Exhibit 10.64
WESTERN LOAD POCKET CALL OPTION AGREEMENT
BETWEEN
ORANGE AND ROCKLAND UTILITIES, INC.
AND
SOUTHERN ENERGY NY-GEN, L.L.C.
November 24, 1998
TABLE OF CONTENTS
Article I. Definitions and Interpretation............................2
Article II. Representations, Warranties and Covenants................13
Article III. Term.....................................................16
Article IV. O&R's Right to Dispatch the Facility.....................17
Article V. Delivery by NY-Gen LLC...................................21
Article VI. Price....................................................21
Article VII. Payment Terms............................................23
Article VIII. Testing and Capacity Ratings.............................26
Article IX. Generation Commitments...................................26
Article X. Start-up Lead Times and Other Operating Constraints......26
Article XI. Metering.................................................27
Article XII. Coordination of Facility and System Maintenance..........27
Article XIII. Modifications............................................28
Article XIV. Termination..............................................28
Article XV. Indemnification..........................................31
Article XVI. Limitation of Liability..................................38
Article XVII. Insurance................................................39
Article XVIII. Force Majeure............................................42
Article XIX. Contract Documents.......................................44
Article XX. Dispute Resolution.......................................45
Article XXI. Taxes....................................................45
Article XXII. Assignment or Transfer...................................45
Article XXIII. Regulatory Approval; Effective Date......................47
Article XXIV. Confidentiality..........................................47
Article XXV. Amendments...............................................49
Article XXVI. Books and Records: Audit Rights.........................50
Article XXVII. Miscellaneous Provisions.................................50
THIS LOAD POCKET CALL OPTION AGREEMENT ("Agreement"), dated as of
the 24th day of November 1998 , between ORANGE AND ROCKLAND UTILITIES,
INC., a New York corporation ("O&R") with an office at Xxx Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000 and SOUTHERN ENERGY NY-GEN, L.L.C. a Delaware
limited liability company ("NY-Gen LLC") with offices at 000 Xxxxxxx
Xxxxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, O&R is authorized by its certificate of incorporation and
by the State of New York to engage in the production, transmission, sale
and distribution of electricity for heat, light and power to the public;
WHEREAS, pursuant to an Electric Rate and Restructuring Plan dated
November 6, 1997 O&R has agreed to divest by auction all its electric
generating facilities;
WHEREAS, pursuant to this auction process, O&R has agreed to sell
the Facility (as defined below) to NY-Gen LLC;
WHEREAS, O&R desires to have the ability to call on and dispatch
the Facility under the terms of this Agreement in those hours when the
operation of the Facility is required by O&R to ensure the reliability of
the Load Pocket (as hereinaf ter defined) ("Load Pocket Hours");
WHEREAS, NY-Gen LLC agrees to dispatch the Facility during Load
Pocket Hours on the terms and conditions set forth herein and therefore is
willing to enter into this Agreement with O&R; and
WHEREAS, O&R agrees to pay NY-Gen LLC to dispatch the Facility
during Load Pocket Hours on the terms and conditions set forth herein and
therefore is willing to enter into this Agreement with NY-Gen LLC.
NOW, THEREFORE, in consideration of the premises and other valuable
consideration given the one to the other, the sufficiency of which each
Party ac knowledges, O&R and NY-Gen LLC agree as follows:
Article I. Definitions and Interpretation
1.1 The following terms when used herein (and in the schedules
attached hereto) with initial capitalization, shall have the meaning
specified in this Article. The singular shall include the plural and the
masculine shall include the feminine and neuter, and vice versa. "Includes"
or "including" shall mean "including without limitation". References to a
section, article or schedule shall mean a section, article or schedule of
this Agreement, as the case may be, unless the context requires otherwise,
and reference to a given Agreement or instrument shall be a reference to
that Agreement or instrument as modified, amended, supplemented or restated
through the date as of which such reference is made. Unless the context
otherwise requires, references to any Law shall be deemed references to
such Law as it may be amended, replaced or restated from time to time.
Unless the context otherwise requires, any reference to a "person" includes
any individual, partnership, firm, company, corporation, joint venture,
trust, association, organization or other entity, in each case whether or
not having separate legal personality.
1.2 The following terms shall have the meanings set forth below:
(a) ASA: The Gas Turbine and Hydroelectric Generating
Stations Sales Agreement dated as of November 24, 1998 by and between
NY-Gen LLC and O&R.
(b) Available: That the Facility is capable, in real time
(subject to Start-up Lead Times), of producing Energy which can be
Delivered up to the Availability Limit.
(c) Availability: The capability of the Facility at any
given time to produce Energy measured in MW.
(d) Availability Limit: For any hour the maximum number of
MW which NY-Gen LLC is obligated to make Available from the Facility
pursuant to this Agreement, as identified in Schedule A.
(e) Business Day: Any day other than Saturday, Sunday or any
day which is a legal holiday or a day on which banking institutions in the
State of New York are authorized by law or other governmental action to
close.
(f) Capacity: The capability to generate or transmit
electrical power measured in megawatts ("MW").
(g) Capital Improvement: A material addition or modification
to, change in, or replacement or renewal of plant or equipment which
comprises a Facility or any other plant, equipment or facilities used by
NY-Gen LLC for the production of Energy at the Facility.
(h) Closing Date: The date and time at which the closing of
the transactions contemplated by the ASA actually occurs.
(i) Commission: The New York State Public Service Commission.
(j) Contract Year: Each 12-month period commencing on the
Effective Date or on any anniversary of the Effective Date occurring during
the term of this Agreement.
(k) Daily Dispatch Notice: A notice requesting dispatch of
the Facility to provide Energy delivered by O&R to NY-Gen LLC's Scheduling
Coordi nator on the day before a Requested Operation Period pursuant to
this Agreement, in a form which complies with the requirements of Section
4.2.
(l) Deliver: To deliver Energy to the Delivery Point in
compli ance with the requirements described in Section 5.1 and the term
"Delivered" shall be construed accordingly.
(m) Delivered MW or Delivered MWhs: The MW or MWhs of
Energy, as the case may be, Delivered by NY-Gen LLC pursuant to O&R's
request.
(n) Delivery Point: The generator terminals at the Facility,
which are the physical points where Energy will be delivered and measured
for purposes of this Agreement.
(o) Dispatch Notice: A Daily Dispatch Notice, an Hourly
Dispatch Notice and/or a Dispatch Notice given by O&R in real time to
NY-Gen LLC's Scheduling Coordinator.
(p) DMNC: Dependable Maximum Net Capability.
(q) Due Date: The date which is 30 days after the date on
which a Party submits an invoice to the other Party.
(r) Effective Date: The same date as the Closing Date.
(s) Emergency: A condition or situation which is likely to
result in degradation or disruption of service to O&R's customers, or is
likely to endanger life or property.
(t) Emission Costs: NY-Gen LLC's emissions' related costs as
calculated pursuant to Schedule E.
(u) Energy: Electrical energy.
(v) Energy Costs: NY-Gen LLC's costs for Delivered MWhs
which are Delivered pursuant to a Dispatch Notice as calculated pursuant to
Section 6.2 and Schedule C.
(w) Facility: The electrical generating facilities more
particularly described in Schedule A, individually or collectively as the
case may be.
(x) FERC: Federal Energy Regulatory Commission.
(y) Forced Outage: Any outage of the Facility other than (i)
a Planned Outage, (ii) a Planned Overhaul, (iii) an outage caused by a
Force Majeure Event, (iv) an outage caused by an act or omission of O&R,
including any O&R Event of Default, (v) an outage caused by an ISO order or
request to take a unit off line as a result of an emergency or as a result
of any abnormal transmission condition on O&R's System, or (vi) any outage
required to comply with any environmental restrictions, that fully or
partially curtails its ability to produce Energy when dis patched by O&R in
accordance with the terms of this Agreement.
