EXECUTION COPY
AMENDED AND RESTATED
ENERGY PURCHASE AGREEMENT
By and Between
SITHE/INDEPENDENCE POWER PARTNERS, L.P.
and
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Dated as of September 1, 2000
TABLE OF CONTENTS
Page
ARTICLE I-DEFINITIONS..................................1
1.01 Format........................................1
1.02 Definitions...................................2
ARTICLE II-TERM........................................4
2.01 Effective Time................................4
2.02 Termination Time..............................4
ARTICLE III-PURCHASE AND SALE OF CAPACITY..............4
3.01 Purchase and Sale.............................4
3.02 Failure to Provide Purchase Capacity..........5
3.03 Payment.......................................6
3.04 Interest......................................6
3.05 Obligations Unconditional.....................6
ARTICLE IV-SUBORDINATED PAYMENTS.......................6
4.01 Subordinated Payments.........................6
ARTICLE V-EVENTS OF DEFAULT............................7
5.01 Events of Default.............................7
5.02 Notice of Default; Cure.......................8
5.03 Remedies......................................8
ARTICLE VI-AMENDMENTS..................................9
6.01 Amendments....................................9
ARTICLE VII-INDEMNIFICATION............................9
7.01 Independence's Indemnification................9
7.02 ConEd's Indemnification.......................9
7.03 Indemnification Procedures....................10
7.04 Survival......................................10
ARTICLE VIII-LIMITATION OF LIABILITY...................10
8.01 Limitation on Damages.........................10
8.02 Survival......................................11
ARTICLE IX-FORCE MAJEURE...............................11
9.01 Force Majeure.................................11
9.02 Performance Excused...........................11
9.03 Resumption of Performance.....................11
ARTICLE X-REPRESENTATIONS AND COVENANTS................12
10.01 Independence's Representations................12
10.02 ConEd's Representations.......................12
ARTICLE XI-ASSIGNMENT..................................13
11.01 Assignment....................................13
ARTICLE XII-MISCELLANEOUS..............................13
12.01 Headings......................................13
12.02 Waiver........................................14
12.03 No Third Party Beneficiaries..................14
12.04 Severability..................................14
12.05 Entire Agreement..............................15
12.06 Notices.......................................15
12.07 Governing Law.................................16
12.08 Counterparts..................................16
AMENDED AND RESTATED ENERGY PURCHASE AGREEMENT
This AMENDED AND RESTATED ENERGY PURCHASE AGREEMENT ("Agreement") dated
as of September 1, 2000 by and between SITHE/INDEPENDENCE POWER
PARTNERS,L.P., a Delaware limited partnership ("Independence") and
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New York corporation
("ConEd").
WITNESSETH
WHEREAS, Independence and ConEd are parties to the Energy Purchase
Agreement dated as of May 20, 1991 (as amended and in effect immediately
prior to the Effective Time (as defined below), the "EPA");
WHEREAS, the EPA is a forty-year contract for the sale of capacity and
associated energy by Independence from the Station (as defined below),
currently a "qualifying cogeneration facility" under the Public Utility
Regulatory Policies Act of 1978, to ConEd, based on the ratio of 740 MW to
the applicable Summer DMNC (as defined in the EPA) of the Station (as defined
below) and determined in accordance with EPA;
WHEREAS, the New York State electricity market is being restructured:
(a) to give New York Independent System Operator, Inc. ("NYISO") operational
control over certain transmission facilities of the transmission owners that
comprise the Memebers of the Transmission Owners Committee of the Energy
Association of New York State (the "Member Systems"); and (b) to establish
the ISO Administered Markets (as defined in the ISO Services Tariff (as
defined below)); and
WHEREAS, as a result of this industry restructuring, Independence and
ConEd have each agreed, effective as of the Effective Time (as defined
below), to amend and restate the EPA in its entirety;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, Independence and ConEd, intending to be legally bound,
agree as follows:
ARTICLE I-DEFINITIONS
1.01 FORMAT
------
(a) References to Articles and Sections herein are cross-
references to Articles and Sections, respectively, in this Agreement, unless
otherwise stated.
(b) All Schedules that are attached to this Agreement are
incorporated by reference as if fully set forth herein.
1.02 DEFINITIONS
-----------
In addition to the terms defined elsewhere in this Agreement, when used
with initial capitalization, whether singular or plural, the following terms
shall have the meanings set forth below. All references in this Agreement to
any governmental or non-governmental entity, including, without limitation,
NYISO, the Member Systems and FERC, shall include any and all successors to
such entities. Unless the context otherwise requires, any reference herein to
any contract or agreement and any schedule, attachment or exhibit thereto
shall mean such contract, agreement, schedule, attachment or exhibit as
amended, supplemented and modified and in effect from time to time.
(a) "Affiliate" of any person or entity means any other person
or entity which, directly or indirectly, controls or is controlled by or
under common control with such person or entity.
(b) "Capacity" means the capability to generate electrical
power, measured in megawatts.
(c) "Capacity Payment" has the meaning assigned to that term in
Section 3.01(a) of this Agreement.
(d) "Contract Year" means the First Contract Year and each
succeeding 12-month period beginning on November 1 and ending on the
following October 31.
(e) "Current Installed Capacity Requirements" means the
Installed Capacity Requirements currently in effect as of the date of this
Agreement and determined in accordance with and based upon the DMNC (as
implemented by the ISO under the ISO Services Tariff) for the applicable
Capability Period (as such term is defined in the ISO Services Tariff).
(f) "Deficiency Charges" has the meaning assigned to that term
in Section 3.02(c) of this Agreement.
