Exhibit 10.27
EXECUTION COPY
PUBLIC RELEASE VERSION
ENERGY CONTRACT
Dated as of March 28, 2002
Between
SOUTHERN POWER COMPANY
as Seller
And
DYNEGY POWER MARKETING, INC.
as Purchaser
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS...........................................................................................1
ARTICLE 2: TERM OF AGREEMENT.....................................................................................9
2.1 Filing of Agreement...................................................................................9
2.2 Termination Date......................................................................................9
2.3 Effect of Termination.................................................................................9
2.4 Effective Date........................................................................................9
ARTICLE 3: DETERMINATION OF CONTRACT CAPACITY; SALE AND PURCHASE OF CONTACT CAPACITY AND ENERGY..................9
3.1 Determination of Contract Capacity....................................................................9
3.2 Sale and Purchase of Contract Capacity................................................................9
3.3 Sale and Purchase of Contract Energy.................................................................10
3.4 Source of Contract Energy............................................................................10
ARTICLE 4: SELLER'S RESOURCES AND CURTAILMENTS..................................................................10
4.1 Specified Seller's Resources.........................................................................10
4.2 Pre-Scheduled Excused Hours..........................................................................10
4.3 Permits; Compliance with Laws........................................................................12
4.4 Administrative Procedures and Administrative Committee...............................................12
4.5 Provision of Contract Capacity and Contract Energy...................................................12
ARTICLE 5: PAYMENTS.............................................................................................16
5.1 Reservation Payment..................................................................................16
5.2 Energy Payment.......................................................................................16
5.3 Conversion Payment...................................................................................16
5.4 Performance Bonus....................................................................................16
5.5 Additional Payments..................................................................................18
5.6 Regulatory...........................................................................................18
5.7 Wholesale Generation Rates...........................................................................19
ARTICLE 6: SCHEDULING, SOUTHERN'S AND DYPM'S RIGHTS TO SELLER'S RESOURCES, TITLE AND RISK OF LOSS...............19
6.1 Scheduling...........................................................................................19
6.2 Replacement Gas......................................................................................19
6.3 Southern's Rights to the Specified Seller's Resources................................................21
6.4 Title and Risk of Loss...............................................................................21
ARTICLE 7: TRANSMISSION SERVICE.................................................................................21
7.1 DYPM Obligations and Assumption of Transmission Risk.................................................22
7.2 Southern Obligations.................................................................................22
7.3 Imbalances and Penalties.............................................................................22
ARTICLE 8: METERING.............................................................................................22
8.1 Metering.............................................................................................22
ARTICLE 9: BILLING AND PAYMENT..................................................................................22
9.1 Timing; Method of Payment............................................................................22
9.2 Late Payment.........................................................................................23
9.3 Disputed Xxxxxxxx....................................................................................23
9.4 Adjustments..........................................................................................23
9.5 Audit Rights.........................................................................................23
ARTICLE 10: CHANGE IN LAW.......................................................................................23
10.1 Limitations.......................................................................................23
10.2 Determination.....................................................................................23
10.3 Initiation of Surcharge...........................................................................23
10.4 Timing............................................................................................24
10.5 Contest and Dialogue..............................................................................24
ARTICLE 11: LIABILITY ALLOCATION; LIMITATIONS ON LIABILITY......................................................24
11.1 Costs, Taxes and Charges..........................................................................24
11.2 Indemnification...................................................................................24
11.3 Limitation of Liability...........................................................................24
ARTICLE 12: FORCE MAJEURE EVENT.................................................................................25
12.1 Force Majeure Event Defined.......................................................................25
12.2 Applicability of Force Majeure Event..............................................................26
12.3 Effect of Force Majeure Event.....................................................................26
12.4 Other Effects of Force Majeure Events.............................................................26
ARTICLE 13: EVENT OF DEFAULT....................................................................................27
13.1 Event of Default..................................................................................27
13.2 Exclusive Remedies................................................................................28
ARTICLE 14: CREDITWORTHINESS AND SECURITY.......................................................................29
14.1 Guaranty in Favor of Southern.....................................................................29
14.2 Negative Watch Credit Support in Favor of Southern................................................29
14.3 Credit Support in Favor of Southern for Junk Rating...............................................30
14.4 Post December 31, 2005 Provisions.................................................................30
14.5 Guaranty in Favor of DYPM.........................................................................31
14.6 Negative Watch Credit Support in Favor of DYPM....................................................31
14.7 Credit Support in Favor of DYPM for Junk Rating...................................................32
14.8 Post June 1, 2005 Provisions......................................................................32
ARTICLE 15: DELIVERY EXCUSE.....................................................................................32
15.1 Definition........................................................................................32
15.2 No Breach for Delivery Excuse.....................................................................33
ARTICLE 16: REPRESENTATIONS AND WARRANTIES......................................................................33
16.1 Execution.........................................................................................33
16.2 Permits...........................................................................................33
16.3 Binding Obligations...............................................................................33
16.4 Execution and Consummation........................................................................34
16.5 Actions and Proceedings...........................................................................34
16.6 Processor........................................................................................34
ARTICLE 17: ASSIGNMENT..........................................................................................34
17.1 General Rule......................................................................................34
17.2 Consent Required..................................................................................34
ARTICLE 18: DISPUTE RESOLUTION..................................................................................34
18.1 Senior Officers...................................................................................35
18.2 Arbitration.......................................................................................35
18.3 Binding Nature of Proceedings.....................................................................35
ARTICLE 19: MISCELLANEOUS.......................................................................................36
19.1 Governing Law; Waiver of Jury Trial...............................................................36
19.2 Confidentiality...................................................................................36
19.3 Survivorship of Obligations.......................................................................37
19.4 Notice of Proceedings.............................................................................37
19.5 No Third Party Beneficiaries......................................................................37
19.6 Section Headings Not to Affect Meaning............................................................37
19.7 Computation of Time...............................................................................37
19.8 Interest..........................................................................................38
19.9 Entire Agreement..................................................................................38
19.10 Counterparts......................................................................................38
19.11 Amendments........................................................................................38
19.12 Waivers...........................................................................................38
19.13 No Partnership Created............................................................................38
19.14 Character of Sale.................................................................................38
19.15 Notices...........................................................................................38
19.16 Survival..........................................................................................40
19.17 Construction......................................................................................40
19.18 Imaged Agreement..................................................................................40
19.19 GDP-IPD...........................................................................................41
19.20 Higher Heating Value..............................................................................41
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
ENERGY CONTRACT
BETWEEN
SOUTHERN POWER COMPANY
AND
DYNEGY POWER MARKETING, INC.
This ENERGY CONTRACT is made and entered into as of this 28th day of
March, 2002 (the "Execution Date"), by and between SOUTHERN POWER COMPANY
(hereafter referred to as "Southern" or "Seller"), a Delaware corporation having
its principal office and place of business at 000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, and DYNEGY POWER MARKETING, Inc., (hereinafter referred to as
"DYPM"), a corporation organized and existing under the laws of the State of
Texas having its principal office and place of business at 0000 Xxxxxxxxx Xx.,
Xxxxx 0000, Xxxxxxx, XX 00000. (Southern and DYPM are hereafter referred to
individually and collectively as a "Party" or the "Parties," respectively.)
RECITALS:
DYPM desires to purchase and Southern desires to sell, Contract
Capacity and Contract Energy in accordance with this Agreement for the period
from June 1, 2005 through May 31, 2030.
Subject to the terms and conditions of this Agreement, Southern will
deliver and sell to DYPM, and DYPM will accept and purchase from Southern,
Contract Capacity and Contract Energy from Seller's Resources as provided in
this Agreement.
NOW THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
The following terms shall have the respective meanings set forth below.
"Administrative Committee" has the meaning set forth in Section 4.4.2.
"Administrative Procedures" has the meaning set forth in Section 4.4.1.
"Affiliate" shall mean, with respect to a corporation, partnership or
other entity, each such other corporation, partnership or other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such corporation, partnership,
or other entity.
"Agreement" means this Energy Contract, including, to the extent
applicable, any amendments and appendices hereto that the Parties may execute
now or at any time in the future.
"Alternate Delivery Point" means a point of delivery as agreed to by
the Parties for the delivery of Contract Capacity and Scheduled Energy from
Replacement Seller's Resources.
"Annual ENDH" means [redacted] for each Contract Year.
"Billing Month" means each Month during the Term beginning with the
second Month of the first Contract Year and includes the Month immediately
following the expiration or early termination of this Agreement.
"BTU" means British Thermal Units.
"Business Day" means any Day on which Federal Reserve Member Banks in
New York, New York are open for business. A Business Day shall begin at 0800 CPT
and end at 1700 CPT.
"Central Prevailing Time" or "CPT" means the local time at any point in
Birmingham, Alabama.
"Change-in-Law" means a Law (including a new or changed interpretation
of an existing Law by a Government Agency, or an interpretation by a Government
Agency previously unknown to Southern) that becomes effective after the date of
the Agreement and generally affects the cost of electric generation [redacted].
Examples of a Change in Law include (but are not limited to): (i) Laws
pertaining to changes in environmental Laws that seek to decrease existing
limits (e.g., NOx) or to establish limits for currently uncontrolled substances
(e.g., CO2); and (ii) Laws pertaining to the imposition of energy taxes on
wholesale power sales. A Change in Law does not include changes in: (i) income
taxes; (ii) taxes assessed or imposed by a county or municipal authority (such
as ad valorem taxes); (iii) franchise and occupational taxes; or (iv) Laws that
have unique application to the Specified Seller's Resources.
"Commercially Reasonable" or "Commercially Reasonable Efforts" means,
with respect to any purchase, sale, decision, or other action made, attempted or
taken by a Party, such efforts as a reasonably prudent business would undertake
for the protection of its own interest under the conditions affecting such
purchase, sale, decision, or other action, including without limitation,
electric system reliability and stability, the amount of notice of the need to
take such action, the duration and type of the purchase or sale or other action,
and the commercial environment in which such purchase, sale, decision, or other
action occurs.
"Contest" means with respect to any Person, a contest of: (i) any
Governmental Approval, acts or omissions by any Government Agency or any related
matters; or (ii) the amount or validity of any claim pursued by such Person in
good faith and by appropriate legal, administrative or other proceedings
diligently conducted, so long as the contesting Party could not reasonably be
expected to be prevented from performing its material obligations under this
Agreement pending the outcome of such contest.
"Contract Capacity" has the meaning set forth in Section 3.1.
"Contract Energy" has the meaning set forth in Section 3.3.
"Contract Heat Rate" means [redacted].
"Contract Year" means: (i) for the first Contract Year, the Effective
Date of Service through May 31, 2006; and (ii) for each Contract Year
thereafter, each twelve (12) Month period thereafter beginning June 1 and ending
May 31.
"Conversion Payment" has the meaning set forth in Section 5.3
"Day" means the twenty-four (24) hour period beginning and ending at
2400 CPT.
"Delivered Energy" means the amounts of energy, expressed in MWhs, that
are delivered by Southern from Seller's Resources in accordance with this
Agreement.
"Delivery Excuse" has the meaning set forth in Section 15.1.
"Delivery Point" means the Interconnection Point(s) or such Alternate
Delivery Point(s) connected with the Southern Company Transmission System as may
be mutually agreed upon by Southern and DYPM.
"Determination Period" has the meaning set forth in Section 4.5.1(b).
"DYPM" has the meaning set forth in the introductory paragraph hereof.
"Effective Date of Service" means June 1, 2005.
"Eligible Guaranty" has the meaning set forth in Section 14.1.
"Eligible Guaranty Threshold" has the meaning set forth in Section
14.1.
"Emergency Condition" means a condition or situation (not principally
caused by Southern) that presents an imminent physical threat of danger to life,
health or property, or a situation in which delivery of Scheduled Energy to the
Delivery Point could reasonably be expected to cause a significant disruption on
the Southern Company Transmission System.
"ENDH" means an excused non-delivery hour (or portion of an hour) in
which an Unavailability has occurred for which Southern accumulates ENDH
pursuant to Section 4.5.2. ENDH for any hour shall equal the ratio of the amount
of Contract Capacity associated with the Scheduled Energy not provided to the
Contract Capacity for such hour.
"ENDH Accumulated" means, for a Month, the number of Equivalent ENDH
accumulated pursuant to Section 4.5.4.
