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Exhibit 10.8
NEW YORK TRANSITION AGREEMENT
BETWEEN
AES NY, L.L.C.
AND
NEW YORK STATE ELECTRIC & GAS CORPORATION
Dated as of August 3, 1998
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TABLE OF CONTENTS
SECTION 1 - FORMAT and DEFINITIONS............................................ 2
1.1 Format.......................................................... 2
1.2 Definitions..................................................... 2
SECTION 2 - TERM AND TERMINATION.............................................. 4
SECTION 3 - INSTALLED CAPACITY REQUIREMENT, QUANTITY AND PRICE................ 5
SECTION 4 - SCHEDULING ....................................................... 7
4.1 Schedule Dates.................................................. 7
4.2 Notification Changes............................................ 8
SECTION 5 - BILLING PROCEDURES................................................ 8
5.1 Billing......................................................... 8
5.2 Billing Disputes................................................ 10
5.3 Survival........................................................ 10
SECTION 6 - INDEMNIFICATION................................................... 10
6.1 Generator's Indemnification..................................... 10
6.2 NYSEG's Indemnification......................................... 11
6.3 Indemnification Procedures...................................... 11
6.4 Survival........................................................ 11
SECTION 7 - LIMITATION OF LIABILITY........................................... 12
7.1 Limitation on Damages........................................... 12
SECTION 8 - FORCE MAJEURE..................................................... 13
8.1 Force Majeure................................................... 13
8.2 Obligation to Make Payment...................................... 13
8.3 Due Diligence................................................... 13
8.4 Survival........................................................ 14
SECTION 9 - DEFAULT AND TERMINATION........................................... 14
9.1 Default Defined................................................. 14
9.2 Occurrence of Event of Default.................................. 14
SECTION 10 - ADDITIONAL REMEDIES.............................................. 15
SECTION 11 - DISPUTES......................................................... 15
SECTION 12 - REPRESENTATIONS.................................................. 15
12.1 Representations of NYSEG....................................... 15
12.2 Representations of Generator................................... 16
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12.3 Representations of Both Parties................................ 17
SECTION 13 - ASSIGNMENT OR OTHER CHANGE IN CORPORATE IDENTITY................. 17
SECTION 14 - HEADINGS ........................................................ 18
SECTION 15 - WAIVER .......................................................... 18
SECTION 16 - COUNTERPARTS .................................................... 18
SECTION 17 - GOVERNING LAW ................................................... 19
SECTION 18 - SEVERABILITY .................................................... 19
SECTION 19 - AMENDMENT ....................................................... 19
SECTION 20 - ENTIRE AGREEMENT................................................. 20
SECTION 21 - FURTHER ASSURANCES............................................... 20
SECTION 22 - NO THIRD PARTY BENEFICIARIES..................................... 20
SECTION 23 - CONFIDENTIALITY.................................................. 21
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NEW YORK TRANSITION AGREEMENT
This Agreement is made and entered into as of this 3rd day of
August, 1998, by and between AES NY, L.L.C. ("Generator"), a Delaware limited
liability company having its principal place of business at 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and NEW YORK STATE ELECTRIC & GAS CORPORATION
("NYSEG"), a New York corporation having a principal place of business at
Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000-0000. The
Generator and NYSEG shall each be referred to as a "Party," and shall be
referred to collectively as the "Parties."
Factual Recitals
WHEREAS, NGE Generation, Inc. ("NGE Gen"), an affiliate of
NYSEG, has offered its coal-fired generating plants located in New York (the
"Plants") for sale by auction;
WHEREAS, NYSEG, Generator and NGE Gen have entered into as of
August 3, 1998 an Asset Purchase Agreement by and among NGE Gen, NYSEG, and
Generator ("APA") pursuant to which Generator shall purchase all of the Plants;
WHEREAS, the rights and obligations of buyers and generators
of electric generating capacity, energy, transmission and ancillary services may
be modified by the proposal pending before the Federal Energy Regulatory
Commission ("FERC") to restructure the New York Power Pool, which contemplates
the formation of the New York Independent System Operator ("ISO") and the
implementation of the ISO Tariff filed on December 19, 1997 in FERC Docket Nos.