(g) "Effective Time" has the meaning assigned to that term in
Section 2.01 of this Agreement.
(h) "FERC" means the Federal Energy Regulatory Commission.
(i) "First Contract Year" means the period of time beginning at
the Effective Time and ending on October 31, 2000.
(j) "Force Majeure" has the meaning assigned to that term in
Section 9.01 of this Agreement.
(k) "Future Installed Capacity Requirements" means the
Installed Capacity Requirements which become effective after the Effective
Time and replace the Current Installed Capacity Requirements.
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(i) "GDPIPD" has the meaning assigned to that term in Section
3.01(a) of this Agreement.
(m) "Indemnified Party" has the meaning assigned to that term
in Section 7.03(a) of this Agreement.
(n) "Indemnifying Party" has the meaning assigned to that term
in Section 7.03(a) of this Agreement.
(o) "Installed Capacity" has the meaning assigned to that term
in the ISO Services Tariff and, with respect to Installed Capacity located in
the New York Control Area (as defined in the ISO Services Tariff), excludes
any requirement or limitation based on deliverability or location.
(p) "Installed Capacity Requirements" means the requirements
for Installed Capacity set forth in the ISO Services Tariff, as such
requirements may be modified from time to time.
(q) "ISO Services Tariff" means the New York Independent
Systems Operator Market Administration and Control Area Services Tariff filed
with and made effective by FERC, as such tariff may be amended and made
effective from time to time.
(r) "LSE" means a Load Serving Entity, as defined in the ISO
Services Tariff.
(s) "Monthly Shortfall" has the meaning assigned to that term
in Section 3.02(a) of this Agreement.
(t) "Price Adjustment" has the meaning assigned to that term in
Section 3.02(d) of this Agreement.
(u) "Purchased Capacity" means, for each Contract Year: (a) 740
MW of Installed Capacity, to the extent that the quantity of Installed
Capacity is determined in accordance with the Current Installed Capacity
Requirements; or (b) if and to the extent that the quantitiy of Installed
Capacity is determined in accordance with the Future Installed Capacity
Requirements, an amount of Installed Capacity equivalent to the amount of
Installed Capacity under clause (a) (as reasonably determined by mutual
agreement of the parties), it being the intent of the parties that the rights
and obligations hereunder will not be materially altered.
(v) "Replacement Capacity" has the meaning assigned to that
term in Section 3.01(a) of this Agreement.
(w) "Station" means the electrical generation facility owned by
Independence and located in Oswego County, New York.
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ARTICLE II-TERM
2.01 EFFECTIVE TIME
This Agreement shall be effective as of 12:01 a.m. (New York time) on
September 1, 2000 (the "Effective Time").
2.02 TERMINATION TIME
Unless terminated earlier in accordance with the terms hereof, and
except as provided in Section 4.01(d), this Agreement shall remain in effect
through October 31, 2014 and shall terminate as of 12:00 a.m., New York time,
on November 1, 2014.
ARTICLE III-PURCHASE AND SALE OF CAPACITY
3.01 PURCHASE AND SALE
(a) During each Contract Year, Independence shall sell, and
ConEd shall purchase, the Purchased Capacity. ConEd shall pay Independence a
monthly capacity payment (each such monthly payment, a "Capacity Payment")
for each month in each Contract Year equal to the sum of (1) $4,748,174 per
month plus (2) the product of (A) $5,500,000 per month multiplied by (B) a
fraction, the numerator of which is the value of the Gross Domestic Product
Implicit Price Deflator ("GDPIPD") determined in accordance with Section
3.01(c) below for the third quarter of the calendar year immediately preceding
the applicable month, and the denominator of which is the corresponding value
of the GDPIPD for the third quarter of the calendar year ending on December
31, 1999. Independence may supply the Purchased Capacity from any source
(including, without limitation, from sources other than the Station), so long
as such Purchased Capacity meets the Installed Capacity Requirements. As soon
as possible following each decision by Independence to supply all or any
portion of the Purchased Capacity from source(s) other than the Station (the
"Replacement Capacity"), Independence shall provide ConEd with written notice
thereof. Such notice(s) shall identify the sources from which such
Replacement Capacity will be provided.
(b) During each Contract Year, the Capacity Payment for each
month shall be reduced by an amount equal to 6.25% of the product of (1) the
average locational based marginal price (expressed in dollars per megawatt
hour) for energy at the Pleasant Valley bus for all hours of such month based
upon a weighted average of (i) the time weighted/integrated real time
locational based marginal prices and (ii) the day ahead locational based
marginal prices for each hour of such month in Real-Time Market and the
Day-Ahead Market administered by the NYISO multiplied by (2) the monthly
quantity set forth on Schedule A. In calculating the weighted average of the
real time and day ahead prices, the parties agree to a weighting of 50% of
the price for each hour of such month in the Real-Time Market and 50% of the
price for each hour of such month in the Day-Ahead Market. In the event that
either of such markets is discontinued, the weighted average shall be 100% of
the surviving market. In the event that both
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such markets are discontinued, the weighted average shall be 100% of the
applicable replacement market or if more than one replacement market shall
exist, the weighted average of such markets consistent with the weightings
set forth above.
(c) The value of the GDPIPD for the third quarter of a calendar
year applicable to any month shall be the latest value of the GDPIPD for such
third quarter available at the end of such calendar year from the U.S.
Department of Commerce, Bureau of Economic Analysis (base year 1987 = 100).
It is the parties' intent to use the GDPIPD to track inflation from December
31, 1999 in New York State. If the GDPIPD is discontinued or reconstituted in
such a manner as to render it unusable for the purposes intended by the
parties, Independence and ConEd agree to substitute an inflation index that
most closely reflects the GDPIPD as constituted at the time of execution of
the EPA.
