ADDENDUM
(Special Provisions - Exhibit "B")
For the Base Contract for Short-Term Sale and Purchase of Natural Gas
between
Louisville Gas and Electric Company/Kentucky Utilities Company ("Company")
and
Enron North AmericaCorp. ("Counterparty")
Dated ______________
 
A.  In Section 1.2 insert "a recorded" before the word telephone in the second line.  Insert the word "recorded" before the word telephonic on the fifth line.  
 
B. In order to clarify the intentions of both Parties in Section 1.3deleted the third sentence in its entirety and replace it with the following:
 
"If there are any material differences between timely sent Transaction Confirmations governing the same transaction, then the oral agreement reached under Section 1.2 shall be controlling and satisfy the statute of frauds."
 
C.   Add the following sections as 1.4 and 1.5:
                
1.4           Each Party shall at its expense, maintain equipment necessary to regularly record Transactions on Transaction Tapes and retain Transaction Tapes in such manner as to protect its business records from improper access; provided neither Party shall be liable for any malfunction of equipment or the operation thereof in respect of any Transaction WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE.  No Transaction shall be invalidated should a malfunction occur in equipment regularly utilized for recording Transactions or retaining Transaction Tapes or the operation thereof, and in such event, the Transaction shall be evidenced by the written and computer records of the parties concerning the Transaction made contemporaneously with the telephone conversation.
 
1.5.1           Each party consents to the recording of the telephone conversations of their respective personnel in connection with this Contract. Each party waives on its own and its employees' behalf further notice of such recording, and each party further commits to notify its employees of such recording and to obtain any necessary consent of such employees. The parties agree not to contest or assert a defense to the validity or enforceability of telephonic Transactions entered into in accordance with this Contract under laws relating to (a) whether certain agreements are to be in writing or signed by the party to be thereby bound. or (b) the lack of authority of any employee of the party if the employee name is stated in the Transaction Tape (provided, however, if a Party provides the other Party with a list of those of its employees that are exclusively authorized by the Party to enter into a Transaction, then the Party shall be able to challenge the authority of any of its employees other than such listed employees).
 
D.    Replace Section 2.6 with the following:
 
2.6                 "Contract" shall mean the legally binding relationship established by (i) the Base Contract, (ii) this Addendum and (iii) any executed (or deemed accepted)  Transaction Confirmation.
 
E.    Delete "or alternate fuels" from Section 2.9 "Cover Standard"
 
F.     Add the following at the end of Section 2:
 
2.27          "Buyer" shall mean the party that agrees to purchase Gas as evidenced by the Transaction 
                Confirmation.
 
2.28                "Contract Period" means the term of any particular Transaction agreed to by the parties as specified in the Transaction Confirmation.
 
2.29         "Credit Support Document" Shall mean, as to a party ("the First Party"), a guaranty, hypothecation agreement, margin or security agreement or document, or any other document containing an obligation of a third party ("Credit Support Provider") or of the First Party in favor of the other party supporting any obligations of the first party under this Contract.
 
2.30         "Eligible Collateral" shall mean (i) cash, (ii) a Letter of Credit from a financial institution acceptable by the ("Beneficiary Party"), or (iii) Guaranty from a guarantor acceptable to the secured party
 
2.31         "Futures Contract" shall mean the standardized contract for the purchase or sale of Gas that is traded for future delivery underthe applicable trading board's regulations.
 
2.32         "Letter of Credit" means one or more irrevocable, transferable standby letters of credit from a major U.S. commercial bank or a foreign bank with a U.S. branch office, with such bank having a credit rating of at least "A-" from S&P or "A3" from Moody's.
 
2.33        "Material Adverse Change" shall mean a Party's credit rating falls below a Moody's rating of Baa 
or an S&P rating of BBB. Moody's shall mean Moody's Investor Services, Inc. or its successors. 
S&P shall mean the Standard & Poor's Rating Group (a division of McGraw-Hill Inc.) or its 
successors.  
 
2.34                "NYMEX" shall mean the New York Mercantile Exchange.
 
2.35         "Price" shall mean the amount or pricing mechanism agreed to by the parties as specified in the Transaction Confirmation.
 
2.36                Receipt/Delivery Obligation" shall mean one of EFP, Firm or Swing as set forth in the Transaction Confirmation for a particular Transaction.
 
