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Exhibit 10.13
EXECUTION COPY
COAL HAULING AGREEMENT
COAL HAULING AGREEMENT dated as of May 6, 1999 (as amended,
supplemented or otherwise modified from time to time, this "Agreement") among
SOMERSET RAILROAD CORPORATION, a corporation organized and existing under the
laws of the State of New York ("SRC"), AES NY3, L.L.C., a limited liability
company organized and existing under the laws of the State of Delaware ("AES
NY3"), and AES EASTERN ENERGY L.P., a limited partnership organized and existing
under the laws of the State of Delaware ("AEE").
W I T N E S S E T H
WHEREAS, pursuant to the Lease (as defined in the Credit
Agreement, as defined below), AEE is the lessee of an Undivided Interest in the
▇▇▇▇▇▇▇ Station, which consists of a coal-fired, steam turbine generating unit
with a generating capacity of 675 MW located near ▇▇▇▇▇▇, New York (the "▇▇▇▇▇▇▇
Facility");
WHEREAS, pursuant to certain separate leases, AEE is the
lessee of an undivided interest in the ▇▇▇▇▇▇▇▇ Station, which consists of a
coal-fired, steam turbine generating unit with a generating capacity of 306 MW
located near Lansing, New York (the "▇▇▇▇▇▇▇▇ Facility");
WHEREAS, AES NY3, as of the Effective Date (defined in Section
17 below), will be the owner of all of the issued and outstanding stock of SRC,
and SRC is the owner of a rail line from Lockport, New York to the ▇▇▇▇▇▇▇
Facility and rolling stock used on such line and to transport coal to the
▇▇▇▇▇▇▇▇ Facility (collectively, the "Railroad");
WHEREAS, AEE desires to have the Railroad transport coal and
other materials between Lockport, New York and the ▇▇▇▇▇▇▇ Facility and make its
rail cars available to transport coal to the ▇▇▇▇▇▇▇▇ Facility; and
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WHEREAS, SRC is willing to transport coal and other materials
between Lockport, New York and the ▇▇▇▇▇▇▇ Facility and make its rail cars
available to transport coal to the ▇▇▇▇▇▇▇▇ Facility;
WHEREAS, SRC proposes to repay certain existing indebtedness
and to finance the operation of the Railroad by entering into the Credit
Agreement, dated as of May 6, 1999, among SRC, CIBC, Inc., as Agent (the
"Agent"), and the Banks from time to time signatories thereto (as amended,
supplemented or modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement SRC has
executed and delivered to the Agent, the Security Agreement (as defined in the
Credit Agreement) granting for the purposes therein specified, inter alia, a
security interest in and to the amounts payable by AEE to SRC hereunder; and
WHEREAS, pursuant to the Assignment and Consent to Assignment
dated as of the date hereof among the parties hereto, the Owner Trust and the
Agent, AEE has, subject to Section 14 hereof, assigned to the Owner Trust, and
the Owner Trustee has simultaneously reassigned to AEE for the period prior to
the expiration, or earlier termination, of the term of the Lease, a percentage
undivided interest equal to the Undivided Interest in all of AEE's right, title
and interest under this Agreement, and AEE has granted certain other rights to
the Owner Trust, all as set forth therein;
NOW, THEREFORE, SRC and AEE agree as follows:
1. Definitions. Capitalized terms used in this Agreement,
including the recitals, and not otherwise defined herein shall have the
respective meanings set forth in Appendix A to the Participation Agreement
(▇▇▇▇▇▇▇ A-1), dated as of May 1, 1999 (the "Participation Agreement"), among
AEE, ▇▇▇▇▇▇▇ Facility Trust A-1; as Owner Trust, DCC
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Project Finance Fourteen, Inc., as Owner Participant, and Bankers Trust Company,
as Indenture Trustee and Pass Through Trustee.
2. Railroad Services. SRC shall, subject to Section 4(a) of
this Agreement, haul such quantities of coal and other materials as may be
required from time to time by AEE (and, following the expiration or earlier
termination of the Lease, the Owner Trust) for the ▇▇▇▇▇▇▇ Facility, operated in
accordance with the Operative Documents, and as may be within the capability of
the Railroad, and make its rail cars available to transport coal to the ▇▇▇▇▇▇▇▇
Facility.