(z) Good Utility Practices: Any of the practices, methods or
acts engaged in or approved by a significant portion of the electric
utility industry with respect to similar facilities during the relevant
time period, which in each case, in the exercise of reasonable judgment in
light of the facts known or that should have been known at the time the
decision was made, could have been expected to accomplish the desired
result at a reasonable cost consistent with good business practices,
reliability, safety, law, regulation, environmental protection and
expedition. Good Utility Practices are not intended to be limited to the
optimum practices, methods or acts to the exclusion of all others, but
rather to delineate the acceptable practices, methods, or acts generally
accepted in such industry.
(aa) Governmental Authority: Any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to a government.
(bb) Hourly Dispatch Notice: A notice, delivered by O&R to
NY-Gen LLC's Scheduling Coordinator, requesting dispatch of the Facility to
provide Energy pursuant to this Agreement, other than a Daily Dispatch
Notice, in such form as may be adopted by the Parties, provided that such
form complies with the require ments of Section 4.2 of this Agreement.
(cc) Interest Rate: The rate of interest at the prime rate
of The Chase Manhattan Bank in effect on the applicable date.
(dd) ISO: The New York Independent System Operator.
(ee) ISO Protocols: The rules, protocols, procedures and
standards promulgated by the ISO (as amended from time to time) to be
complied with by the ISO and all market participants in relation to
participation in the market for Energy in accordance with the ISO Operating
Agreement and Tariff.
(ff) ISO Tariff: The open access transmission operating
agree ment and tariff approved by the FERC, in FERC Docket Nos.
ER97-1523-000, OA97-470-000, and ER97-4234-000, as it may be modified and
in effect from time to time.
(gg) Law: Any law, treaty, code, rule, regulation, or order
or determination of an arbitrator, court or other Governmental Authority,
or any franchise, license, lease, permit, certificate, authorization,
qualification, right or approval issued or granted by a Governmental
Authority and binding on a Party or any of its property.
(hh) Load Pocket: The electric load required by O&R's
customers in the area of O&R's service territory outlined on the attached
diagram on Schedule H, provided, however, that, (i) because of transmission
constraints on O&R's transmission and distribution system as of the date
hereof, such area requires generating resources internal to such area to
ensure reliable service to such electric load and (ii) the Facility is a
generating resource internal to such area that is neces sary to ensure such
reliable service.
(ii) Market Transaction: A delivery of Energy and/or
capacity from the Facility, other than pursuant to this Agreement.
(jj) Maximum Requested MW: The highest MW output of the
Facility which O&R can request NY-Gen LLC to dispatch, as shown on Schedule
A.
(kk) Minimum Requested MW: The lowest MW output needed to
maintain stable continuous operation of the Facility, as shown on Schedule
A.
(ll) NERC: North American Electric Reliability Council or its
successors.
(mm) Nonmarket Transaction: A delivery of Energy from the
Facility pursuant to a Dispatch Notice under this Agreement.
(nn) NY-Gen LLC's Scheduling Coordinator: The Scheduling
Coordinator identified by NY-Gen LLC.
(oo) NYPP: The New York Power Pool or its successors.
(pp) NYPP Procedures: The most current methods and procedures
of the NYPP, including those for determining DMNC, as amended.
(qq) Off-Peak: All hours not classified as On-Peak hours.
(rr) On-Peak: The hours in Monday through Friday from hour
beginning 7:00 a.m. through hour beginning 10:00 p.m. excluding NERC holidays.
(ss) O&R Load Zone: The load zone as designated by the ISO
which encompasses the O&R service territory.
(tt) O&R's System: O&R's electric transmission and
distribution system.
(uu) Party: Either O&R or NY-Gen LLC and Parties means O&R
and NY-Gen LLC.
(vv) Planned Outage: A planned interruption in the
electrical output of the Facility or a planned transmission interruption of
the O&R System, as the case may be, to perform routine maintenance pursuant
to the Planned Outage schedule provided under Section 12.3.
(ww) Planned Overhaul: A planned interruption in the
electrical output of the Facility or a planned transmission interruption of
the O&R System, as the case may be, to perform a major equipment overhaul
and inspections or major transmission facilities maintenance and inspection
at the dates and times provided under Section 12.3.
(xx) Requested MW : The MW of generation capability which
O&R requests be made available from the Facility pursuant to a Dispatch
Notice.
(yy) Requested Operation Period: The hours during which O&R
requests that the Facility be dispatched pursuant to a Dispatch Notice.
(zz) Shutdown: The condition of the Facility where the
generator rotor is at rest.
(aaa) Start-up: The action of bringing the Facility from
Shutdown to Synchronous Speed, to its Minimum Requested MW and having it
unconditionally released for ramping to full load if required, and
"Started-up" and "Starting-up" shall be construed accordingly.
(bbb) Start-up Lead Time: The amount of time required to
Start-up the Facility, as shown on Schedule A.
(ccc) Start-up Costs: NY-Gen LLC's costs for Starting-up the
Facility in response to a Dispatch Notice, as described in Section 6.2 and
Schedule D.
(ddd) Summer Capability Period: The meaning provided by the
NYPP, the ISO or their successor(s), as may be modified from time to time.
Summer Capability Period is currently each May 1 through October 31 of each
year.
(eee) Synchronized: The condition where the Facility is
connected to the Transmission Grid.
(fff) Synchronous Speed: That speed required by the Facility
to enable it to be Synchronized to the Transmission Grid.
(ggg) Transmission Grid: The electric transmission system
(as it may be modified or expanded from time to time) under control of the
NYPP or the ISO.
(hhh) Winter Capability Period: The meaning provided by the
NYPP, the ISO or their successor(s), as may be modified from time to time.
Winter Capability Period is currently each November 1 through April 30 of
the following calendar year.
1.3 Each of the following terms has the meaning specified in the
Section set forth opposite such term:
Term Section
---- -------
Adjustment Invoice 7.4
Agreement Preamble
Annual Forecast 4.1
Availability Payment 6.1
Direct Claim 15.4
Disclosing Party 24.1
Estimated Invoice 7.1
Event of Default 14.1
Force Majeure Event 18.1
Forecast 4.1
Generation Costs 6.2
Indemnifiable Loss 15.3
Indemnifying Party 15.3
Indemnitee 15.3
Load Pocket Dispatch Log Schedule J
Load Pocket Hours Recitals
Net Worth 22.1
NY-Gen LLC Indemnifiable Loss 15.2
NY-Gen LLC Preamble
O&R Preamble
O&R Indemnifiable Loss 15.1
Occurrence Schedule G
Recipient 24.1
Shed Load Schedule G
Taxes 21.1
Third Party Claim 15.4
Article II. Representations, Warranties and Covenants
2.1 NY-Gen LLC makes the following representations, warranties and
covenants as the basis for the benefits and obligations contained in this
Agreement.
(a) NY-Gen LLC represents that it is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has the power and authority to own its
properties, to carry on its business as now being conducted and to enter
into this Agreement and carry out the transactions contemplated hereby and
perform and carry out all covenants and obligations on its part to be
performed under and pursuant to this Agreement.
(b) NY-Gen LLC represents and warrants that (i) it is duly
authorized to enter into this Agreement and discharge and perform all
covenants and obligations on its part to be performed under and pursuant to
this Agreement, (ii) the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of
and compliance with the provisions of this Agreement will not conflict with
or constitute a breach of or a default under, any of the terms, conditions
or provisions of any law, any order of any court or other agency of
government, or any contractual limitation, deed of trust, mortgage,
partnership agreement, loan agreement, other evidence of indebtedness or
any other agreement or instrument to which NY-Gen LLC is a party or by
which it or any of its property is bound, or result in a breach of or a
default under any of the foregoing, except for such conflicts, breaches or
defaults, as to which requisite waivers have been obtained or which would
not have a material adverse effect on NY-Gen LLC's ability to perform its
obligations under this Agreement, and (iii) this Agreement is the legal,
valid and binding obligation of NY-Gen LLC enforceable in accordance with
its terms, except that such enforceability may be limited by applicable
laws affecting or relating to enforcement of creditors' rights and general
principles of equity.