2.37         "Seller" shall mean the party that agrees to sell Gas as evidenced by the Transaction Confirmation.
 
2.38         "Tax" shall mean any tax levied, assessed or claimed to be due by any Federal, State, County, Tribal, or Municipal Government or any other governmental agency having jurisdiction to do so.
 
2.39                "Transaction" means a particular, specifically agreed-to purchase or sale of Gas for delivery or receipt to be performed under this Contract, as evidenced by a Transaction Confirmation or by a recorded oral telephone conversation where an offer was made by a party and accepted by the other party.
 
2.40        "Transaction Tape" shall be defined as electronic tape(s) of telephone recordings maintained by 
                Company and/or the Counterparty for verification and/or evidentiary purposes.
 
G.   Delete "or alternate fuels" from line four (4) of Section 3.2.
 
H.        The following paragraphs will be added to Section 5: 
 
5.2           All Gas delivered by Seller shall meet the quality and heat specification of the pipeline system and/or facilities which shall receive the Gas at the Delivery Point(s) set forth in the Transaction Confirmation.  The unit of quantity measurements for purposes of this contract shall be one MMBtu Dry.
 
5.3           BTU and volume measurements shall be made at the pressure and temperature basis of the measuring pipeline in accordance with the provisions of such pipeline's then effective FERC Gas Tariff, or in event such pipeline is not subject to FERC regulation, the applicable Gas transportation regulations or contract provisions of such pipeline.
 
I.      Add the following language after the first sentence of Section 6, designated as Buyer Pays At and After Delivery Point:
 
All such Taxes shall be paid by Seller directly to the taxing authority unless Buyer is required by law to collect and remit such Taxes, in which event Buyer shall withhold from payments to Seller an amount required to be collected and remitted by Buyer and then remit such amounts to the taxing authority.
 
J.     Add the following language to the end of Section 6 as a new paragraph:  
 
In the event a  federal energy, BTU, consumption, or use tax shall be imposed, both Buyer and 
Seller shall work to reasonably apportion said Tax, taking into account the ability of either party 
to pass through all or a part of such tax . In the event that the parties are unable to reach an 
agreement with respect to the apportionment of any such Tax and such Tax would have a 
substantial adverse effect on any transaction with a forward delivery of six (6) months or greater 
of the party liable for such Tax (the "Affected Party") the Affected Party may declare an early 
termination with respect to any transactions then outstanding between the parties which are 
affected by such Tax ("the Affected Transactions").  The Affected Party shall provide the other 
party with thirty (30) days prior written notice of its intent to terminate the Affected Transactions.  
Such notification shall be made no later than thirty (30) days after the effective date of the Tax.  
Both parties shall calculate in a commercially reasonable manner their net Gain or net Loss (as 
defined below) resulting from the termination of the Affected Transactions without taking into 
effect the impact of the Tax.  If both parties have a net Gain, the party with the greater net Gain 
shall pay to the other party fifty percent (50%) of the difference between the two net Gains.  If 
both parties have a net Loss, the party with the lesser net Loss shall pay to the other party fifty 
percent (50%) of the difference between the two net Losses.  If one party shall have a net Gain 
and the other party shall have a net Loss, the party with the net Gain shall pay to the other party fifty percent (50%) of the sum of the absolute value of the net Gain and the absolute value of the net Loss.  Any such payments pursuant to this provision shall be made in accordance with Article 7.  For purposes of this provision "Gains" shall mean, with respect to either party, an amount equal to the present value of the economic benefit to it, if any (exclusive of costs), resulting from the termination of the Affected Transactions, calculated in a commercially reasonable manner and in accordance with GAAP.  "Losses" shall mean, with respect to either party, an amount equal to the present value of the economic loss to it, if any (exclusive of costs), resulting from the termination of the Affected Transactions, calculated in a commercially reasonable manner and in accordance with GAAP.
 
 
K.   Add the following to the end of  Section 7:
 
7.5             The parties shall net all same currency amounts due and owing (and/or past due from prior billing 
        periods, provided however, that any such past due amounts that are the subject of a bona fide 
        dispute shall not be subject to this Section 7.5 until such dispute is resolved) arising out of the 
                 transactions under this Contract such that the party owing the greater amount shall make a single 
                 payment of the net amount in accordance with Article 7 of this Contract, provided that, except as 
                         expressly provided in this Contract or any  such credit support agreement (if any), no payment 
                required to be made pursuant to the terms of any credit support agreement shall be subject to 
                netting under this or any other provision of this Contract. In the event that the parties have 
                executed a separate netting agreement, the terms and conditions therein shall prevail with respect 
                to this Section 7.5.
 
