ENRON CAPITAL & TRADE RESOURCES LIMITED (“ENRON”)

GENERAL TERMS & CONDITIONS ("GTC")(“GTC”)

(UK GAS PHYSICAL BEACH)

1.	Transactions
	The parties shall engage in transactions on this website pursuant to these terms and conditions (“Transaction”).  Transactions will be initiated by you ("Counterparty") offering to buy or sell by clicking on the designated boxes on this website.  This website is not, and shall not be construed as, an offer to buy or sell by Enron.   Enron may accept or reject Counterparty's offer at its sole discretion.  A Transaction shall be deemed executed at the time that Enron first signifies its acceptance of Counterparty's offer, accessible on the Enron website server.  The parties may also complete a written confirmation by way of record of the terms of each Transaction but in the event of any conflict Enron’s electronic records or paper copies of such records shall prevail.  All such Transactions shall constitute a single integrated agreement between the parties, it being acknowledged that the parties are relying upon the fact that all such Transactions will form a single agreement and that the parties would not otherwise enter into any Transactions.  The Designated Quantity shall be scheduled by Seller and Buyer at the Delivery Point(s) during the Period of Delivery and at the Contract Price as provided in each Transaction.  For the purposes of this GTC and each Transaction, one Therm equals 29.3071 kilowatt hours.

2.	Quantity Obligations
All gas shall be “scheduled” (which term when used in relation to Seller shall mean tendered for delivery at the Delivery Point(s) and in relation to Buyer shall mean having made proper nominations and having made available at the Delivery Point(s) sufficient capacity to permit Buyer to take delivery of quantities the quantity of gas scheduled by Seller) at the Delivery Point(s) on a firm basis and in the Designated Quantity on every day of the Period of Delivery;  “Day” shall mean the period of 24 hours commencing at 06.00 am 0600 hours on one day and ending at 06.00 am 0600 hours on the following day. The Buyer shall pay for all or any scheduled gas delivered as provided in Clause 6. The Buyer shall not be liable for any gas delivered in excess of scheduled gas except as provided in (2) below, and the Seller's only liability to the Buyer for any underdelivery or overdelivery of scheduled gas shall be to pay the sums, as liquidated damages, determined as set out below:

Underdeliveries:  If on any Day the Seller fails, for reasons other than Force Majeure, to deliver to the Buyer as scheduled the quantity gas the of gas properly nominated by Buyer, Seller shall pay to the Buyer Buyer a sum (if positive) calculated in accordance with the following formula:

(SAP-P) x D

where:

SAP 	=	the System Average Price for that Day;

P 	=	the Contract Price for that Transaction; and

D 	=	a number of Therms equal to the difference between the quantity of gas properly nominated by Buyer and the quantity, in Therms, of gas actually delivered by Seller under that Transaction on that Day,

unless Buyer can show that the actual loss suffered in respect of that Day was greater, in which event Seller shall pay to Buyer such sum as represents Buyer’s actual loss, such payment to be no greater than a sum (if positive) calculated in accordance with the following formula:

(SMBP-P) x D

Where where:

SMBP =	the System Marginal Buy price Price for that Day;

P 	=	the Contract Price for that Transaction; and

D 	=	a number of Therms equal to the difference between the relevant Transaction Nomination quantity of gas properly nominated by Buyer and the quantity, in Therms, of Natural Gas, gas actually delivered by the Seller under that Transaction on that Day.

Overdeliveries:	If, on any Day, the Seller delivers to the Buyer at the Delivery Point any quantity of gas in excess of the scheduled quantities due for delivery on that day, then: quantity of gas properly nominated by Buyer, Seller shall to pay to Buyer:

(a)	(1) any Overrun Charges incurred by Buyer as a result of such overdelivery; and

(b)	if the System Marginal Sell Average Price for that Day is negative (but in no other event), the Seller shall pay to the Buyer a sum calculated in accordance with the following formula:

SMSP SAP x Q; 

or where:

(2) If SAP 	=	the System Marginal Sell Average Price for that Day is positive the Buyer ;