(c) NY-Gen LLC represents and warrants that all consents and
authorizations required for NY-Gen LLC to execute and deliver this
Agreement have been obtained, except for such consents and authorizations
which, if not obtained, would not be reasonably likely to have a material
adverse affect on NY-Gen LLC's ability to perform its obligations under
this Agreement.
2.2 O&R makes the following representations, warranties and
covenants as the basis for the benefits and obligations contained in this
Agreement.
(a) O&R represents and warrants that it is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York, has the corporate power and authority to own its
properties, to carry on its business as now being conducted and to enter
into this Agreement and the transac tions contemplated hereby and perform
and carry out all covenants and obligations on its part to be performed
under and pursuant to this Agreement.
(b) O&R represents and warrants that it is duly authorized
to enter into this Agreement and discharge and perform all covenants and
obligations on its part to be performed under and pursuant to this
Agreement and that the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of
and compliance with the provisions of this Agreement will not conflict with
or constitute a breach of or a default under, any of the terms, conditions,
or provisions of any law, any order of any court or other agency of
government, the certificate of incorporation or by-laws of O&R, or any
contractual limitation, corporate restriction or outstanding trust
indenture, deed of trust, xxxx xxxx, loan agreement, other evidence of
indebtedness or any other agreement or instrument to which O&R is a party
or by which it or any of its property is bound, or result in a breach of or
default under any of the foregoing except for such conflicts, breaches or
defaults, as to which requisite waivers have been obtained or which would
not have a material adverse effect on O&R's ability to perform its
obligations under this Agreement, and (iii), and this Agreement is the
legal, valid and binding obligation of O&R enforceable in accordance with
its terms except that such enforceability may be limited by applicable laws
affecting or relating to enforcement of creditors' rights and general
principles of equity.
(c) O&R represents and warrants that all consents and
authoriza tions required to execute this Agreement have been obtained
except for such consents and authorizations which, if not obtained, would
not be reasonably likely to have a material adverse affect on O&R's ability
to perform its obligations under this Agreement.
(d) O&R represents and warrants that as of the Closing Date
the Facilities are capable of meeting the operating requirements specified
herein in accordance with Good Utility Practices, including the Maximum
Requested MW, the Minimum Requested MW, the Requested MW, the heat rates
set forth in Schedule A, the Start-up Lead Time, the Synchronous Speed and
the requirements to be set forth in a Dispatch Notice, and O&R has no
knowledge of any conditions at the Facilities that could cause such
Facilities to be unable to satisfy such requirements during the term of
this Agreement.
Article III. Term
3.1 This Agreement shall remain in full force and effect for a
period of one year from the Closing Date. O&R may, in its sole discretion,
extend the term of this Agreement for a maximum of four additional
consecutive one year terms. In order for O&R to exercise its option to
extend the term of this Agreement, O&R must provide NY-Gen LLC with written
notice, at least 120 days prior to the termination of this Agreement, of
its intention to extend the term of this Agreement for another year.
Applicable provisions of this Agreement shall continue in effect after
termination to the extent necessary to provide for final xxxxxxxx and
adjustments. Upon each one year extension of this Agreement, the
Availability Payments in Schedule B shall be increased in accordance with
the Consumer Price Index for all Urban consumers, U.S. City Average, all
times, unadjusted (base date January 1998) released by the U.S. Government
Department of Labor, Bureau of Labor Statistics or its successor, or should
such price index be discontinued, or the bases of its calcula tion be
substantially modified, such other price index as is mutually agreed upon
by O&R and NY-Gen LLC.
Article IV. O&R's Right to Dispatch the Facility
4.1 On the Effective Date and, if the term of this Agreement has
been extended pursuant to Section 3.1, on the anniversary of the Effective
Date, O&R will provide NY-Gen LLC with a non-binding forecast ("Annual
Forecast") representing O&R's then current best estimate of the Capacity
that O&R will require the Facility to provide during the next 12 months for
the Load Pocket. Not less than 30 days prior to the beginning of every
calendar month during the term of this Agreement, O&R shall provide NY-Gen
LLC with a non-binding forecast ("Forecast") represent ing O&R's then
current best estimate of the Capacity that O&R will require the Facility to
provide from the beginning of that calendar month through the end of the
following two calendar months (a three month period) for the Load Pocket.
The Forecast and Annual Forecast will take into account the Planned Outages
and Planned Overhauls. O&R shall use its best efforts to prepare its
estimate but shall have no liability to NY-Gen LLC for the accuracy or
completeness of the Forecast or the Annual Forecast.
4.2 Subject to the terms and conditions described in this
Agreement, O&R shall have the right to direct that the Facility be
available to Deliver Energy during Load Pocket Hours for the Load Pocket.
O&R shall direct the dispatch of the Facility by delivering, in accordance
with the communication protocols from time to time established by the
Parties, a Daily Dispatch Notice to NY-Gen LLC's Schedul ing Coordinator
not later than 10:00 a.m. of the day before the commencement of the
Requested Operation Period specified in such notice and/or delivering an
Hourly Dispatch Notice to NY-Gen LLC's Scheduling Coordinator at least one
half hour prior to the commencement of the Requested Operation Period
specified in such notice and/or delivering a Dispatch Notice in real time.
Each Dispatch Notice shall comply with the Start-up Lead Times and the
other operational limitations described in Schedule A, and, NY-Gen LLC
shall have no liability, nor shall NY-Gen LLC suffer any reductions in
payments, for failure to comply with a Dispatch Notice which is not in
compliance with such limitations. Each Daily Dispatch Notice or Hourly
Dispatch Notice may be modified by a subsequent Daily Dispatch Notice or a
subsequent Hourly Dispatch Notice, subject to the restrictions of this
subsection. O&R may, subject to the restrictions of this subsection, issue
a Dispatch Notice directing dispatch of the Facility in real time for the
Load Pocket.
4.3 Each Dispatch Notice shall specify the time of commencement and
termination of the Requested Operation Period and, for each hour of the
Requested Operation Period, the Minimum Requested MW which O&R requests to
be dis patched and the Maximum Requested MW O&R requests to be available
for the Load Pocket. All hours of operation in each Dispatch Notice shall
be consecutive Load Pocket Hours, unless otherwise agreed to in writing by
NY-Gen LLC. O&R may not direct NY-Gen LLC to conduct more than one
dispatchable start-up per calendar day per generating unit. Each Party
shall record the applicable information from the Dispatch Notices in the
Load Pocket Dispatch Log, a form of which is attached hereto in the Form of
Schedule J.
4.4 If NY-Gen LLC considers that a Dispatch Notice does not comply
with the limitations set forth in Schedule A or that NY-Gen LLC is
otherwise not required to dispatch the Facility in accordance with a
Dispatch Notice, it shall forthwith give written notice to O&R to that
effect. This notice shall specify in detail why NY-Gen LLC believes the
Dispatch Notice does not comply or NY-Gen LLC is not otherwise required to
dispatch the Facility, as the case may be, and shall include, without
limitation, the following bases for the notice as applicable:
(i) any amount of Capacity requested by O&R that
NY-Gen LLC is not obligated to provide
pursuant to Sec tion 9.1;
(ii) whether the Start-up Lead Time or any other
operating constraint as described in Schedule
A is inconsistent with Delivery of the
Requested MW in accordance with the Dispatch
Notice;
(iii) any operation of the Facility necessary to
comply with the Dispatch Notice which would be
in breach of any applicable Law or would
conflict with Good Utility Practices.
4.5 Upon receipt of NY-Gen LLC's notice issued pursuant to Section
4.4, O&R may, by delivering a notice to NY-Gen LLC's Scheduling Coordinator
promptly thereafter, but in no event later than half an hour prior to
commencement of the Requested Operation Period, modify the Dispatch Notice
in accordance with NY-Gen LLC's notice.
4.6 At or about 9:00 a.m. each day, NY-Gen LLC shall provide O&R
with a daily status report regarding the operating characteristics and
current status of the Facility, substantially in the form attached hereto
as Schedule L. This report will include information that pertains to the
reliable performance of the Facility such as response rate, start up time,
minimum run time, minimum down time, minimum loading point, full load point
and available choice of fuels. The report also will describe the Facility's
current availability, deratings and planned operations for the next 24
hours. NY-Gen LLC shall notify O&R immediately of any actual or planned
change to this data.