(d) The Capacity Payment for each calendar month from September
of 2000 to and including December of 2000 shall also be reduced by an amount
equal to $486,992.
3.02 FAILURE TO PROVIDE PURCHASED CAPACITY
(a) If and to the extent that in any month the amount of
Installed Capacity provided pursuant to this Agreement (including any
Replacement Capacity) is less than the Purchased Capacity applicable to such
month for any reason, including as a result of the occurrence or continuance
of a Force Majeure event, such deficiency amount shall be deemed to be a
monthly shortfall (a "Monthly Shortfall").
(b) Independence shall pay to ConEd the greater of (1) the
Price Adjustment for each month and (2) Deficiency Charges incurred and paid
by ConEd for each month.
(c) For purposes of this Agreement, "Deficiency Charges" means,
for any month, all deficiency charges, costs, and penalties assessed to ConEd
under the ISO Services Tariff to the extent arising out of or relating to any
Monthly Shortfall. ConEd hereby agrees to use commercially reasonable efforts
to mitigate such Deficiency Charges.
(d) For purposes of this Agreement,"Price Adjustment" means, for
any month, the product of (1) the amount payable by ConEd for such month in
accordance with Section 3.01 of this Agreement multiplied by (2) a fraction
(x) the numerator of which is equal to the average Monthly Shortfall for the
12 month period ending on the last day of the immediately preceding month and
(y) the denominator of which is the Purchased Capacity. For purposes of this
Agreement, the Monthly Shortfall for each of the 12 months immediately
preceding the Effective Time shall be deemed to be zero.
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3.03 PAYMENT
ConEd shall pay the Capacity Payment to Independence for each month on
or before the 20th day of the immediately succeeding month by wire transfer
or immediately available funds to the account entitled "Project Revenue Fund"
maintained by Independence with The Bank of New York, Account No. 229289, 000
Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, or to such other person
or account as shall be specified from time to time by Independence to ConEd
in writing. Any payments being wired to the above-referenced account should
be directed to ABA 000000000; The Bank of New York, Corporate Trust/GLA
111-585; for further credit to TAS Account 229289; REF: Sithe Independence
PWR Project Revenue Fund. Independence shall pay the Deficiency Charges or
the Price Adjustment, if any, for each month on or before the 20th day of the
immediately succeeding month by wire transfer of immediately available funds
in accordance with instructions specified from time to time by ConEd to
Independence in writing.
3.04 INTEREST
Except as otherwise provided in Article IV, if either party fails to
make any payment required by this Agreement when due, including contested
portions of bills that are later determined to be due, or if either party
makes an overpayment requiring a refund by the other party, the amount due
shall bear interest, from the due date of the payment or the date on which
the overpayment was made until the date of payment, at a rate equal to 200
basis points over the prime lending rate in effect during the period of
nonpayment, as quoted to substantial commercial customers by Citibank, N.A.,
New York, New York, or its successor.
Payments mailed or wired on the due date will be considered timely. If
the due date of any payment falls on a Saturday, Sunday or legal holiday,
payments will be considered timely if mailed or wired on the next business
day.
3.05 OBLIGATIONS UNCONDITIONAL
Notwithstanding the fact that at any time during the term of this
Agreement (a) the ISO Services Tariff may cease to exist, (b) the market for
Capacity and/or Installed Capacity may cease to exist, (c) ConEd may no
longer be obligated as an LSE or otherwise under applicable law, rule or
regulation to acquire Capacity and/or Installed Capacity or (d) for any other
reason, ConEd may no longer need or require the Purchased Capacity, ConEd
shall not be relieved of its obligations hereunder to make Capacity Payments
for Purchased Capacity as contemplated by this Article III.
ARTICLE IV-SUBORDINATED PAYMENTS
4.01 SUBORDINATED PAYMENTS
(a) Subject to the terms of subordination attached hereto as
Schedule B (the "Terms of Subordination"), during each Contract Year,
Independence shall pay to ConEd an
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amount equal to the payment amount as set forth opposite such Contract Year
on Schedule C hereto (the "Subordinated Payment"). Subject to the Terms of
Subordination, Independence shall make such Subordinated Payments in equal
quarterly installments in March, June, September and December of each
Contract Year, with the final such installment being due on October 31, 2014.
To the extent that a Subordinated Payment is not made when due, the unpaid
amount shall accrue interest commencing from the date such Subordinated
Payment was due through the date of payment at an interest rate per annum
equal to 8.16% until such unpaid amount together with accrued interest
thereon is paid in full. Interest shall accrue based on actual days elapsed
and a year of 365/366 days, as applicable, and be compounded on an annual
basis.
(b) Independence, any Affiliate of Independence or any designee of
such Affiliate may, at any time, prepay all or any portion of Independence's
obligations under this Section 4.01 to make the Subordinated Payments. The
amount of any such prepayment shall be equal to the net present value of such
portion of the Subordinated Payments to be prepaid determined as of the
proposed date of Payment utilizing a discount rate of 8.16% and assuming each
quarterly payment would be made on the last day of each calendar quarter.
Upon payment in full of all of the Subordinated Payments (whether by payment
or prepayment), together with any amounts owing pursuant to the third
sentence of Section 4.01(a), Independence shall have no further obligation to
make any Subordinated Payments and shall no longer be subject to any further
obligations under the Terms of Subordination.