3. Payments. AEE shall pay to SRC in consideration for the
undertaking of SRC set forth in Section 2 of this Agreement the amounts set
forth below:
(a) Until the later of (i) the expiration of the Lease Term
and (ii) the Repayment Date (as defined in the Credit Agreement), AEE shall pay
to SRC such amounts from time to time as, when added to funds available to SRC
from any other sources, will be at least sufficient but not more than required
to enable SRC to pay, when due, all of its operating and other expenses,
including without limitation all amounts which SRC may be required to pay on
account of (A) all out of pocket costs of SRC, including an amount equal to all
taxes (other than income taxes paid by a direct or indirect parent entity on a
timely basis as part of a consolidated return but including any payment required
to be made by SRC to such parent entity in respect of any taxes paid on behalf
of SRC by such parent entity) imposed upon SRC by any Applicable Law, (B)
interest on, and principal of, outstanding Indebtedness of SRC under the Credit
Agreement or Indebtedness replacing, refinancing or rolling over the
Indebtedness under the Credit Agreement or Indebtedness of SRC otherwise
permitted pursuant to Section 6(c) hereof, (C) all fees, costs, expenses and
other amounts payable by SRC under the Credit Agreement, the Fee Letter (as
defined in the Credit Agreement) and the Loan Documents
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(as defined in the Credit Agreement) and in respect of Indebtedness replacing,
refinancing or rolling over the Indebtedness under the Credit Agreement and in
respect of Indebtedness otherwise permitted pursuant to Section 6(c) hereof and
(D) without duplication, capital expenditures necessary to permit SRC to
continue to provide rail service to the ▇▇▇▇▇▇▇ Facility and rail cars to the
▇▇▇▇▇▇▇ Facility and the ▇▇▇▇▇▇▇▇ Facility in the ordinary course of its
business, including, without limitation, capital expenditures for the
replacement of existing rail cars, major maintenance activities and capital
improvements necessary to provide rail service to the ▇▇▇▇▇▇▇ Facility and rail
cars to the ▇▇▇▇▇▇▇ Facility and the ▇▇▇▇▇▇▇▇ Facility, and, with the written
consent of the Owner Trustee, not to be unreasonably withheld or delayed, to be
obtained at least ten (10) business days prior to such expenditure, capital
expenditures necessary to provide rail service to new customers, incurred by SRC
in connection with the Railroad.
(b) After the later of (i) the expiration of the Lease Term
and (ii) the Repayment Date (as defined in the Credit Agreement), AEE (and,
following the expiration or earlier termination of the Lease, the Owner Trust)
shall pay to SRC an amount equal to the sum of (A)(1) all out of pocket costs of
SRC (subject, upon request, to annual audit), including an amount equal to all
taxes (other than income taxes paid by a direct or indirect parent entity on a
timely basis as part of a consolidated return, but including any payments
required to be made by SRC to such parent entity (excluding the Owner Trust) in
respect of any taxes paid on behalf of SRC by such parent entity) imposed by any
Applicable Law, plus (2) interest on, and principal of, any outstanding
Indebtedness replacing or refinancing the Indebtedness under the Credit
Agreement or any Indebtedness of SRC otherwise permitted pursuant to Section
6(c) hereof, plus (3) all fees, costs, expenses and other amounts payable by SRC
in respect of Indebtedness replacing or refinancing the Indebtedness under the
Credit Agreement and in respect of Indebtedness otherwise permitted pursuant to
Section 6(c)
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hereof plus (4) without duplication, capital expenditures necessary to permit
SRC to continue to provide rail service to the ▇▇▇▇▇▇▇ Facility and rail cars to
the ▇▇▇▇▇▇▇ Facility and the ▇▇▇▇▇▇▇▇ Facility in the ordinary course of its
business, including, without limitation, capital expenditures for the
replacement of existing rail cars, major maintenance activities and capital
improvements necessary to provide rail service to the ▇▇▇▇▇▇▇ Facility and rail
cars to the ▇▇▇▇▇▇▇ Facility and the ▇▇▇▇▇▇▇▇ Facility, and, with the written
consent of the Owner Trust, not to be unreasonably withheld or delayed, to be
obtained at least ten (10) business days prior to such expenditure, capital
expenditures necessary to provide rail service to new customers, incurred by SRC
in connection with the Railroad, plus (B) a premium equal to 3% of the amounts
payable under clause (A) above.
4. Governmental Authorizations. (a) The performance by SRC of
its obligations hereunder shall be subject to the receipt and continued
effectiveness of all authorizations of regulatory authorities as are necessary
to permit SRC to perform its obligations hereunder, including the receipt and
continued effectiveness of all regulatory authorizations as are necessary to
permit SRC to haul such quantities of coal and other materials as provided in
Section 2 hereof on the Railroad. SRC agrees to use all commercially reasonable
efforts to ensure that all such authorizations of regulatory authorities are
secured and maintained in the name of SRC, effective at all times.