Q 	=	the number of Therms of gas actually delivered by Seller under that Transaction on that Day in excess of the quantity of gas properly nominated by Buyer,

unless Buyer can show that the actual loss suffered in respect of that Day was greater, in which event Seller shall pay to the Seller a sum Buyer such sum as represents Buyer’s actual loss, such payment to be no greater than a sum (if positive) calculated in accordance with the following formula:

SMSP x Q

Where where:

SMSP 	=	the System Marginal Sell Price for that Day;

Q 	=	the number of Therms of Natural Gas gas actually delivered to the Delivery Point by Seller under that Transaction on that Day in excess of the quantity of gas properly nominated by Buyer. any quantity due for delivery:

together with in the case of (1) or less in the case of (2) any Overrun Charges incurred by the Buyer as a result of such overdelivery.

[If on any Day a party fails to schedule the Designated Quantity, then such occurrence shall constitute a “Default” and the “Default Quantity” shall be the numerical difference between the Designated Quantity and the amount of gas scheduled. Upon Default, the defaulting party shall pay to the other party an amount equal to the product of the Default Quantity multiplied by the Replacement Price Differential. “Replacement Price Differential” means (i) in the event of a Seller’s Default, the positive difference obtained by subtracting the Contract Price from the cost to Buyer, including incremental transportation costs and other basis adjustments, to replace the Default Quantity for such day and (ii) in the event of Buyer’s Default, the positive difference obtained by subtracting the price obtained by Seller in an incremental, arms-length sale(s) to a third party of a quantity equal to the Default Quantity for such Day, less incremental transportation charges to Seller, and including other basis adjustments, from the Contract Price.] 

3.	Early Termination
If a Triggering Event (as defined below) occurs with respect to either party during a Period of Delivery, the other party (the “Notifying Party”) may upon three days written notice to the first party establish a date on which any or all Transactions will terminate (“Early Termination Date”) and withhold any payments then due; provided that in respect of Triggering Event (ii) all transactions shall automatically terminate.  The Notifying Party shall calculate its damages, including its associated costs and legal fees, resulting from the termination of the Transactions selected by it, or in the case of Triggering Event (ii) all Transactions (the “Termination Payment”).  The Termination Payment will be determined by (i) comparing the value of (a) the remaining Period of Delivery, Designated Quantity and Contract Price under each such Transaction had it not been terminated to (b) the equivalent quantities and relevant market prices for the remaining Period of Delivery either quoted by a bona fide third party offer or which are reasonably expected to be available in the market under a replacement contract and (ii) ascertaining the associated costs and legal fees.  All terminated Transactions shall be netted against each other and upon netting, if the calculation of the Termination Payment does not result in a payment due to the Notifying Party, the Termination Payment shall be zero, save in the case of those Transactions terminated pursuant to Triggering Event (ii), in which event, if the calculation of the Termination Payment results in a payment due to either party, the other party shall pay such Termination Payment.  The Notifying Party shall provide the Affected Party with a written statement of the amount of the Termination Payment.  The Termination Payment shall be paid within 10 days of receipt of such statement.  At the time for payment of any Termination Payment, each party shall pay to the other party all additional amounts payable by it pursuant hereto.  “Triggering Event” means, with respect to a party (the “Affected Party”): (i) the failure by the Affected Party to make, when due, any payment required or to perform any other covenant set forth herein, in each case within 3 days after receipt of notice thereof, or (ii) the Affected Party (a) making an assignment or arrangement for the benefit of creditors, (b) filing a petition or commencing, authorising or acquiescing in the commencement or a proceeding under any bankruptcy or similar law, or having such a petition filed against it which petition remains undismissed for 30 days, (c) otherwise becoming bankrupt or insolvent or (d) being unable to pay its debts as they fall due (e) the Affected Party is unable to pass on the cost of a New Tax to its customer or (iii) the Affected Party’s unexcused failure to schedule the Designated Quantity for a cumulative period of 10 or more Days in a 3 month period.

