Document:

Exhibit 10.27

 

REDACTED

 

SECOND AMENDMENT TO
ENERGY MANAGEMENT AGREEMENT

 

This Second Amendment to Energy Management Agreement is entered into by
and between KGen Hot Spring LLC (“Owner”) and Fortis Energy Marketing &
Trading GP, successor in interest to The Cincinnati Gas & Electric Company (“Energy Manager”).

 

WHEREAS, Owner and Energy Manager are parties to that certain Energy
Management Agreement dated August 17, 2004, as amended (the “Agreement”);

 

WHEREAS, by amendment dated July 25, 2007, Owner and Energy Manager
extended the term of the Agreement and revised the Monthly Management Fee under
the Agreement; and

 

WHEREAS, Owner and Energy Manager’s agreement to the above revised
Management Fees was, in part, in consideration of the anticipated execution of
Energy Management Agreements between Energy Manager and affiliates of Owner (“Owner
Affiliates”) providing for services to be performed by Energy Manager with
respect to generation facilities that were expected to be acquired by such
Owner Affiliates; and

 

WHEREAS, the acquisition of such generation facilities by the respective
Owner Affiliates was not consummated as contemplated by Owner and Energy
Manager; and

 

WHEREAS, the parties hereto desire to further amend the Agreement to
revise the Management Fee as provided herein:

 

NOW THEREFORE, for and in consideration of the agreements herein made
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree to amend the Agreement as
follows:

 

1.                         Section
6.1, Management Fees, is deleted in its entirety and replaced by the
following:

 

“Commencing
with the Effective Date and continuing until August 31, 2007, Energy Manager
shall be entitled to a monthly fee equal to the greater of (i) [* * *] (“Fixed Dollar Portion”) or (ii) [* * *] of
the monthly Generation Margin
(the “Monthly Management Fee”). Effective as of September 1, 2007 and
continuing until October 31, 2007, the Monthly Management Fee shall be equal to
the greater of (i) [* * *] (fixed Dollar Portion”) or (ii) [* * *] of the
monthly Generation Margin. Effective as of November 1, 2007 and continuing for
the remainder of the term of this Agreement, the Monthly Management Fee shall
be equal to the greater of (i) [*
* *] (“Fixed Dollar Portion”) or (ii) [* * *] of the monthly Generation Margin. Payment of the amounts specified in this
Section 6.1 shall be made in accordance with Section 6.3 below.”

 

2.                         Except as
amended hereby, all terms and conditions of the Agreement shall remain in full
force and effect.

 

_________

***
Certain information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

1

 

IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment to Energy Management Agreement in multiple originals, effective as of
November 1, 2007.

 

	
  KGen
  Hot Spring LLC

  	
  Fortis
  Energy Marketing & Trading GP

  
	
   

  	
   

  
	
  By:

  	
  /s/ James H. Sweeney
  III

  	
   

  	
  By:

  	
  /s/ Jack L. Farley

  	
   

  
	
  Name:

  	
  James H. Sweeney III

  	
   

  	
  Name:

  	
  Jack L. Farley

  	
   

  
	
  Title:

  	
  Sr. Vice-President

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Frank Vickers

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Frank Vickers

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  Managing Director

  	
   

  

 

2Exhibit
10.28

 

REDACTED

 

SERVICE
PACKAGE NO. 410018

AMENDMENT NO. 0

 

GAS
TRANSPORTATION AGREEMENT  

(For Use Under Rate Schedules FT-A and FT-GS)

 

THIS AGREEMENT is made,
entered into and effective as of this 30 day of January, 2001 by and between
EAST TENNESSEE NATURAL GAS COMPANY, a Tennessee Corporation, hereinafter
referred to as “Transporter”  and
DUKE  ENERGY MURRAY,  LLC, 
a  Delaware  limited liability company, hereinafter
referred to as “Shipper.”  Transporter
and Shipper shall be referred to herein individually as the “Party” and
collectively as “Parties.”