Article V. Delivery by NY-Gen LLC
5.1 NY-Gen LLC shall, in response to a Dispatch Notice from O&R,
dispatch the Facility at the Minimum Requested MW and make available the
Maximum Requested MW in accordance with the Dispatch Notice, subject to the
limits described in this Agreement.
5.2 NY-Gen LLC shall, in response to a Dispatch Notice from O&R,
provide reactive supply and voltage control for the Load Pocket by making
available the minimum MVARs at full MW load as set forth in Schedule A.
Article VI. Price
6.1 Following the Effective Date, O&R shall make Availability
payments as described in Schedule B ("Availability Payments") to NY-Gen LLC
in accordance with Section 7.1.
6.2 When NY-Gen LLC dispatches a Facility into the ISO during Load
Pocket Hours pursuant to a Dispatch Notice, O&R shall pay NY-Gen LLC its
Generation Costs as set forth below ("Generation Costs"), to the extent
that the revenue received by such Facility from the ISO is less than the
Generation Costs during such time period. For purposes of determining such
payment described in the preceding sentence, (i) the revenue received by
the Facility shall include all revenue received from all energy and
ancillary services markets, during the period the Facility operates as
recorded in the Load Pocket Dispatch Log, but shall exclude any capacity
payments and (ii) such revenue shall not be reduced by any penalties
assessed by the ISO for non-performance. Generation Costs shall be the sum
of all applicable Energy Costs for both minimum generation and above
minimum genera tion (as calculated pursuant to Schedule C), Start-up Costs
(as calculated pursuant to Schedule D) and Emissions Costs (as calculated
pursuant to Schedule E). Schedule F illustrates how payment will be
calculated when a Facility is operating pursuant to Market and Nonmarket
Transactions. In addition, to the extent that O&R issues a notice modifying
the Dispatch Notice pursuant to Section 4.2 or 4.5, O&R shall compensate
NY-Gen LLC for any incremental costs including, but not limited to,
imbalance or scheduling charges and/or penalties imposed on or incurred by
NY-Gen LLC as a result of the modification.
6.3 If NY-Gen LLC fails to be available to provide Energy during
Load Pocket Hours, NY-Gen LLC shall be assessed the penalties as calculated
in accor dance with Schedule G to this Agreement. Such penalties shall be
O&R's sole and exclusive remedy with respect to any failure to be available
or to provide Energy during Load Pocket Hours.
6.4 Nothing in this Agreement shall restrict NY-Gen LLC from
entering into Market Transactions either inside or outside of a Requested
Operation Period.
6.5 O&R is not purchasing from and accordingly makes no payment to
NY-Gen LLC for either capacity or ancillary services pursuant to this
Agreement. If the Parties wish to engage in the purchase or sale of
capacity and/or ancillary services, they will do so pursuant to a separate
agreement(s).
Article VII. Payment Terms
7.1 Within 14 days after the end of each calendar month during the
term of this Agreement (and, if termination of this Agreement does not
occur at the end of a month, within 14 days after the end of the month in
which termination occurs), NY-Gen LLC shall submit an estimated invoice
("Estimated Invoice") to O&R for all charges properly due under this
Agreement for that month using reasonable estimates of actual data. Such
invoice shall set out or be supported by detailed calculations and
breakdowns of the estimated amounts due. The Estimated Invoice shall be
paid by O&R no later than the Due Date.
7.2 All payments shall be made by wire transfer in accordance with
instructions from the Party making payment or by memorandum accounts. Each
Party may set off any undisputed amount owed to the other Party against any
undisputed amount owed pursuant to this Agreement or other arrangement(s)
agreed to between the Parties.
7.3 If any sum or part of a sum shown on an invoice is disputed by
either Party, payment of the undisputed sums on that invoice shall not be
withheld. Interest on any unpaid amounts shall be charged at the Interest
Rate plus 2 percent per annum calculated from the Due Date of the invoice
to the date of payment.
7.4 NY-Gen LLC shall submit to O&R an adjusted or supplemental
invoice ("Adjustment Invoice") within 60 days after the date of the
Estimated Invoice which Adjustment Invoice should reflect the actual
amounts due from O&R to NY-Gen LLC for the months covered by the
appropriate Estimated Invoice. If the Adjustment Invoice reflects an amount
that is less than the amount charged to O&R under the Estimated Invoice,
NY-Gen LLC shall pay the difference between the amount in the Adjustment
Invoice and the amount in the Estimated Invoice to O&R together with
interest at the Interest Rate from the Due Date of the Estimated Invoice to
the effective date of repayment by NY-Gen LLC no later than the Due Date
and the provisions of Section 7.2 shall apply to any such payment.
If the Adjustment Invoice reflects an amount that is greater than
the amount charged to O&R under the Estimated Invoice, O&R shall pay the
difference between the amount in the Adjustment Invoice and the amount in
the Estimated Invoice to NY-Gen LLC together, with interest from the Due
Date of the Estimated Invoice to the date of payment by O&R.
7.5 If the Due Date is not a Business Day, then the next following
Business Day will be the Due Date.
7.6 If O&R does not dispute the amount in an Estimated Invoice or
an Adjustment Invoice in a writing provided to NY-Gen LLC identifying in
reasonable detail the reasons therefor within six months after receipt of
such invoice, such invoice shall be deemed correct. Each Party shall at its
own cost provide the other Party with such information and assistance as
the other Party reasonably requests to resolve the dispute, subject to the
confidentiality provisions herein. If O&R has disputed the amount prior to
its due date in a writing provided to NY-Gen LLC identifying in reasonable
detail the reasons thereof, O&R shall not be obligated to pay the disputed
amount until such dispute is resolved. The Parties shall engage in good
faith negotiations to resolve any disputed amounts within 30 days. If the
Parties are unable to resolve the dispute within such 30-day period, either
Party may exercise such rights and remedies available to it under law or at
equity. If the dispute is finally settled or determined in favor of NY-Gen
LLC, NY-Gen LLC shall include the amount settled or determined in an
invoice under Section 7.1 or 7.4 plus interest. If the settlement or
determination of the dispute results in an amount being due to O&R, NY-Gen
LLC shall pay O&R or credit the rebate to O&R at the time the next invoice
is issued to O&R plus interest. Interest on disputed amounts will be calcu
lated in accordance with Section 7.3.
Article VIII. Testing and Capacity Ratings
8.1 During the term of this Agreement, NY-Gen LLC shall provide O&R
with the results of the DMNC test which NY-Gen LLC performs for each
capability period (as defined by the NYPP or the ISO or their successors)
in accordance with NYPP Procedures or any similar test established by the
ISO Protocols.
Article IX. Generation Commitments
9.1 O&R shall not have the right under this Agreement to dispatch
the Facility (i) in excess of the Maximum Requested MW, (ii) less than the
Minimum Requested MW, (iii) to provide Energy to customers outside of the
Load Pocket or to support O&R's System outside of the Load Pocket, or (iv)
during any outage that is included as an exception to the definition of
"Forced Outage".
Article X. Start-up Lead Times and Other Operating Constraints
10.1 NY-Gen LLC shall not be obligated under this Agreement to
Start-up the Facility unless the amount of time between the delivery of the
Dispatch Notice requesting such Start-up and the commencement of the
applicable Requested Operation Period shall at least equal the Start-up
Lead Time.
10.2 NY-Gen LLC shall not be obligated to operate the Facility
pursuant to this Agreement in excess of the other operational limits as set
forth in Schedule A or in a manner inconsistent with Good Utility Practices
or Law.
Article XI. Metering
11.1 Metering services shall be performed as provided for in the
Continuing Site/Interconnection Agreement, by and between O&R and NY-Gen LLC,
dated November 24, 1998.
