the Delivery MDQ.

2.2 Customer will inform CTC of its delivery of natural gas for any Gas Day by
notice via telephone call and confirming telecopy to CTC no later than one and a
half (11/2) hours prior to the applicable Transporter's earliest regular
nomination deadline for such Gas Day to permit CTC to receive such deliveries,
and CTC will confirm such nomination by return notice via telecopy to Customer.

2.3 During the Redelivery Period, CTC shall cause to be redelivered to Customer,
and Customer shall receive, a quantity of natural gas equal to the quantity
nominated by Customer for redelivery in accordance with Section 2.4 below, up to
and including the Redelivery MDQ, provided that the requested redeliveries do
not cause Customer to have a negative balance in its Exchange Account.

2.4 Customer shall nominate the daily redelivery quantity of natural gas for any
Gas Day by telephone call with confirming telecopy to CTC no later than one and
a half (11/2) hours prior to the applicable Transporter's earliest regular
nomination deadline for such Gas Day to permit CTC to redeliver such gas, and
CTC will confirm such nomination by return notice via telecopy to Customer.

2.5 The Points of Delivery under this Agreement shall be supply delivered: on
the Michigan Consolidated Gas Company ("MichCon") system; at the interconnection
of MichCon's system and the Shell Western E&P, Inc. processing plant at
Kalkaska, Michigan; or at an interconnection between the MichCon system and one
or more of the following pipelines: ANR Pipeline Company ("ANR") at the Willow
Run Interconnect, or Panhandle Eastern Pipe Line Company ("Panhandle") at the
River Rouge Interconnect.

2.6 The Points of Redelivery under this Agreement shall be Customer's natural
gas distribution system at a point(s) mutually agreed upon by CTC and Customer.

2.7 Customer shall be responsible for making all arrangements and paying for the
transportation of the gas to the Point of Delivery and from the Point of
Redelivery. CTC shall be responsible for making all arrangements and paying for
the transportation of gas from the Point of Delivery and to the Point of
Redelivery.

2.8 The parties will cooperate to the extent operationally feasible to avoid
imbalances resulting in imbalance or penalty charges, and/or cash-out
obligations, under the provisions of the applicable Transporter's Tariff. This
cooperation will include maintaining operational balancing arrangements or
similar arrangements with Transporter to reduce the likelihood of imbalance or
penalty charges being incurred. Each party will promptly notify the other
whenever it has knowledge of an imbalance condition that must be corrected to
avoid such imbalance or penalty charges, or cash-out obligations. Should either
party incur an imbalance or penalty charge, or cash-out obligation from a
Transporter, both parties shall use their reasonable efforts to determine the
validity as well as the cause of such imbalance or penalty charge, or cash-out
obligation. If the parties determine that the imbalance or penalty charge, or
cash-out obligation was imposed solely as a result of Customer's actions or
omissions, then Customer shall pay such imbalance, penalty charge, or cash-out
obligation. If the parties determine that the imbalance or penalty charge, or
cash-out obligation was imposed solely as a result of CTC's actions or
omissions, then CTC shall pay such imbalance or penalty charge, or cash-out
obligation. If the parties determine that the imbalance or penalty charge, or
cash-out obligation was imposed as a result of the actions or omissions of both
parties, then each party shall pay that portion of the imbalance or penalty
charge, or cash-out obligation caused by its actions or omissions.

2.9 Upon expiration or termination of this Agreement, Customer shall be
obligated to schedule redelivery of any positive balance reflected in Customer's
Exchange Account by the end of the month in which expiration or termination is
deemed to be effective. Customer may solicit an offer from CTC to purchase
remaining Exchange Account volumes, but CTC shall be under no obligation to
purchase the same. For volumes remaining in Customer's Exchange Account after
the end of the month in which expiration or termination is deemed effective,
such volumes shall be redelivered to Customer, or purchased by CTC, or a
third-party within one (1) month of such expiration or termination; if such
redelivery or purchase does not occur within the one-month period, then Customer
shall continue to pay applicable charges pursuant to Section 3.1(a) below, until
such volumes are redelivered to Customer, or purchased by CTC, or a third-party.
Unless CTC and Customer agree otherwise in a separate written instrument CTC is
under no obligation to redeliver volumes sold by Customer to a third party.