 

WHEREAS, Shipper and
Transporter are parties to a precedent agreement dated January 30, 2001 (“Precedent
Agreement”), pursuant to which Transporter will undertake to construct certain
facilities to serve Shipper; and

 

WHEREAS, pursuant to the
terms and conditions of the Precedent Agreement Shipper desires to obtain firm
transportation capacity from Transporter; and

 

WHEREAS, subject to all
of the terms and conditions of the Precedent Agreement and this Agreement,
Transporter desires to provide firm transportation service for Shipper pursuant
to the terms and conditions of Transporter’s Rate Schedule FT-A;

In consideration of the premises and of the mutual
covenants herein contained, the parties do agree as follows:

 

ARTICLE I -
DEFINITIONS

 

The definitions found in
Section 1 of Transporter’s General Terms and Conditions are incorporated herein
by reference.

 

ARTICLE II - SCOPE
OF AGREEMENT

 

Transporter agrees to
accept and receive daily, on a firm basis, at the Receipt Point(s) listed on
Exhibit A attached hereto, from Shipper such quantity of gas as Shipper makes
available up to the applicable Transportation Quantity stated on Exhibit A
attached hereto and deliver for Shipper to the Delivery Point(s) listed on
Exhibit A attached hereto an Equivalent Quantity of gas. The Rate Schedule
applicable to this Agreement shall be stated on Exhibit A.

 

ARTICLE III -
RECEIPT AND DELIVERY PRESSURES

 

Shipper shall deliver, or cause to be delivered, to
Transporter the gas to be transported hereunder at pressures sufficient to
deliver such gas into Transporter’s system at the Receipt Point(s). Transporter
shall deliver the gas to be transported hereunder to or for the account of
Shipper at the pressures existing in Transporter’s system at the Delivery
Point(s) unless otherwise specified on Exhibit A.

 

1

 

ARTICLE IV -
QUALITY SPECIFICATIONS AND STANDARDS FOR MEASUREMENTS

 

For all gas received, transported, and delivered hereunder,
the Parties  agree  to 
the  quality specifications  and standards 
for measurement as provided for in Transporter’s General Terms and
Conditions. Transporter shall be responsible for the operation of measurement
facilities at the Delivery Point(s) and Receipt Point(s). In the event that
measurement facilities are not operated by Transporter, the responsibility for
operations shall be deemed to be Shipper’s.

 

ARTICLE V -
FACILITIES

 

The facilities necessary to receive, transport, and
deliver gas as described herein are in place and no new facilities are
anticipated to be required.

ARTICLE VI

 

RATES AND CHARGES
FOR GAS TRANSPORTATION

 

6.1                    Rates
and Charges - Commencing on the date of implementation of this Agreement under
Section 10.1, the compensation to be paid by Shipper to Transporter shall be in
accordance with Transporter’s effective Rate Schedule FT-A or FT-GS, as
specified on Exhibit A. Where applicable, Shipper shall also pay the Gas
Research Institute surcharge and Annual Charge Adjustment surcharge as such
rates may change from time to time. Except as provided to the contrary in any
written or electronic agreement(s) between Transporter and Shipper in effect
during the term of this Agreement, Shipper shall pay Transporter the applicable
maximum rate(s) and all other applicable charges and surcharges specified in
the Notice of Rates in Transporter’s FERC Gas Tariff and in this Rate Schedule.
Transporter and Shipper may agree that a specific discounted rate will apply
only to certain volumes under the Agreement. Transporter and Shipper may agree
that a specified discounted rate will apply only to specified volumes (MDQ, TQ,
commodity volumes or Authorized Overrun volumes) under the Agreement; that a
specified discounted rate will apply only if specified volumes are achieved
(with the maximum rates applicable to volumes above the specified volumes or to
all volumes if the specified volumes are never achieved); that a specified
discounted rate will apply only during specified periods of the year or over a
specifically defined period of time; and/or that a specified discounted rate
will apply only to specified points, zones, markets or other defined
geographical areas. Transporter and Shipper may agree to a discounted rate
pursuant to the provisions of this Section 6.1 provided that the discounted
rate is between the applicable maximum and minimum rates for this service.

 

2

 

6.2                    Changes
in Rates and Charges - Shipper agrees that Transporter shall have the
unilateral right to file with the appropriate regulatory authority and make
changes effective in (a) the rates and charges stated in this Article, (b) the
rates and charges applicable to service pursuant to the Rate Schedule under
which this service is rendered and (c) any provisions of Transporter’s General
Terms and Conditions as they may be revised or replaced from time to time.
Without prejudice to Shipper’s right to contest such changes’, Shipper agrees
to pay the effective rates and charges for service rendered pursuant to this
Agreement. Transporter agrees that Shipper may protest or contest the
aforementioned filings, or may seek authorization from duly constituted
regulatory authorities for adjustment of Transporter’s existing FERC Gas Tariff
as may be found necessary to assure Transporter just and reasonable rates.