ER97-1523-000, 0A97-470-000 and ER97-4234-000, or its successor, as they may be
amended from time-to-time. FERC may approve, accept, modify, or reject the
proposal, and its actions may affect the rights and obligations under this
Agreement; and
WHEREAS, in consideration of the sale of the Plants to
Generator, and in recognition of NYSEG's installed capacity requirements for its
native load customers, Generator and NYSEG agree to enter into this New York
Transition Agreement between AES NY, L.L.C. and New York State Electric & Gas
Corporation (hereinafter referred to as this "Agreement"). Pursuant to this
Agreement, NYSEG will purchase from Generator, and Generator will sell to NYSEG,
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1424 MW of Installed Capacity (as defined herein) for the term of this Agreement
as described herein. This Agreement does not address the purchase or sale of
energy or ancillary services by or between the Parties and does not obligate
either Party to sell and deliver energy to the other Party.
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, Generator and NYSEG hereby agree as follows:
SECTION 1 - FORMAT AND DEFINITIONS
1.1 FORMAT
Any reference to a Section number herein is intended to be an
internal cross reference to a Section in this Agreement unless otherwise stated.
1.2 DEFINITIONS
When used with initial capitalization, whether singular or
plural, the following terms shall have the meanings set forth below. Any term
used in this Agreement that is not defined herein shall have the meaning
customarily attributed to such term by the electric utility industry in New
York.
"Agreement" shall mean this New York Transition Agreement
between Generator and NYSEG, dated as of August 3, 1998, as may be amended from
time to time.
"APA" shall mean an Asset Purchase Agreement by and among NGE
Gen, NYSEG, and Generator.
"Auction" shall mean the sale of NYSEG's coal-fired electric
generating units described in the "Offering Memorandum, New York State Electric
& Gas Corporation Sale of New York Coal-Fired Generation Facilities, April 8,
1998."
"FERC" shall mean the Federal Energy Regulatory Commission.
"Force Majeure" shall have the meaning set forth in Section 8.
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"Generator" shall mean ABS NY, L.L.C.
"Installed Capacity" shall mean electric generating capacity
that satisfies the applicable Installed Capacity requirements established by the
NYPP or ISO, as they apply to NYSEG.
"ISO" shall mean the New York independent system operator, as
described in the Supplemental Filing, or its successor.
"ISO Tariff" shall mean the tariff described in the
Supplemental Filing, as it may be amended from time to time.
"NGE Gen" shall mean NGE Generation, Inc.
"NYPP" shall mean the New York Power Pool or its successor.
"NYSEG" shall mean New York State Electric & Gas Corporation,
or its successor.
"Replacement Capacity" shall mean Installed Capacity under
this Agreement from a source different from the source identified by Generator
and subsequently identified to the NYPP or ISO in NYSEG's periodic reports
required under applicable procedures to the extent such Installed Capacity
satisfies NYPP or ISO Installed Capacity requirements applicable to NYSEG.
"Replacement Capacity Costs" shall mean the incremental cost
of Replacement Capacity to the extent it exceeds the cost of ICAP in accordance
with Section 3.2.
"Summer Capability Period" shall have the meaning provided by
the NYPP, the ISO or their successor(s) as may be modified from time to time.
Summer Capability Period is currently each May 1 through October 31 of each
year.
"Supplemental Filing" shall mean the December 19, 1997
Supplemental Filing to the Comprehensive Proposal to Restructure the New York
Wholesale Electric Market in FERC Docket Nos. ER97-1523-000, 0A97-470-000, and
ER97-4234-000.
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"Transfer Date" shall mean the date, after the Auction, upon
which NGE Gen transfers the title of the Plants to Generator.
"Winter Capability Period" shall have the meaning provided for
by the NYPP, the ISO or their successor(s) as may be modified from time to time.
Winter Capability Period is currently each November 1 through April 30 of the
following calendar year.
SECTION 2 - TERM AND TERMINATION
2.1 Subject to any regulatory authorizations, this Agreement
shall become effective when signed by the Parties. NYSEG's right and obligation
to purchase Installed Capacity and Generator's obligation to provide and sell
Installed Capacity shall take effect on the first Transfer Date. This Agreement
shall terminate on April 30, 2001 or at the end of the 2000/2001 Winter
Capability Period, if different, or earlier pursuant to the terms of this
Agreement.