"ENDH Available" means, for any point in time in any Month, the number
of ENDH (or partial ENDH) that are available for accumulation pursuant to
Southern's election under Section 4.5.2. The amount of ENDH Available in any
Month shall be equal to the difference between Annual ENDH for the Contract Year
in which such Month occurs and the sum of (i) ENDH Accumulated during such Month
(before the point of calculation) and (ii) ENDH Accumulated during all of the
Months elapsed during such Contract Year preceding the Month in which the
calculation is made.
"Energy Payment" means the payment for Delivered Energy to be made by
DYPM to Southern as calculated in Section 5.2.
"Energy Price" means, [redacted].
"Equivalent ENDH" has the meaning set forth in Section 4.5.4.
"Event of Default" has the meaning set forth in Section 13.1.
"Execution Date" has the meaning set forth in the introductory
paragraph hereof.
"Extended Outage Period" has the meaning set forth in Section 4.5.1(b).
"Extended Unavailability" has the meaning set forth in Section 4.5.6.
"FERC" means the Federal Energy Regulatory Commission, or any successor
to its functions.
"Force Majeure Event" has the meaning set forth in Section 12.1.
"Force Majeure Hour" shall occur in any hour (or portion of an hour) in
which a Force Majeure Event occurs or is continuing. During a Force Majeure
Hour, if the energy available from the Seller's Resources (as measured in hourly
amounts and expressed in MWh) is greater than zero but less than the amount of
Scheduled Energy, then a partial Force Majeure Hour shall be determined equal to
the ratio of the amount of Contract Capacity not available from the Seller's
Resources in such hour due to the Force Majeure Event to the Contract Capacity
that would have been available for such hour absent such Force Majeure Event.
"Gas" means Natural Gas.
"Gas Index" means [redacted]
"GDP-IPD" means the Gross Domestic Product Implicit Price
Deflator published in the National Income and Product Account by the U.S.
Department of Commerce.
"Government Agency" means any federal, state, local,
territorial or municipal government and any department, commission, board,
bureau, agency, instrumentality, judicial or administrative body thereof.
"Governmental Approval" means any authorization, consent, approval,
license, ruling, permit, exemption, variance, order, judgment, decree,
declarations of or regulation of any Government Agency relating to Seller's
Resources or to the execution, delivery or performance of this Agreement.
"Guarantor" has the meaning set forth in 13.1.2.
"Guaranty" means a Guaranty or other instrument guaranteeing a Party's
obligations under this Agreement as contemplated under Article 14.
"Hour Block" means any period within a Day that is comprised of either
a succession of Off Peak Hours or a succession of On Peak Hours.
"Imaged Agreement" has the meaning set forth in Section 19.18.
"Increased Electricity Costs" means the additional costs and expenses
of electric power hereunder that result from utilizing Commercially Reasonable
Efforts to comply with or recognize a Change in Law (or cumulative Changes in
Law). For purposes of calculating the Increased Electricity Costs for any
Contract Year associated with capitalized expenditures (determined in accordance
with Generally Accepted Accounting Principles), the Parties will at that time
establish an appropriate levelized fixed charge rate (incorporating in
appropriate proportions: (i) Southern Company's cost of equity, as determined by
a mutually agreeable third party; and (ii) Southern's cost of debt in the cost
of capital calculation used to develop that rate) for application to the
original capital cost. This calculation will represent the total cost associated
with the capital expenditures. Any costs and expenses not otherwise reflected in
a levelized fixed charge rate calculation shall be treated as Increased
Electricity Costs as incurred.
"Interconnection Point" means the substation(s) where the Specified
Seller's Resources are physically interconnected to the Southern Company
Transmission System.
"kW" means kilowatt(s).
"kWh" means kilowatt hour(s).
"Law" means any statute, law, requirement, rule or regulation
imposed by a Government Agency, whether in effect now or at any time in the
future.
"MMBTU" means million BTU.
"MW" means megawatt(s).
"MWh" means megawatt hour(s).
"Major Bank" means the Federal Reserve Bank of Atlanta,
Georgia.
"Month" means a calendar month.
"Monthly Weighting Factor" means, for any Month, the weighting factor
set forth opposite such Month in the table below:
Month Weighting Factor
January...................[redacted]
February..................[redacted]
March.....................[redacted]
April.....................[redacted]
May.......................[redacted]
June......................[redacted]
July......................[redacted]
August....................[redacted]
September.................[redacted]
October...................[redacted]
November..................[redacted]
December..................[redacted]
"NERC" means the North American Electric Reliability Council, or any
successor to its functions.
"Non-Summer DPF" has the meaning set forth in Section 5.4.2.
"Non-Summer PAF" has the meaning set forth in Section 5.4.2.
"Non-Summer Performance Bonus" has the meaning set forth in Section
5.4.2.
"OATT" means the Open Access Transmission Tariff of Southern Companies
or a successor tariff governing transmission on the Southern Company
Transmission System that has been accepted by FERC, as the same may be changed
or amended from time to time.
"Off Peak Hour" means: (i) any hour from 2200 CPT to 0600 CPT, Monday
through and including Friday; (ii) any hour during any holiday recognized by
NERC; and (iii) any hour during Saturday and Sunday.
"On Peak Hour" means any hour from 0600 CPT to 2200 CPT, Monday through
and including Friday, excluding any hour of any holiday recognized by NERC.
"Peak Period" means, for each Contract Year, the Months of June, July,
August, September, January and February.
"Performance Payment" means [redacted].
"Person" means any individual, corporation, limited liability
corporation, partnership, joint venture, trust, unincorporated organization,
Government Agency or other entity.
"Pre-Scheduled Excused Hours" means hours in which the Specified
Seller's Resources are unavailable for Scheduling, as such hours are designated
and scheduled in accordance with Section 4.2.
"Prime Rate" means, for any Day on which the calculation of an interest
amount begins under this Agreement, the "Prime Rate" specified for such Day (or,
if such Day is not a Business Day, on the first Business Day following such Day)
under the "Money Rate" table of the Wall Street Journal. In the event that the
Wall Street Journal ceases to report a Prime Rate, the Prime Rate for purposes
of this Agreement shall be the prime rate (or its functional equivalent) charged
by the Major Bank in the United States of America.
"Prudent Industry Practices" means any of the practices, methods,
standards and acts (including the practices, methods and acts engaged in or
approved by a significant portion of the electric power industry in the United
States) that, at a particular time, in the exercise of reasonable judgment in
light of the facts known or that should reasonably have been known at the time a
decision was made, could have been expected to accomplish the desired result
consistent with good business practices, reliability, economy, safety and
expedition, and which practices, methods, standards and acts generally conform
to operation and maintenance standards recommended by equipment suppliers and
manufacturers, applicable design limits and applicable Governmental Approvals
and Laws.
"Replacement Gas Price" has the meaning set forth in Section 6.2.1.
"Replacement Cost" means, [redacted].
"Replacement Seller's Resources" means [redacted].
"Replacement Value" has the meaning set forth in Section 13.2.4.
"Reservation Payment" has the meaning set forth in Section 5.1.
"Schedule" means the right of DYPM to schedule the delivery of
Scheduled Energy in accordance with this Agreement. Any form of the term
Schedule (e.g., "Scheduled" or "Scheduling") shall refer to the exercise of such
right by DYPM.
"Scheduled Energy" means the amounts of energy, expressed in MWh,
Scheduled by DYPM to be delivered by Southern in accordance with this Agreement.
"Scheduling Constraints" has the meaning set forth in Appendix B.
"Seller" has the meaning set forth in the introductory paragraph
hereof.
"Seller Election Period" has the meaning set forth in Section 4.5.1(b).
"Seller's Resources" means: (i) the Specified Seller's Resources;
and/or (ii) the Replacement Seller's Resources.
"Southern" has the meaning set forth in the introductory
paragraph hereof.
"Southern Company" means The Southern Company, a publicly held
corporation organized and existing under the laws of the State of Delaware and
having its principal place of business in Atlanta, Georgia.
"Southern Company Transmission" means the functional transmission
division of Southern Company Services, Inc., or any successor transmission
provider.
"Southern Company Transmission System" means the integrated
transmission systems of the electric operating companies of Southern Company, as
such systems may be modified or expanded from time-to-time, as well as any
successor transmission system(s).
"Specified Seller's Resources" means the physical generating
resource(s) (including any adjacent and/or associated facilities or equipment
and including non-generating facilities) designated by Southern in its sole
discretion pursuant to Section 4.1 from which Southern may provide the Contract
Capacity and Scheduled Energy that: (i) is interconnected to the Southern
Company Transmission System; (ii) will comply with applicable Laws as of the
Effective Date of Service; and (iii) is a Gas fired combined cycle facility.
"Summer DPF" has the meaning set forth in Section 5.4.1.
"Summer PAF" has the meaning set forth in Section 5.4.1.
"Summer Performance Bonus" has the meaning set forth in Section 5.4.1.
"Taxes" means any or all ad valorem, property, occupational, severance,
emissions, generation, first use, conservation, energy, transmission, utility,
gross receipts, privilege, sales, use, excise and other taxes, governmental
charges, licenses, fees, permits and assessments, and taxes based on net income
or net worth.
"Term" means the period from the Execution Date through May 31, 2030,
or such earlier date on which this Agreement is terminated in accordance with
its terms.
"Unavailability" means any time in which the Specified Seller's
Resources (or any part thereof) are physically incapable of providing all or a
portion of Scheduled Energy for reasons other than a Force Majeure Event or
Delivery Excuse.
"Undelivered Energy" means that quantity of Scheduled Energy that
Southern fails to deliver to the Delivery Point in response to a Schedule for
which ENDH is not accumulated and which failure is not attributable to a Force
Majeure Event or Delivery Excuse.
"VOM Charge" means [redacted]
ARTICLE 2
TERM OF AGREEMENT
2.1 Filing of Agreement. This Agreement shall be filed with the FERC on or
before such date as may be required by Law. To the extent practicable, any such
filing shall be made under a request for confidential treatment. This Agreement
shall not be contingent on such filing.
2.2 Termination Date. Unless earlier terminated in accordance with
its terms, this Agreement shall continue in effect from the Execution Date
through May 31, 2030.
2.3 Effect of Termination. Subject to the exercise of a non-defaulting
Party's rights under Section 13.2, in the event that this Agreement is
terminated, the rights and obligations of the Parties hereunder shall continue
unaffected until the termination is effective in accordance with the terms and
conditions thereof. Any such termination shall not relieve DYPM of its
obligation to pay any unpaid invoices for any Contract Capacity made available
and Contract Energy supplied prior to the effective date of such termination, or
relieve Southern of its obligation to provide Contract Capacity and to deliver
Scheduled Energy (or pay a Performance Payment) prior to the effective date of
such termination.
2.4 Effective Date. This Agreement shall become effective on the
Execution Date without regard to the status of the construction of the Specified
Seller's Resources, permits relating to the Specified Seller's Resources, or
with respect to any other condition that could affect the construction,
operation or existence of the Specified Seller's Resources.
ARTICLE 3
DETERMINATION OF CONTRACT CAPACITY; SALE AND PURCHASE OF CONTRACT CAPACITY
AND ENERGY
3.1 Determination of Contract Capacity. The Contract Capacity shall
equal [redacted] for the Term of this Agreement. The Contract Capacity shall not
be subject to adjustment during the Term for any reason, including the
performance of the Specified Seller's Resources, and re-designation of the
Specified Seller's Resources.
3.2 Sale and Purchase of Contract Capacity. Subject to the terms and
conditions of this Agreement, beginning on the Effective Date of Service and
until the end of the Term, Southern shall make available and sell to DYPM at the
Delivery Point, and DYPM shall accept and purchase, the Contract Capacity.
3.3 Sale and Purchase of Contract Energy. Subject to the terms and
conditions of this Agreement, beginning on the Effective Date of Service and
until the end of the Term, Southern shall deliver and sell to DYPM, and DYPM
shall accept and purchase from Southern, energy at the Delivery Point up to the
Contract Capacity ("Contract Energy").
3.4 Source of Contract Energy. [redacted].
ARTICLE 4
SELLER'S RESOURCES AND CURTAILMENTS
4.1 Specified Seller's Resources.
4.1.1 At any time prior to January 1, 2003, Southern shall by
notice to DYPM designate, in its sole discretion, the Specified Seller's
Resources. Southern shall perform all of Southern's obligations hereunder
relative to Specified Seller's Resources in accordance with Prudent Industry
Practices and the terms of this Agreement.