(b) At all times prior to the later of (i) the expiration of
the Lease Term and (ii) the Repayment Date (as defined in the Credit Agreement),
AEE shall, to the extent permitted by law, be obligated to perform its
obligations hereunder whether or not (a) SRC or AES NY3 shall have received all
authorizations necessary to permit it to perform its obligations hereunder, (b)
any such authorizations shall at any time in question be in effect, (c) SRC or
AES NY3, as applicable, at any time in question, shall have performed its
obligations or covenants hereunder,
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(d) the representations and warranties of SRC or AES NY3 hereunder are true at
any time in question, or (e) SRC shall have suspended performance of its
obligations pursuant to the last sentence of this Section 4(b) or for any other
reason whatsoever. SRC may, from time to time, in its sole discretion, suspend
performance of any of its obligations hereunder during any period that AEE does
not perform its obligations under Section 3 hereof.
5. Representations and Warranties. Each of the parties hereto
represents and warrants as to itself that as of the date hereof:
(a) It is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and has all
requisite power and authority to enter into and perform its obligations under
this Agreement.
(b) The execution, delivery and performance by it of this
Agreement and the compliance by it with the terms and provisions hereof have
been duly authorized by all necessary action of such party.
(c) Assuming the due authorization, execution and delivery by
each other party hereto, this Agreement constitutes the legal, valid and binding
obligations of such party, enforceable against such party in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, arrangement, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles of equity.
(d) The execution, delivery and performance by it of this
Agreement, the consummation by it of the transactions contemplated hereby, and
compliance by it with the terms and provisions hereof do not and will not (i)
conflict with or result in any breach of any agreement to which it is a party,
(ii) conflict with any Applicable Law which could reasonably be expected to have
a material
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adverse effect, (iii) conflict with the limited liability company agreement,
partnership agreement or organizational documents of such party, (iv) result in
the creation of any Lien (except, in the case of AEE, Permitted Liens and, in
the case of AES NY3 and SRC, Permitted Liens (as defined in the Credit
Agreement)) upon any of the properties or assets of such party pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement or any other
agreement, contract or instrument to which such party is a party or by which any
of its properties or assets are bound.
(e) No material authorization or approval or other action by,
or notice to or filing or registration with, any Governmental Entity is required
for the due execution, delivery and performance by such party of this Agreement,
other than any authorization or approval or other action or notice or filing as
has been duly obtained, taken or given.
(f) It is in compliance with all Applicable Laws, and it has
not received any notice from any Governmental Entity of non-compliance with the
need to perform any work, make repairs or make any capital improvements in order
to comply with, or the imposition or threat of imposition of penalties under,
Applicable Laws, except where such non-compliance could not reasonably be
expected to have a material adverse effect.
(g) In the case of SRC and AES NY3 only, it will be, as of the
Effective Date (as defined in Section 17 below) an indirect wholly owned
subsidiary of The AES Corporation.
(h) In the case of SRC only, it is the lawful owner of, and
has all right, title and interest or an easement granting exclusive possession
in, and to (subject to the Mortgage, the Railcar Mortgage and the Security
Agreement (each as defined in the Credit Agreement)), the Railroad (including,
without limitation, all property, real, personal and mixed, all rights of way,
lands, fixtures,
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structures, tenements and hereditaments of whatever kind or description)
necessary to perform its obligations hereunder.
6. Covenants of SRC. SRC hereby covenants and agrees that:
(a) It shall comply in all material respects with Applicable
Laws in the conduct of its business and the performance of its obligations
hereunder.
(b) It shall promptly notify AEE, the Owner Trust (in
accordance with the provisions of the Trust Agreement) and the Agent of the
imposition of any Lien directly or indirectly created, incurred, assumed or
suffered to exist by SRC on or with respect to its properties or assets, except
Permitted Liens and, prior to the Repayment Date, Permitted Liens (as defined in
the Credit Agreement), and shall promptly, at its own expense, take such action
as may be necessary to fully discharge or release any such Lien; provided that,
notwithstanding the foregoing, without the prior written consent of the Agent,
SRC shall not, prior to the Repayment Date (as defined in the Credit Agreement),
create, incur, assume or suffer to exist any Liens on its properties or assets
except Permitted Liens (as defined in the Credit Agreement).