 

ARTICLE VII -
RESPONSIBILITY DURING TRANSPORTATION

 

As between the Parties hereto, it is agreed that from
the time gas is delivered by Shipper to Transporter at the Receipt Point (s)
and prior to delivery of such gas to or for the account of Shipper at the
Delivery Point(s), Transporter shall be responsible for such gas and shall have
the unqualified right to commingle such gas with other gas in its system and
shall have the unqualified right to handle and treat such gas as its own. Prior
to receipt of gas at Shipper’s Receipt Point(s) and after delivery of gas at
Shipper’s Delivery Point(s), Shipper shall have sole responsibility for such
gas.

 

ARTICLE VIII -
BILLINGS AND PAYMENTS

 

Billings and payments under this Agreement shall be in
accordance with Section 16 of Transporter’s General Terms and Conditions as
they may be revised or replaced from time to time.

 

ARTICLE IX - RATE
SCHEDULES AND

GENERAL TERMS AND CONDITIONS

 

This Agreement is subject to the effective provisions
of Transporter’s FT-A or FT-GS Rate Schedule, as specified in Exhibit A, or any
succeeding rate schedule and Transporter’s General Terms and Conditions on file
with the FERC, or other duly constituted authorities having jurisdiction, as
the same may be changed or superseded from time to time in accordance with the
rules and regulations of the FERC, which Rate Schedule and General Terms and
Conditions are incorporated by reference and made a part hereof for all purposes.

 

3

ARTICLE X - TERM
OF CONTRACT

 

10.1              This
Agreement shall be effective as of the date first above written. Subject to
Paragraph 5 of the Precedent Agreement, service under this Agreement shall
commence on the later of: (i) February 1, 2002; or (ii) the date that all of
the conditions precedent set forth in Paragraph 8 of the Precedent Agreement
are satisfied and construction of the facilities necessary to provide the firm
transportation service contemplated herein are completed and available for
service. After service commences under this Agreement, this Agreement shall
continue in effect until and including the later of: (i) January 31, 2022; or
(ii) the last day of the month in which the twentieth (20th)
anniversary of the commencement of service under this Agreement occurs (“Primary
Term”) provided, however, that if the Primary Term is one year or more, then
the contract shall remain in force and effect and the contract term will
automatically roll-over for additional five year increments (“Secondary Term”)
unless Shipper, one year prior to the expiration of the Primary Term or a
Secondary Term, provides written notice to Transporter of either (1) its intent
to terminate the contract upon expiration of the then current term or (2) its
desire to exercise its right-of-first-refusal in accord with Section 7.3 of
Transporter’s General Terms and Conditions. Provided further, if the FERC or
other governmental body having jurisdiction over the service rendered pursuant
to this Agreement authorizes abandonment of such service, this Agreement shall
terminate on the abandonment date permitted by the FERC or such other
governmental body. In the event that the Precedent Agreement is terminated for
any reason other than commencement of service under this Agreement, then
service under this Agreement shall not commence and this Agreement shall be
null and void.

 

10.2              In
addition to any other remedy Transporter may have, Transporter shall have the
right to terminate this Agreement in the event Shipper fails to pay all of the
amount of any bill for service rendered by Transporter hereunder when that
amount is due, provided Transporter shall give Shipper and the FERC thirty days
notice prior to any termination of service. Service may continue hereunder if
within the thirty day notice period satisfactory assurance of payment is made
in accord with Section 16 of Transporter’s General Terms and Conditions.

 

4

ARTICLE XI -
REGULATION

 

11.1              This
Agreement shall be subject to all applicable governmental statutes, orders,
rules, and regulations and is contingent upon the receipt and continuation of
all necessary regulatory approvals or authorizations upon terms acceptable to
Transporter and Shipper. This Agreement shall be void and of no force and
effect if any necessary regulatory approval or authorization is not so obtained
or continued. All Parties hereto shall cooperate to obtain or continue all
necessary approvals or authorizations, but no Party shall be liable to any
other Party for failure to obtain or continue such approvals or authorizations.