(c) By its execution of this Agreement, ConEd hereby agrees to the
Terms of Subordination attached hereto as Schedule B, and agrees that the
obligation of Independence to make the Subordinated Payments, and the right of
ConEd to receive or enforce its rights to receive the Subordinated Payments,
are expressly subject to such Terms of Subordination.
(d) The provisions of this Section 4.01 shall survive any
termination or expiration of this Agreement until the Subordinated Payments,
together with accrued interest thereon, have been paid in full.
ARTICLE V - EVENTS OF DEFAULT
5.01 EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall
constitute an event of default under this Agreement:
(a) A material breach of any material term or condition of this
Agreement, including, but not limited, to (i) any material breach of a
representation, warranty or covenant made in this Agreement, and (ii) failure
of either party to make a required payment to the other party of amounts due
hereunder if such payments due reach a level which cannot be offset by any
payments due and owing to such party under this Agreement; provided, however,
that Independence's failure to make any Subordinated Payment shall not
constitute or result in a
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breach or default by Independence of this Agreement if and to the extent such
payment is deferred as contemplated by the Terms of Subordination.
(b) A receiver or liquidator or trustee of either party or any of
its property shall be appointed by a court of competent jurisdiction, and
such receiver, liquidator or trustee shall not have been discharged within
one hundred twenty (120) days, or by decree of such a court, a party shall be
adjudicated bankrupt or insolvent or any substantial part of its property
shall have been sequestered, and such decree shall have continued
undischarged and unstayed for a period of one hundred twenty (120) days after
the entry thereof; or a petition to declare bankruptcy or to reorganize a
party pursuant to any of the provisions of the Federal Bankruptcy Code, as
now in effect or as it may hereafter be amended, or pursuant to any other
similar state statute as now or hereafter in effect, shall be filed against
a party and shall not be dismissed within one hundred twenty (120) days after
such filing, or
(c) A party shall file a voluntary petition in bankruptcy under
any provision of any federal or state bankruptcy law or shall consent to the
filing of any bankruptcy or reorganization petition against it under any
similar law; or, without limiting the generality of the foregoing, a party
shall file a petition or answer or consent seeking relief or assisting in
seeking relief in a bankruptcy under any provision of any federal or state
bankruptcy law or shall consent to the filing of any bankruptcy or
reorganization petition against it under any similar law, or, without
limiting the generality of the foregoing, a party shall file a petition or
answer or consent seeking relief or assisting in seeking relief in a
proceeding under any of the provisions of the Federal Bankruptcy Code, as now
in effect or as it may hereafter be amended, or pursuant to any other similar
state statute as now or hereafter in effect, or an answer admitting the
material allegations of a petition filed against it in such a proceeding; or
a party shall make an assignment for the benefit of its creditors; or a party
shall admit in writing its inability to pay its debts generally as they
become due; or a party shall consent to the appointment of a receiver,
trustee, or liquidator of it or of all or party of its property.
5.02 NOTICE OF DEFAULT; CURE
Upon the occurrence of any such event of default other than those
described in Section 5.01(b) and (c), the party not in default shall give
written notice of the event of default to the defaulting party and, if
applicable, to Seller's lenders at the address provided by Seller to Buyer in
writing. Such notice of default shall set forth, in reasonable detail, the
nature of the default and, where known and applicable, the steps necessary to
cure such default. The defaulting party and, if applicable, Seller's
lenders, shall have thirty (30) days following receipt of such notice either
to (i) cure such default or (ii) commence in good faith and continue to
diligently pursue all such steps as shall be reasonably necessary and
appropriate to cure such default in the event such default cannot reasonably
be completely cured within such thirty (30) day period.
5.03 REMEDIES
Notwithstanding the foregoing, after the occurrence of any such event of
default and the expiration of all applicable cure periods with respect
thereto without such default being cured, the
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non-defaulting party shall be entitled (i) to commence an action to require
the defaulting party to remedy such default and specifically perform its
duties and obligations hereunder in accordance with the terms and conditions
hereof and (ii) to exercise such other rights and remedies as it may have at
equity or at law, subject however to the provisions of Article VIII of this
Agreement.
ARTICLE VI - AMENDMENTS
6.01 AMENDMENTS
This Agreement shall not be amended unless such amendment is in writing
and executed by the parties. It is the intent of this Article VI that, 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 under Section 205 or 206 of the Federal Power Act or any other
applicable law or regulation (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 parties as provided above.
Either party shall, as and if requested by the other party, support this
Agreement in filings and with testimony in any administrative or judicial
proceeding related to or in connection with this Agreement.
ARTICLE VII - INDEMNIFICATION
7.01 INDEPENDENCE'S INDEMNIFICATION
Independence shall indemnify, defend and hold harmless ConEd and its
Affiliates and their officers, trustees, directors, employees and agents from
and against any and all claims, demands, suits, losses, damages, liabilities,
costs and expenses (including reasonable attorney's fees and costs of
investigation) for damage to tangible property and injury to or death of
persons, including ConEd's employees, Independence's employees and the
employees of any third party, to the extent caused by, arising out of the
related to the gross negligence or willful misconduct of Independence in
connection with or resulting from Independence's performance or breach of
this Agreement.
7.02 ConED'S INDEMNIFICATION
ConEd shall indemnify, defend and hold harmless Independence and its
Affiliates and their officers, directors, trustees, employees and agents from
and against any and all claims, demands, suits, losses, damages, liabilities,
costs and expenses (including reasonable attorney's fees and costs of
investigation) for damage to tangible property and injury to or death of
persons, including Independence's employees, ConEd's employees and the
employees of any third party, to the extent caused by, arising out of or
related to the gross negligence or willful misconduct of ConEd in connection
with or resulting from ConEd's performance or breach of this Agreement.