Article XII. Coordination of Facility and System Maintenance
12.1 NY-Gen LLC shall use its commercially reasonable efforts to
fuel, operate and maintain the Facility, or cause the Facility to be
fueled, operated and maintained, in accordance with all material Laws and
Good Utility Practices so that NY-Gen LLC is able to perform its
obligations under this Agreement. NY-Gen LLC shall also notify O&R of any
derating greater than 5% of the Facility's nominal ratings, as set forth in
Schedule A, that will cause NY-Gen LLC to be unable to perform its
obligations during a Load Pocket Hour.
12.2 Other than unscheduled maintenance, each Party shall use
reasonable efforts to coordinate with the other Party the maintenance of
the Facility and the O&R System, as the case may be, as well as any
electric transmission lines, required in order to ensure the sound
operation of the Facility and O&R's System. Except in cases of Emergency
and Good Utility Practices, neither Planned Outages, including planned
partial outages, and Planned Overhauls shall be scheduled or performed at
the Facility or the O&R System, as the case may be, during the On-Peak
hours in the months of June through September, inclusive, without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed.
12.3 Within 60 days after the Effective Date, each Party shall
provide the other Party, a non-binding schedule of Planned Outages and
Planned Overhauls (including expected commencement date and duration) for
the following calendar year. In addition, each Party shall provide a
non-binding two-year forecast of Planned Overhauls in accordance with ISO
procedures. Each Party may make such changes to such schedules and
forecasts as it considers appropriate, at its sole discretion, subject to
the restrictions set forth herein.
Article XIII. Modifications
13.1 In the event of any material loss or damage to the Facility
that would substantially impair the capability of the Facility to Deliver
Energy during a Load Pocket Hour, NY-Gen LLC shall at its own expense make
such repairs or replace ments as it considers necessary in accordance with
Good Utility Practices in order to perform its obligations hereunder.
Article XIV. Termination
14.1 Unless otherwise caused by a Force Majeure Event or an act or
omission of the non-defaulting Party, any one or more of the following
events shall constitute an Event of Default under this Agreement, and the
terms "Event of Default" or "Events of Default" shall mean, whenever they
are used in this Agree ment, any one or more of the following events:
(a) Failure by either Party to pay any material amount due
and payable by it pursuant to this Agreement after the same shall have
become due and payable;
(b) A material breach by either Party of any covenant,
condition or obligation on its part to be performed (other than as referred
to in paragraph (a) above) and such failure shall materially and adversely
affect such Party's perfor xxxxx under this Agreement and such breach is
not cured within 30 days after the breaching Party receives written notice
thereof from the non-breaching Party, or within such longer cure period as
may reasonably be required if such breach cannot be reasonably cured within
such 30-day period and the defaulting Party has instituted corrective
action and diligently attempts to cure such default and continues such
action until the cure is complete;
(c) The dissolution or liquidation of either Party, or the
admission in writing by either Party of its inability to pay its debts as
they become due, or the failure by either Party to lift any execution,
garnishment or attachment of such consequences as will impair such Party's
ability to perform substantially its obliga tions pursuant to this
Agreement, or the commission by either Party of any act of bankruptcy, or
the adjudication of either Party as a bankrupt, or the making of any
assignment by either Party for the benefit of its creditors or the entry by
either Party into an agreement of composition with its creditors, or the
approval by a court of competent jurisdiction of a petition applicable to
either Party in any proceeding for the reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar proceeding
instituted under the provisions of any bankruptcy act or under any similar
act in any domestic or foreign jurisdiction which may now be in effect or
hereafter enacted, or within 60 days after the commencement of any such
proceeding against either Party such proceeding shall have been dismissed,
or the filing of an answer admitting or not contesting the material
allegations of a petition against it in such proceeding, or the appointment
without the consent or acquiescence of either Party, of any trustee,
receiver or liquidator of either Party or of any material part of its
properties, if within 60 days thereafter such appointment shall not have
been vacated, or if either Party shall seek or consent or acquiesce in the
appointment of any trustee, receiver or liquidator of itself or of any
material part of its properties;
(d) If any material representation or warranty made by or on
behalf of either Party shall prove to have been false or incorrect in any
material respect on the date as of which made.
14.2 Whenever any Event of Default shall have occurred and be
continu ing, the non-defaulting Party, to the extent permitted by law, may,
upon written notice to the defaulting Party, terminate this Agreement and
thereupon this Agree ment shall cease and terminate.
14.3 In addition to the foregoing remedies, whenever any Event of
Default, which materially affects the defaulting Party's performance under
this Agreement, shall have occurred and be continuing, the non-defaulting
Party, to the extent permitted by law, shall be entitled to suspend
immediately its performance under this Agreement, until such Event of
Default is corrected. If the Event of Default does not cease or is not
corrected, the non-defaulting Party may proceed to terminate this Agreement
in accordance with the provisions of this Agreement.
14.4 No termination of this Agreement shall relieve the defaulting
Party of its liability and obligations hereunder accruing or arising prior
to such termination, and the non-defaulting Party may take wherever action
at law or in equity as may appear necessary or desirable to enforce
performance and observance of any obliga tions, agreements, or covenants
under this Agreement, and the rights given hereunder shall be in addition
to all other remedies available to the Parties, either in law, at equity or
otherwise, for the breach of this Agreement.
Article XV. Indemnification
15.1 NY-Gen LLC's Indemnification
NY-Gen LLC shall indemnify, hold harmless and defend O&R,
its parent, affiliates, and successors, and their officers, directors,
employees, agents, subcontractors, and successors, from and against any and
all claims, demands, liabilities, costs, losses, judgments, damages and
expenses (including, without limitation, reasonable attorney and expert
fees, and disbursements incurred by O&R in any actions or proceedings
between O&R and a third party, NY-Gen LLC, or any other party) to the
extent the foregoing are not covered by insurance ("O&R Indemnifiable
Losses") asserted against or suffered by O&R for (i) damage to property, or
(ii) injury to or death of any person, including O&R employees, NY-Gen
LLC's employees and their affiliates' employees, or any third parties, in
such case to the extent caused by the gross negligence or willful
misconduct of NY-Gen LLC and/or its officers, directors, employees, agents,
and subcontractors and arising out of this Agreement and not caused by the
negligence or willful misconduct of any such Indemnitee.
15.2 O&R's Indemnification
O&R shall indemnify, hold harmless and defend NY-Gen LLC,
its parent, affiliates, and successors, and their officers, directors,
employees, agents, subcontractors, and successors, from and against any and
all claims, demands, liabilities, costs, losses, judgments, damages and
expenses (including, without limitation, reasonable attorney and expert
fees, and disbursements incurred by NY-Gen LLC in any actions or
proceedings between NY-Gen LLC and a third party, O&R, or any other party)
to the extent the foregoing are not covered by insurance ("NY-Gen LLC
Indemnifiable Losses") asserted against or suffered by NY-Gen LLC for (i)
damage to property, or (ii) injury to or death of any person, including
NY-Gen LLC employees, O&R's employees and their affiliates' employees, or
any third parties, in each case to the extent caused by the gross
negligence or willful miscon duct of O&R and/or its officers, directors,
employees, agents, and subcontractors and arising out of this Agreement and
not caused by the negligence or willful misconduct of any such Indemnitee.
15.3 Indemnification Procedures
Either Party entitled to receive indemnification under this
agreement (an "Indemnitee") having a claim under these indemnification
provisions shall make a good faith effort to recover all losses, damages,
costs and expenses from insurers of such Indemnitee under applicable
insurance policies so as to reduce the amount of any O&R Indemnifiable Loss
or NY-Gen LLC Indemnifiable Loss, as appropriate, hereunder. The amount of
any O&R Indemnifiable Loss or NY-Gen LLC Indemnifiable Loss, as
appropriate, shall be reduced to the extent that Indemnitee receives any
insurance proceeds with respect to an O&R Indemnifiable Loss or NY-Gen LLC
Indemnifiable Loss, as appropriate (either may be referred to as an
"Indemnifiable Loss").