4.1.2 Southern may from time to time during the Term request a
change in the designation of Specified Seller's Resources made pursuant to
Section 4.1.1. Southern shall make such requested change no later than six (6)
Months prior to the commencement of a particular Contract Year, which change if
accepted by DYPM as provided below, shall result in the newly designated
resource becoming the Specified Seller's Resource(s) for the upcoming Contract
Year and thereafter until an additional request is made by Southern and accepted
by DYPM. Following the receipt of a request to change the designation of the
Specified Seller's Resource(s), DYPM may, in its sole discretion, elect to
accept or reject the requested re-designation. DYPM shall indicate its decision
to accept or reject the proposed re-designation within thirty (30) Days of
DYPM's receipt, provided however, that if DYPM fails to respond during such
period DYPM shall be deemed to have rejected the requested re-designation.
Nothing in this Agreement shall require Southern to request a change in
designation hereunder, and any such request shall be made at Southern's sole
discretion.
4.2 Pre-Scheduled Excused Hours.
4.2.1(a) Scheduling of Pre-Scheduled Excused Hours. On or
before April 1 prior to each Contract Year, DYPM shall provide to Southern a
non-binding proposed schedule of energy for each Month of such Contract Year.
Within one hundred twenty (120) Days after receiving DYPM's proposed schedule,
Southern shall submit to DYPM a proposed schedule of Pre-Scheduled Excused Hours
for the applicable Contract Year. The proposed schedule of Pre-Scheduled Excused
Hours shall give due consideration to, and shall take into account, the proposed
schedule submitted by DYPM; provided, however, that in no event shall Southern's
proposed schedule provide for any Pre-Scheduled Excused Hours during a Peak
Period without the prior written consent of DYPM. Within thirty (30) Days after
receiving Southern's proposed schedule of Pre-Scheduled Excused Hours, DYPM may
request, in writing, that Southern reschedule any such Pre-Scheduled Excused
Hours. Following receipt of such request of DYPM, Southern shall inform DYPM as
to whether it can accommodate DYPM's request and, if so, shall further advise
DYPM of the good faith estimated costs that will be incurred by Southern in
connection with accommodating the request of DYPM to re-schedule the
Pre-Scheduled Excused Hours. DYPM shall then within five (5) Days of the receipt
of the estimated costs provided by Southern determine whether Southern should
reschedule the Pre-Scheduled Excused Hours. Without regard to any prior
estimate, DYPM shall reimburse Southern for all Commercially Reasonable costs
related to such change in schedule. While Southern must use Commercially
Reasonable Efforts to accommodate a request of DYPM to re-schedule any
Pre-Scheduled Excused Hours, Southern may elect to decline rescheduling if, in
Southern's Commercially Reasonable judgment, it would cause a failure on the
part of Southern to observe Prudent Industry Practices, or if the proposed
re-schedule would cause Southern to incur costs which DYPM is unwilling to
reimburse. If Southern makes the election not to accommodate a request of DYPM
to reschedule Pre-Scheduled Excused Hours, DYPM may propose an alternate
schedule for Pre-Scheduled Excused Hours, in which case Southern and DYPM shall
continue to negotiate the rescheduling of Pre-Scheduled Excused Hours as
provided above, but in no event shall such negotiation continue after September
30 of the Contract Year for which such Pre-Scheduled Excused Hours are
scheduled. In addition to the foregoing, within thirty (30) Days after the
beginning of each Contract Year, Southern shall provide to DYPM a non-binding
schedule of Pre-Scheduled Excused Hours for the next three (3) Contract Years.
(b) Pre-Scheduled Excused Hours for any Contract Year shall
not exceed [redacted]. If, however, during any Contract Year, Southern does not
utilize its allocation of Pre-Scheduled Excused Hours for that Contract Year,
then the unused portion of Pre-Scheduled Excused Hours (the "Banked
Pre-Scheduled Excused Hours") may be carried forward to the next succeeding
Contract Year and may be utilized by Southern in addition to the regular
allotment of Pre-Scheduled Excused Hours. The total of all available
Pre-Scheduled Excused Hours available to Southern during any Contract Year,
including the hours that comprise Banked Pre-Scheduled Excused Hours may not
exceed [redacted]. Unless otherwise agreed by the Administrative Committee,
Banked Pre-Scheduled Excused Hours may only be utilized by Southern during a
Contract Year in which utilization of such Banked Pre-Scheduled Excused Hours is
necessary for Southern, in Southern's Commercially Reasonable judgment, to
comply with Prudent Industry Practices.
4.2.2 Accumulation of Pre-Scheduled Excused Hours. DYPM and
Southern shall include procedures with respect to the logging and record keeping
of actual Pre-Scheduled Excused Hours elapsed during any Month in the
Administrative Procedures agreed upon pursuant to Section 4.4.
4.2.3 No Scheduling during Pre-Scheduled Excused Hours or
Banked Pre-Scheduled Excused Hours. DYPM shall not have the right to submit a
Schedule during any Pre-Scheduled Excused Hour or Banked Pre-Scheduled Excused
Hour.
4.3 Permits; Compliance with Laws.
4.3.1 Governmental Approvals. Subject to the right of Contest,
each Party shall, at its expense, acquire and maintain in effect all
Governmental Approvals necessary for it to perform its obligations under this
Agreement.
4.3.2 Compliance by Southern. Subject to the right of Contest,
Southern shall at all times comply with all Laws and Governmental Approvals
applicable to Southern and/or to the Specified Seller's Resources necessary for
Southern to perform its obligations under this Agreement.
4.3.3 Compliance by DYPM. Subject to the right of Contest,
DYPM shall at all times comply with all Laws and Governmental Approvals
applicable to DYPM necessary for DYPM to perform its obligations under this
Agreement.
4.4 Administrative Procedures and Administrative Committee.
4.4.1 Administrative Procedures. DYPM and Southern shall
develop written Administrative Procedures no later than thirty (30) Days before
the Effective Date of Service. The Administrative Procedures shall establish the
protocol under which the Parties shall perform their respective responsibilities
under this Agreement, including method of Day-to-Day communications, key
personnel lists, logging and tracking of hours of Unavailability, Pre-Scheduled
Excused Hours, Force Majeure Hours, ENDH Accumulated, hours of Delivery Excuse,
and daily capacity level and energy reports.
4.4.2 Administrative Committee. DYPM and Southern shall form a
committee to act in matters relating to the performance of their respective
obligations under this Agreement ("Administrative Committee"). Each Party shall
appoint one representative and one alternate representative to serve on the
Administrative Committee. The Parties shall notify each other in writing of such
appointments and any changes thereto. The Administrative Committee shall have no
authority to modify the terms or conditions of this Agreement. The
Administrative Committee shall meet as frequently as it deems necessary, and all
of its decisions must be the unanimous decision of the representatives. The
Administrative Committee may consult with representatives of the Southern
Company Transmission System as appropriate in reaching its decisions.
4.4.3 Southern shall disclose to the Administrative Committee
any condition or defect in or with respect to the Specified Seller's Resources
of which it is actually aware and that may reasonably be expected to cause the
Specified Seller's Resource to be unable to provide Scheduled Energy; provided,
however, that the foregoing shall not be construed to require Southern to make
inspections of the Specified Seller's Resources.
4.5 Provision of Contract Capacity and Contract Energy.
4.5.1 Unavailability.
(a) Notification. Southern shall promptly notify DYPM
after discovering any circumstance that could reasonably be expected to
result in an Unavailability.
(b) Periods of Unavailability. In the event of an
Unavailability, the period after commencement of such Unavailability shall
be divided into two distinct, contiguous periods:
(i) The period beginning at the time of the occurrence of the
Unavailability until the earlier of the removal of the Unavailability or 2400
CPT of the Day in which such occurrence happens shall be referred to as the
"Determination Period"; and
(ii) The period from the end of the Determination Period until the removal
of the Unavailability shall be referred to as the "Extended Outage Period".
The four hour period immediately following the occurrence of an Unavailability
(which may include a portion of the Determination Period and/or the Extended
Outage Period) shall be referred to as the "Seller Election Period"; provided,
however, that if the Unavailability is resolved, the Seller Election Period
shall end at such time.
(c) Circumstances of Unavailability. With regard to any
Unavailability that results in an Extended Outage Period, as soon as practicable
after the commencement of such Extended Outage Period, Southern shall notify
DYPM of:
(i) The cause (or if not known, Southern's best estimate of the cause) of
the Unavailability;
(ii) The proposed corrective action that can be taken by Southern to
resolve the Unavailability; and
(iii) Southern's best estimate of the expected duration of the Extended
Outage Period.
In addition, Southern shall advise DYPM of any material information relating to
the cause, duration and resolution of an Unavailability as soon as practicable
after such information becomes known to Southern whether before or after the
commencement of an Extended Outage Period. Southern shall have an ongoing
obligation to keep DYPM advised as to any significant changes with respect to
the information provided pursuant to this subsection (c). Southern's estimate of
the duration of an Unavailability shall be based on the best information then
available to Southern. Southern shall promptly notify DYPM of any expected
changes in the period of the Unavailability and shall continue its investigation
in a Commercially Reasonable manner for the duration of such Unavailability.
(d) Obligations of Southern. Consistent with Prudent Industry Practices,
Southern shall use Commercially Reasonable Efforts to avoid Unavailability and
to minimize the duration of any Unavailability.
4.5.2 Southern Elections during an Unavailability.
(a) Seller Election Period. Within [redacted] after the
commencement of the Seller Election Period, Southern shall provide
telephonic (or acceptable electronic) notice to DYPM of whether it
will, to the extent of the Unavailability, either:
[redacted]
Notwithstanding the occurrence of an Unavailability, [redacted]. Such action by
Southern during the Carry Period shall not constitute an election for purposes
of the Seller Election Period. Once made, however, such election shall apply for
the remainder of the Seller Election Period, with appropriate recognition for
Southern's actions (if any) during the Carry Period.
(b) Determination Period. Within [redacted] after the
commencement of an Unavailability, Southern shall, for each Hour Block within
the Determination Period (but only for those hours not covered by an election in
the Seller Election Period) and subject to Section 4.5.2(d), provide telephonic
(or acceptable electronic) notice to DYPM (along with notice of the election for
the first Day of the Extended Outage Period as required by Section 4.5.2(c)) of
whether it will, to the extent of the Unavailability, either:
[redacted].
(c) Extended Outage Period. For each Day of an Extended Outage
Period, Southern shall, for each Hour Block within such Day (but only for those
hours not covered by an election in the Seller Election Period) and subject to
Section 4.5.2(d), provide telephonic (or acceptable electronic) notice to DYPM
of whether it will, to the extent of the Unavailability, either:
[redacted].
Notice under this subsection (c) shall be provided by Southern no later than:
(i) for the first Day of the Extended Outage Period, the time that notice is
provided under Section 4.5.2(b); and (ii) for all other Days of the Extended
Outage Period, thirty (30) minutes after receipt of DYPM's Schedule for such Day
under Section 6.1 (but no earlier than 0800 CPT). In addition, upon the
commencement of the Extended Outage Period, Southern shall provide DYPM a
non-binding projection of its anticipated elections under this subsection (c)
for each Day of the expected duration of the Extended Outage Period.
(d) Hour Block Elections. [redacted]
--------------------
(e) Failure to Make Elections. [redacted].
-------------------------
(f) Schedule Changes during an Unavailability. For any hour of
any Day during an Unavailability, if DYPM changes a Schedule provided pursuant
to Section 6.1 after 0900 CPT of the previous Day so that Scheduled Energy is
greater in such hour than contemplated at 0900 CPT of such previous Day (such
greater amount being referred to as "Increased Scheduled Energy"),
notwithstanding any other provision of this Section 4.5.2, Southern shall have
the right, by providing telephonic (or electronic) notice to DYPM thirty (30)
minutes after Southern receives DYPM's notice of such change, to either:
[redacted]. If Southern does not make an election under this subsection (f) for
any hour, Southern shall be deemed to have elected to cover Increased Scheduled
Energy for such hour in the same manner as its elections under Section 4.5.2(a),
(b) and (c). An election made by Southern (or deemed to have been made) under
this subsection (f) shall only apply to Increased Scheduled Energy and shall not
alter elections for Scheduled Energy made under Section 4.5.2(a), (b) and (c).
(g) DYPM Right to Purchase Undelivered Energy. With respect to
any Unavailability, DYPM shall have the right to purchase Undelivered
Energy using Commercially Reasonable Efforts [redacted].
(h) Exclusive Remedy. Southern's sole and exclusive liability
and DYPM's sole and exclusive remedy for an Unavailability shall be determined
by the election(s) chosen (or deemed to have been chosen) by Southern in
accordance with this Section 4.5.2.