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7.03 INDEMNIFICATION PROCEDURES
(a) A party which becomes entitled to indemnification under
this Agreement (the "Indemnified Party") shall give written notice to the
other party (the "Indemnifying Party") of the occurrence of the events which
give rise to such right of indemnification within 30 days of the Indemnified
Party becoming aware of the occurrence thereof. Such notice shall describe
the claim, the basis thereof and shall indicate an estimate of the amount of
the claim. To the extent that the Indemnifying Party is prejudiced by any
failure of the Indemnified Party to provide such notice, such notice shall be
a condition precedent to the liability of the Indemnifying Party under this
Article VII.
(b) At the Indemnified Party's request, the Indemnifying Party
shall, at its cost and expense, defend (with counsel reasonably acceptable to
the Indemnified Party) any suit asserting a claim against the Indemnified
Party with respect to which the Indemnified Party is entitled to
indemnification hereunder, and shall pay all costs and expenses incurred by
the Indemnified Party to enforce its right to indemnification. The
Indemnified Party may, at its own expense, retain separate counsel and
participate in the defense of any such suit. Neither party may settle or
compromise a claim or suit without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld or delayed.
7.04 SURVIVAL
The indemnification obligations of each party under this Article VII
shall not be limited in any way by any limitation on insurance, by the amount
or types of damages, or by any compensation or benefits payable by the
parties under Worker's Compensation Acts, disability benefit acts or other
employee acts or otherwise. The provisions of this Article VII shall survive
termination, cancellation, suspension, completion or expiration of this
Agreement.
ARTICLE VIII - LIMITATION OF LIABILITY
8.01 LIMITATION ON DAMAGES
Except to the extent arising out of the obligations of Independence and
ConEd to indemnify the other party under Article VII of this Agreement,
neither party, nor their respective officers, directors, partners, agents,
employees, or Affiliates, shall be liable to the other party or its
Affiliates, officers, directors, trustees, partners, agents, employees,
successors or assigns, for claims for incidental, special, indirect or
consequential damages of any nature connected with or resulting from
performance or breach of this Agreement, including, without limitation,
claims in the nature of lost revenues, income or profits (other than payments
specifically provided for and properly due under this Agreement) or losses,
damages or liabilities under any financing, lending or construction
contracts, agreements or other arrangements to which Independence may be
party, irrespective of whether such claims are based upon warranty,
negligence, strict liability, contract, operation of law or otherwise.
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8.02 SURVIVAL
The provisions of this Article VIII shall apply regardless of fault and
shall survive termination, cancellation, suspension, completion or expiration
of this Agreement.
ARTICLE IX - FORCE MAJEURE
9.01 FORCE MAJEURE
The term "Force Majeure" as used herein shall include but not be limited
to acts of God, earthquakes, fires, floods, storms, strikes, labor disputes,
riots, insurrections, acts of war (whether declared or otherwise), acts of
governmental, regulatory or judicial bodies, or any other causes beyond the
reasonable control of and without the fault or negligence of the party
claiming force majeure.
9.02 PERFORMANCE EXCUSED
If either party because of Force Majeure is rendered wholly or partly
unable to perform its obligations under this Agreement, except for a party's
obligation to make payments under this Agreement, that party shall be excused
from whatever performance is affected by the Force Majeure to the extent so
affected, provided that:
(a) The non-performing party, within fourteen (14) days after it
becomes aware or should have become aware that it would be unable to
perform, gives the other party written notice describing the
particulars of the occurrence;
(b) The suspension of performance is of no greater scope and of
no longer duration than is required by the Force Majeure;
(c) No obligations of either party which arose before the
occurrence causing the suspension of performance are excused as a
result of the occurrence; and
(d) The non-performing party endeavors to remedy its inability
to perform.
This Section shall not require the settlement of any strike, walkout,
lockout or other labor dispute on terms which, in the sole judgment of the
party involved in the dispute, are contrary to its interest. It is understood
and agreed that the settlement of strikes, walkouts, lockouts or other labor
disputes shall be entirely within the discretion of the party involved in the
dispute.
9.03 RESUMPTION OF PERFORMANCE
Prior to the resumption of performance suspended as a result of a Force
Majeure occurrence, the non-performing party shall give the other party
written notice of such resumption.
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ARTICLE X - REPRESENTATIONS AND COVENANTS
10.01 INDEPENDENCE'S REPRESENTATIONS
Independence hereby represents and warrants as follows:
(a) It is a limited partnership duly organized and validly
existing and in good standing under the laws of Delaware and is duly
qualified to do business and in good standing in the State of New York.
(b) It has all requisite power and authority to carry on the
business to be conducted by it and to enter into this Agreement and the
transactions contemplated hereby, and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement.
(c) The execution and delivery of this Agreement and the
performance of the its obligations hereunder have been duly authorized by all
necessary action on its part and do not and will not conflict with or result
in a breach of its partnership agreement or any indenture, mortgage, other
agreement or instrument, or any statute or rule, regulation, order, judgment
or decree of any judicial or administrative body to which it is a party or by
it or any of its properties are bound or subject.
10.02 ConEd's REPRESENTATIONS
ConEd hereby represents and warrants as follows:
(a) It is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of New York.
(b) It has the corporate power and authority to own its
properties, carry on its electric utility business as now being conducted,
enter into this Agreement and the transactions contemplated hereby, and
perform and carry out all covenants and obligations on its part to be
performed under and pursuant to this Agreement.