7.6            Upon either party's request, Buyer and/or Seller shall provide support documentation including 
but not limited to copies of any and all pertinent portions of transporter statements related to 
                 completed transaction between the parties in order to determine the final settlement amount due 
for each production Month.  Each party shall exercise reasonable efforts to provide support 
documentation that is inclusive of volume and price [by location] data for the applicable 
production Month
 
L.    Add to the end of Section 8.2: 
 
In the event of any claim or litigation, at any time, concerning Seller's title to the leases, wells, 
Gas produced or liquid hydrocarbons recovered from the Gas sold here under or the proceed from 
the sale thereof, Buyer shall, without limiting any other remedies available to it, be entitled to 
suspend only those payments related to the subject of (or any product of the subject of) any 
dispute, claim or controversy to Seller until such claims or litigation of title is resolved to Buyer's 
satisfaction.
 
M.   Add the following language to the end of Section 9.1:  
 
Notices of interruption to Firm obligations may be provided verbally, effective immediately and, then shall be confirmed in writing as soon as reasonably possible
 
N.    Delete Section 10 in its entirety and replace with the following:
 
10.1         Events of Default.  In the event (each a "Default") either party (the "Defaulting Party")
 
(i)enters into Bankruptcy whether voluntary or involuntary; 
 
(ii)has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets;
(iii)fails to make, when due, any payment required pursuant to this Contract if such failure is not remedied within three (3) Business Days after written notice of such failure is given to the Defaulting Party by the other party ("Non-Defaulting Party") and provided the payment is not the subject of a good faith dispute; 
 
(iv)fails to provide adequate assurance of its ability to perform all of its outstanding material obligations to the Non-Defaulting Party under the Contract or otherwise within a period not to exceed forty-eight (48) hours (but at least one (1) Business Day) of a demand therefore when the Non-Defaulting Party has reasonable grounds for insecurity; 
 
(v)           fails to establish, maintain, extend or increase Eligible Collateral when required pursuant to this Contract; then the Non-Defaulting Party shall be entitled to exercise the remedies as set forth in this Section 10. 
 
(vi)          suffers the occurrence of a Material Adverse Change; provided, such Material Adverse Change shall not be considered an Event of Default if the Defaulting Party establishes and maintains for so long as the Material Adverse Change is continuing, Eligible Collateral to the Non-Defaulting Party in form and amount acceptable to the Non-Defaulting Party;    
 
(vii)         or the guarantor (if any) of the Defaulting Party fails to perform any covenant set forth in the Guaranty Agreement it delivered in respect of this Contract; or if any representation or warranty made by such guarantor in said Guaranty Agreement shall prove to have been false or misleading in any material respect when made or when deemed to be repeated; or if the Guaranty Agreement expires or is terminated or in any way ceases to guarantee the obligations of the Defaulting Party under this Contract; or if such guarantor enters into Bankruptcy whether voluntary or involuntary.
 
the Non-Defaulting Party shall have the right to (a) immediately suspend delivery or payment and/or (b) liquidate and terminate all Transactions entered into pursuant to this Contract and then outstanding between the parties, in accordance with and subject to the provisions of Section 10.2 below. In no event shall amounts actually recovered by a Non-Defaulting Party under one subsection of this Article 10 be recovered under another subsection.
 
