ANY OTHER PAYMENTS REQUIRED TO BE MADE BY PARTY B IN CONNECTION
THEREWITH, PARTY B SHALL PAY TO PARTY A, FROM AND INCLUDING THE CLOSING DATE TO
AND EXCLUDING THE LATEST SETTLEMENT DATE SCHEDULED TO OCCUR WITH RESPECT TO THE
SG NOVATED TRANSACTIONS, A MONTHLY FEE (THE "SG EXPOSURE FEE") ON THE SG
NOTIONAL AMOUNT.
THE SG EXPOSURE FEE FOR EACH MONTH AND THE FORMULA USED TO
CALCULATE EACH SUCH MONTHLY AMOUNT SHALL BE SET FORTH ON EXHIBIT 10(A)(II). THE
SG EXPOSURE FEE SHALL BE PAYABLE MONTHLY IN ARREARS, ON THE 10TH DAY OF EACH
MONTH (EACH, AN "EXPOSURE FEE DUE DATE"); PROVIDED, HOWEVER, THAT EACH SUCH
PAYMENT SHALL NOT BE CONSIDERED PAST DUE IF SUCH PAYMENT IS PAID TO PARTY A ON
OR BEFORE THE 10TH DAY OF THE THIRD MONTH FOLLOWING THE APPLICABLE EXPOSURE FEE
DUE DATE.
(III)
THE PARTIES ACKNOWLEDGE AND AGREE THAT, IN
RESPECT OF THE SG NOVATED TRANSACTIONS, (A) THE FEE PAID TO PARTY A PURSUANT TO
CLAUSE (V) OF THIS PART 10(A) SHALL BE IN LIEU OF ANY GAS ADDER AND SLEEVE ADDER
THAT OTHERWISE WOULD HAVE APPLIED TO SUCH TRANSACTIONS, AND (B) THE AGGREGATE
NOTIONAL AMOUNT OF THE SG NOVATED TRANSACTIONS WILL BE COUNTED TOWARD THE
MINIMUM GAS QUANTITY FOR THE INITIAL CONTRACT YEAR.
33
(IV)
PARTY B AGREES THAT, TO SECURE ITS OBLIGATIONS
UNDER THE SG NOVATED TRANSACTIONS, IT SHALL DELIVER TO PARTY A ON THE CLOSING
DATE CASH IN AN AMOUNT EQUAL TO THAT PORTION OF THE SG NOTIONAL AMOUNT THAT
PARTY A ATTRIBUTES TO THE MARK-TO-MARKET EXPOSURE FOR CALCULATION PERIODS UNDER
THE SG NOVATED TRANSACTIONS THAT COMMENCE MORE THAN ONE CALENDAR YEAR FROM THE
CLOSING DATE (EACH, A "SG FUTURE CALCULATION PERIOD").
ALL SUCH CASH SHALL BE
HELD BY PARTY A IN THE SWAP NOTE SUB ACCOUNT; PROVIDED, HOWEVER, THAT, ON EACH
GAS SWAP SETTLEMENT DATE FOLLOWING OCTOBER 31, 2009 AND AS LONG AS NO DEFAULT OR
POTENTIAL TERMINATION EVENT HAS OCCURRED AND IS CONTINUING WITH RESPECT TO PARTY
B, PARTY A SHALL TRANSFER FROM THE SWAP NOTE SUB ACCOUNT TO THE PARTY A SUB
ACCOUNT AN AMOUNT EQUAL TO THE MARK-TO-MARKET EXPOSURE THAT PARTY A, IN
ACCORDANCE WITH THE PRECEDING SENTENCE, ATTRIBUTED TO THE SG FUTURE CALCULATION
PERIOD OCCURRING 11 MONTHS FOLLOWING SUCH GAS SWAP SETTLEMENT.
(V)
ON THE CLOSING DATE, AND IN CONSIDERATION
FOR PARTY A ENTERING INTO THE SG NOVATED TRANSACTIONS AND THE SG SLEEVE
TRANSACTIONS, PARTY B SHALL PAY TO PARTY A A FEE IN AN AMOUNT EQUAL TO
$600,000.
(B)
THIRD PARTY TRANSACTIONS.
(I)
WITHIN 30 DAYS OF THE CLOSING DATE,
PARTY B SHALL EITHER (A) TERMINATE AND LIQUIDATE OR (B) NOVATE TO PARTY A, AS
THE CASE MAY BE, ALL OF THE OUTSTANDING HEDGING TRANSACTIONS WITH THIRD PARTIES
THAT ARE LISTED ON EXHIBIT 10(B)(I).
WITH RESPECT TO SUCH TRANSACTIONS ON
EXHIBIT 10(B)(I) THAT PARTY B ELECTS TO TERMINATE AND LIQUIDATE (SUCH
TRANSACTIONS, THE "THIRD PARTY TRANSACTIONS"), SUCH TERMINATIONS AND
LIQUIDATIONS MAY RESULT IN TERMINATION PAYMENTS TO BE MADE BY PARTY B TO ONE