2.2 This Agreement is subject to any necessary regulatory
acceptance or approval without any material modifications or condition. If any
regulatory agency having jurisdiction over this Agreement requires any
modification to, or imposes any condition of acceptance or approval of, this
Agreement, and
2.2.a. such modification or condition could reasonably be
expected to, in the aggregate, create, as to Generator, a Buyer Material Adverse
Effect, as defined in Section 5.3(a) of the APA, or, as to NYSEG, a material
adverse effect on the business assets, operations, or conditions (financial or
otherwise) of NYSEG, then the Parties shall engage in good faith negotiations
for a period of thirty (30) days following the issuance of that acceptance or
approval in order to agree to revisions to this Agreement to satisfy, or
otherwise address, such modification or condition. If the Parties fail to agree
mutually to such changes, then the Parties may exercise their rights under
Article 9 of the APA, or
2.2.b. such modification or condition could not reasonably be
expected to, in the aggregate, create, as to Generator, a Buyer Material Adverse
Effect, as defined in
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Section 5.3(a) of the APA, or, as to NYSEG, a material adverse effect on the
business assets, operations, or conditions (financial or otherwise) of NYSEG,
then the Parties shall engage in good faith negotiations for a period of thirty
(30) days following the issuance of that acceptance or approval in order to
agree to revisions to this Agreement to satisfy, or otherwise address, such
modification or condition. If the Parties fail to agree mutually to such
changes, then NYSEG may make a unilateral filing to satisfy the modification or
condition, which filing shall attempt to satisfy the intent of the Parties under
this Agreement; provided, however, that the Generator shall have the right to
protest the manner in which NYSEG has attempted to satisfy such modification or
condition.
SECTION 3 - INSTALLED CAPACITY REQUIREMENT, QUANTITY AND PRICE
3.1 Unless excused by Force Majeure, NYSEG shall purchase from
Generator and Generator shall provide to NYSEG Installed Capacity in the amount
of 1424 MW for the term of this Agreement. Subject to Sections 3 and 5, NYSEG
shall compensate Generator for Installed Capacity at the Price of $68/MW-Day.
3.2 Subject to Sections 3.1 and 3.4, NYSEG shall pay Generator
monthly as follows:
PAYMENT = ICAP x $68.00/MW-DAY x NUMBER OF
DAYS IN MONTH OR PART OF MONTH
Where:
ICAP is the Installed Capacity not to exceed 1424 MW for the term of this
Agreement, that is actually provided by Generator to NYSEG to the extent NYSEG
receives Installed Capacity credit to satisfy its Installed Capacity requirement
under applicable NYPP or ISO rules or procedures.
3.3 NYSEG shall make no other payment to Generator for
Installed Capacity actually provided under this Agreement.
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3.4 CAPACITY REQUIREMENT
3.4.a. Whenever ICAP is less then the amount of Installed
Capacity that Generator is required to supply under Section 3.1, Generator shall
pay NYSEG monthly for any costs incurred by NYSEG associated with Generator's
failure to supply all or part of the Installed Capacity as follows:
The sum of (a) all charges incurred imposed by the NYPP or
ISO, to the extent they exceed charges that would have been due under
Sections 3.1 and 3.2 had Generator performed with respect to the amount
of Installed Capacity by which Generator was deficient and on which
NYSEG incurred NYPP or ISO charges, including penalties and fines; (b)
if Generator fails to provide Replacement Capacity, and NYSEG obtains
Replacement Capacity, then NYSEG's Replacement Capacity Cost, to the
extent not included in (a); and (c) all related transaction costs, to
the extent not included in (a) and (b), that are reasonably incurred,
associated with Generator's failure to provide Installed Capacity.
3.4.b. If NYSEG incurs any costs over a period greater than
one calendar month or at one time associated with Generator deficiencies
described above in this Section at a different time, or if NYSEG purchases more
Installed Capacity than the amount by which Generator was deficient, then NYSEG
shall, in its reasonable discretion, allocate these costs on a monthly basis and
determine the portion associated with the deficiency.
3.4.c. NYSEG shall set off any payments Generator owes under
this Section 3.4 against any payments NYSEG owes Generator under Section 3.2. If
the payments due NYSEG under Section 3.4 exceed payments due Generator under
Section 3.2., then Generator shall pay NYSEG the difference.
3.5 Subject to the confidentiality provisions of Section 23,
NYSEG and Generator shall provide each other with the information required each
year as described in Section 4, except that NYSEG may disclose to NYPP or the
ISO all information required pursuant to the NYPP or ISO procedures, including
any NYPP or ISO confidentiality procedures.
3.6 Subject to the terms and conditions set forth herein,
Generator shall:
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a. satisfy all requirements applicable to suppliers of
Installed Capacity established by the NYPP or the ISO (including any
applicable locational requirements and compliance with and satisfaction
of all applicable tariffs, rules and practices) so that NYSEG will
receive 1424 MW of Installed Capacity for the term of this Agreement;
and
b. reasonably cooperate with NYSEG in arranging any necessary
interfaces or protocols to satisfy NYPP or ISO requirements associated
with any services provided under this Agreement, or the Interconnection
Agreement entered into between NYSEG and Generator associated with the
interconnection of the Plants and NYSEG's transmission system.