4.	Other Events
If the Affected Party’s activities become subject to regulation of any kind (other than with respect to New Taxes (as defined below)) to a different extent than that existing at the date of the Transaction (the “Transaction Date”) and such regulation either (i) renders a Transaction unenforceable or (ii) in the reasonable opinion of the non-Affected Party materially adversely affects the business (financial or otherwise) of the Affected Party, then in the case of (i), either party, and in the case of  (ii), only the Affected Party, shall have the right to declare an Early Termination Date in accordance herewith; provided that notwithstanding such right, the Affected Party shall pay the Termination Payment calculated by the non-Affected Party as provided above. 

5.	Operations and Delivery
Should Buyer desire to change the quantity to be scheduled, Buyer shall provide to Seller facsimile notice thereof not later than one “Business Day” (being any day other than a Saturday, Sunday or public holiday in England) prior to the earliest nomination deadline of either Party’s transporter for the applicable Day.  Scheduling requests to Seller will be accepted at the telephone number provided by Seller to Buyer and shall be confirmed by facsimile.  Seller shall obtain transportation to the Delivery Point(s), and Buyer shall obtain transportation from the Delivery Point(s).  Seller represents that all scheduled gas shall meet the specifications of Buyer’s transporter.  Unless otherwise agreed, nothing herein, including an event of Force Majeure (as defined below), shall require or permit either party to schedule gas at a point other than a Delivery Point or in excess of the Designated Quantity.  If either party receives an order from a transporter requiring action in connection with a Transaction such party shall immediately notify the other party of the order and provide a copy of same by facsimile.  Each party shall take all actions required and shall indemnify, defend and hold harmless the other party from and against any claims related to the order under which the indemnifying party failed to take the action required thereby. 	 

6.	Payments
Seller shall provide Buyer with a written statement (including a valid VAT invoice) covering the preceding month.  Billing and payment will be based on scheduled quantities.  Within 10 days of the request of either party, the other party shall provide, to the extent it has a legal right of access thereto and/or such statement is then available, a copy of the applicable transporter’s allocation or imbalance statement for the requested period.  All amounts payable under a Transaction are due by the 20th day of the month in which the statement therefor was received or 10 days after the date of receipt of the statement, if later.  If the due date for any payment to be made hereunder is not a Business Day, the due date of such payment shall be the following Business Day.  All payments  shall be made by wire transfer in immediately available funds to the payee on the applicable due date.  Interest on overdue amounts shall accrue at the rate of three percent over the applicable base rate of Barclays Bank plc.  Obligations to make payment under all Transactions may be offset against each other, set off or recouped therefrom, or netted for payment. All amounts payable hereunder shall be exclusive of VAT or analogous tax, where applicable, which Buyer shall also pay at the rate applicable thereto from time to time.  Seller shall provide Buyer with a valid VAT invoice.  "Business Day"“Business Day” means any day other than a Saturday, Sunday or UK public holiday.

7.	Taxes
Seller shall pay, or cause to be paid, all royalties, Taxes, tariffs and other sums or charges arising upstream of the Delivery Point(s) in respect of the gas made available to Buyer and shall indemnify, defend and hold harmless Buyer from any claims arising therefrom.  Buyer shall pay, or cause to be paid, all royalties, Taxes, tariffs and other sums or charges arising on or downstream from the Delivery Point(s) in respect of the gas of which it takes delivery under this Transaction and shall indemnify, defend and hold harmless Seller from any claims arising therefrom.  Notwithstanding the foregoing, if a tax payable by either party is enacted and effective after the Transaction Date, or if there is an increase in the rate of or a change in the law, order, rule, regulation or interpretation of an existing tax, (a "New Tax")“New Tax”), the party affected by the New Tax shall firstly seek to pass on the cost of the New Tax to its customer.  If the party affected by the New Tax is unable to pass on the cost of the New Tax, such party shall be entitled to, but not obliged to, designate an Early Termination.  A New Tax shall not include VAT, the proposed Climate Change Levy or a Tax imposed generally on income or profits.