(c) It will not create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness,
except for (i) Indebtedness under the Credit Agreement, (ii) Indebtedness
replacing, refinancing or rolling over the Indebtedness under the Credit
Agreement, provided that the principal amount of Indebtedness referenced in this
clause (ii) shall not exceed the principal amount of Indebtedness under the
Credit Agreement, and (iii) other Indebtedness, so long as the sum of such other
Indebtedness plus the aggregate outstanding Permitted Indebtedness of AEE does
not exceed the aggregate limit of Permitted Indebtedness set forth in all of the
Participation Agreements; provided that, nothing herein shall restrict or
prevent SRC from entering into
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operating leases for rail cars from time to time; and provided further that,
notwithstanding the foregoing, without the prior written consent of the Required
Banks in accordance with (and as defined in) the Credit Agreement, SRC shall
not, prior to the Repayment Date (as defined in the Credit Agreement), create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness or enter into any operating leases for
rail cars, except for Indebtedness or operating leases permitted under the
Credit Agreement; and provided further that, except for the Indebtedness
referred to in clauses (c)(i) and (ii) of this Section 6, Indebtedness to
finance the purchase of rail cars to provide rail service to the ▇▇▇▇▇▇▇
Facility and the ▇▇▇▇▇▇▇▇ Facility and operating leases for rail cars, it will
not incur any Indebtedness or enter into any operating leases at any time
without the prior written consent (which consent is not to be unreasonably
withheld or delayed in the case of Indebtedness to finance capital expenditures
or operating leases necessary to provide rail service to new customers and in
all other cases such consent to be given or withheld in the sole discretion of
the Owner Trust), to be obtained at least ten (10) business days prior to the
entering into of any such Indebtedness or operating leases, of the Owner Trust.
(d) It will not consolidate or merge with or into any other
Person.
(e) It will not engage in any business other than the
ownership, operation and maintenance of the Railroad and the incurrence of
capital expenditures in connection with the Railroad; provided that,
notwithstanding the foregoing, without the prior written consent of the Required
Banks in accordance with (and as defined in) the Credit Agreement, SRC shall
not, prior to the Repayment Date (as defined in the Credit Agreement), incur any
capital expenditures except for capital expenditures permitted under the Credit
Agreement; and provided further that, except for capital expenditures financed
through Indebtedness permitted under Section 6(c) hereof for which consent of
the Owner Trust is
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not required and capital expenditures financed through additional equity
contributions, it will not incur capital expenditures without the prior written
consent (which consent is not to be unreasonably withheld or delayed in the case
of capital expenditures necessary to provide rail service to the new customers
and in all other cases such consent to be given or withheld in the sole
discretion of the Owner Trust), to be obtained at least ten (10) business days
prior to such expenditure, of the Owner Trust.
(f) It will not sell, license, transfer or otherwise dispose
of any asset or any interest therein, except for the disposition of (i) any
obsolete or retired property not used or useful in its business or (ii) any used
assets for fair value in the ordinary course of business, provided that the Net
Cash Proceeds (as defined in the Credit Agreement as of the date hereof) thereof
are promptly applied to acquire comparable assets to be used in the ordinary
course of its business.
(g) It will cause the Railroad to be operated in compliance in
all material respects with Applicable Law and in a commercially reasonable
manner.
(h) On or prior to the fifteenth anniversary of the date
hereof, it will ensure that it is not, directly or indirectly, obligated with
respect to any Indebtedness under any replacement, refinancing, extension or
rollover of the Indebtedness under the Credit Agreement (it being understood and
acknowledged that this clause (h) shall not be construed as changing, modifying
or extending in any manner the Repayment Date under (and as defined in) the
Credit Agreement).
(i) It will maintain and repair the Railroad as necessary to
ensure its proper use and operation.
7. Covenants of AES NY3. AES NY3 hereby covenants and agrees
that:
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(a) Subject to the rights and remedies of the Secured Party
under (and as defined in) the Pledge Agreement (as defined in the Credit
Agreement) it shall maintain ownership of all of the issued and outstanding
shares of SRC, and shall not create, incur, assume or suffer to exist any Liens
on the shares of SRC, except for Permitted Liens and, prior to the Repayment
Date, Liens created or permitted under the Loan Documents (as defined in the
Credit Agreement); provided that, notwithstanding the foregoing, without the
prior written consent of the Required Banks in accordance with (and as defined
in) the Credit Agreement, AES NY3 shall not, prior to the Repayment Date (as
defined in the Credit Agreement), create, incur, assume or suffer to exist any
Liens on the shares of SRC, except for Liens created or permitted under the Loan
Documents (as defined in the Credit Agreement).
(b) It will not (i) permit SRC to create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness, except to the extent permitted pursuant to Section 6(c)
above, or (ii) create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness, except for
Permitted Indebtedness.