 

11.2              Promptly
following the execution of this Agreement, the Parties will file, or cause to
be filed, and diligently prosecute, any necessary applications or notices with
all necessary regulatory bodies for approval of the service provided for
herein.

 

11.3              In
the event the Parties are unable to obtain all necessary and satisfactory
regulatory approvals for service prior to the expiration of two (2) years from
the effective date hereof, then, prior to receipt of such regulatory approvals,
either Party may terminate this Agreement by giving the other Party at least
thirty (30) days prior written notice, and the respective obligations hereunder,
except for the reimbursement of filing fees herein, shall be of no force and
effect from and after the effective date of such termination.

 

11.4              The
transportation service described herein shall be provided subject to the
provisions of the FERC Regulations shown by Shipper on Exhibit A hereto.

 

ARTICLE XII -
ASSIGNMENTS

 

12.1              Either
Party may assign or pledge this Agreement and all rights and obligations
hereunder under the provisions of any mortgage, deed of trust, indenture or
other instrument that it has executed or may execute hereafter as security for
indebtedness; otherwise. Shipper shall not assign this Agreement or any of its
rights and obligations hereunder, except as set forth in Section 17 of
Transporter’s General Terms and Conditions.

 

12.2              Any
person or entity that shall succeed by purchase, transfer, merger, or
consolidation to the properties, substantially or as an entirety, of either
Party hereto shall be entitled to the rights and shall be subject to the
obligations of its predecessor in interest under this Agreement.

 

5

ARTICLE XIII -
WARRANTIES

 

In addition to the warranties set forth in Section 22
of Transporter’s General Terms and Conditions, Shipper warrants the following:

 

13.1              Shipper
warrants that all upstream and downstream transportation arrangements are in
place, or will be in place, as of the requested effective date of service, and
that it has advised the upstream and downstream transporters of the receipt and
delivery points under this Agreement and any quantity limitations for each
point as specified on Exhibit A attached hereto. Shipper agrees to indemnify
and hold Transporter harmless for refusal to transport gas hereunder in the
event any upstream or downstream transporter fails to receive or deliver gas as
contemplated by this Agreement.

 

13.2              Shipper
agrees to indemnify and hold Transporter harmless from all suit actions, debts,
accounts, damages, costs, losses, and expenses (including reasonable attorneys
fees) arising from or out of breach of any warranty, by the Shipper herein.

 

13.3              Shipper
warrants that it will have title or the right to acquire title to the gas
delivered to Transporter under this Agreement.

 

13.4              Transporter
shall not be obligated to provide or continue service hereunder in the event of
any breach of warranty; provided, Transporter shall give Shipper and the FERC
thirty days notice prior to any termination of service. Service will continue
if, within the thirty day notice period, Shipper cures the breach of warranty.

 

ARTICLE XIV -
MISCELLANEOUS

 

14.1              Except
for changes specifically authorized pursuant to this Agreement, no modification
of or supplement to the terms and conditions hereof shall be or become
effective until Shipper has submitted a request for change through Transporter’s
Electronic Bulletin Board and Shipper has been notified through Transporter’s
Electronic Bulletin Board of Transporter’s agreement to such change.

 

14.2              No
waiver by any 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.

 

6

 

14.3              Except
when notice is required through Transporter’s Electronic Bulletin Board,
pursuant to Transporter’s FT-A or FT-GS Rate Schedule, as applicable, or
pursuant to Transporter’s General Terms and Conditions, any notice, request,
demand, statement or bill provided for in this Agreement or any notice that
either Party may desire to give to the other shall be in writing and mailed by
registered mail to the post office address of the Party intended to receive the
same, as the case may be, to the Party’s address shown on Exhibit A hereto or
to such other address as either Party shall designate by formal written notice
to the other. Routine communications, including monthly statements and
payments, may be mailed by either registered or ordinary mail. Notice shall be
deemed given when sent.

 

14.4              THE
INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT SHALL BE IN ACCORDANCE WITH
AND CONTROLLED BY THE LAWS OF THE STATE OF TENNESSEE, WITHOUT REGARD TO CHOICE
OF LAW DOCTRINE THAT REFERS TO THE LAWS OF ANOTHER JURISDICTION.

 

14.5              The
Exhibit(s) attached hereto is/are incorporated herein by reference and made a
part of this Agreement for all purposes.