10.2              In the event a party terminates this Contract under Section 10.1 ("Non-Defaulting Party"), the 
Non-Defaulting Party shall designate an early termination date ("Early Termination Date").  Such 
Early Termination Date shall be designated within three (3) Business Days after the Non-
Defaulting Party receives knowledge the occurrence of an event of default under Section 10.1 and 
the Non-Defaulting Party shall provide immediate notice of such date to the other party 
("Defaulting Party").  Upon the Early Termination Date, the Non-Defaulting Party shall have the 
right to liquidate all Transaction(s) under this Contract (including any portion of a Transaction not 
yet fully delivered) then outstanding by:  (i) Closing out each Transaction being liquidated at its 
Market Value (as defined below) so that each such Transaction is cancelled and a settlement 
payment in an amount equal to the difference between such Market Value and the Contract Value 
(as defined below) of such Transaction shall be due to the Buyer under the Transaction if such 
Market Value exceeds the Contract Value and to the Seller if the opposite is the case; (ii) 
Discounting each amount then due under clause (i) above to net present value in a commercially 
reasonable manner at the time of liquidation (to take account of the period between the date of 
liquidation and the date on which such amount would have otherwise been due pursuant to the 
relevant Transaction); and (iii) Setting off or aggregating, as appropriate, any or all settlement 
payments (discounted as appropriate) and (at the election of the Non-Defaulting Party) any or all 
other amounts owing between the parties under this Contract so that all such amounts are 
aggregated and/or netted to a single liquidated amount payable by one party to the other.  The net 
amount due under any such liquidation shall be paid by the close of business on the third Business 
Day following the Early Termination Date.  For purposes of this Section 10.2 "Contract Value" 
means the amount of the Gas remaining to be delivered or purchased pursuant to a Transaction 
multiplied by the price per unit of gas stated in the applicable Transaction, and "Market Value" 
means the amount of Gas remaining to be delivered or purchased pursuant to a Transaction 
multiplied by the market price per unit determined by the Non-Defaulting Party in a commercially 
reasonable manner for the delivery or production area, as applicable.  The rate of interest used in 
calculating net present value pursuant to (ii) of this Section 10.2 shall be determined by the Non-
Defaulting Party in a commercially reasonable manner.  The parties agree that this Contract and 
all Transaction under this Section 10.2 shall constitute a "forward contract" within the meaning of 
the U.S. Bankruptcy Code and any other applicable insolvency laws.  The Non-Defaulting Party's 
rights under Section 10 and to those costs under Sections 3 and 4 accrued prior to the Early 
Termination Date are the sole and exclusive remedy of the Non-Defaulting Party.  The Non-
Defaulting Party shall give notice that a liquidation pursuant to this Section 10.2 has occurred to 
the Defaulting Party no later than the time specified above, provided that failure to give such 
notice shall not affect the validity or enforceability of liquidation nor give rise to any claim by the 
Defaulting Party against the Non-Defaulting Party.  With respect to any Transaction, "the amount 
of the Gas remaining to be delivered or purchased" shall mean only quantities which the parties 
are obligated as of the Early Termination Date to sell and purchase on a Firm basis during the 
remaining portion of the Delivery Period, which shall include only the period of time to which the 
parties are definitely committed as of the Early Termination Date and shall not include any 
possible but not certain extensions of the term ("evergreen" provisions, etc.).
 
O.   Section 11.1 is deleted in its entirety and the following new Section 11.1 is inserted in its place:
 
                "Except with regard to a party's obligation to make payment due under Section 7. and Imbalance 
Charges under Section 4, neither party shall be liable to the other for failure to perform a Firmobligation, to the extent such failure was caused by Force Majeure.  The term "Force Majeure"as employed herein means an event not anticipated as of the date hereof, 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 exercise of due diligence such Party, or third party, is unable to overcome or obtain or cause to be obtained a commercially reasonable substitute performance therefore.  Subject to the foregoing sentence, events of Force Majeure shall include the events as further defined in Section 11.2 and shall include an event of Force Majeure occurring with respect to the facilities or services of Buyer's or Seller's Transporter."
 
P.   Section 11.3 is deleted in its entirety and the following new Section 11.3 is inserted in its place:
 
   "Neither party shall be entitled to the benefit of the provisions of Force Majeure to the extent     
performance is affected by any or all of the following circumstances:  (i) the loss of Buyer's 
                markets or 
Buyer's inability economically to use or resell Gas purchased hereunder, (ii) the loss or 
                failure of 
Seller's Gas supply, including, without limitation, depletion of reserves or other failure 
                of 
production, (iii) Seller's ability to sell Gas to a market at a more advantageous price,(iv) the 
                        
curtailment of interruptible or secondary firm transportation unless primary, in-path, firm 
                        transportation 
is also curtailed; (v) the party claiming excuse failed to remedy the condition and to 
                resume the 
performance of such covenants orobligations with reasonable dispatch; or 
                        (vi) economic hardship.  The 
party claiming Force Majeure shall not be excused from its 
                        responsibility for Imbalance Charges."
 