(c) It will not (i) permit SRC to engage in any business other
than as permitted pursuant to Section 6(e) hereof, or (ii) engage in any
business other than the ownership of the shares of SRC.
(d) It will, at all times after the Repayment Date (as defined
in the Credit Agreement) but before the expiration of the Lease Term, deposit
any and all of its net revenues with the Depositary Agent in accordance with,
and to the extent required by, the Depositary Agreement.
8. Term. This Agreement shall terminate upon later of (i) the
expiration of the Site Lease Term and (ii) the Repayment Date (as defined in the
Credit Agreement).
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9. Setoff. At all times prior to the later of (i) the
expiration of the Lease Term and (ii) the Repayment Date (as defined in the
Credit Agreement), AEE's obligation to make payments to SRC hereunder shall be
absolute and unconditional under any and all circumstances, including without
limitation, the existence of any Indebtedness now or at any time hereafter
payable or owing by SRC to AEE or the existence of any setoff, counterclaim,
recoupment, defense or other right or claim which AEE may at any time have or
have had against SRC. At all times prior to the later of (i) the expiration of
the Lease Term and (ii) the Repayment Date (as defined in the Credit Agreement),
AEE hereby expressly waives such right of setoff, counterclaim or recoupment,
each such defense and any other such right or claim. After the later of (i) the
expiration of the Lease Term and (ii) the Repayment Date (as defined in the
Credit Agreement), AEE shall have the right to setoff against any amounts owing
by AEE to SRC, any amounts owed by SRC to AEE.
10. Governing Law; Judicial Proceedings; Waiver of Jury Trial.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) Any judicial proceedings brought against AEE, SRC or AES
NY3 by AEE, SRC or AES NY3 with respect to any Loan Document Related Claim (as
defined in the Credit Agreement) shall be brought in any court of competent
jurisdiction in the City of New York, and, by execution and delivery of this
Agreement, AEE, SRC and AES NY3 (i) accept, generally and unconditionally, the
exclusive jurisdiction of such courts and any related appellate court and
irrevocably agree to be bound by any judgment rendered thereby in connection
with any Loan Document Related Claim (as defined in the Credit Agreement) and
(ii) irrevocably waive any objection it may now or hereafter have as to the
venue of any such proceeding brought in such a court or that such a court is an
inconvenient forum. AEE, SRC and AES NY3 hereby waive personal service of
process and consent that service of process upon it may be made by certified or
registered
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mail, return receipt requested, at its address specified or determined in
accordance with the provisions of, in the case of SRC, Section 10.01(a)(ii) of
the Credit Agreement and, in the case of AEE, Section 10 of the Consent to
Assignment (as defined in the Credit Agreement) and, in the case of AES NY3,
Section 5.20(a)(ii) of the Pledge Agreement (as defined in the Credit
Agreement), and service so made shall be deemed completed on the third Business
Day after such service is deposited in the mail. Nothing herein shall affect the
right of any Person to serve process in any other manner permitted by law. AEE,
SRC AND AES NY3 HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING
ANY LOAN DOCUMENT RELATED CLAIM (AS DEFINED IN THE CREDIT AGREEMENT).
11. Waivers; Amendments. Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement in writing executed by SRC and AEE, and consented to in writing by the
Agent under the Credit Agreement.
12. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto relative to the subject matter hereof. Any
previous agreement among the parties hereto with respect to the subject matter
hereof is superseded by this Agreement.
13. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.
14. Assignment. None of the parties hereto may assign their
rights or obligations under this Agreement to any third party without the prior
written approval of the other parties hereto; provided that without the consent
of the other parties hereto (i) SRC may assign or create a Lien over its rights
under this Agreement in favor of the Lenders under the Credit Agreement and (ii)
AEE may, subject to the
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assignment and Lien of SRC's rights hereunder in accordance with the Loan
Documents (as defined in the Credit Agreement), assign or create a Lien over its
rights under this Agreement in favor of the Owner Trust.
15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute an original but all of which
when taken together shall constitute one contract.
16. 49 U.S.C. Section 10709. This Agreement is made pursuant
to 49 U.S.C. Section 10709.
17. Effective Date. This Agreement shall not be effective
until AES NY3 shall have purchased all of the issued and outstanding shares of
SRC in accordance with the Asset Purchase Agreement (such date, the "Effective
Date").
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year first above written.
SOMERSET RAILROAD CORPORATION,
By: _________________________
Name:
Title:
AES EASTERN ENERGY L.P.
By: _________________________
Name:
Title:
AES NY3, L.L.C.
By: _________________________
Name:
Title:
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