(c) The execution and delivery of this Agreement by it and
the performance of its obligations hereunder have been duly authorized by all
necessary corporate action on the part of ConEd and do not and will not
conflict with or result in a breach of its Articles of Incorporation or
by-laws or any indenture, mortgage, other agreement or instrument, or any
statute or rule, regulation, order, judgment or decree of any judicial or
administrative body to which it is a party or by it or any of its properties
are bound or subject.
12
ARTICLE XI - ASSIGNMENT
11.01 ASSIGNMENT
(a) This Agreement and all of the provisions hereof shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests, or obligations hereunder shall be assigned,
except to an Affiliate or successor, by either party hereto, whether by
operation of law or otherwise, without the prior written consent of the other
party, which consent may not be unreasonably withheld or delayed. No
assignment of all or any portion of the rights, interests or obligations
permitted pursuant to the immediately preceding sentence shall relieve or
discharge the assignor from any of its obligations under this Agreement
without the prior written consent of the non-assigning party, which consent
shall not be unreasonably withheld or delayed. Any assignment of this
Agreement in violation of the foregoing shall be, at the option of the
non-assigning party, void.
(b) Notwithstanding the foregoing provisions of Section
11.01(a), (i) ConEd may assign all or any portion of its rights and
obligations hereunder to any of its Affiliates, (ii) Independence may assign
all or any portion of its rights and obligations hereunder to any of its
Affiliates (including, without limitation, Sithe Power Marketing, L.P., a
Delaware limited partnership), and (iii) Independence may assign, transfer,
pledge or otherwise dispose of its rights and interests hereunder to a
trustee or lending institution for the purposes of financing or refinancing
any of its assets, including upon or pursuant to the exercise of remedies
with respect to such financing or refinancing, or by way of assignments,
transfers, pledges, or other dispositions in lieu thereof; provided, however,
that no such assignment of all or any portion of the rights, interests or
obligations of a party pursuant to this Section 11.01(b) shall relieve or
discharge the assignor from any of its obligations under this Agreement
unless the non-assigning party consents to such release or discharge in
accordance with Section 11.01(a). With respect to clause (iii) of this
Section 11.01(b), ConEd Agrees to execute and deliver such documents as may
be reasonably necessary to accomplish any such assignment, transfer, pledge,
or other disposition of rights hereunder, so long as ConEd's rights under
this Agreement are not thereby altered, amended, diminished or otherwise
impaired, including, without limitation, a consent and agreement
substantially in the form of the Consent and Agreement dated as of January
27, 1993 executed by ConEd in connection with the EPA.
ARTICLE XII - MISCELLANEOUS
12.01 HEADINGS
The descriptive headings of the Articles and Sections of this Agreement
are inserted for convenience only and are not intended to affect the meaning,
interpretation or construction of this Agreement.
13
12.02 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 benefits 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. Each of the parties hereby expressly acknowledges
and agrees that effective as of the Effective Time, ConEd shall have no
obligation to purchase and receive, and Independence shall have no obligation
to sell and deliver, any electrical energy and/or any ancillary services (as
defined in the ISO Services Tariff) and/or any other service related to the
provision of electrical energy and/or capacity and the obligations of the
parties are expressly limited to the purchase and sale of Purchased Capacity
as set forth herein. Each of the parties hereby further acknowledges and
agrees that effective as of the Effective Time, without any further notice or
action on the part of ConEd or Independence, each party to the EPA and its
respective predecessors and successors in interest, agents, directors,
officers, partners, trustees, employees, affiliates and shareholders shall be
irrevocably released and forever discharged from all manner of actions,
causes of action, suits, debts, sums of money, accounts, reckonings, bonds,
bills, controversies, judgments, claims and demands whatsoever at law or in
equity, known or unknown, which any party ever had, now has or hereafter can,
shall or may have, based upon or by reason of any matter, cause or thing
related to or arising out of the EPA prior to the Effective Time.
Notwithstanding the foregoing, nothing contained herein shall be deemed to
relieve ConEd from its obligation to make Energy Payments (as defined in the
EPA), Capacity Payments (as defined in the EPA) and O&M Payments (as defined
in the EPA) in accordance with Articles V and VI(b) of the EPA for
Electricity (as defined in the EPA) delivered prior to the Effective Time,
and nothing herein shall relieve Independence from its obligations under
Article XI of the EPA, respecting qualification under federal law, and
Article XXIV of the EPA, respecting audits and inspections, relating solely
to the period prior to January 1, 2000. Notwithstanding the provisions of
Article VI(c) of the EPA, for purposes of calculating the final adjustment to
the Capacity Payments for the period from January 1, 2000 through the last
day of the calendar month immediately preceding the Effective Time, such
final adjustment shall be determined as if (a) the EPA had expired on the
last day of the calendar month immediately preceding the Effective Time and
(b) the Equivalent Availability ratio for each calendar month during the
period from January 1, 2000 through such date of expiration were 93.6%.
12.03 NO THIRD PARTY BENEFICIARIES
Except as set forth in the Terms of Subordination, the parties do not
intend that this Agreement confer any rights or remedies on any person or
party other than the parties, their successors and permitted assigns.
12.04 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,
14
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.
12.05 ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the parties,
and supersedes any and all previous understandings, oral or written, with
respect to the subject matter hereof.
12.06 NOTICES
Notices required or permitted to be given hereunder shall be in writing,
shall be deemed given when received if sent by facsimile transmission
(provided receipt thereof is confirmed in writing), recognized overnight
courier or first class mail to the appropriate telephone number or address set
forth below. Parties' notice addresses are as follows:
If to Independence:
Sithe/Independence Power Partners, L.P.