4.5.3 Performance in Accordance with Elections.
For any hour of an Unavailability, Southern shall be required
to [redacted], but only to the extent that DYPM has properly requested and is
entitled to receive Scheduled Energy for such hour in accordance with the terms
of this Agreement.
4.5.4 Calculation of Equivalent ENDH.
For any hour in which Southern [redacted].
4.5.5 Example Calculations.
To demonstrate the application of provisions related to
[redacted], example calculations are set forth in Appendix B.
4.5.6 Extended Unavailability.
[redacted].
4.5.7 Force Majeure Event.
(a) No Obligation to Deliver. For any hour in which a Force Majeure Event
affecting the Specified Seller's Resources or the facilities up to and at the
Interconnection Point(s) is occurring or is continuing, to the extent that such
event prevents Southern from delivering Scheduled Energy, Southern shall not be
obligated to deliver, and DYPM shall not be entitled to receive, Scheduled
Energy. In such event, to the extent of such Force Majeure Event, Southern shall
not be required to make any of the elections under Section 4.5.2 [redacted].
(b) Adjustment of Reservation Payment. [redacted].
---------------------------------
4.5.8 Delivery Excuse.
(a) No Obligation to Deliver. For any hour in which a Delivery
Excuse is occurring or is continuing, to the extent of such Delivery Excuse,
Southern shall not be obligated to deliver, and DYPM shall not be entitled to
receive, Scheduled Energy. In such event, to the extent of the Delivery Excuse,
Southern shall not be required to make any of the elections under Section 4.5.2
and shall not be required to [redacted].
(b) Continuation of DYPM Obligations. DYPM shall not be
relieved of its performance obligations hereunder during a Delivery Excuse,
including its obligation to pay Southern the Reservation Payment, even if such
Delivery Excuse continues for the remainder of the Term.
4.5.9 Delivery from Specified Seller's Resources.
Under no circumstance shall Southern be permitted to
accumulate ENDH, claim an Unavailability, or claim a Force Majeure Event to the
extent Southern is able, in a manner that is consistent with Prudent Industry
Practices, to provide Scheduled Energy from the Specified Seller's Resources as
required hereunder.
ARTICLE 5
PAYMENTS
5.1 Reservation Payment. Commencing on the Effective Date of
Service and for each Month of the Term, DYPM shall pay to Southern a
Reservation Payment for the Contract Capacity. The Reservation
Payments for each Month are set forth in Appendix A.
5.2 Energy Payment. Commencing on the Effective Date of Service
and for each Month of the Term, DYPM shall pay to Southern an Energy
Payment. The Energy Payment for each Month shall be equal to the
product of: [redacted].
5.3 Conversion Payment. Commencing on the Effective Date of Service and
for each Month of the Term, DYPM shall pay to Southern a Conversion Payment.
The Conversion Payment shall be equal to the sum across all hours of a Month
of: [redacted]. The Conversion Payment shall be calculated on an hourly basis
and accumulated to determine the monthly total. For purposes of this
calculation, a Replacement Energy Block is defined as that quantity of
Delivered Energy (in MWh) provided from Replacement Seller's Resources
associated with a certain Replacement Gas Price established pursuant to
Section 6.2.
5.4 Performance Bonus. For the Term of this Agreement, Southern
shall receive a Summer Performance Bonus and a Non-Summer Performance
Bonus, if applicable.
5.4.1 Summer Performance Bonus
The Summer Performance Bonus will be calculated based on the
Months of June through August of each Contract Year and shall be paid by DYPM to
Southern within thirty (30) Days after August 31 of each Contract Year. The
Summer Performance Bonus shall be calculated as follows:
Summer
Performance
Bonus = [redacted]
where:
Summer PAF is the performance adjustment factor corresponding to the
calculated summer delivery performance factor ("Summer DPF") set forth
in the Table below:
Summer DPF Summer PAF
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
Summer DPF is computed as follows:
Summer DPF = [redacted].
5.4.2 Non-Summer Performance Bonus
The Non-Summer Performance Bonus will be calculated based on
the Months of September through May of each Contract Year and shall be paid by
DYPM to Southern within thirty (30) Days after May 31 of each Contract Year. The
Non-Summer Performance Bonus shall be calculated as follows:
Non-Summer
Performance
Bonus = [redacted]
where:
Non-Summer PAF is the performance adjustment factor corresponding to
the calculated non-summer delivery performance factor ("Non-Summer
DPF") set forth in the Table below:
Non-Summer DPF Non-Summer PAF
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
Non-Summer DPF is computed as follows:
Non-Summer DPF = [redacted].
5.4.3 Notwithstanding the foregoing, the sum of the Summer
Performance Bonus and the Non-Summer Performance shall not exceed [redacted].
5.5 Additional Payments. In addition to the payments specified in
this Article 5, the Parties shall pay as all amounts due pursuant to
the other provisions of this Agreement.
5.6 Regulatory.
5.6.1 The Parties anticipate that this Agreement will be filed
with and accepted by FERC as a market based contract, and thus this Agreement
shall not be contingent on FERC acceptance. Having freely negotiated and agreed
upon the economic bargain among them as set forth hereunder, Southern and DYPM
waive all rights under Sections 205 and 206 of the Federal Power Act to effect a
change in the Agreement. Moreover, it is the Parties' mutual intent that FERC be
precluded, to the fullest extent permitted by law, from altering this Agreement
in any way. Notwithstanding the foregoing, if at any time FERC takes some action
that reduces the economic benefit of this Agreement to Southern as contemplated
on the Execution Date ("Original Economic Benefit"), Southern shall be deemed to
have retained rights under Section 205 to file for changes in the Agreement, but
only to the extent required to restore the Original Economic Benefit.
5.6.2 Southern may exercise its Section 205 rights provided
under Section 5.6.1 if at any time it reasonably determines in its sole
discretion that the application of FERC's ratemaking practices and procedures
may support the restoration of some or all of the Original Economic Benefit.
Before exercising such rights, Southern shall negotiate with DYPM in an effort
to reach mutual agreement regarding amendments to this Agreement that would
restore some or all of the Original Economic Benefit. Southern shall file any
resulting amendments for acceptance by FERC, and DYPM shall actively support
such filing(s). If the Parties are unable to agree upon such amendment(s),
Southern shall be entitled to make unilateral filing(s) at FERC to modify the
Agreement in order to restore some or all of the Original Economic Benefit. In
this latter event, DYPM shall actively support Southern's filing and its right
to recover the Original Economic Benefit; however, DYPM reserves the right to
propose modifications based on a good faith belief that such filing implements
revisions that would exceed the Original Economic Benefit.
5.6.3 Any amendment(s) or unilateral filing(s) contemplated
hereunder shall restore the Original Economic Benefit (or any allowed portion
thereof) for the remainder of the Term, including any portion of the Original
Economic Benefit associated with prior periods (with interest). Nothing in this
Agreement is intended to or shall restrict the number of times that Southern may
exercise the above-described Section 205 rights during the Term or within any
specific time frame.
5.7 Wholesale Generation Rates. All payments specified in this
Section 5 are the unbundled power sales rates for wholesale
generation. Transmission related services are addressed in Article 7.
ARTICLE 6
SCHEDULING, SOUTHERN'S AND DYPM'S RIGHTS TO SELLER'S RESOURCES, TITLE AND
RISK OF LOSS
6.1 Scheduling.
6.1.1 Daily Schedule. On each Business Day, Southern shall
inform DYPM before [redacted] of the amount of Contract Energy expected to be
available from the Specified Seller's Resources for each hour of the following
Day that is a Business Day, and any intervening Day. DYPM shall provide Southern
its Schedule for each hour of each Day(s) on or before [redacted] of the
previous Business Day. Such Schedule shall be consistent with the Scheduling
Constraints and the terms of this Agreement. [redacted] DYPM shall be
responsible for complying with all transmission reservation, scheduling and
tagging requirements (whether under the OATT or other industry scheduling
requirements or standards) associated with the delivery of Scheduled Energy at
and after the Delivery Point. All costs and expenses (including penalties)
associated with a Schedule and Scheduled Energy at and beyond the Delivery Point
shall be the sole responsibility of DYPM unless caused by Southern.
6.1.2 Delivery of Scheduled Energy. Subject to Southern's
elections (if any) in Section 4.5.2, Southern shall deliver Scheduled Energy to
the Delivery Point in accordance with DYPM's Schedule.
6.1.3 Minimum Amount of Scheduled Energy. Any
Schedule submitted by DYPM under this Agreement for any hour must be for
a minimum of 150 MW.
6.2 Replacement Gas.
6.2.1 Within [redacted] after receiving DYPM's Schedule for
the next Day under Section 6.1.1 (but no earlier than [redacted], Southern shall
notify DYPM (either telephonic or electronic) whether it will cover DYPM's
Schedule utilizing Replacement Seller's Resources. If Southern provides notice
that it will cover some portion of the Schedule with Replacement Seller's
Resources, within [redacted] after receiving such notice by Southern, DYPM shall
offer a delivered price (in $/MMBTU) ("Replacement Gas Price") for the amount of
Gas (in MMBTU) that would have been required by the Specified Seller's Resources
to produce the energy to be served by Replacement Seller's Resources
("Replacement Gas"). Within [redacted] of receiving such price, Southern shall
then elect to: (i) treat the price offered by DYPM as the Replacement Gas Price
(including for purposes of Section 5.3); or (ii) treat the price offered by DYPM
as the Replacement Gas Price (including for purposes of Section 5.3) and require
DYPM to cause one of its Affiliates to deliver Replacement Gas at alternate
delivery points, provided that Southern shall compensate such Affiliate for the
additional actual costs (if any) incurred to deliver to such alternate points in
lieu of delivery to the Specified Seller's Resources. In the case of (ii),
Southern shall receive and purchase from DYPM's Affiliate, and DYPM shall cause
one of its Affiliates to supply and sell to Southern, the Replacement Gas at the
Replacement Gas Price, at such alternate delivery point(s) specified by Southern
(such transaction to be performed pursuant to another contemporaneous agreement
between the Parties). DYPM's Affiliates shall use Commercially Reasonable
Efforts to arrange for the delivery to the alternate delivery point(s);
provided, however, that Southern bears the risk to the extent the delivery
arrangements associated with delivery to Specified Seller's Resources are not
adequate for delivering to the alternate delivery point(s).
6.2.2 In the event that DYPM increases the amount of Scheduled
Energy (or submits a Schedule where none existed) (such increased amount being
referred to as the "Increased Scheduled Energy") for any hour after it has
submitted the Schedule for such hour pursuant to the second sentence of Section
6.1 (or after 0900 CPT if no Schedule was submitted), then Southern shall notify
DYPM (either telephonic or electronic) whether it will cover DYPM's Schedule
utilizing Replacement Seller's Resources. If Southern provides notice that it
will cover some portion (or all) of the Increased Scheduled Energy with
Replacement Seller's Resources, the Parties shall follow the procedures set
forth in Section 6.2.1 with regard to establishing a Replacement Gas Price and,
if required by Southern, accomplishing the delivery of Replacement Gas by an
Affiliate of DYPM to alternate delivery point(s); provided, however, the
Administrative Committee shall establish the pertinent time frames for
communications of the Parties in this regard.
6.2.3 In the event that DYPM decreases the amount of Scheduled
Energy for any hour in which Southern has previously notified DYPM that it will
provide some portion of Scheduled Energy from Replacement Seller's Resources,
and to the extent that Southern determines (consistent with Scheduling
Constraints and the terms of this Agreement) that the requested decrease will
not be accommodated by lowering the output of the Specified Seller's Resources,
Southern shall decrease the amount of Scheduled Energy provided from Replacement
Seller's Resources (the amount of such decrease from Replacement Seller's
Resources being referred to as the "Decreased Replacement Energy"). Southern
shall propose to DYPM a delivered price (in $/MMBTU) ("Decreased Replacement Gas
Price") for the amount of Gas (in MMBTU) that would have been required to
produce the Decreased Replacement Energy at the Specified Seller's Resources
("Decreased Replacement Gas"). After receiving such price, DYPM shall then elect
to: (i) treat the price offered by Southern as the Decreased Replacement Gas
Price and not require Southern to deliver Decreased Replacement Gas; or (ii)
treat the price offered by Southern as the Decreased Replacement Gas Price and
require Southern to deliver Decreased Replacement Gas at alternate delivery
points, provided that DYPM shall compensate Southern for the additional actual
costs (if any) incurred to deliver Decreased Replacement Gas to such alternate
delivery points in lieu of delivery to the Specified Seller's Resources. In the
case of (ii), DYPM shall receive and purchase from Southern, and Southern shall
supply and sell to DYPM, the Decreased Replacement Gas at the Decreased
Replacement Gas Price, at such alternate delivery point(s) specified by DYPM
(such transaction to be performed pursuant to another contemporaneous agreement
between the Parties). Southern will use Commercially Reasonable Efforts to
arrange for delivery to the alternate delivery point(s); provided, however, that
DYPM bears the risk to the extent the delivery arrangements associated with
delivery to the Specified Seller's Resources are not adequate to arrange for
deliveries to the alternate delivery point(s). In addition, the Parties shall
calculate a Replacement Gas Adjustment. The Replacement Gas Adjustment shall
equal the product of: (i) the Replacement Gas Price less the Decreased
Replacement Gas Price; and (ii) the Decreased Replacement Gas. If the
Replacement Gas Adjustment is positive, then DYPM shall owe such amount to
Southern. If the Replacement Gas Adjustment is negative, then Southern shall owe
the absolute value of such amount to DYPM. In the event that there are multiple
Replacement Gas Prices applicable to multiple Replacement Gas quantities for any
hour (pursuant to Section 6.2.1 and 6.2.2), for the purposes of calculating the
Replacement Gas Adjustment, the Replacement Gas Price(s) shall be utilized in
the order they were established until the entire quantity of Decreased
Replacement Gas is satisfied with corresponding quantities of Replacement Gas.