3.7 Subject to the terms and conditions set forth herein,
NYSEG shall satisfy all requirements applicable to purchasers of Installed
Capacity established by the NYPP or the ISO.
3.8 Nothing in this Agreement shall prevent a Party from
utilizing the services of any subcontractor as it deems appropriate to perform
its obligations under this Agreement; provided that each Party shall require its
subcontractors to comply with all applicable terms and conditions of Agreements
in performing such obligations and provided, further, however, that the use of
such subcontractors shall not relieve the Party of its liability for its
obligations under this Agreement.
SECTION 4 - SCHEDULING
4.1 SCHEDULE DATES
Subject to Section 4.2, NYSEG and Generator shall comply with
the following scheduling procedures:
a. Generator shall notify NYSEG in writing 30 days prior to
the anticipated Transfer Date of the location and name of each
generating unit that Generator will use to supply the Installed
Capacity required pursuant to this Agreement and the amount of
Installed Capacity it shall supply from each unit for the period from
the Transfer Date to and including October 31, 1999.
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b. By September 1, 1999, and September 1, 2000, Generator
shall notify NYSEG in writing of the location and name of each
generating unit that Generator will use to supply the Installed
Capacity required pursuant to this Agreement and the amount of
Installed Capacity it shall supply from each unit for the periods from
November 1, 1999 though April 30, 2000, and November 1, 2000 through
April 30, 2001, respectively.
c. By October 1, 1999, and October 1, 2000, NYSEG is required
to report all sources to be used to supply NYSEG's Installed Capacity
requirement to the NYPP or ISO.
d. To the extent permitted by ISO or NYPP procedures and
consistent with Generator's obligations under Sections 3.1, 3.2 and
3.6, Generator shall notify NYSEG of any changes in the name and
location of, and the amount of Installed Capacity from, any generating
unit to be used by Generator to supply the Installed Capacity required
pursuant to this Agreement at least thirty (30) days before the date
NYSEG is required to report such change to the NYPP or ISO.
4.2 NOTIFICATION CHANGES
If the NYPP or ISO modifies the notification schedules or the
definition of Summer Capability Period or Winter Capability Period such that the
schedule dates contained in this Section 4 are inconsistent with the modified
schedule or definition, then NYSEG shall provide reasonable notice thereof to
Generator and shall thereafter have the right to revise the dates in this
Section 4 to be consistent with said modification.
SECTION 5 - BILLING PROCEDURES
5.1 BILLING
a. Generator shall render a xxxx for services provided the
previous calendar month to NYSEG for an amount calculated in accordance with
Section 3.2 on or before the 20th day of each month. All amounts owed, unless
otherwise agreed, shall be due and payable on or before the first business day
common to both Parties on or after the later of
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(1) the last day of the month, or (2) 10 days after NYSEG receives a xxxx.
b. NYSEG shall render bills to Generator for any amounts owed
by Seller to NYSEG calculated in accordance with Section 3.4 on or before the
20th day of each month. All amounts owed, unless otherwise agreed, shall be due
and payable on or before the first business day common to both Parties on or
after the later of (1) the last day of the month, or (2) 10 days after Generator
receives a xxxx.
c. Each Party may set off any amounts owed to the other Party
against any amount owed pursuant to this Agreement or other arrangement(s)
agreed to between the Parties including, without limitation, amounts owed NYSEG
under Section 3.4.
d. Interest on unpaid amounts or payments received after the
due date shall accrue at a rate equal to the prime commercial lending rate
established from time to time by Chase Manhattan Bank, N.A., New York, New York,
or its successor, from the due date until the date upon which payment is made.
e. All xxxxxxxx to NYSEG shall be sent to:
Xxxx Xxxxxxxx
Manager of Electric Supply
Planning and Procurement
0000 Xxxxxx Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
f. All xxxxxxxx to Generator shall be sent to:
AES NY, L.L.C.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Project Manager
g. Any payments owed directly by Generator to the ISO or the
NYPP shall be made pursuant to the procedures established in the ISO Tariff, by
the ISO or in the NYPP procedures. Generator shall be solely responsible for
making all such payments to the ISO or the NYPP.
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h. The Parties shall maintain records of all transactions
hereunder for accounting and operating purposes for a period of six years from
the time of the transactions.
5.2 BILLING DISPUTES
If a Party contests the billed amount, the contesting Party
shall pay the undisputed billed amount and provide written notice to the other
Party identifying the reason for the dispute. Disputed amounts shall be paid
into an escrow account pending resolution of the dispute. Interest at the rate
specified in Section 5.1.d shall accrue on the portion, if any, that is refunded
or credited to the contesting Party or that is released from escrow to the
non-contesting Party, when the contested amount is resolved.