8.	Force Majeure
Except with respect to payment obligations, in the event either party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations, it is agreed that upon such party giving notice of such Force Majeure to the other party as soon as reasonably possible (to be confirmed in writing), such party shall be relieved from liability for failure to perform its obligations hereunder from the inception and during the continuance of the Force Majeure for a period of up to 60 days.  The party receiving notice of Force Majeure may immediately take such action as it deems necessary at its expense for the entire 60 day period or any part thereof.  “Force Majeure” means an event not anticipated as of the Transaction Date, which is not within the reasonable control of the party, or in the case of third party obligations or facilities, the third party claiming suspension, and which by the use of reasonable endeavours such party, or third party, is unable to overcome or obtain a commercially reasonable substitute performance therefor and shall include an event of Force Majeure occurring with respect to either party’s transporter.

9.	Title , Risk of  Loss and  Indemnity
Seller warrants that its entitlement to gas delivered hereunder to Buyer is free from all encumbrances liens and adverse claims and warrants its right to sell the same.  As between the parties, Seller shall be deemed to be in exclusive control and possession of the gas scheduled hereunder and responsible for any damage or injury caused thereby prior to the time the same shall have been delivered to Buyer.  After delivery of gas to Buyer at the Delivery Point(s), Buyer shall be deemed to be in exclusive control and possession thereof and responsible for any injury or damage caused thereby.  Each party assumes all liability for and shall indemnify, defend and hold harmless the other party from and against any claims, including death of persons, arising from any act or incident occurring when entitlement to gas is vested in the indemnifying party.  It is the intent of the parties that this indemnity be without regard to the causes thereof, including, without limitation, the negligence of any indemnified party, whether such negligence be sole, joint or concurrent, or active or passive; provided, neither party shall be liable in respect of any claim to the extent same resulted from the gross negligence, wilful misconduct or bad faith of the indemnified party.  Title to the gas scheduled and delivered hereunder shall pass to Buyer at the Delivery Point(s).  Each party shall indemnify, defend and hold harmless the other party from and against any scheduling or other charges (other than Buyer's inbalance Buyer’s imbalance charges and any other loss of Buyer due to caused by Seller underdelivering or overdelivering the scheduled quantity of gas properly nominated by Buyer which shall be dealt with in Clause 2 above) imposed by either party’s transporter (as the case may be) which are incurred by either party as a result of Buyer’s failure to take delivery of gas under any Transaction, or Seller’s failure to make available a quantity of gas equal to the amount scheduled by Buyer for the relevant Day (including without limitation failure to nominate sufficient quantities of gas to the person transporting gas to or from the Delivery Point(s)).

10.	Confidentiality
	Each party undertakes not to disclose the terms of a Transaction to a third party (other than the party's affiliates' employees, lenders, professional advisers or any bona fide intended assignee of a party's rights and obligations under a Transaction each having agreed to keep such terms confidential) except in order to comply with any applicable law, order or regulation; provided that each party shall notify the other party of any proceeding of which it is aware which may result in disclosure and use reasonable efforts to prevent or limit the disclosure.  The provisions of this GTC other than the terms of a Transaction are not subject to this confidentiality obligation. The parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation; provided that all monetary damages shall be limited to actual direct damages.

11.	Damages 
For breach of any provision for which an express remedy or measure of damages is herein provided, such express remedy or measure of damages shall be the sole and exclusive remedy hereunder, the obligor’s liability shall be limited as set forth in such provision and all other remedies or damages at law or in equity are waived.  If no remedy or measure of damages is expressly herein provided, the obligor’s liability shall be limited to direct actual damages only, such direct actual damages shall be the sole and exclusive remedy hereunder and all other remedies or damages at law or in equity are waived.  Unless expressly herein provided, neither party shall be liable for consequential, or indirect damages, lost profits or other business interruption damages, in tort, contract, under any indemnity provision or otherwise.  Notwithstanding any other provision in this GTC, in no event shall either party be liable for any penalties or charges assessed by any transporter for the unauthorised receipt of gas by the other party.  Nothing in this GTC shall have the effect of limiting or restricting either party's liability arising as a result of its fraud. Any limitations or restrictions on the liability of either party in this GTC shall only apply to the extent permitted by applicable law.

12.	Law.
This GTC, each Transaction and the rights and duties of the parties arising therefrom shall be governed by and construed in accordance with the laws of England, and the parties hereby submit to the exclusive jurisdiction of the English courts.

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