The Administrative Committee shall establish the pertinent time frames for
communications of the Parties under this Section 6.2.3.
6.2.4 In the event that Southern elects to pay Performance
Payments for any hour pursuant to Section 4.5.2, the Parties shall follow
procedures consistent with those set forth in Section 6.2.1 and/or Section 6.2.2
in order to establish a Replacement Gas Price for calculating the applicable
Conversion Payment and, if required by Southern, accomplishing the delivery of
Replacement Gas by an Affiliate of DYPM to alternate delivery point(s);
provided, however, the Administrative Committee shall establish the pertinent
time frames for communications of the Parties in this regard. Any decreases in
Scheduled Energy covered by Performance Payments shall be treated consistent
with Section 6.2.3.
6.3 Southern's Rights to the Specified Seller's Resources. During any
time for which DYPM has not submitted (or is not permitted to submit) a Schedule
or during any time when Scheduled Energy is not provided from the Specified
Seller's Resources, Southern shall have the right to dispatch the Specified
Seller's Resources for its own purposes to the extent not Scheduled (or
permitted to be Scheduled) or Scheduled Energy is not provided from the
Specified Seller's Resources, including for the purpose of supplying energy to
third parties. Any Schedule provided by DYPM in accordance with the terms of
this Agreement (including Section 6.1) shall have priority over Southern's
schedule.
6.4 Title and Risk of Loss. Southern shall be deemed to be in exclusive
control of the Scheduled Energy prior to the Delivery Point. DYPM shall be
deemed to be in exclusive control of the Scheduled Energy at and after the
Delivery Point. Custody, title and risk of loss of Contract Capacity and
Scheduled Energy shall transfer from Southern to DYPM at the Delivery Point.
ARTICLE 7
TRANSMISSION SERVICE
7.1 DYPM Obligations and Assumption of Transmission Risk. DYPM, or its
designee, shall arrange, obtain, contract, and pay for any and all transmission
service and ancillary services required (including service under the OATT) to
deliver the Contract Capacity and Scheduled Energy from and beyond the Delivery
Point. During transmission curtailments, Southern will cooperate to assist DYPM
in modifying deliveries of Scheduled Energy with less restrictive notice
provisions than those set forth in Article 6; provided, however, Southern shall
have no liability or obligation to the extent it does not allow DYPM to deviate
from such notice requirements. Notwithstanding anything set forth in Section 7.2
or elsewhere to the contrary, it is DYPM's sole and exclusive responsibility at
all times to arrange, obtain, contract and pay for any and all transmission and
ancillary services required to deliver any energy hereunder from and beyond the
Delivery Point. DYPM assumes all risk associated with the availability, adequacy
and cost of such transmission service and ancillary services.
7.2 Southern Obligations. Southern, or its designee, shall arrange,
obtain, contract, and pay for any transmission service required to deliver
Contract Capacity and Scheduled Energy (whether from the Specified Seller's
Resources or Replacement Seller's Resources) to the Delivery Point. Southern
will also be responsible for securing and maintaining an interconnection
agreement with the applicable transmission provider that allows Southern to
deliver Scheduled Energy from Seller's Specified Resources to the
Interconnection Point.
7.3 Imbalances and Penalties. Any penalties or imbalances resulting
from actions or inactions of DYPM (or any third party to which DYPM may be
supplying the capacity and energy provided hereunder) will be the responsibility
of DYPM. Any penalties or imbalances resulting from actions or inactions of
Southern will be the responsibility of Southern.
ARTICLE 8
METERING
8.1. Metering. All quantities of energy delivered under
this Agreement shall be measured in accordance with Prudent Industry
Practices.
ARTICLE 9
BILLING AND PAYMENT
9.1 Timing; Method of Payment. The billing Party will submit to the
other Party, as promptly as practicable after the first of each Billing
Month, an invoice (by mail, facsimile or electronic means) for transactions
and the amounts due under the terms of this Agreement for the preceding
Month. Bills for each Billing Month shall be due and payable on the tenth
(10th) Day after the Day on which the billed Party receives the invoice,
unless otherwise agreed. Payment shall be made, on or before the due date, to
the billing Party in accordance with the invoice in immediately available
funds through wire transfer, or other mutually agreeable method.
9.2 Late Payment. Amounts that are owed by a Party shall, if not
remitted within the time period specified under Section 9.1, be subject to a
late payment charge equal to the interest calculated pursuant to Section
19.8, accrued and payable on a monthly basis with respect to the unpaid
amount. Such late payment charge shall accrue from the due date of such
amount until the date on which it is paid.
9.3 Disputed Xxxxxxxx. [redacted].
9.4 Adjustments. If any overcharge or undercharge in any form
whatsoever shall at any time be found and the invoice therefor has been paid,
the Party that has been paid the overcharge shall refund the amount of the
overcharge to the other Party, and the Party that has been undercharged shall
pay the amount of the undercharge to the other Party, within thirty (30) Days
after final determination thereof; provided, however, that no retroactive
adjustment shall be made for any overcharge or undercharge unless written
notice of the same is provided to the other Party within a period of
twenty-four (24) Months from the date of the invoice in which such overcharge
or undercharge was first included. Any such adjustments shall be made with
interest calculated in accordance with Section 19.8 from the date that the
undercharge or overcharge actually occurred.
9.5 Audit Rights. The Parties shall keep complete and accurate records,
meter readings and memoranda of their operations under this Agreement and
shall maintain such data for a period of at least two (2) years after the
completion of each Billing Month hereunder; provided, however, records
relating to a disputed matter shall be retained until the dispute is
resolved. Such records shall be available for inspection and audit by the
other Party upon reasonable request and during regular Business hours.
ARTICLE 10
CHANGE IN LAW
10.1 Limitations. The Parties acknowledge that during the term of this
Agreement, Changes in Law that increase Southern's cost of providing capacity
and/or energy hereunder could occur. During the Term, Southern will be
responsible for up to a total of [redacted] of Increased Electricity Costs
("Cost Threshold"). Notwithstanding the foregoing, any Increased Electricity
Costs in any Contract Year in excess of [redacted] will be paid by DYPM through
an additional payment or surcharge (the "Change in Law Surcharge"). Once
Southern has incurred Increased Electricity Costs up to the Cost Threshold, DYPM
shall pay for all Increased Electricity Costs through the Change in Law
Surcharge, as provided below. In lieu of the Change in Law Surcharge, the
Parties may agree on other payment mechanisms whereby DYPM shall pay for
Increased Electricity Costs. Alternatively, the Parties may mutually agree on
certain reductions in DYPM's rights to purchase Contract Capacity and Scheduled
Energy in lieu of payment of Increased Electricity Costs.
10.2 Determination. [redacted]
10.3 Initiation of Surcharge. In the event that total Increased
Electricity Costs for any Contract Year will exceed [redacted], or if the Cost
Threshold will be exceeded, Southern shall provide DYPM with written notice of a
proposed Change in Law Surcharge. No earlier than [redacted] thereafter,
Southern may initiate the Change in Law Surcharge consistent with such notice.
10.4 Timing. [redacted].
10.5 Contest and Dialogue. [redacted]. Whenever either Party anticipates
the possibility of a Change in Law, it may request meeting(s) to engage in open
dialogue with the other to exchange ideas regarding potential courses of action.
ARTICLE 11
LIABILITY ALLOCATION; LIMITATIONS ON LIABILITY
11.1 Costs, Taxes and Charges. Except as otherwise provided in this
Agreement, in addition to all other amounts due and payable under this
Agreement: (i) Southern shall be responsible for all costs, Taxes, and
charges of any kind relating to the delivery of energy, capacity,
transmission, and/or related services prior to the Delivery Point (by way of
clarification of the foregoing, Taxes prior to the Delivery Point include: ad
valorem taxes on the Specified Seller's Resources; income taxes on Southern
or its property; and taxes on payments made to Southern under this
Agreement); and (ii) DYPM shall be responsible for all costs, Taxes, and
charges of any kind relating to the delivery of energy, capacity,
transmission, and/or related services at and after the Delivery Point (by way
of clarification of the foregoing, Taxes at and after the Delivery Point
include: income taxes on DYPM or its property, and any taxes incurred in
connection with downstream sales of the Scheduled Energy). Each Party shall
provide the other Party upon written request a certificate of exemption or
other reasonably satisfactory evidence of exemption if any exemption from or
reduction of any Tax is applicable. Each Party shall exercise Commercially
Reasonable Efforts to obtain and to cooperate in obtaining any exemption from
or reduction of any Tax.
11.2 Indemnification. Unless otherwise agreed in writing by the
Parties, Southern and DYPM shall each defend, indemnify and save harmless the
other and their respective officers, directors, servants, agents, employees
and representatives from and against any and all claims, demands, costs or
expenses (including reasonable attorneys' fees) for loss, damage or injury to
any person, property or interest arising out of or in any way related to this
Agreement to the extent such loss, damage or injury occurs on its own side of
the Delivery Point, irrespective of negligence, whether actual or claimed, of
the other. Nothing in this Agreement shall create a contractual relationship
between one Party and the customers of the other Party, nor shall it create a
duty of any kind to such customers.
11.3 Limitation of Liability.
11.3.1 there are no warranties under this agreement EXCEPT TO
THE EXTENT SPeciFICALLy set forth HEREIN. the parties hereby specifically
disclaim and exclude all implied warranties, including the implied warranties
of merchantability and of fitness for a particular purpose.
11.3.2 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES SUFFERED BY
THAT PARTY OR BY ANY CUSTOMER OF THAT PARTY, FOR lost profits or other
business interruption damages, WHETHER BY VIRTUE OF ANY STATUTE, IN TORT OR
CONTRACT, UNDER ANY PROVISION OF INDEMNITY OR OTHERWISE. THE PARTIES INTEND
THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE
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. TO THE EXTENT ANY DAMAGES REQUIRED
TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES
ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE
REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A
REASONABLE APPROXIMATION OF THE HARM OR LOSS.
11.3.3 In the event that any provision of this Section 11.3 is
held to be invalid or unenforceable, this Section shall be void and of no effect
solely to the extent of such invalidity or unenforceability, and no claim
arising out of such invalidity or lack of enforceability shall be made by one
Party against the other or its officers, agents, or employees. Notwithstanding
the foregoing, this Section 11.3 shall not limit or negate the right of either
Party to be fully indemnified as provided in Section 11.2 or limit the remedies
available for an Event of Default.
ARTICLE 12
FORCE MAJEURE event
12.1 Force Majeure Event Defined.
12.1.1 General Rule. As used herein, an Event of Force Majeure
means an unforeseeable cause(s) beyond the reasonable control of and without the
fault or negligence of the Party claiming Force Majeure, including but not
limited to acts of God, strike, flood, earthquake, storm, fire, lightning,
epidemic, war, riot, civil disturbance, sabotage, terrorism, change in law or
applicable regulation subsequent to the Execution Date and action or inaction by
any federal, state or local legislative, executive, administrative or judicial
agency or body which, by exercise of due foresight such Party could not
reasonably have expected and which, by the exercise of due diligence, it is
unable to overcome.