15.4 Defense of Claims. (a) If any Indemnitee receives written
notice of the assertion of any claim or of the commencement of any claim,
action, or proceed ing made or brought by any Person who is not a Party to
this Agreement or any affiliate of a Party to this Agreement (a "Third
Party Claim") with respect to which indemnification is to be sought from a
person required to provide indemnification under this Agreement (an
"Indemnifying Party"), the Indemnitee will give such Indemnifying Party
reasonably prompt written notice thereof, but in any event not later than
30 days after the Indemnitee's receipt of written notice of such Third
Party Claim. Such notice shall describe the nature of the Third Party Claim
in reasonable detail and will indicate the estimated amount, if
practicable, of the Indemnifiable Loss that has been or may be sustained by
the Indemnitee. The Indemnifying Party will have the right to participate
in or, by giving written notice to the Indemnitee, to elect to assume the
defense of any Third Party Claim at such Indemnifying Party's own expense
and by such Indemnifying Party's own counsel, and the Indemnitee will
cooperate in good faith in such defense at such Indemnitee's own expense.
(b) If within ten calendar days after an Indemnitee provides
written notice to the Indemnifying Party of any Third Party Claim the
Indemnitee receives written notice from the Indemnifying Party that such
Indemnifying Party has elected to assume the defense of such Third Party
Claim as provided in the last sentence of Section 15.4(a), the Indemnifying
Party will not be liable for any legal expenses subsequently incurred by
the Indemnitee in connection with the defense thereof; provided, however,
that if the Indemnifying Party fails to take reasonable steps necessary to
defend diligently such Third Party Claim within 20 calendar days (unless
waiting 20 calendar days would prejudice the Indemnitee's rights) after
receiving notice from the Indemnitee that the Indemnitee believes the
Indemnifying Party has failed to take such steps, the Indemnitee may assume
its own defense, and the Indemnifying Party will be liable for all
reasonable expenses thereof. Without the prior written consent of the
Indemnitee, the Indemnifying Party will not enter into any settlement of
any Third Party Claim which would lead to liability or create any financial
or other obligation on the part of the Indemnitee for which the Indemnitee
is not entitled to indemnification hereunder. If a firm offer is made to
settle a Third Party claim without leading to liability or the creation of
a financial or other obligation on the part of the Indemnitee for which the
Indemnitee is not entitled to indemnification hereunder and the
Indemnifying Party desires to accept and agree to such offer, the
Indemnifying Party will give written notice to the Indemnitee to that
effect. If the Indemnitee fails to consent to such firm offer within ten
business days after its receipt of such notice, the Indemnitee may continue
to contest or defend such Third Party Claim and, in such event, the maximum
liability of the Indemnify ing Party as to such Third Party Claim will be
the amount of such settlement offer, plus reasonable costs and expenses
paid or incurred by the Indemnitee up to the date of such notice.
Notwithstanding the foregoing, the Indemnitee shall have the right to pay,
compromise, or settle any Third Party Claim at any time, provided that in
such event the Indemnitee shall waive any right to indemnity hereunder
unless the Indemnitee shall have first sought the consent of the
Indemnifying Party in writing to such payment, settlement, or compromise
and such consent was unreasonably withheld or delayed, in which event no
claim for indemnity therefor hereunder shall be waived.
(c) Any claim by an Indemnitee on account of an
Indemnifiable Loss which does not result from a Third Party Claim (a
"Direct Claim") will be asserted by giving the Indemnifying Party
reasonably prompt written notice thereof, stating the nature of such claim
in reasonable detail and indicating the estimated amount, if practicable,
but in any event not later than 30 calendar days after the Indemnitee
becomes aware of such Direct Claim, and the Indemnifying Party will have a
period of 30 calendar days within which to respond to such Direct Claim. If
the Indemnify ing Party does not respond within such 30 calendar day
period, the Indemnifying Party will be deemed to have accepted such Direct
Claim. If the Indemnifying Party rejects such Direct Claim, the Indemnitee
will be free to seek enforcement of its rights to indemnification under
this Agreement.
(d) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an indemnity payment in respect thereof, is
reduced by recovery, settlement or otherwise under or pursuant to any
insurance coverage, or pursuant to any claim, recovery, settlement or
payment by or against any other entity, the amount of such reduction, less
any costs, expenses or premiums incurred in connection therewith (together
with interest thereon from the date of payment thereof at the prime rate
then in effect of the Chase Manhattan Bank, N.A.), will promptly be repaid
by the Indemnitee to the Indemnifying Party. Upon making any indemnity
payment, the Indemnifying Party will, to the extent of such indemnity
payment, be subrogated to all rights of the Indemnitee against any third
party in respect of the Indemnifiable Loss to which the indemnity payment
relates; provided, however, that (i) the Indemnifying Party will then be in
compliance with its obligations under this Agreement in respect of such
Indemnifiable Loss and (ii) until the Indemnitee recovers full payment of
its Indemnifiable Loss, any and all claims of the Indemnify ing Party
against any such third party on account of said indemnity payment is hereby
made expressly subordinated and subjected in right of payment to the
Indemnitee's rights against such third party. Without limiting the
generality or effect of any other provision hereof, each such Indemnitee
and Indemnifying Party will duly execute upon request all instruments
reasonably necessary to evidence and perfect the above-described
subrogation and subordination rights. Nothing in this Section 15.4(d) shall
be construed to require any Party hereto to obtain or maintain any
insurance coverage.
(e) A failure to give timely notice as provided in this
Section 15.4 will not affect the rights or obligations of any Party
hereunder except if, and only to the extent that, as a result of such
failure, the Party which was entitled to receive such notice was actually
prejudiced as a result of such failure.
15.5 Each Party shall be responsible for protecting its facilities
from possible damage by reason of electrical disturbances or faults caused
by the opera tion, faulty operation, or non-operation of the other Party's
facilities, and such other Party shall not be liable for any such damages
so caused.
Article XVI. Limitation of Liability
16.1 Neither Party shall be liable to the other Party or its
affiliates for any consequential, incidental, punitive, special or indirect
damages arising out of or relating to the performance or breach of this
Agreement including, without limita tion, replacement power costs, loss of
revenue, loss of anticipated profits or loss of use of the Facility, the
O&R System or other property, whether or not such damages are based upon
causes of action for breach of contract, statutory (including negli gence
and misrepresentation), breach of warranty, or strict liability.
16.2 The benefits of this Article shall also extend to each Party's
affiliates and their respective officers, directors, employees, and agents
and, to the extent they are acting on behalf of such Party, such Party's
contractors, subcontractors, suppliers and vendors of every tier, and shall
survive termination or suspension of this Agree ment, as well as the
fulfillment of the obligations of the Parties hereunder.
Article XVII. Insurance
17.1 NY-Gen LLC or its affiliate, at its cost and expense, shall
maintain and keep in full force and effect during the term of this
Agreement the following insurance in connection with the Facility:
(a) Workers' Compensation Insurance for statutory
obligations imposed by Workers' Compensation or Occupational Disease Laws,
and Employer's Liability Insurance with a minimum limit of $1,000,000. When
applicable, coverage shall include the United States Longshoreman's and
Harbor Workers' Compensation Act and the Xxxxx Act.
(b) General Liability Insurance including Personal Injury,
Broad Form Property Damage, Products/Completed Operations, Explosion,
Collapse and Underground (XCU) Liability, Contractual Liability and
Contractors Protective Liability Insurance with minimum limits of liability
of $2,000,000 per occurrence.
(c) Automobile Liability Insurance, including coverage for
all owned, non-owned and hired automotive equipment used by NY-Gen LLC with
minimum limits of liability of $5,000,000 per occurrence.
(d) All risk property damage insurance, including boiler and
machinery coverage, with minimum limits of $125,000,000.
(e) Business interruption and extra expense insurance
covering expenses and losses due to business interruption, resulting from
damage to the Facility, in amounts to be determined by NY-Gen LLC.
17.2 In the event the Facility is substantially damaged or
destroyed, O&R shall have the right to cause the proceeds of insurance
policies required under Section 17.1(d) to be used to repair or rebuild the
Facility; provided, however, that NY-Gen LLC may control the disbursement
of such insurance proceeds for such purpose.