5.3 SURVIVAL
The Provisions of Sections 3.2 through 3.4 and 5 shall survive
termination, expiration, cancellation, suspension, or completion of this
Agreement to the extent necessary to allow for final billing and payment.
SECTION 6 - INDEMNIFICATION
6.1 GENERATOR'S INDEMNIFICATION
The Generator shall indemnify, hold harmless and defend NYSEG,
its parent, affiliates, and successors, and their officers, directors,
employees, agents, subcontractors, and successors, from and against any and all
claims, demands, liabilities, costs, losses, judgments, damages and expenses
(including, without limitation, reasonable attorney and expert fees, and
disbursements incurred by NYSEG in any actions or proceedings between NYSEG and
a third party, the Generator, or any other party) for damage to property, injury
to or death of any person, including NYSEG's employees, Generator's employees
and their affiliates' employees, or any third parties, to the extent caused
wholly or in part by any act or omission, negligent or otherwise, by Generator
and/or its officers, directors, employees, agents, and subcontractors arising
out of or connected with this Agreement.
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6.2 NYSEG'S INDEMNIFICATION
NYSEG shall indemnify, hold harmless and defend Generator, its
parent, affiliates and successors, and their officers, directors, employees,
agents, subcontractors, and successors, from and against any and all claims,
demands, liabilities, costs, losses, judgments, damages, and expenses
(including, without limitation, reasonable attorney and expert fees, and
disbursements incurred by Generator in any actions or proceedings between
Generator and a third party, NYSEG, or any other party) for damage to property,
injury to or death of any person, including Generator's employees, NYSEG's
employees and their affiliates' employees, or any third parties, to the extent
caused wholly or in part by any act or omission, negligent or otherwise, by
NYSEG and/or its officers, directors, employees, agents, and subcontractors
arising out of or connected with this Agreement.
6.3 INDEMNIFICATION PROCEDURES
If either Party intends to seek indemnification under this
Section 6 from the other Party, the Party seeking indemnification shall give the
other Party notice of such claim within ninety (90) days of the commencement of,
or the Party's actual knowledge of, such claim or action. Such notice shall
describe the claim in reasonable detail, and shall indicate the amount
(estimated if necessary) of the claim that has been, or may be sustained by,
said Party. To the extent that the other Party will have been actually and
materially prejudiced as a result of the failure to provide such notice, such
notice will be a condition precedent to any liability of the other Party under
the provisions for indemnification contained in this Agreement. Neither Party
may settle or compromise any claim without the prior consent of the other Party;
provided, however, said consent shall not be unreasonably withheld or delayed.
6.4 SURVIVAL
The indemnification obligations of each Party under this
Section 6 for acts or occurrences prior to expiration, termination, completion,
suspension or cancellation of this Agreement shall continue in full force and
effect regardless of whether this Agreement expires, terminates, or is
suspended, completed or canceled. Such obligations shall not be limited in any
way by any limitation on insurance, by the amount or types of damages,
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or by any compensation or benefits payable by the Parties under worker's
compensation acts, disability benefit acts or other employee acts, or otherwise.
SECTION 7 - LIMITATION OF LIABILITY
7.1 LIMITATION ON DAMAGES
Except for indemnity obligations set forth in Section 6 and
additional remedies set forth in Section 10, neither NYSEG nor the Generator,
nor their respective officers, directors, agents, employees, parents,
affiliates, successors, assigns, or subcontractors nor their respective
officers, directors, agents, employees, successors, assigns, or subcontractors
shall be liable to the other Party or its parent, subsidiaries, affiliates,
officers, directors, agents, employees, successors, assigns, or subcontractors
for claims, suits, actions, causes of action or otherwise for incidental,
punitive, special, indirect, multiple or consequential damages (including
attorneys' fees or litigation costs) connected with, or resulting from,
performance or non-performance of this Agreement, or any actions undertaken in
connection with, or related to this Agreement, including, without limitation,
any such damages which are based upon causes of action for breach of contract,
tort (including negligence and misrepresentation), breach of warranty or strict
liability.
7.2 Subject to indemnity obligations set forth in Section 6,
upon an Event of Default by NYSEG under this Agreement, which Event of Default
is not excusable due to an event of Force Majeure or due to an Event of Default
by Generator under this Agreement, NYSEG's liability to the Generator shall be
limited to the Generator's direct damages incurred by the Generator as a result
of such default by NYSEG.