12.1.2 Exceptions. Notwithstanding anything contained in Section
12.1.1, the term Force Majeure shall not include any of the following:
[redacted]
12.2 Applicability of Force Majeure Event.
Neither Party shall be in breach or liable for any delay or failure in
its performance under this Agreement (except for such Party's performance of its
payment obligations hereunder, which shall not be excused by any Force Majeure
Event) to the extent such performance is prevented or delayed due to a Force
Majeure Event, provided that:
12.2.1 The non-performing Party shall give the other Party
written notice within three (3) Business Days of the commencement of the Force
Majeure Event, with available details to be supplied within [redacted] after the
commencement of the Force Majeure Event further describing the particulars of
the occurrence of the Force Majeure Event;
12.2.2 The delay in performance shall be of no greater scope
and of no longer duration than is directly caused by the Force Majeure Event;
12.2.3 The Party whose performance is delayed or prevented
shall proceed with Commercially Reasonable Efforts to overcome the events or
circumstances preventing or delaying performance and shall, as requested (but
not more often than weekly), provide written progress reports to the other Party
during the period that performance is delayed or prevented describing actions
taken and to be taken to remedy the consequences of the Force Majeure Event, the
schedule for such actions and the expected date by which performance shall no
longer be affected by the Force Majeure Event; and
12.2.4 When the performance of the Party claiming the Force
Majeure Event is no longer being delayed or prevented, that Party shall give the
other Party written notice to that effect.
12.3 Effect of Force Majeure Event.
12.3.1 Except for the obligation of either Party to make any
required payments under this Agreement, the Parties shall be excused from
performing their respective obligations under this Agreement and shall not be
liable in damages or otherwise if and to the extent that they are unable to so
perform or are prevented from performing by a Force Majeure Event.
12.3.2 [redacted]
12.4 Other Effects of Force Majeure Events. If any Force Majeure Event
claimed by a Party shall continue for more than [redacted] from the date of
notice provided by such Party in Section 12.2.1, then the other Party may, at
any time following the end of such period, terminate this Agreement upon written
notice to the affected Party. Upon such termination, neither Party shall have
any further obligation to the other Party except as to payment of any costs and
liabilities incurred prior to the effective date of such termination. Any notice
of termination under this Section must be received during the period that
performance continues to be delayed or prevented by the Force Majeure Event.
ARTICLE 13
EVENT OF DEFAULT
13.1 Event of Default. The occurrence of any one of the following
shall constitute an "Event of Default":
13.1.1 The failure by a Party to make payment to the other
Party for amounts due under this Agreement after said amounts have become due
and payable and such failure is not cured within [redacted] after receiving
written notice from the Party to which such payments are due;
13.1.2 A Party or any Party guaranteeing such Party's
obligations hereunder (a "Guarantor") shall: (i) admit in writing its inability
to pay its debts as such debts become due; (ii) make a general assignment or an
arrangement or composition with or for the benefit of its creditors; (iii) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against such Party or such Guarantor under any bankruptcy or
similar law; (iv) take any action for the purpose of effectuating any of the
foregoing; or (v) fails to comply with the terms and conditions of its Guaranty;
13.1.3 A proceeding or case shall be commenced, without the
application or consent of the Party or its Guarantor, in any court of competent
jurisdiction, seeking: (i) its liquidation, reorganization of its debts,
dissolution or winding-up, or the composition or readjustment of its debts; (ii)
the appointment of a receiver, custodian, liquidator or the like of the Party or
its Guarantor or of all or any substantial part of its assets or the assets of
its Guarantor; or (iii) similar relief in respect of such Party or its Guarantor
under any law relating to bankruptcy, insolvency, reorganization of its debts,
winding-up, composition or adjustment of debt;
13.1.4 The failure of any Party to comply with the requirements of
Article 14 regarding creditworthiness and/or security;
13.1.5 The failure of a Party to comply with the requirements of
Article 17 regarding assignment;
13.1.6 Any representation or warranty made by a Party under
Article 16 proves to have been false or misleading in any material respect and
such representation or warranty is not made true within twenty (20) Days after
notice thereof to such Party; provided, however, that the cure must also remove
any adverse effect on the non-defaulting Party;
13.1.7 A Party shall fail to pay when due (subject to any
applicable cure or grace period), whether by acceleration or otherwise, any
principal or interest on indebtedness aggregating in excess of [redacted] in
principal amount; or any indebtedness aggregating in excess of [redacted] shall
be declared due and payable or be required to be prepaid (other than by a
regularly scheduled payment) prior to the stated maturity of such indebtedness;
or
13.1.8 The material failure by a Party to comply with any
material provision of this Agreement (other than the events described above and
those for which a remedy is expressly provided) if such failure is not the
result of a Force Majeure Event, an Unavailability or is not otherwise excused
in accordance with this Agreement, and such failure continues uncured for
[redacted] after written notice thereof switch order from the other Party;
provided, however, if such failure is not capable of being cured within such
period of [redacted] with the exercise of reasonable diligence, then such cure
period shall be extended for an additional reasonable period of time (not to
exceed [redacted]), so long as the Party is exercising reasonable diligence to
cure such failure.
13.2 Exclusive Remedies.
13.2.1 Upon the occurrence of an Event of Default and at all
times during any applicable cure period, for so long as such Event of Default is
continuing (or as long as the defaulting Party is attempting to cure during such
cure period), the non-defaulting Party's sole and exclusive remedy shall be to
suspend its performance under this Agreement and/or declare an Early Termination
Date as provided below.
13.2.2 If an Event of Default has occurred, the non-defaulting
Party shall have the right, in its sole discretion, by no more than [redacted]
notice to the defaulting Party, to designate a Day no earlier than the Day such
notice is effective as the date on which the Agreement shall terminate ("Early
Termination Date"). Subject to Section 19.3, this Agreement shall terminate on
the Early Termination Date and neither Party shall have any further liability or
obligation to the other hereunder, except as provided in Sections 13.2.3 or
13.2.4 below, as applicable.
13.2.3 Southern's notice under Section 13.2.2 shall indicate one of
the following elections: [redacted] payment; or (ii) receive a continuing
damage payment. In the event Southern elects to receive the [redacted],
DYPM shall pay Southern such amount within three (3) Business Days after
the Early Termination Date as liquidated damages for all claims associated
with the Event of Default under this Agreement. In the event Southern
elects to receive the continuing damage payment, Southern shall calculate
an amount equal to: [redacted].
13.2.4 With fifteen (15) Days after DYPM's notice under Section
13.2.2, the Parties shall each select an independent party to determine the
[redacted] of the Agreement. Within thirty (30) Days after such notice, the
two independent parties shall select a third independent party to determine
the [redacted] of the Agreement. Within sixty (60) Days after such notice,
the three (3) independent parties shall provide the Parties with their
respective estimates of the [redacted]. The actual [redacted]. If one Party
disputes the actual [redacted], within five (5) Business Days of notice of
the actual [redacted] determined by the independent parties, such Party may
submit the dispute for resolution pursuant to the arbitration procedures of
Article 18. If the actual [redacted] ultimately used is the value
determined by the three independent parties, then such value cannot exceed
a net present value (using a discount rate of 8%) of [redacted] as of the
Early Termination Date. If the actual [redacted] ultimately used is the
value determined pursuant to arbitration, then such value cannot exceed a
net present value (using a discount rate of 8%) of [redacted] as of the
date of the arbitrators' decision. If the final determination of the
[redacted] indicates that a payment is owed to DYPM, then the actual
[redacted] will be paid by Southern to DYPM within three (3) Business Days
of such determination. If the final determination of the [redacted]
indicates that a payment would be owed to Southern absent the Event of
Default by Southern, then although the [redacted] to DYPM would be
negative, neither Party shall be required to pay the other any amount
hereunder. As used herein, [redacted].
ARTICLE 14
CREDITWORTHINESS AND SECURITY
14.1 Guaranty in Favor of Southern. Simultaneously with the execution
of this Agreement, DYPM shall cause Dynegy Holdings Inc., the parent company of
DYPM, to execute and deliver a Guaranty Agreement in the form of that attached
hereto as Appendix D (DYPM Guaranty). If at any time during the Term, the long
term senior unsecured indebtedness of Dynegy Holdings Inc. (or the provider of
an Eligible Guaranty) has or drops to a rating below either (i) Baa3 by Xxxxx'x
Investors Service ("Moody's") (or future equivalent) or BBB- by Standard &
Poor's Ratings Group ("S&P") (or future equivalent), then DYPM shall provide a
substitute guaranty in form and substance substantially similar to the DYPM
Guaranty (the "Eligible Guaranty") issued by an entity with a long term senior
unsecured indebtedness rating of at or above both (i) Baa3 by Moody's (or future
equivalent) and (ii) BBB- by S&P (or future equivalent) (the "Eligible Guaranty
Threshold"). DYPM shall provide such Eligible Guaranty within ten (10) Days of
receipt of notice from Southern that DYPM is required to provide an Eligible
Guaranty due to the downgrade to a rating below either (i) Baa3 by Moody's (or
future equivalent) or (ii) BBB- by S&P (or future equivalent). If DYPM is unable
to provide an Eligible Guaranty to Southern during such ten (10) Day period,
then DYPM and Dynegy Holdings Inc. must be and remain in compliance with and
Southern must receive the security and payments as required by the terms of
Section 14.3 and 14.4 below.
14.2 Negative Watch Credit Support in Favor of Southern. If at any time
during the period beginning on the date hereof through December 31, 2005, the
long term senior unsecured indebtedness of Dynegy Holdings Inc. (or the provider
of an Eligible Guaranty) has or drops to a rating of either (i) Baa3 by Moody's
(or future equivalent) and Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty), its credit rating or indebtedness is on watch for possible downgrade
by Moody's (or future equivalent) or (ii) BBB- by S&P (or future equivalent) and
Dynegy Holdings Inc. (or the provider of an Eligible Guaranty), its credit
rating or indebtedness is on negative CreditWatch by S&P (or future equivalent),
then DYPM or Dynegy Holdings Inc. (or the provider of an Eligible Guaranty)
shall within three (3) Business Days after such event provide to and maintain in
favor of Southern a letter of credit issued by an issuer reasonably acceptable
to Southern in the amount of [redacted] in substantially the form of Appendix E
hereto unless a [redacted] letter of credit has been properly issued and remains
in effect in accordance with the first sentence of Section 14.3 or 14.4 below.
Without limiting the foregoing, if at any time during the period June 1, 2005
through December 31, 2005, the long term senior unsecured indebtedness of Dynegy
Holdings Inc. (or the provider of an Eligible Guaranty) has or drops to a rating
of either (i) Baa3 by Moody's (or future equivalent) and Dynegy Holdings Inc.
(or the provider of an Eligible Guaranty), its credit rating or indebtedness is
on watch for possible downgrade by Moody's (or future equivalent) or (ii) BBB-
by S&P (or future equivalent) and Dynegy Holdings Inc. (or the provider of an
Eligible Guaranty), its credit rating or indebtedness is on negative CreditWatch
by S&P (or future equivalent), then DYPM or Dynegy Holdings Inc. (or the
provider of an Eligible Guaranty) shall within three (3) Business Days after
such event provide or cause to be provided to Southern a [redacted] payment in
lieu of the last twenty-four (24) months of monthly Reservation Payments unless
the monthly Reservation Payments to Southern under this Agreement are
immediately and thereafter remain increased by $150,000 per month.
14.3 Credit Support in Favor of Southern for Junk Rating. If at any
time during the period beginning on the date hereof through December 31, 2005,
the long term senior unsecured indebtedness of Dynegy Holdings Inc. (or the
provider of an Eligible Guaranty) has or drops to a rating of below either (i)
Baa3 by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent), then DYPM or Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty) shall within three (3) Business Days after such event provide to and
maintain in favor of Southern a letter of credit issued by an issuer reasonably
acceptable to Southern in the amount of [redacted] in substantially the form of
Appendix E hereto unless a [redacted] letter of credit has been properly issued
and remains in effect in accordance with the first sentence of Section 14.2
above or Section 14.4 below. Without limiting the foregoing, if at any time
during the period June 1, 2005 through December 31, 2005, the long term senior
unsecured indebtedness of Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty) has or drops to a rating of below either (i) Baa3 by Moody's (or
future equivalent) or (ii) BBB- by S&P (or future equivalent), then DYPM or
Dynegy Holdings Inc. (or the provider of an Eligible Guaranty) shall, unless the
monthly Reservation Payments to Southern under this Agreement are immediately
and thereafter remain increased by [redacted] per month, within three (3)
Business Days after such event provide or cause to be provided to Southern
either (i) a [redacted] in lieu of the last forty-eight (48) months of monthly
Reservation Payments or (ii) a [redacted] payment in lieu of the last
twenty-four (24) months of monthly Reservation Payments subject to the
restriction that this option (ii) shall not be available unless the monthly
Reservation Payments to Southern under this Agreement are immediately and
thereafter remain increased by [redacted] per month.