ARTICLE III

PRICE

3.1 Customer shall pay CTC for each month during the term of this Agreement the
following Fees:

(a) A fixed monthly fee of $123,333.00;

3.2 The Exchange Fee set forth in Section 3.1 does not include taxes, if any,
arising out of the transaction. Customer shall pay all taxes imposed on, or with
respect to, the natural gas prior to its delivery at the Points of Delivery and
at and after its redelivery at the Point of Redelivery. CTC shall pay all taxes
imposed on, or with respect to, the gas at and after its delivery at the Points
of Delivery and prior to its redelivery at the Point of Redelivery. Each party
shall furnish the other with any applicable exemption or resale certificates
prior to initial deliveries.

ARTICLE IV

BILLING AND PAYMENT

4.1 Beginning in August 2000 and on or before the tenth (10th) day of each month
thereafter during the term of this Agreement and the month immediately following
the termination date, CTC shall render a statement to Customer for the
applicable Exchange Fee provided for in Article III, above. Customer shall pay
to CTC on or before the twenty-fifth (25th) day of the month the amount billed
in that statement; provided that, if the twenty-fifth (25th) day of the month is
not a Business Day, Customer shall pay the stated amount on the next succeeding
Business Day. If CTC is late in rendering its statement, the due date for
payment shall be extended on a day-for-day basis to the next Business Day.
Unless notified otherwise, all payments shall be made by electronic transfer to
a bank account specified by CTC on the monthly statement.

4.2 In the event that Customer disputes any portion of a statement rendered
pursuant to Article III, above the total undisputed amount shall nevertheless be
paid when due. If the parties cannot resolve the dispute within thirty (30) days
after such payment, the matter shall be submitted to a mutually agreed upon firm
of nationally known public accountants or other third party with appropriate
expertise (the "Expert") who shall examine the records and billings and make a
written report thereon, which shall be delivered to each party. The decision
rendered by the Expert in this report shall be binding upon both parties. The
party against whom the Expert's decision is rendered shall pay the fees and
expenses of the Expert incurred in connection with such decision. If both
parties prevail with respect to some part of the Expert's decision, the fees and
expenses of the Expert shall be allocated between the parties in a manner
appropriate to the Expert's decision. Each party shall pay for its own expenses,
including attorneys' fees, with respect to any such dispute.

4.3 Should Customer fail to pay the undisputed amount of any statement rendered
by CTC when such amount is due, or any disputed amount ultimately determined to
be due, Customer shall pay CTC interest thereon from the date due until the date
of payment at an annual rate equal to the lesser of (1) the then-effective prime
rate of interest as published under the heading "Money Rates" in The Wall Street
Journal, plus one percent (1%), or (2) the maximum rate allowed by law. In
addition, CTC may, upon two (2) Business Days prior written notice sent to
Customer by facsimile transmission, suspend further service under this Agreement
until amounts are paid in full and/or may terminate this Agreement.

4.4 Each party shall have the right, at its expense and during normal business
hours, and upon two (2) Business Days prior notice, to audit the books and
records of the other party to the extent necessary to verify the accuracy of any
statement rendered under this Agreement.

4.5 Should CTC find at any time within twenty-four (24) months after the date of
any statement rendered by it that there has been an undercharge in the amount
billed in the statement rendered to Customer for services provided under this
Agreement, CTC may submit a statement for such undercharge, and Customer, upon
verifying the same, shall pay such amount within thirty (30) days after receipt
of the statement, with interest as provided for in Section 4.3.

4.6 Should Customer find at any time within twenty-four (24) months after the
date of any statement rendered by CTC that there has been an overcharge in the
amount billed in the statement by CTC to Customer for services rendered under
this Agreement, and if Customer has paid said overcharge, the overcharge, if
verified by CTC, shall be refunded within thirty (30) days of notification by
Customer, with interest as provided for in Section 4.3.

ARTICLE V

CREDITWORTHINESS

5.1 Upon execution of this Agreement, or at any time during the term hereof,
should CTC have a reasonable good faith belief that Customer lacks the ability
to meet its payment obligation, either because of Customer's failure to meet the
criteria for creditworthiness under CTC's credit policy, or otherwise, CTC may
require that Customer do any one of the following:

(a) provide CTC with a corporate guarantee of Customer's payment obligation
under this Agreement within fourteen (14) days after receiving a request to do
so; or

(b) provide CTC with an irrevocable stand-by letter of credit in a form, and
with a bank, reasonably acceptable to CTC within fourteen (14) days after
receiving a request to do so.

 

Should Customer fail to comply with any one of the requirements set forth above,
CTC may, at its option, refuse to commence, suspend, and/or terminate service
under this Agreement, with no liability on either party's part except for
payment of amounts due and owing under the Agreement and disposition of any gas
in the Exchange Account in accordance with Section 6.1.