X.X. Xxx 0000
00 Xxxxxxxxxxxx Xxx
Xxxxxx, Xxx Xxxx 00000
Attention: General Manager
with a copy to:
Sithe/Independence Power Partners, L.P.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxx and
Hyun Park, Esq.
If to ConEd:
Consolidated Edison Company
of New York, Inc.
0 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President-Energy Management
Facsimile: 000-000-0000
Attention: Vice President-Energy Management
15
The foregoing notices, addresses, and telephone numbers may be changed
by written notice given in accordance with this Section 12.06, without the
need for an amendment hereof or the consent of the other party.
12.07 GOVERNING LAW
(a) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
contracts made and to be performed therein.
(b) The parties agree that all disputes between them which arise
under this Agreement and which are not settled, other than disputes which are
exclusively within the jurisdiction of FERC, shall be decided by a court of
competent jurisdiction in the State of New York and the parties submit to the
jurisdiction of the courts of the State of New York and the Federal District
Courts located in New York, New York.
12.08 COUNTERPARTS
This Agreement may be executed in counterparts, all of which shall
constitute one and the same Agreement and each of which shall be deemed to be
an original.
[SIGNATURE PAGE FOLLOWS]
16
IN WITNESS WHEREOF, the parties have executed this Agreement by their
authorized representatives as of the day and year first set forth above.
SITHE/INDEPENDENCE POWER PARTNERS, L.P.
By: Sithe/Independence, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President-Operations
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
By: /s/ Xxxxxxx X. Xxxxxxx 6/20/00
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: VP
17
SCHEDULE A
-----------------------------------------------------
MONTH MEGAWATT-HOURS
-----------------------------------------------------
January 606,352
-----------------------------------------------------
February 565,747
-----------------------------------------------------
March 628,842
-----------------------------------------------------
April 554,561
-----------------------------------------------------
May 433,697
-----------------------------------------------------
June 554,029
-----------------------------------------------------
July 575,965
-----------------------------------------------------
August 570,295
-----------------------------------------------------
September 552,136
-----------------------------------------------------
October 405,733
-----------------------------------------------------
November 548,315
-----------------------------------------------------
December 604,328
-----------------------------------------------------
TOTAL 6,600,000
-----------------------------------------------------
18
SCHEDULE B
TERMS OF SUBORDINATION
Section 1. DEFINITIONS. The following terms shall have the meanings
herein specified. Unless otherwise stated, any agreement, contract or
document defined or referred to herein shall mean such agreement, contract or
document and all schedules exhibits and attachments thereto as amended,
supplemented or otherwise modified and in effect from time to time. Any
reference to any Person shall include its successors and assigns.
"AMENDED AND RESTATED ENERGY PURCHASE AGREEMENT" means that certain
Amended and Restated Energy Purchase Agreement dated as of September 1, 2000
by and between ConEd and Independence.
"COLLATERAL AGENT" means the Person or Persons designated and/or
appointed from time to time to serve as collateral agent on behalf of one or
more of the Senior Parties.
"CONED" means Consolidated Edison Company of New York, Inc., a New York
corporation.
"ENRON" means Enron Capital & Trade Resources, Corp., a Delaware
corporation.
"ENRON OBLIGATIONS" means Independence's obligations to Enron under the
Gas Sales Agreement.
"ENRON SUBORDINATED OBLIGATIONS" means Independence's obligations to
Enron which are subject to deferral as contemplated by Section 4.7 of the Gas
Sales Agreement, including Independence's obligation to repay the balance of
the Tracking Account (as defined in the Gas Sales Agreement).
"GAS SALES AGREEMENT" means the Amended and Restated Base Gas Sales
Agreement dated as of October 26, 1992 between Enron and Independence.
"INDEPENDENCE" means Sithe/Independence Power Partners, L.P., a Delaware
limited partnership.
"PERSON" means any individual, sole proprietorship, corporation,
partnership, joint venture, limited liability company, trust, unincorporated
association, institution, governmental authority or any other entity.
"SENIOR DEBT TERMINATION DATE" means the date on which all the Senior
Obligations (other than the Enron Subordinated Obligations and other than
contingent liabilities and obligations which are unasserted at such date)
have been indefeasibly paid or otherwise satisfied in full and all Senior
Debt Financing Documents related thereto have been terminated.
19
"SENIOR FINANCING DOCUMENTS" means all agreements, documents and
instruments evidencing and/or securing the Senior Obligations including the
Gas Sales Agreement.
"SENIOR OBLIGATIONS" means (a) the principal, premium, interest, fees,
expenses, penalties, and other obligations of Independence arising under any
credit agreement, note purchase agreement, bond indenture, security
agreement, lease agreement, interest rate exchange agreement or swap agreement
or other document or documents relating thereto (including, without
limitation, any reimbursement loan agreement relating to the issuance of a
debt service reserve letter of credit for the repayment of any Senior
Obligations, and any working capital loan facility, the proceeds of which are
used to pay operating expenses of Independence) entered into (i) at or prior
to January 1, 2000, the proceeds or credit of which are used for the
acquisition, development, financing, construction, completion, construction
loan retirement, modification required by the terms of the Senior
Obligations, or repair or replacement of all or any portion of the Station or
(ii) at any time but only to the extent that the proceeds of which are used
(A) to repay or refinance all or a portion of the Senior Obligations then
outstanding (provided, however, that the final maturity of the Senior
Obligations, after giving effect to any such repayment or refinancing, may
not extend beyond the final maturity therefor in effect prior to such
repayment or refinancing) or (B) to repair or replace all or any portion of
the Station or to modify the Station as required by the terms of the Senior
Obligations and (b) the Enron Obligations.