7.3 Subject to indemnity obligations set forth in Section 6,
upon an Event of Default by Generator under this Agreement, which Event of
Default is not excusable due to an event of Force Majeure or due to an Event of
Default by NYSEG under this Agreement, Generator's liability to NYSEG shall be
limited to NYSEG's direct damages incurred by NYSEG as a result of such default
by Generator, including costs calculated in accordance with Section 3.4.
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7.4 Subject to Sections 6 and 10, NYSEG's exclusive remedy
shall be direct damages, which shall be payments under Section 3.4 and
Generator's exclusive remedy shall be direct damages, which shall be payment for
services rendered under Section 3.
7.5 The provisions of this Section 7 shall apply regardless of
fault and shall survive termination, cancellation, suspension, completion or
expiration of this Agreement.
SECTION 8 - FORCE MAJEURE
8.1 FORCE MAJEURE
A Party shall not be considered to be in default or breach of
this Agreement, and shall be excused from performance, or liability for damages
to the other Party, if and to the extent it shall be delayed in or prevented
from performing or carrying out any of the obligations or responsibilities of
this Agreement, arising out of or from any act, omission or circumstances
occasioned by or in consequence of any act of God, labor disputes, act of the
public enemy, war, invasion, riot, fire, storm, flood, ice, explosion, or by any
other cause or causes beyond the reasonable control of the Party invoking Force
Majeure to avoid liability, including any order, regulation or restriction
imposed by governmental, military or lawfully established civilian authorities.
8.2 OBLIGATION TO MAKE PAYMENT
Nothing contained in this Section 8 shall relieve any Party of
the obligation to make payments when due pursuant to this Agreement.
8.3 DUE DILIGENCE
Any Party claiming Force Majeure shall (1) provide prompt
written notice of such Force Majeure event to the other Party giving a detailed
written explanation of the event and estimate of its expected duration and
probable effect on the performance of that Party's obligations hereunder; and
(2) use due diligence in accordance with Good Utility Practice (as defined in
the Supplemental Filing) to continue to perform its obligations under this
Agreement and
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to remove the condition that prevents performance, including the provision of
Replacement Capacity, if available, irrespective of cost; except that settlement
of any labor dispute shall be in the sole judgment of the affected Party.
8.4 SURVIVAL
The provisions in this Section 8 shall survive termination,
cancellation, suspension, completion or expiration of this Agreement.
SECTION 9 - DEFAULT AND TERMINATION
9.1 DEFAULT DEFINED
Unless excused by Force Majeure, or the other Party's Event of
Default, each of the following events shall be deemed to be an Event of Default
hereunder: failure of either Party, in a material respect, to comply with,
observe, or perform any covenant, warranty or obligation under this Agreement,
without limitation, including the obligation to pay amounts due under Section 3
in accordance with Section 5, and such failure is not cured or rectified within
30 days after written notice thereof from the other Party.
9.2 OCCURRENCE OF EVENT OF DEFAULT
Subject to Section 6, upon occurrence of an Event of Default
by either Party, the defaulting Party shall be liable to the non-defaulting
Party for only direct damages as defined in Section 7.4 resulting from the Event
of Default. In addition, the non-defaulting Party may pursue any remedies and
may terminate this Agreement by giving at least 25 days advance written notice
to the defaulting Party, such termination to be effective as of the date
specified in such notice.
9.3 The provisions of this Section 9 shall survive
termination, cancellation, suspension, completion or expiration of this
Agreement.
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SECTION 10 - ADDITIONAL REMEDIES
Subject to Section 7.2, and to the extent permitted by law,
the Parties shall be entitled to injunctive relief to prevent breaches by a
Party, and specific performance to enforce the terms of this Agreement, in
addition to any other remedy to which a Party is entitled under this Agreement,
at law, or in equity.
SECTION 11 - DISPUTES
Any disagreement between NYSEG and Generator as to their
rights and obligations under this Agreement shall first be addressed by the
Parties. If representatives of the Parties are unable in good faith to
satisfactorily resolve their disagreement, the Parties shall refer the matter to
their respective senior management. If after using their good faith best efforts
to try to resolve the dispute, senior management cannot resolve the dispute in
30 days, either Party may exercise any right or remedy available pursuant to
this Agreement.