ARTICLE VI

TERM

6.1 This Agreement shall be effective as of July 1, 2000, and shall continue
through March 31, 2001. The Parties agree that any natural gas remaining in
Customer's Exchange Account upon the expiration or termination of this
agreement, shall be subject to the disposition procedure identified in Section
2.10.

ARTICLE VII

MEASUREMENT AND QUALITY

7.1 All gas delivered hereunder shall be measured at the Point of Delivery by
the Transporter operating the measurement equipment at the Point of Delivery,
and shall conform to the measurement and quality specifications contained in
that Transporter's Tariff.

7.2 All gas redelivered hereunder shall be measured at the Point of Redelivery
by the Transporter operating the measurement equipment at the Point of
Redelivery, and shall conform to the measurement and quality specifications
contained in that Transporter's Tariff.

ARTICLE VIII

FORCE MAJEURE

8.1 Neither CTC nor Customer shall be liable in damages to the other for any
act, omission or circumstances occasioned by or in consequence of any acts of
God, explosions, breakage or accident to machinery or lines of pipe, line
freezeups, curtailments instituted by any Transporter(s), the binding order of
any court or governmental authority, or any other cause, whether of the kind
herein enumerated, or otherwise, not within the control of the party claiming
force majeure and which by the exercise of due diligence such party is unable to
prevent or overcome. The term "force majeure" as used in this Agreement shall
not include (a) the curtailment or interruption of interruptible transportation
by Transporter; (b) the loss of Customer's markets nor Customer's inability
economically to use or resell gas purchased hereunder; or (c) the loss or
failure of CTC's gas supply, including, without limitation, depletion of
reserves or other failure of production, nor CTC's ability to sell gas to a
market at a more advantageous price.

8.2 Such causes or contingencies affecting the performance of this Agreement by
either party, however, shall not relieve it of liability in the event of its
concurring negligence or in the event of its failure to use due diligence to
remedy the situation and remove the cause in an adequate manner and with all
reasonable dispatch; nor shall such causes or contingencies affecting the
performance of this Agreement relieve either party from its obligation to make
payment of amounts then due hereunder, nor shall such causes or contingencies
relieve either party of liability unless such party shall give notice and full
particulars of the same in writing or by facsimile transmission to the other
party as soon as possible after the occurrence relied on.

ARTICLE IX

REGULATION

9.1 This Agreement is subject to all valid laws, orders, rules and regulations
of duly constituted governmental authorities having jurisdiction.
Notwithstanding any other provision in this Agreement, if any regulatory body,
governmental entity or agency having jurisdiction prohibits any transaction
entered into pursuant to this Agreement or otherwise conditions such transaction
in a form that is unacceptable in the sole judgment of the party affected
thereby, then the party so affected may terminate this Agreement by thirty (30)
days prior written notice stating the date of such termination, with no
liability on either party's part except for payment of amounts due and owing
under the Agreement and disposition of any remaining gas in Customer's Exchange
Account in accordance with Section 2.10.

ARTICLE X

WARRANTY

10.1 Each party warrants that all gas delivered and redelivered hereunder shall
be free and clear of all liens, encumbrances and claims whatsoever, and that it
will indemnify the other party and save it harmless from suits, actions, debts,
accounts, damages, costs, losses and expenses, including attorneys' fees,
arising from or out of adverse claims of any and all persons to said gas or
arising from royalties, taxes, license fees or charges thereon, to the extent
that they arise or attach to the gas when it is subject to the indemnifying
party's control and possession as defined in Article Xl, below.

ARTICLE Xl

POSSESSION AND LIABILITY

11.1 With respect to gas delivered by Customer to CTC, Customer shall be deemed
in exclusive control and possession of the gas, and responsible for any damages
or injuries caused thereby, until it is delivered to CTC at the Points of
Delivery at which point title shall pass to CTC. CTC shall be deemed in
exclusive control and possession of said gas and responsible for any damages or
injuries caused thereby, at and after it is delivered by Customer to CTC at the
Points of Delivery.

11.2 With respect to gas redelivered by CTC to Customer, CTC shall be deemed in
exclusive control and possession of the gas, and responsible for any damages or
injuries caused thereby, until it is delivered to Customer at the Point of
Redelivery at which point title shall pass to Customer. Customer shall be deemed
in exclusive control and possession of said gas, and responsible for any damages
or injuries caused thereby, at and after it is redelivered by CTC to Customer at
the Point of Redelivery.