 

14.6              If
any provision of this Agreement is declared null and void, or voidable, by a
court of competent jurisdiction, then that provision will be considered
severable at Transporter’s options; and if the severability option is
exercised, the remaining provisions of the Agreement shall remain in full force
and effect.

 

14.7              This
Agreement supersedes and cancels the Gas Sales and Transportation Agreement(s)
between Shipper and Transporter dated (not applicable) and (not applicable)
respectively.

 

7

 

IN WITNESS WHEREOF, the Parties hereto have caused
this Agreement to be duly executed as of the date first hereinabove written.

 

 

	
  EAST TENNESSEE NATURAL GAS COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY: 

  	
  /s/ C. Gregory Harper

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE: 

  	
  Vice President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE: 

  	
  1.30.01

  	
   

  	
   

  	
   

  

 

 

	
  DUKE ENERGY MURRAY, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY: 

  	
  /s/ Larry Wall

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE: 

  	
  Vice President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE: 

  	
  2/1/01

  	
   

  	
   

  	
   

  

 

8

 

EXHIBIT
A TO THE 

FIRM TRANSPORTATION AGREEMENT

DATED January 30, 2001
 BETWEEN
 EAST TENNESSEE NATURAL GAS COMPANY

AND

DUKE ENERGY MURRAY, LLC

Shipper: DUKE ENERGY MURRAY, LLC

Rate Schedule: FT-A

 

Transportation Quantity:

 

For the period commencing
on February 1, 2002 and continuing through April 30, 2002

[***]

 

For the period commencing
on May 1, 2002 and continuing through June 30, 2002

[***]

 

For the period commencing
on July 1, 2002 and continuing through the end of the term of the contract

[***]

 

Proposed Commencement Date: Later of: (i) November 1,
2002; or (ii) the date that construction of the facilities necessary to provide
the firm transportation service contemplated herein is completed and such facilities
are available for service.

 

Termination Date: Later of: (i) October 31, 2022; or
(ii) the last day of the month in which the twentieth (20th)
anniversary of the commencement of service occurs

 

Transportation Service will be provided under Part 284,
Subpart G of FERC Regulations.

 

Primary Receipt Point(s):

 

	
  Name

  	
   

  	
  Meter No.

  	
   

  	
  Maximum

  Daily

  Quantity

  	
   

  	
  Interconnect

  Party

  	
   

  	
  Location

  Co., State

  	
   

  
	
  Mt.
  Pleasant-TETCO

  	
   

  	
  59329

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VS 3214

  	
   

  	
  TBD

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Primary Delivery
  Point(s):

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Name

  	
   

  	
  Meter No.

  	
   

  	
  Maximum

  Daily

  Quantity

  	
   

  	
  Interconnect 

  Party

  	
   

  	
  Location

  Co., State

  	
   

  
	
  DENA - Murray

  	
   

  	
  TBD

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

_________

*** Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

9

 

Name of entity(s) to delivery gas to Transporter:

 

Name of entity(s) to receive gas from Transporter:

 

* Transporter shall not be obligated to deliver more
cubic feet of gas to any Shipper than the quantity calculated using 1.03 dth
per million cubic feet.

 

Notices not made through the LINK system shall be made
to:

 

	
  Shipper

  NOTICES: 

  	
  

  [* * *]

  [* * *]

  [* * *]

  
	
  Attention:

  	
   

  
	
  INVOICES: 

  	
  [* * *]

  [* * *]

  [* * *]

  
	
  Attention:

  	
   

  

 

	
  New Facilities
  Required:

  	
   

  	
  Not applicable 

  
	
  New Facilities
  Charge: 

  	
   

  	
  Not applicable

  

 

(This Exhibit A supersedes and cancels Exhibit A dated
(not applicable) to the Firm Transportation Agreement dated (not applicable).

 

	
  EAST TENNESSEE NATURAL GAS CO.

  	
   

  	
  DUKE ENERGY MURRAY, LLC

  
	
   

  	
   

  	
   

  
	
  BY: 

  	
  /s/ C. Gregory Harper

  	
   

  	
  BY: 

  	
  /s/ Larry Wall

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE: 

  	
  Vice President

  	
   

  	
  TITLE: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  1.30.01

  	
   

  	
  DATE:

  	
  2/1/01

  

 

_________

*** Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

10

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