SECTION 12 - REPRESENTATIONS
12.1 REPRESENTATIONS OF NYSEG
NYSEG represents and warrants to Generator as follows:
a. Organization. NYSEG is a corporation duly organized,
validly existing and in good standing under the laws of the State of
New York and NYSEG has the requisite corporate power and authority to
carry on its business as now being conducted.
b. Authority Relative to this Agreement. NYSEG has the
requisite power and authority to execute and deliver this Agreement
and, subject to the procurement of applicable regulatory approvals, to
carry out the actions required of it by this Agreement. The execution
and delivery of this Agreement and the actions it contemplates have
been duly and validly authorized by all required corporate action. The
Agreement has been duly and validly executed and
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delivered by NYSEG and constitutes a valid and binding Agreement of
NYSEG.
c. Regulatory Approval. NYSEG has obtained or will obtain by
the Transfer Date any and all approvals of, and given any notice to,
any public authority that are required for NYSEG to execute and deliver
this Agreement.
d. Compliance With Law.
(1) NYSEG represents and warrants that it is not in
violation of any applicable law, statute, order, rule, or
regulation promulgated or judgment entered by any Federal,
state, or local governmental authority, which violation would
affect NYSEG's performance of its obligations under this
Agreement.
(2) NYSEG represents and warrants that it will comply
with all applicable laws, rules, regulations, codes, and
standards of all Federal, state, and local governmental
agencies having jurisdiction over NYSEG or this Agreement.
12.2 REPRESENTATIONS OF GENERATOR
Generator represents and warrants to NYSEG as follows:
a. Generator is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and Generator has the requisite power and authority to carry
on its business as now being conducted.
b. Authority Relative to this Agreement. Generator has the
requisite power and authority to execute and deliver this Agreement
and, subject to the procurement of applicable regulatory approvals, to
carry out the actions required of it by this Agreement. The execution
and delivery of this Agreement and the actions it contemplates have
been duly and validly authorized by all required action. This Agreement
has been duly and validly executed and delivered by Generator and
constitutes a valid and binding Agreement of Generator.
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c. Regulatory Approval. Generator has obtained or will obtain
by the Transfer Date any and all approvals of, and given any notice to,
any public authority that are required for Generator to execute and
deliver this Agreement.
d. Compliance With Law.
(1) Generator represents and warrants that it is not
in violation of any applicable, law, statute, order, rule, or
regulation promulgated or judgment entered by any Federal,
state, or local governmental authority, which violation would
affect Generator's performance of its obligations under this
Agreement.
(2) Generator represents and warrants that it will
comply with all applicable laws, rules, regulations, codes,
and standards of all Federal, state, and local governmental
agencies having jurisdiction over the Generator or this
Agreement.
12.3 REPRESENTATIONS OF BOTH PARTIES
The representations and warranties in Sections 12.1 and 12.2
shall continue in full force and effect for the term of this Agreement.
SECTION 13 - ASSIGNMENT OR OTHER CHANGE IN CORPORATE IDENTITY
This Agreement and all of the provisions hereof shall be
binding upon, and inure to the benefit of the Parties and their respective
successors and permitted assigns, but assignment of any right, interest or
obligation under this Agreement may not be made without the other Party's
written consent, which may not be unreasonably withheld. Assignments that are
not consented to may be voided by the non-assigning Party. This instrument shall
be binding upon and inure to the benefit of NYSEG, Generator and their
respective successors and assigns. Notwithstanding the foregoing, (a) NYSEG may
assign this Agreement to an affiliate of NYSEG that has a contractual or
statutory obligation to supply Installed Capacity to NYSEG's retail customers;
and (b) Generator may assign, transfer, pledge or otherwise dispose of its
rights and interests hereunder to a
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trustee or lending institution(s) for the purposes of financing or refinancing
the acquisition of the Plants, including upon or pursuant to the exercise of
remedies under such financing or refinancing, or by way of assignments,
transfers pledges conveyances or dispositions in lieu thereof; provided,
however, that no such assignment, transfer, pledge, conveyance, or disposition
shall relieve or in any way discharge Generator form the performance of its
duties and obligations under this Agreement. NYSEG agrees to execute and
deliver, at Generator's expense, such documents as may be reasonable and
necessary to accomplish any such assignment, transfer, pledge, conveyance, or
disposition of rights hereunder for purposes of the financing or refinancing of
the acquisition of the Plants, so long as NYSEG's rights under this Agreement
are not thereby altered, amended, diminished or otherwise impaired.
SECTION 14 - HEADINGS
The descriptive headings of the Sections of this Agreement are
inserted for convenience only and do not affect the meaning or interpretation of
this Agreement.
SECTION 15 - WAIVER
Except as otherwise provided in this Agreement, any failure of
a Party to comply with any obligation, covenant, agreement, or condition herein
may be waived by the Party entitled to the benefit thereof only by a written
instrument signed by the Party granting such waiver, but such waiver shall not
operate as a waiver of, or estoppel with respect to any subsequent failure of
the first Party to comply with such obligation, covenant, agreement, or
condition.