M.   Add as Section 11.6:
 
11.6        Any party claiming Force Majeure (the "Claiming Party") as an excuse for performance shall 
provide the other party (the Non-claiming Party") a good faith estimate of the duration of the Force Majeure. Sales or purchases to this Contract and affected by a claim of Force Majeure may be terminated by the Non-claiming Party if such event continues for a period of thirty (30) continuous days.
 
N.    The following paragraph replaces Section 12: 
 
                The term of this Contract shall be month-to-month until terminated on thirty (30) days advance written notice by either party; provided, however, that the provisions hereof shall survive termination of this Contract and continue to apply to any Transactions entered into between Counterparty and Company prior to the date of termination of this Contract until such time as any and all such Transactions are completed or terminated.  . Notwithstanding any termination, the obligation to make payment and provisions of Sections 1.5, 8.1, 8.2, 8.3, 8.4, 13.9, 13.10, 13.11, 13.12, 13.14, and 13.5 shall continue to apply.
 
O.    The following paragraphs will be added to Section 13:
 
13.9              Any dispute relating to this Agreement shall may, by the mutual agreement of both parties, be resolved by binding, self-administered arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association ("AAA") and all such proceedings shall be subject to the Federal Arbitration Act.  There shall be three arbitrators.  Each party shall designate an arbitrator, who need not be neutral, within 30 days of receiving notification of the filing with the AAA of a demand for arbitration.  The two arbitrators so designated shall elect a third arbitrator.  If either party fails to designate an arbitrator within the time specified or the two parties' arbitrators fail to designate a third arbitrator within 30 days of their appointment, the third arbitrator shall be appointed by the AAA.  Only damages allowed pursuant to this Agreement may be awarded and the arbitrators shall have no authority to award treble, exemplary or punitive damages of any type under any circumstances regardless of whether such damages may be available under Texas New York law
 
13.10                DISCLAIMER OF WARRANTIES.  EXCEPT FOR WARRANTIES MADE BY SELLER PURSUANT TO SECTIONS 5 AND 8, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
 
13.11Neither party shall disclose the terms of this Contract, any Transaction Confirmation, and/or any 
information disclosed pursuant to Section 7.6 hereof to any third party absent written consent of the 
other party except where (i) disclosure is made to employees of the party or its affiliates,(ii) 
necessary to comply with any applicable law, order, regulation or exchange rule; provided, however, 
that each party shall notify the other party promptly upon receipt of any request to it in any 
proceeding that could result in an order requiring such disclosure and the party subject to such 
request shall use reasonable efforts to prevent or limit such disclosure; or (iii) necessary to effectuate 
transportation of Gas pursuant to this Contract. As a condition to conducting any audit and/or being 
provided with any support documentation pursuant to Sections 7.4 and 7.6 respectively, each party 
acknowledges that the documents and records provided might contain proprietary or competitively 
sensitive information, which the reviewing party shall treat as confidential. Each party acknowledges 
that any breach of any of its obligations with respect to confidentiality or use of the disclosing party's 
confidential information hereunder is likely to cause or threaten irreparable harm to the disclosing 
party, and accordingly  the reviewing party agrees that in the event of such breach the disclosing 
party shall be entitled to seek equitable relief to protect its interest therein, including but not limited 
to preliminary and permanent injunctive relief.
 
13.12UCC- Except as otherwise provided for herein, the provisions of the Uniform Commercial Code 
("UCC") of the state whose laws shall govern this Contract shall be deemed to apply to all 
Transactions
 
13.13 NOTWITHSTANDING ANY OTHER PROVISIONS HEREIN, THE PARTIES HERETO 
 WAIVE ANY AND ALL RIGHTS, CLAIMS OR CAUSES OF ACTION ARISING UNDER 
 THIS AGREEMENT FOR INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR 
 FOR LOST PROFITS.  THIS PROVISION SHALL SURVIVE ANY TERMINATION OF THIS 
 AGREEMENT.
 
13.14No claim under this Contract shall be enforceable by either party unless it is the subject of a filed 
lawsuit or arbitration within two (2) years of the date that the cause of action occurred.
 
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