"SENIOR PARTIES" means, collectively, (a) the Persons that have
extended, or that are obligated to extend, credit, directly or indirectly, to
Independence pursuant to the Senior Financing Documents and (b) Enron.
"STATION" means Independence's cogeneration facility located in Oswego
County, New York.
"SUBORDINATED OBLIGATIONS" means Independence's obligation to pay all or
any portion of the amounts payable to ConEd as provided in Section 4.01 of
the Amended and Restated Energy Purchase Agreement.
Section 2. SUBORDINATION. (a) ConEd hereby agrees for the benefit of the
Senior Parties that the Subordinated Obligations are and shall be junior and
subordinate, to the extent and in the manner set forth hereinafter, in right
of payment to the prior indefeasible payment or satisfaction in full of all
Senior Obligations (other than the Enron Subordinated Obligations). In
furtherance thereof, ConEd further agrees that, subject to Section 2(b)
hereof:
(i) ConEd shall not ask, demand, xxx for, take or receive from
Independence, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment of all or any of the
Subordinated Obligations unless and until the Senior Debt Termination
Date shall have occurred.
(ii) Upon any distribution of all or any of the assets of
Independence to creditors of Independence upon the dissolution, winding
up, liquidation, arrangement, reorganization or composition of
Independence whether in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings or upon an assignment
20
for the benefit or creditors or any other marshalling of the assets and
liabilities of Independence or otherwise, any payment or distribution of
any kind (whether in cash, property or securities) which otherwise would
be payable or deliverable upon or with respect to the Subordinated
Obligations shall be paid or delivered directly to the Collateral Agent
for application (in the case of cash) to or as collateral (in the case
of non-cash property or securities) for the payment or prepayment of the
Senior Obligations until the Senior Obligations (other than the Enron
Subordinated Obligations) have been paid or otherwise satisfied in full.
(iii) ConEd acknowledges and agrees that each of the Senior
Parties may authorize and direct the Collateral Agent on its behalf to
demand specific performance of these terms of subordination, whether or
not Independence shall have complied with any of the provisions hereof
applicable to it at any time when ConEd shall have failed to comply with
any of such provisions applicable to it. ConEd hereby irrevocably waives
any defense based on the adequacy of a remedy at law, which might be
asserted as a bar to such remedy of specific performance.
(iv) Until the Senior Debt Termination Date, ConEd shall not
commence or join with any creditor other than the Collateral Agent in
commencing any proceeding referred to in subsection (ii) above for the
payment of any amounts which otherwise would be payable or deliverable
upon or with respect to the Subordinated Obligations.
The forgoing provisions regarding subordination are for the benefit of the
Senior Parties and shall be enforceable by them directly against ConEd, and
no Senior Party shall be prejudiced in its right to enforce subordination of
any of the Subordinated Obligations by any act or failure to act by
Independence or anyone in custody of its assets or property. Independence
shall not make any payment to ConEd, and ConEd shall not retain any payment
from Independence, in contravention of this Section 2(a).
(b) ConEd further acknowledges and agrees that, until the Senior Debt
Termination Date, all payments on or with respect to the Subordinated
Obligations may only be made to ConEd from distributions to the equity owners
of Independence permitted by the Senior Financing Documents. ConEd hereby
acknowledges and agrees that the Subordinated Obligations are unsecured
obligations of Independence.
(c) In the event that ConEd shall receive any payment on or with respect
to the Subordinated Obligations that is not permitted pursuant to these Terms
of Subordination, it shall promptly deliver such payment, in kind, to the
Collateral Agent, with such endorsements as the Collateral Agent may request.
Section 3. RIGHTS OF SENIOR PARTIES. The Senior Parties and the
Collateral Agent may, at any time and from time to time, without any consent
of or notice to ConEd and without impairing or releasing the obligations of
ConEd with respect to the terms of subordination (i) amend in any manner any
agreement under which any of the Senior Obligations is outstanding in
accordance with the terms thereof; (ii) sell, exchange, release, not perfect
and otherwise deal with any
21
property at any time pledged, assigned or mortgaged to secure the Senior
Obligations; (iii) release anyone liable in any manner under or in respect of
the Senior Obligations; (iv) exercise or refrain from exercising any rights
against Independence and others; and (v) apply any sums from time to time
received to payment or satisfaction of the Senior Obligations.
Section 4. INDEBTEDNESS. Independence shall not directly or indirectly
create, incur, assume, or otherwise be or become liable with respect to any
indebtedness other than (i) indebtedness in respect of the Senior
Obligations, (ii) indebtedness in respect of current accounts and other
amounts payable in the ordinary course of business, (iii) indebtedness
subject and subordinated (on terms and conditions reasonably satisfactory to
ConEd) to Independence's obligations under Section 4.01 of the Amended and
Restated Energy Purchase Agreement, provided that such indebtedness is in
respect of the acquisition, development, construction, completion, operation,
maintenance, repair, replacement, use, expansion, or modification of all or
any portion of the Station or the performance of any of Independence's
obligations under the Amended and Restated Energy Purchase Agreement, and
(iv) indebtedness, the proceeds of which are to be distributed by
Independence to the equity investors in Independence, provided that such
indebtedness has been approved in writing by ConEd.
22
SCHEDULE C
SUBORDINATED PAYMENTS
Contract Year Payment Amount
------------ --------------
Effective Time to October 31, 2000 $3,539,024
November 1, 2000 to October 31, 2001 $6,460,976
November 1, 2001 to October 31, 2002 $5,000,000
November 1, 2002 to October 31, 2003 $5,000,000
November 1, 2003 to October 31, 2004 and $2,263,400
each subsequent Contract Year
23