SECTION 16 - COUNTERPARTS
This Agreement may be executed in two or more counterparts,
all of which will be considered one and the same Agreement and each of which
will be deemed an original.
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SECTION 17 - GOVERNING LAW
This Agreement and all rights, obligations, and performances
of the Parties hereunder, are subject to all applicable Federal and state laws,
and to all duly-promulgated orders and other duly-authorized action of
governmental authorities having jurisdiction.
When not in conflict with or preempted by Federal law, this
Agreement will be governed by and construed in accordance with the law of the
State of New York, without giving effect to the conflict of law principles
thereof. Except for those matters covered in this Agreement that are
jurisdictional to the FERC and the appellate courts to the extent of any appeals
from FERC proceedings, any action arising out of or concerning this Agreement
must be brought in the federal and state courts of the State of New York. Both
Parties hereby consent to the exclusive jurisdiction of the State of New York
for the purpose of hearing and determining any action not preempted by Federal
law or not within the jurisdiction of the FERC.
SECTION 18 - SEVERABILITY
If any of the provisions of this Agreement are held to be
unenforceable or invalid by any court or regulatory authority of competent
jurisdiction, the Parties shall, to the extent possible, negotiate an equitable
adjustment to the provisions of this Agreement with a view toward effecting the
purpose of this Agreement, and the validity and enforceability of the remaining
provisions hereof shall not be affected thereby.
SECTION 19 - AMENDMENT
If the applicable provisions of the ISO Tariff, or any other
ISO or NYPP rules relating to Installed Capacity or the implementation of this
Agreement are changed materially from the ISO Tariff filed with FERC by the
Member Systems of NYPP on December 19, 1997, NYSEG reserves the right, to
unilaterally make conforming changes to this Agreement to fulfill the purposes
of this Agreement or, if NYSEG does not derive the value of Installed Capacity
contemplated by this Agreement, due to such events as elimination of Installed
Capacity requirements, to terminate
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this Agreement. Any such conforming change to this Agreement shall be subject to
filing with FERC and shall be without prejudice to Generator's right to protest
such change. Except as provided above in this Section 19 and subject to Section
2.2.b., the rates, terms and conditions contained in this Agreement are not
subject to change under Section 205 or 206 of the Federal Power Act, as either
section may be amended or superseded, absent the mutual written agreement of the
Parties. It is the intent of this Section 19 that, except as provided above in
this Section 19 and subject to Section 2.2.b., to the maximum extent permitted
by law, the rates, terms and conditions in this Agreement shall not be subject
to change, regardless of whether such change is sought (a) by the FERC acting
sua sponte on behalf of a Party or third party, (b) by a Party, (c) by a third
party, or (d) in any other manner; and that this Agreement may be amended,
modified, or supplemented only by written agreement of both NYSEG and Generator.
SECTION 20 - ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between
the Parties, and supersedes any and all previous understandings, oral or
written, which pertain to the subject matter contained herein or therein.
SECTION 21 - FURTHER ASSURANCES
The Parties hereto agree to promptly execute and deliver, at
the expense of the Party requesting such action, any and all other and further
instruments and documents which may be reasonably requested in order to
effectuate the transactions contemplated hereby.
SECTION 22 - NO THIRD PARTY BENEFICIARIES
Nothing in this Agreement, express or implied, is intended to
confer on any person, other than the Parties, any rights or remedies under or by
reason of this Agreement.
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SECTION 23 - CONFIDENTIALITY
Each Party shall hold in confidence all confidential documents
and information furnished by the other Party in connection with this Agreement
unless disclosure is compelled by judicial or administrative process or other
provision of law. If disclosure is so compelled, the Party shall use best
efforts to obtain trade secret protection for such information and documentation
and shall promptly notify the other Party if it receives notice, or otherwise
concludes, that the production of any information subject to this Section 23 is
being sought under any provision of law. Either Party may utilize information
subject to this Section 23 in any proceeding under Section 11, subject to
appropriate confidentiality arrangements. The Parties agree that monetary
damages would be inadequate to compensate for breach of obligations under
Section 23. Each Party agrees, subject to Section 18 that the other Party shall
be entitled to equitable relief, by way of
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injunction or otherwise, if it breaches or threatens to breach its obligations
under Section 23.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be duly executed as of the date and year first above written.
NEW YORK STATE ELECTRIC & GAS CORPORATION
By:
-----------------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President
AES NY, L.L.C.
By:
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Xxxxx Xxxxxxx
Manager
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