ARTICLE XII

NOTICES

12.1 Unless otherwise provided herein, all communications from one party to the
other shall be sent by registered mail, overnight courier or facsimile
transmission, and shall be effective upon receipt thereof. However, routine
communications shall be deemed duly delivered when mailed by either registered
or ordinary mail, or sent by overnight courier or facsimile transmission
(telecopy). Communications sent by ordinary mail shall be considered received
three (3) Business Days after deposit in the mail. Monthly statements shall be
sent by overnight courier or facsimile transmission. All communications should
be addressed to:

CUSTOMER:

 

CTC:

All Correspondence

 

 

The Peoples Gas Light and Coke Company

 

CoEnergy Trading Company

130 E. Randolph Drive

 

150 West Jefferson

Gas Supply Administration

 

Suite 1800

22nd Floor

 

Detroit, Michigan 48226

Chicago, Illinois 60601

 

Attn: Mr. Kevin McCracken

Attn: Mr. Dave Wear, Manager

 

Telephone: (313) 256-5925

Telephone: (312) 240-4554

 

Facsimile: (313) 256-5739

Facsimile: (312) 240-4211

 

Duns #: 806 708 806

Duns#: 006 932 115

 

 

 

 

 

Operating Communications

 

Attn: Ms. Margo Pardi

Attn: Gas Control

 

Telephone: (313) 256-6299

Telephone: (312) 240-4754

 

Facsimile: (313) 963-3636

Facsimile: (312) 240-4762

 

After Hours Telephone: (800) 506-9857

 

 

 

For Payments

:

 

CoEnergy Trading Company

Not Applicable

 

150 West Jefferson

 

 

Suite 1800

 

 

Detroit, Michigan 48226

 

 

Attn: Accounts Payable

 

ARTICLE XIII

GOVERNING LAW AND JURISDICTION

13.1 This Agreement shall be governed by the law of the state of Michigan
without regard to principles of conflicts of law.

ARTICLE XIV

NON-WAIVER OF FUTURE DEFAULTS

14.1 No waiver by either party of any one or more defaults by the other in the
performance of any provision of this Agreement shall operate or be construed as
a waiver of any future default or defaults, whether of a like or of a different
character.

ARTICLE XV

TRANSFER AND ASSIGNMENT

15.1 Any company that shall succeed by purchase, merger or consolidation to
either party hereto shall be entitled to the rights and shall be subject to the
obligations of its predecessor in title under this Agreement. Either party may,
without relieving itself of its obligations under this Agreement, assign any of
its rights and obligations hereunder to a corporation with which it is
affiliated at the time of such assignment. Otherwise, no assignment of this
Agreement or of any rights or obligations hereunder shall be made by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld. The provisions of this Article XV shall not
prevent either party from pledging or mortgaging its rights hereunder as
security for its indebtedness. This Agreement shall be binding upon and inure to
the benefit of the respective successors and permitted assigns of the parties
hereto.

ARTICLE XVI

LIMITATION ON DAMAGES

16.1 Neither party shall be liable to the other for any incidental,
consequential (including lost profits), indirect, special, exemplary, or
punitive damages.

ARTICLE XVII

ENTIRE AGREEMENT

17.1 This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof. Any prior understandings, representations,
promises, undertakings, agreements or inducements, whether written or oral,
concerning the subject matter hereof not contained herein shall have no force
and effect. This Agreement may be modified or amended only by writing that is
duly executed by both parties.

ARTICLE XVIII

CONFIDENTIALITY

18.1 Each party will keep the terms of this Agreement confidential during the
term hereof, using the same degree of care it customarily uses with respect to
confidential business information, provided that disclosure may be made to a
regulatory authority having jurisdiction if requested or required by that
authority, or if the party is obligated by law, rule or order to make such
disclosure. If disclosure to a regulatory authority is made, the disclosing
party will request confidential treatment of the disclosed information.

ARTICLE XIX

THIRD PARTY BENEFICIARY

19.1 Customer and CTC agree that there are no third party beneficiaries of this
Agreement and that the provisions of this Agreement do not impart enforceable
rights to anyone who is not a signatory to this Agreement.

 

IN WITNESS WHEREOF,

the parties hereto have caused this Agreement to be executed in duplicate by
their duly authorized officers, as of the day and year first above written.

 

THE PEOPLES GAS LIGHT AND

 

COENERGY TRADING COMPANY

COKE COMPANY

 

 

 

 

 

 

 

 

By: /s/ William E. Morrow

 

By: /s/ Steven E. Kurmas

William E. Morrow

 

Name: Steven E. Kurmas

Executive Vice President

 

Title: President & CEO

 

 

 

 

 

Reviewed O.G.C.

 

 

BY 6/21/00