14.4 Post December 31, 2005 Provisions. If at any time after December
31, 2005, the long term senior unsecured indebtedness of Dynegy Holdings Inc.
(or the provider of an Eligible Guaranty) has or drops to a rating below either
(i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent), then DYPM or Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty) shall within three (3) Business Days after such event provide to and
maintain in favor of Southern a letter of credit issued by an issuer reasonably
acceptable to Southern in the amount of [redacted] in substantially the form of
Appendix E hereto, unless a [redacted] letter of credit has been properly issued
and remains in effect in accordance with the first sentence of Section 14.2 or
14.3 above.
14.5 Guaranty in Favor of DYPM. If hereafter Southern's net worth
(calculated by subtracting Southern's liabilities (net of intercompany loans)
from Southern's total assets (excluding goodwill) as such terms are determined
in accordance with GAAP) falls below [redacted], Southern shall provide to DYPM
a guaranty from an entity with a long term senior unsecured indebtedness rating
at or above (i) Baa3 by Moody's (or future equivalent) and (ii) BBB- by S&P (or
future equivalent) in substantially the form of Appendix F (Southern Guaranty)
in an amount equal to seventy percent (70%) of the amount by which [redacted]
exceeds Southern's net worth (the "Shortfall Amount") or, at Southern's option,
Southern shall deliver to DYPM a letter of credit in the Shortfall Amount in
substantially the form of Appendix G hereto. If at any time during the Term, the
long term senior unsecured indebtedness of the provider of the Southern Guaranty
has or drops to a rating below either (i) Baa3 by Moody's (or future equivalent)
or (ii) BBB- by S&P (or future equivalent), then Southern shall provide a
Southern Guaranty issued by an entity with a long term senior unsecured
indebtedness rating at or above the Eligible Guaranty Threshold. Southern shall
provide such Southern Guaranty within ten (10) Days of receipt of notice from
DYPM that Southern is required to provide a Southern Guaranty due to the
downgrade below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB-
by S&P (or future equivalent). If Southern is unable to provide a Southern
Guaranty during the applicable periods described above, then Southern shall
provide and maintain substitute collateral of a value equal to the Shortfall
Amount in form and substance reasonably satisfactory to DYPM which security
shall cover and secure Southern's obligations under this Agreement. The
foregoing substitute collateral shall be replenished so that at all times
substitute collateral of a value equal to the Shortfall Amount is securing
Southern's obligations to DYPM until such time as a Southern Guaranty is
provided. If at any time a Southern Guaranty becomes available, Southern may
elect to provide such Southern Guaranty in replacement of any security
previously provided. Once a Southern Guaranty is provided, any security
previously provided by Southern shall be immediately returned or cancelled as
the case may be, at which time the Southern Guaranty shall remain in place until
the latter of it is terminated in accordance with its terms or until such time
as collateral is again required and provided due to the downgrades of the
provider of the Southern Guaranty to a level below the Eligible Guaranty
Threshold.
14.6 Negative Watch Credit Support in Favor of DYPM. If at any time
prior to June 1, 2005, the long term senior unsecured indebtedness of Southern
has or drops to a rating of either (i) Baa3 by Moody's (or future equivalent)
and Southern, its credit rating or indebtedness is on watch for possible
downgrade by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent) and Southern, its credit rating or indebtedness is on negative
CreditWatch by S&P (or future equivalent), then Southern shall within three (3)
Business Days after such event provide to and maintain in favor of DYPM either
(1) a letter of credit issued by an issuer reasonably acceptable to DYPM in an
amount of [redacted] in substantially the form of Appendix G hereto or (2) a
guaranty from an entity with a long term senior unsecured indebtedness rating at
or above (i) Baa3 by Moody's (or future equivalent) and (ii) BBB- by S&P (or
future equivalent) in the form of Appendix F (Southern Guaranty), unless a
letter of credit or guaranty has been properly issued and remain in effect in
accordance with Section 14.7 or 14.8 below.
14.7 Credit Support in Favor of DYPM for Junk Rating. If at any time
prior to June 1, 2005, the long term senior unsecured indebtedness of Southern
has or drops to a rating of below either (i) Baa3 by Moody's (or future
equivalent) or (ii) BBB- by S&P (or future equivalent), then Southern shall
within three (3) Business Days after such event provide to and maintain in favor
of DYPM either (1) a letter of credit issued by an issuer reasonably acceptable
to DYPM in an amount of [redacted] in substantially the form of Appendix G
hereto or (2) a guaranty from an entity with a long term senior unsecured
indebtedness rating at or above (i) Baa3 by Moody's (or future equivalent) and
(ii) BBB- by S&P (or future equivalent) in the form of Appendix F (Southern
Guaranty), unless a letter of credit or guaranty has been properly issued and
remains in effect in accordance with Section 14.6 above or Section 14.8 below.
14.8 Post June 1, 2005 Provisions. If at any time on or after June 1,
2005, the long term senior unsecured indebtedness of Southern has or drops to a
rating below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by
S&P (or future equivalent), then Southern shall provide to and maintain in favor
of DYPM either (1) a letter of credit issued by an issuer reasonably acceptable
to DYPM in the amount of [redacted] in substantially the form of Appendix G
hereto or (2) guaranty from an entity with a long term senior unsecured
indebtedness rating at or above (i) Baa3 by Moody's (or future equivalent) and
(ii) BBB- by S&P (or future equivalent) in the form of Appendix F (Southern
Guaranty), unless a letter of credit or guaranty has been properly issued and
remains in effect in accordance with Section 14.6 or Section 14.7 above.
ARTICLE 15
DELIVERY EXCUSE
15.1 Definition. As used in this Agreement, "Delivery Excuse" means:
(i) any Event of Default of DYPM under this Agreement or any event which, with
the giving of notice or lapse of time or both, would become an Event of Default
under this Agreement; (ii) the failure of any portion of Gas supply intended for
Specified Seller's Resources under any Gas supply agreement to which Southern is
a party (other than a failure resulting from a default or failure to perform by
Southern or one of its Affiliates) for any reason or the failure of Gas supply
to an alternate gas delivery point(s) (as required by Section 6.2), provided,
however, that failures to supply to alternate delivery point(s) for reasons
beyond DYPM's control shall not constitute a Delivery Excuse; or (iii) the
delivery of Gas to the Specified Seller's Resources that does not meet the
specifications of applicable transportation pipelines serving the Specified
Seller's Resources; (iv) any failure or inability of DYPM to acquire and
maintain adequate transmission service for the delivery of energy; and (v) any
Emergency Condition. Prior to the Effective Date of Service, Southern and DYPM
(or its Affiliate(s)) shall enter into an agreement for the supply of Gas by
DYPM (or its Affiliate(s)) for use by Specified Seller's Resource(s). Nothing
contained in this Agreement or elsewhere shall require Southern to replace,
either in whole or in part, any failure of Gas supply under any Gas supply
agreement (including such an agreement with DYPM or its Affiliate(s)) or
arrangement with any other Gas supply arrangement.
15.2 No Breach for Delivery Excuse. Southern shall not be liable for or
deemed in breach of this Agreement to the extent a Delivery Excuse has occurred
or is continuing, even if the duration of such Delivery Excuse is for the
remainder of the Term of this Agreement; provided that the following shall apply
with regard to a condition that would result in a Delivery Excuse:
(i) Each Party shall promptly notify the other after discovering
any condition or circumstance that could reasonably be expected to
lead to a Delivery Excuse. Upon either Party becoming aware of a
condition that constitutes a Delivery Excuse, that Party shall provide
the other Party with prompt written notice of such condition, with
details further describing the particulars of the condition to be
supplied within twelve (12) Days after commencement of such condition;
(ii) Any delay in performance shall be of no greater scope and of
no longer duration than is directly caused by the Delivery Excuse; and
(iii) When a Party becomes aware that the condition constituting
a Delivery Excuse no longer exists, such Party shall promptly notify
the other when the condition of Delivery Excuse is no longer
preventing such Party's performance under this Agreement.
ARTICLE 16
REPRESENTATIONS AND WARRANTIES
16.1. Execution. Each Party represents and warrants to the other
Party that: (i) it has all the necessary corporate and legal power and
authority and has been duly authorized by all necessary corporate
action to enable it to lawfully execute, deliver and perform under
this Agreement; and (ii) it is a valid legal entity duly organized and
validly existing in good standing under the laws of the state of its
formation and is qualified to do business in the State of Alabama;
16.2. Permits. Each Party represents and warrants to the other
Party that it will hold all permits, licenses or approvals necessary
to lawfully perform its obligations contained herein in the manner
prescribed by this Agreement.
16.3 Binding Obligations. Each Party represents and warrants to
the other Party that this Agreement is the valid and binding
obligation of such Party, enforceable against such Party in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other equitable laws affecting creditor's
rights.
16.4 Execution and Consummation. Each Party represents and
warrants to the other Party 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 do not and will not conflict with any of the terms,
conditions or provisions of any law or partnership agreement, or other
evidence of indebtedness or any other agreement or instrument to which
it is a party or by which it or any of its property is bound, or
result in a breach or default under any of the foregoing.
16.5 Actions and Proceedings. Each Party represents and warrants
to the other that there is no pending or, to the knowledge of such
Party, threatened action or proceeding affecting such Party before any
Government Agency that purports to adversely affect the validity or
enforceability of this Agreement.
16.6 Processor. With respect to the purchase of Contract
Capacity, DYPM represents and warrants that it is a producer,
processor, commercial user or merchant handling energy, and it is
entering into the transactions contemplated by this Agreement for
purposes related to its business as such.
ARTICLE 17
ASSIGNMENT
17.1 General Rule. This Agreement shall be binding upon and inure to
the benefit of the permitted successors and assigns of the Parties hereto.
Except as set forth in Section 17.2, no permitted sale, assignment, transfer or
other disposition shall release or discharge DYPM or Southern from its
obligations under this Agreement, but all such obligations shall also be assumed
by the successor or assign of the Party hereto.
17.2 Consent Required. Neither Party shall assign its interest in this
Agreement in whole or part without the prior written consent of the other Party,
such consent not to be unreasonably withheld or delayed; provided, however,
that, notwithstanding the foregoing, either Party may assign this Agreement to
its parent, or to any direct or indirect wholly-owned subsidiary of such parent
and, upon the approval of the creditworthiness and the ability to perform of
such assignee by the non-assigning Party (which approval shall not be
unreasonably withheld or delayed), the assignor shall be released and discharged
from its obligations under this Agreement. Either Party may collaterally assign
this Agreement to any lender or financial institution without the written
consent of the other Party. Each Party agrees to provide such consents to
collateral assignment as may be reasonably requested by the other Party;
provided that neither Party shall be obligated to provide a consent to
collateral assignment that would have the effect of materially altering the
obligations of such Party under this Agreement.
ARTICLE 18
DISPUTE RESOLUTION
18.1 Senior Officers.
18.1.1 Each of the Parties will designate in writing to the
other Parties a representative who will be authorized to resolve any dispute
arising under this Agreement in an equitable manner and, unless otherwise
expressly provided herein, to exercise the authority of such Party to make
decisions by mutual agreement.
18.1.2 If such designated representatives are unable to
resolve a dispute under this Agreement, such dispute will be referred by each
Party's representative, respectively, to a designated senior officer.
18.1.3 The Parties hereto agree: (i) to attempt to resolve all
disputes arising hereunder promptly, equitably and in a good faith manner; and
(ii) to provide each other with reasonable access during normal business hours
to any and all non-privileged and non-confidential records, information and data
pertaining to any such dispute. Non-confidential information shall be made
available to a Party pursuant to a confidentiality agreement acceptable to the
disclosing Parties.