17.3 For all insurance required under Section 17.1, except Workers'
Compensation and Employers Liability, O&R, its directors, officers and
employees shall be named as additional insureds, as their interest may
appear.
17.4 Consistent with the terms of the indemnities provided for
hereunder, all of the insurance required under Section 17.1 shall be
primary to any or all other insurance coverage and shall not contribute
with similar insurance in effect for O&R.
17.5 All insurance required under Section 17.1 shall contain
provisions wherein all rights of subrogation or recovery of any kind
against O&R, its agents, employees, officers, successors and assigns are
specifically waived by NY-Gen LLC and the insuring entity.
17.6 The General Liability insurance specified in Section 17.1(b)
shall contain a cross liability provision. All insurance required hereunder
shall provide insurance for occurrences during the performance of services
by NY-Gen LLC and all subcontractors pursuant to this Agreement and for a
period of two years after termination of this Agreement. In the event that
any insurance as required herein is available only on a "claims-made"
basis, such insurance shall provide for a retroac tive date not later than
the date of this Agreement and such insurance shall be maintained by NY-Gen
LLC, with a retroactive date not later than the retroactive date required
above, for a minimum period of five years after the termination of this
Agreement.
17.7 All insurance required herein shall be issued by an insurer
admitted to do business in the State of New York and shall have a Best's
Rating of not less than "A" and a net surplus of not less than $25,000,000.
17.8 NY-Gen LLC's insurance carrier shall notify O&R of any
material change in, or cancellation of, the insurance required hereunder at
least 30 days prior to the effective date of any such change or
cancellation.
17.9 Self-insurance may be utilized by NY-Gen LLC.
17.10 Prior to the Closing Date, NY-Gen LLC shall provide, for
O&R's review and approval, a Certificate of Insurance verifying the
existence of insurance coverages in compliance with the requirements of
this Agreement. The Certificate of Insurance should be mailed to:
Risk Management Department
Orange and Rockland Utilities, Inc.
Xxx Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Article XVIII. Force Majeure
18.1 "Force Majeure Event" means any occurrence beyond the
reasonable control of a Party which causes such Party to be delayed in or
prevented from performing or carrying out any of its obligations under this
Agreement and which by the exercise of due diligence in accordance with
Good Utility Practices, that Party is unable to prevent, avoid, mitigate,
or overcome, including the following: any act of God, labor disturbance,
act of the public enemy, war, insurrection, riot, fire, storm or flood,
ice, explosion, breakage or accident to machinery or equipment, order,
regulation or restriction imposed by governmental, military or lawfully
established civilian authorities, provided that a Force Majeure Event shall
not include lack of finances, or change in market conditions, and provided
further that any failure of NY-Gen LLC to obtain fuel or services for the
Facility due to the failure of any supplier or subcontractor of NY-Gen LLC
to perform any obligation to NY-Gen LLC will not constitute a Force Majeure
Event hereunder unless such subcontractor or supplier is unable to perform
for reasons that would constitute a "Force Majeure Event" hereunder.
18.2 If either Party because of a Force Majeure Event is rendered
wholly or partly unable to perform its obligations under this Agreement,
that Party shall be excused from whatever performance is affected by the
Force Majeure Event to the extent so affected, and shall not be liable for
damages caused by such non-performance provided that:
(a) The non-performing Party, within seven days after it
becomes aware or should have become aware that it would be unable to
perform, gives the other Party written notice of the occurrence of the
Force Majeure Event, including an estimation of its expected duration and
probable impact on the performance of its obligations hereunder and
submitting satisfactory evidence of the existence of the Force Majeure
Event;
(b) The suspension of performance is of no greater scope and
of no longer duration than is required by the Force Majeure Event;
(c) No obligations of either Party which arose before the
occur rence causing the suspension of performance are excused as a result
of the occur rence; and
(d) The non-performing Party uses its commercially
reasonable efforts to remedy expeditiously its inability to perform. This
subparagraph shall not require the settlement of any strike, walkout,
lockout or other labor dispute on terms which, in the sole judgment of the
Party involved in the dispute, are contrary to its interest. It is
understood and agreed that the settlement of strikes, walkouts, lockouts or
other labor disputes shall be entirely within the discretion of the Party
involved in the strike, walkout, lockout or other labor dispute.
(e) When the non-performing Party is able to resume
performance of its obligations under this Agreement, that Party shall give
the other Party written notice to that effect.
(f) The Force Majeure Event was not caused by any negligent
acts, or omissions, or failure to comply with any Law or for any breach or
default of this Agreement.
Article XIX. Contract Documents
19.1 The contract documents which comprise the contract between the
Parties are referenced hereto and made a part hereof and consist of the
following:
(a) This Agreement; and
(b) Schedules to this Agreement as follows:
(i) Schedule A: Description of Units and
Performance Requirements;
(ii) Schedule B: Availability Payment ;
(iii) Schedule C: Energy Costs;
(iv) Schedule D: Start-up Costs;
(v) Schedule E: Emissions Costs;
(vi) Schedule F: Payment Examples;
(vii) Schedule G: Penalties;
(viii) Schedule H: Load Pocket Diagram;
(ix) Schedule I: Dispute Resolution Procedures;
(x) Schedule J: Load Pocket Dispatch Log;
(xi) Schedule K: Operating Instructions; and
(xii) Schedule L: Daily Status Report.
Article XX. Dispute Resolution
20.1 The Parties shall make reasonable efforts to settle all
disputes arising out of or in connection with this Agreement. In the event
any dispute is not settled, the Parties shall follow the alternative
dispute resolution procedures set forth in Schedule I.
Article XXI. Taxes
21.1 O&R shall pay all taxes, surcharges, adjustments or other
assessments imposed by law, rule or regulation which are of general
applicability and imposed on sales of Energy from NY-Gen LLC to O&R
pursuant to this Agreement, unless O&R can demonstrate, based on a ruling
from the Commission, that it cannot collect such taxes, surcharges,
adjustments or other assessments from its customers ("Taxes").
Article XXII. Assignment or Transfer
22.1 The Parties acknowledge that any assignment of this Agreement
is subject to approval by the FERC and the NYPSC. Neither Party shall
assign this Agreement or any portion thereof without the prior written
consent of the other Party, which consent shall not be unreasonably
withheld or delayed. Notwithstand ing the foregoing, (a) O&R may assign
this Agreement to an affiliate of O&R that has a contractual or statutory
obligation to supply Energy to O&R's retail customers in the Load Pocket,
provided, however, that no such assignment, transfer, pledge, conveyance,
or disposition shall relive or in any way discharge O&R from the
performance of its duties and obligations under this Agreement; and (b)
NY-Gen LLC may assign, transfer, pledge or otherwise dispose of its rights
and interests hereunder to (i) a trustee or lending institution(s) for the
purposes of financing or refinancing the acquisition of the Purchased
Assets, including upon or pursuant to the exercise of remedies under such
financing or refinancing, or by way of assign ments, transfers, pledges,
conveyances, or dispositions in lieu thereof; provided, however, that no
such assignment, transfer, pledge, conveyance, or disposition shall relieve
or in any way discharge NY-Gen LLC from the performance of its duties and
obligations under this Agreement; or (ii) an affiliate of NY-Gen LLC or
(iii) a purchaser, transferee or lessor of all or substantially all of
NY-Gen LLC's right, title and interest in and to the Purchased Assets,
provided such purchaser, transferee or lessor (A)(1) has a "net worth", or
"consolidated net worth", if applicable, as deter mined in accordance with
U.S. generally accepted accounting principles and re flected in an audited
balance sheet (or consolidated balance sheet, if applicable) ("Net Worth")
at least equal to an amount equal to one-third of the Purchase Price (as
described in Section 3.1 of the ASA) or (2) provides a guaranty from an
affiliate which has a Net Worth at least equal to the amount specified in
(A)(1) above and (B) demonstrates its ability to operate the Purchased
Assets to O&R's reasonable satisfaction in accordance with Good Utility
Practices.