18.2 Arbitration. All disputes arising under, out of, or in relation to
any provision of this Agreement that are not resolved pursuant to Section 18.1
within 30 Days after either Party's receipt of notice referring the dispute to
the senior officers of the Parties (and in any event within the time which legal
or equitable proceedings based on such claim, dispute, or controversy would not
be barred by the applicable statute of limitations) will be submitted upon
written request of any Party to binding arbitration. Each Party will have the
right to designate an arbitrator of its choice, who need not be from the
American Arbitration Association ("AAA") panel of arbitrators but who (a) will
be an expert in the independent power electric generation field and (b) will not
be and will not have been previously an employee or agent of or consultant or
counsel to either Party and will not have a direct or indirect interest in
either Party or the subject matter of the arbitration. Such designation will be
made by notice to the other Party and to the AAA within ten (10) Days or, in the
case of payment disputes, five (5) Days after the date of the giving of notice
of the demand for arbitration. The arbitrators designated by the Parties will
designate a third arbitrator, who will have a background in legal and judicial
matters (and who will act as chairman), within ten (10) Days or, in the case of
payment disputes, five (5) Days after the date of the designation of the last of
the arbitrators to be designated by the Parties, and the arbitration will be
decided by the three arbitrators. If the two arbitrators cannot or do not select
a third independent arbitrator within such period, either Party may apply to the
AAA for the purpose of appointing any person listed with the AAA as the third
independent arbitrator under the expedited rules of the AAA. Such arbitration
will be held in alternating locations of the home offices of the Parties,
commencing with DYPM's home office, or in any other mutually agreed upon
location. The rules of the AAA will apply to the extent not inconsistent with
the rules herein specified. Each Party will bear its own expenses (including
attorneys' fees) with respect to the arbitration, unless the arbitrator decides
on a different allocation of expenses. The arbitrators will designate the Party
to bear the expenses of the arbitrators or the respective amounts of such
expense to be borne by each Party.
18.3 Binding Nature of Proceedings. Each Party understands that this
Agreement contains an agreement to arbitrate with respect to specified disputes.
After signing this Agreement, each Party understands that it will not be able to
bring a lawsuit concerning any dispute that may arise that is covered by this
arbitration provision. Instead, each Party agrees to submit any such dispute to
arbitration pursuant to Section 18.2. Any award of the arbitrator may be
enforced by the Party in whose favor such award is made in any court of
competent jurisdiction.
ARTICLE 19
MISCELLANEOUS
19.1 Governing Law; Waiver of Jury Trial.
19.1.1 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ALABAMA, EXCLUSIVE OF ITS CONFLICTS OF
LAW PROVISIONS, AND, TO THE EXTENT APPLICABLE, BY THE FEDERAL LAW OF THE UNITED
STATES OF AMERICA. BY CHOOSING TO HAVE THIS AGREEMENT GOVERNED BY AND CONSTRUED
UNDER THE LAW OF THE STATE OF ALABAMA, THE PARTIES ARE IN NO WAY SUBMITTING TO
OR INCORPORATING INTO THIS AGREEMENT ANY ALABAMA STATUTE, REGULATION, OR ORDER,
OR ANY OF THE SAME INVOLVING THE GENERATION, SALE, PURCHASE OR TRANSMISSION OF
ELECTRIC CAPACITY OR ELECTRIC ENERGY IN, OR FOR CONSUMPTION IN, THE STATE OF
ALABAMA.
19.1.2 EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
19.2 Confidentiality.
19.2.1 Until such time as the terms of the Agreement are
readily accessible by the public (other than due to the fault of a Party),
neither Party shall disclose the terms of this Agreement to any third party
(other than such Party's (or its Affiliates') employees, lenders, legal counsel,
accountants, or other advisors), except in order to comply with any applicable
law, order, regulatory or exchange rule. Each Party shall notify the other Party
of any proceeding of which it is aware that may result in disclosure and shall
use reasonable efforts to prevent or limit such disclosure. Notwithstanding the
foregoing, either Party may disclose the terms and conditions of this Agreement
to any third party providing permanent or construction financing with respect to
the Specified Seller's Resources (in the case of Southern) or with respect to
other financing obtained by a Party. In connection with a disclosure to any
third party financiers, the disclosing Party shall take such steps as may be
reasonably required to limit the scope of such disclosure and to ensure that
disclosure is not subsequently made by any such financier.
19.2.2 Anything in this Section 19.2 to the contrary
notwithstanding, the Parties agree and acknowledge that, in the course of
performance under this Agreement, the Parties may exchange confidential and
proprietary information (including financial information related to the
Agreement). Each Party agrees and covenants that any and all information it
receives in connection with its performance under this Agreement that the
disclosing Party has designated as confidential will be kept confidential and
shall not be disclosed by the receiving Party to any third party without the
express written consent of the disclosing Party, except in order to comply with
any applicable law, order, regulatory or exchange rule. Any filing by a Party
pursuant to any of the foregoing in compliance with applicable law, order,
regulatory or exchange rule, shall be made under a request for confidential
treatment (unless the filing Party reasonably believes such a request would be
futile) and the other Party shall have the opportunity to review such filing
prior to its dissemination. Neither Party shall issue a press release or similar
disclosure with respect to the existence of this Agreement or its contents
without first obtaining the written consent of the other Party, which consent
shall not be unreasonably withheld.
19.3 Survivorship of Obligations. The termination or cancellation of
this Agreement shall not discharge any Party from any obligation it owes the
other Party under this Agreement by reason of any transaction, loss, cost,
damage, expense or liability occurring, accruing or arising prior to such
termination. It is the intent of the Parties that any such obligation owed
(whether the same shall be known or unknown as of the termination or
cancellation of this Agreement) will survive the termination or cancellation of
this Agreement in favor of the Party to which such obligation is owed. The
Parties also intend that the indemnification and limitation of liability
provisions contained in Section 11.2 shall remain operative and in full force
and effect.
19.4 Notice of Proceedings. Each Party, to the extent it has pertinent
knowledge, shall promptly notify the other Party of any pending or anticipated
federal or state regulatory, judicial or administrative actions, including but
not limited to notice of violations, arising directly out of, caused by, or
related to the Specified Seller's Resources, including any generation equipment
comprising the Specified Seller's Resources, that could materially and adversely
affect either Party's ability to carry out its obligations under this Agreement.
19.5 No Third Party Beneficiaries. This Agreement is not intended to,
and shall not, create rights, remedies or benefits of any character whatsoever
in favor of any Persons, corporations, associations, or entities other than the
Parties, and the rights and obligations of each of the Parties under this
Agreement are solely for the use and benefit of, and may be enforced solely by
the Parties, their successors in interest or permitted assigns.
19.6 Section Headings Not to Affect Meaning. The descriptive headings
of the various Articles and Sections of this Agreement have been inserted for
convenience of reference only and shall in no way modify or restrict any of the
terms and provisions thereof.
19.7 Computation of Time. In computing any period of time prescribed or
allowed by this Agreement, the designated period of time shall begin to run on
the Day immediately following the Day of the act, event or default that
precipitated the running of the designated period of time. The designated period
shall expire on the last Day of the period so computed unless that Day is not a
Business Day, in which event the period shall run until the end of the next
Business Day.
19.8 Interest. Whenever the provisions of this Agreement require the
calculation of an interest rate, such rate shall be computed at an annual rate
equal to the Prime Rate as of the date on which the calculation begins, but not
to exceed the maximum rate which may be lawfully charged. Interest on
obligations arising under this Agreement shall be compounded quarterly based on
a calendar quarter.
19.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter hereof and supersedes any
other agreements, written or oral, between the Parties concerning such subject
matter.
19.10 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19.11 Amendments. This Agreement may only be amended by written agreement
signed by duly authorized representatives of the Parties.
19.12 Waivers. Waivers of the provisions of this Agreement or excuses
of any violations of the Agreement shall be valid only if in writing and signed
by an authorized officer of the Party issuing the waiver or excuse. A waiver or
excuse issued under one set of circumstances shall not extend to other
occurrences under similar circumstances.
19.13 No Partnership Created. Any provision of this Agreement to the
contrary notwithstanding, the Parties do not intend to create hereby any joint
venture, partnership, association taxable as a corporation, or other entity for
the conduct of any business for profit. If it should appear that one or more
changes to this Agreement would be required in order not to create an entity
referenced in the preceding sentence, the Parties agree to negotiate promptly
and in good faith with respect to such changes.
19.14 Character of Sale. The sale of Contract Capacity and Contract
Energy hereunder shall not constitute a sale, lease, transfer or conveyance to
DYPM or any other party of any contractual rights or ownership interests in any
generating unit or other equipment comprising the Specified Seller's Resources,
nor does the sale of Contract Capacity and Contract Energy hereunder constitute
a dedication of ownership of any generating unit or other equipment comprising
the Specified Seller's Resources.
19.15 Notices. Any notice, demand, request, payment, statement, or
correspondence provided for in this Agreement, or any notice which a Party may
desire to give to the other, shall be in writing (unless otherwise expressly
provided by this Agreement) and shall be considered duly delivered when received
by hand delivery, first-class mail, facsimile, or by overnight delivery, at the
addresses listed below; provided, however, if actual delivery occurs at a time
other than between the hours of 0800 and 1700 CPT on a Business Day (each a
"Business Hour"), delivery shall be deemed to have occurred in the next Business
Hour after actual delivery.
(i) To Southern:
Southern Power Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Southern Company Generation and Energy Marketing
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President
Telephone: 000-000-0000
Payment by Wire: Bank of America
ABA 000000000
Account #: 3751237789
(ii) To DYPM
Dynegy Power Marketing, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Asset Management
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Dynegy Power Marketing, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
And
Dynegy Power Marketing, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payment by Wire:
For the Acct. of Dynegy Power Marketing
The First National Bank of Chicago
ABA # 071 000 013
Account # 552 7651
Invoices:
Dynegy Power Marketing, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Accounts Payable-Electric
Facsimile: 000-000-0000
Each Party shall provide the other Party with all names, addresses,
telephone and facsimile numbers necessary for its performance under this
Agreement; and either Party may change the information set forth in this Section
19.15 by giving written notice to the other Party in the manner prescribed by
such section.
19.16 Survival. Any provision(s) of this Agreement that expressly comes
into or remains in force following the termination or expiration of this
Agreement shall survive the termination or expiration of this Agreement.
19.17 Construction. The language used in this Agreement is the product
of both Parties' efforts. Accordingly, each Party irrevocably waives the benefit
of any rule of contract construction that disfavors the drafter of a contract or
the drafter of specific language in a contract.
19.18 Imaged Agreement. Any original executed Agreement, schedule
confirmation or other related document may be photocopied and stored on computer
tapes and disks (the "Imaged Agreement"). The Imaged Agreement, if introduced as
evidence on paper, the schedule confirmation, if introduced as evidence in
automated facsimile form, the transaction tape, if introduced as evidence in its
original form and as transcribed onto paper, and all computer records of the
foregoing, if introduced as evidence in printed format, in any judicial,
arbitration, mediation or administrative proceedings, will be admissible as
between the Parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form. Neither Party
shall object to the admissibility of the transaction tape, the schedule
confirmation or the Imaged Agreement (or photocopies of the transcription of the
transaction tape, the schedule confirmation or the Imaged Agreement) on the
basis that such were not originated or maintained in documentary form under
either the hearsay rule, the best evidence rule or other rule of evidence.
19.19 GDP-IPD. In connection with the calculations under this Agreement
that are referenced to increases based on the values of GDP-IPD, the base value
for all GDP-IPD inflation calculations will be the Implicit Price Deflator
published quarterly by the U.S. Department of Commerce in Table 5 (Quantity and
Price Indexes for Gross Domestic Product) in the Bureau of Economic Analysis
("BEA") National Income and Product Accounts Tables for the first quarter of
2005, as revised by the BEA. The escalation adjustments will be made by dividing
the GDP-IPD for the first calendar quarter preceding the beginning of a new
Contract Year (as revised by the BEA and reported prior to May 31 for the
upcoming Contract Year) by the base GDP-IPD (as revised) from the first calendar
quarter of 2005.
19.20 Higher Heating Value. All Gas quantities referenced herein shall be
in terms of the higher heating value of natural gas.
[The next page is the signature page]
IN WITNESS WHEREOF, Southern and DYPM have caused this Agreement to be executed
in duplicate by their respective duly authorized officers as of the Execution
Date.
SOUTHERN POWER COMPANY
By: ___________________________________
NAME: Xxxxxxx X. Xxxxx
Title: Vice President
........
DYNEGY POWER MARKETING, INC.
By: ___________________________________
NAME: Xxxxxxx X. Xxxxxxxxx
Title: President
APPENDIX A
Payment Schedule[redacted]
APPENDIX B
Scheduling Constraints
[redacted]
APPENDIX C
ENDH Allowance and Performance Payment Sample Calculations
[redacted]
APPENDIX D
Guaranty Agreement
[redacted]
APPENDIX E
Proposed Form of Letter of Credit
[redacted]
APPENDIX F
Guaranty Agreement
[redacted]
APPENDIX G
Proposed Form of Letter of Credit
[redacted]