Article XXIII. Regulatory Approval; Effective Date
23.1 This Agreement shall not become effective and binding upon the
Parties until it has been: (i) signed by each of the Parties hereto, and
(ii) the FERC and the NYPSC have entered a final order in form and
substance satisfactory to O&R and to NY-Gen LLC approving this Agreement
and the recovery by O&R from its customers of all payments made to NY-Gen
LLC pursuant to the terms of this Agreement. O&R and NY-Gen LLC agree to
use their commercially reasonable efforts to obtain such regulatory
approval as promptly as practicable following execution of this Agreement.
Article XXIV. Confidentiality
24.1 All information regarding a Party (the "Disclosing Party")
that is furnished directly or indirectly to the other Party (the
"Recipient") pursuant to this Agreement and marked "Confidential" shall be
deemed "Confidential Information." Notwithstanding the foregoing,
Confidential Information does not include informa tion that (i) is
rightfully received from Recipient from a third party having no obligation
of confidence to the Disclosing Party, (ii) is or becomes in the public
domain, through no action on Recipient's part in violation of this
Agreement, (iii) is already known by Recipient as of the date hereof, or
(iv) is developed by Recipient independently of any Confidential
Information of the Disclosing Party. Information that is specific as to
certain data shall not be deemed to be in the public domain merely because
such information is embraced by more general disclosure in the public
domain.
24.2 Recipient shall keep the Confidential Information strictly
confidential and not disclose any Confidential Information to any third
party for a period of two years from the date the Confidential Information
to any third party for a period of two years from the date the Confidential
Information was received by Recipient, except as otherwise provided herein.
24.3 Recipient may disclose the Confidential Information to its and
its affiliates' respective directors, officers, employees, consultants,
advisors and agents who need to know the Confidential Information for the
purpose of assisting Recipi ent with respect to its obligations under this
Agreement. Recipient shall inform all such parties, in advance, of the
confidential nature of the Confidential Information. Recipient shall cause
such parties to comply with the requirements of this Agreement and shall be
responsible for the actions, uses, and disclosures of all such parties.
24.4 If Recipient becomes legally compelled or required to disclose
any of the Confidential Information (including, without limitation,
pursuant to the rules or regulations of the NYPP, ISO or FERC), Recipient
will provide the Disclosing Party with prompt written notice thereof so
that the Disclosing Party may seek a protective order or other appropriate
remedy. Recipient will furnish only that portion of the Confidential
Information which its counsel considers legally required, and Recipient
will cooperate, at the Disclosing Party's expense, with the Disclosing
Party's counsel to enable the Disclosing Party to obtain a protective order
or other reliable assurance that confidential treatment will be accorded
the Confidential Information. It is further agreed that, if in the absence
of a protective order, Recipient is nonetheless required to disclose any
Confidential Information, Recipient will furnish only that portion of the
Confidential Information which its counsel considers is legally required.
24.5 Recipient shall promptly return to the Disclosing Party all
items containing or constituting Confidential Information, together with
all copies, extracts, or summaries thereof, upon the earlier of (i) the
Disclosing party's request, or (ii) the termination or expiration of this
Agreement.
Article XXV. Amendments
25.1 This Agreement shall not be amended unless such amendment
shall be in writing and signed by a duly authorized representative of each
of the Parties. Such amendments or modifications shall become effective
only after the Parties have received any authorizations required from the
FERC or the NYPSC. Nothing contained in this Agreement shall be construed
as affecting in any way the right of either of the Parties furnishing or
receiving service under this Agreement to unilater ally make application to
the FERC for a change in rates under Sections 205 or 206 of the Federal
Power Act and pursuant to the FERC rules and regulations promulgated
thereunder.
Article XXVI. Books and Records: Audit Rights
26.1 NY-Gen LLC shall maintain for four years the information
utilized to determine the payments pursuant to Schedules C, D, and E. Such
records shall be available at all reasonable times for inspection and audit
by O&R. O&R shall have the right to inspect and audit such records and
supporting documents for any calendar year at any time within the 24 month
period following the end of such year, provided that with respect to
invoices, O&R disputes the amounts of such invoices in the time period
provided in Section 7.6. No adjustments to payments shall be required as a
result of such audit unless and to the extent that O&R makes a claim upon
NY-Gen LLC for any discrepancies disclosed by such audit within two months
following expiration of such 24 month period. The expense of any such audit
shall be borne solely by O&R.
Article XXVII. Miscellaneous Provisions
27.1 Binding Effect. This Agreement and any extension shall inure
to the benefit of and shall be binding upon the Parties and their
respective successors and assigns.
27.2 Counterparts. This Agreement may be executed in several
counter parts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
27.3 Notices. Where written notice is required by this Agreement,
all notices, certificates or other communications hereunder shall be in
writing and shall be deemed delivered (i) when personally delivered (by
courier or otherwise) to the recipient and receipt is confirmed in writing,
(ii) three days after being mailed by United Sates registered or certified
mail, postage prepaid, return receipt requested, or (iii) when faxed to
recipient during the normal business hours of the recipient on a Business
Day (or if not faxed at such time, during the next Business Day) and
receipt is confirmed on the sender's fax machine, addressed or faxed and a
copy is mailed to the other Party on the same Business Day, as follows:
(a) To NY-Gen LLC:
Southern Energy NY-Gen LLC
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxx
Finance Director, North American
Operations
Fax: (000) 000-0000
(b) To O&R:
Orange and Rockland Utilities, Inc.
Xxx Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Attention: Legal Department
Fax: (000) 000-0000
or to such other and different address as may be designated by the Parties.
27.4 Prior Agreements Superseded. This Agreement shall completely
and fully supersede all other prior understandings or agreements, both
written and oral, between the Parties relating to the subject matter
hereto.
27.5 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless
of the laws that might otherwise govern under applicable New York
principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies, and the Seller and the Buyer hereby agree to irrevocably and
unconditionally submit to the exclusive jurisdiction of any State or
Federal court sitting in New York City over any suit, action or proceeding
arising out of or relating to this Agreement. If requested by O&R, NY-Gen
LLC will consent to appointing an agent for service of process in New York
City.
27.6 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the Parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the
Party entitled to the benefits thereof only by a written instrument signed
by the Party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obliga tion, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure.
27.7 Headings. The headings contained in this Agreement are used
solely for convenience and do not constitute a part of the agreement
between the Parties hereto, nor should they be used to aid in any manner in
the construction of this Agreement.
27.8 Third Parties. This Agreement is intended solely for the
benefit of the Parties hereto. Nothing in this Agreement shall be construed
to create any duty to, or standard of care with reference to, or any
liability to, any person not a Party to this Agreement.
27.9 No Survival of Reps and Warranties. Each and every
representation and warranty contained in this Agreement and each and every
covenant contained in this Agreement shall expire with, and be terminated
and extinguished by, (i) the expiration of the term of this Agreement
pursuant to Article III, or (ii) the termina tion of this Agreement
pursuant to Article XIV or otherwise; and neither the Seller, the Buyer nor
any officer, director, trustee or affiliate of either the Seller or the
Buyer shall have any liability whatsoever with respect to any such
representation, warranty or covenant.
27.10 Agency. This Agreement shall not be interpreted or construed
to create an association, joint venture, or partnership between the Parties
or to impose any partnership obligation or liability upon either Party.
Neither Party shall have any right, power or authority to enter into any
agreement or undertaking for, or act on behalf of, or to act as or be an
agent or representative of, or to otherwise bind, the other Party.
IN WITNESS WHEREOF, NY-Gen LLC and O&R have caused this
Agreement to be executed as of the date first above written.
ORANGE AND ROCKLAND UTILITIES, INC.
By: /s/ D. Xxxxx Xxxxxxx
________________________________
Name: D. Xxxxx Xxxxxxx
Title: Vice Chairman and Chief Executive Officer
SOUTHERN ENERGY NY-GEN, L.L.C.
By: /s/ Xxxxx Xxxxxxxx
________________________________
Name: Xxxxx Xxxxxxxx
Title: Vice President
