Exhibit 10.6
EXECUTION COPY
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DEVELOPMENT AND OPERATIONS
SERVICES AGREEMENT
between
AES PRESCOTT, L.L.C.
and
AES IRONWOOD, L.L.C.
Dated as of June 1, 1999
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705 MW (Net) Gas-Fired Combined Cycle Electric Generating Facility
South Lebanon Township, Lebanon County, Pennsylvania
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..........................................................................1
SECTION 1.1 DEFINITIONS..................................................................1
ARTICLE II DEVELOPMENT AND CONSTRUCTION MANAGEMENT.............................................4
SECTION 2.1 DEVELOPMENT AND CONSTRUCTION MANAGEMENT SERVICES.............................4
SECTION 2.2 PAYMENT FOR DEVELOPMENT AND CONSTRUCTION MANAGEMENT SERVICES.................4
ARTICLE III OPERATION AND MAINTENANCE..........................................................5
SECTION 3.1 OPERATING AND MAINTENANCE PERSONNEL AND OTHER SERVICES.......................5
SECTION 3.2 PAYMENT FOR OPERATING AND MAINTENANCE SERVICES...............................5
ARTICLE IV PAYMENT OF FEES.....................................................................7
SECTION 4.1 PAYMENT OF FEES..............................................................7
ARTICLE V TERM, TERMINATION AND RELATIONSHIP OF PARTIES........................................8
SECTION 5.1 TERM.........................................................................8
SECTION 5.2 TERMINATION..................................................................8
ARTICLE VI REPRESENTATIONS AND WARRANTIES......................................................8
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF THE OPERATOR...............................8
SECTION 6.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................9
ARTICLE VII ARBITRATION........................................................................9
SECTION 7.1 ARBITRATION..................................................................9
ARTICLE VIII LIMITATIONS OF LIABILITY.........................................................10
SECTION 8.1 NO CONSEQUENTIAL DAMAGES....................................................10
SECTION 8.2 LIMITATION OF OPERATOR'S LIABILITY..........................................10
ARTICLE IX FORCE MAJEURE......................................................................10
SECTION 9.1 FORCE MAJEURE...............................................................10
ARTICLE X INDEMNIFICATION.....................................................................11
SECTION 10.1 INDEMNIFICATION.............................................................11
ARTICLE XI MISCELLANEOUS......................................................................11
SECTION 11.1 FURTHER ASSURANCES..........................................................11
SECTION 11.2 ENTIRE AGREEMENT............................................................11
SECTION 11.3 COUNTERPARTS................................................................11
SECTION 11.4 GOVERNING LAW...............................................................11
SECTION 11.5 ASSIGNABILITY...............................................................12
SECTION 11.6 BINDING EFFECT..............................................................12
SECTION 11.7 HEADINGS....................................................................12
SECTION 11.8 NOTICES.....................................................................12
SECTION 11.9 AMENDMENT...................................................................13
SECTION 11.10 NO IMPLIED WAIVER...........................................................13
SECTION 11.11 OVERDUE OBLIGATIONS TO BEAR INTEREST........................................13
SECTION 11.12 INDEPENDENT CONTRACTOR......................................................13
SECTION 11.13 ACCESS......................................................................13
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DEVELOPMENT AND OPERATIONS SERVICES AGREEMENT
DEVELOPMENT AND OPERATIONS SERVICES AGREEMENT (this "Agreement"), dated
as of June 1, 1999, by and between AES PRESCOTT, L.L.C. a Delaware limited
liability company (the "Operator"), and AES IRONWOOD, L.L.C, a Delaware limited
liability company (the "Company") (the Company and Operator, each a "Party", and
collectively, the "Parties").
W I T N E S S E T H:
WHEREAS, the Company has been organized to develop, construct, own,
operate and maintain the Facility located at the Facility Site;
WHEREAS, the Company desires that the Operator provide certain
personnel and support services required by the Company for the development and
construction management of the Facility and for operation and maintenance of the
Facility after completion of such development and construction; and
WHEREAS, the Operator desires to provide such personnel and support
services in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the agreements and covenants
hereinafter set forth, and intending to be legally bound hereby, the Parties
hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Capitalized terms not otherwise defined herein shall have the meanings
specified in the Indenture (as defined below). For the purposes of this
Agreement, the rules of construction set forth in the Indenture shall apply as
if such rules were set forth herein. The following terms shall have the meanings
specified below:
"AES Direct Costs" shall have the meaning specified in the Services
Agreement.
"AES Direct Labor Costs" shall have the meaning specified in the
Services Agreement.
"AES Overhead" shall have the meaning specified in the Services
Agreement.
"Annual Adjustment Date" means each January 1st occurring after the
date hereof.
"Annual Revision Date" means each March 1st occurring after the date
hereof.
"Capital Contributions" means the contributions by the Manager to the
Company required pursuant to the LLC Agreement.
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"Commercial Operation Date" has the necessary specified in the Power
Purchase Agreement.
"Company" has the meaning specified in the preamble to this Agreement.
"Direct Costs" means expenditures for all goods and services which, in
the opinion of the Operator, are necessary for the operation, maintenance and
management of the Facility or the performance by the Operator of its obligations
under this Agreement, including but not limited to goods and services (i)
necessary to operate the Facility and all associated facilities and equipment
and (ii) necessary to maintain, repair, replace and otherwise keep the Facility
and all associated facilities and equipment in good and serviceable working
order. Such goods and services shall include without limitation raw materials to
operate the boiler, pollution control equipment and other equipment, including
limestone, magnesium oxide, ammonia, urea, sand and any other additives as
appropriate; utilities, including natural gas, oil, electricity, raw water,
potable water, industrial waste water discharge, sanitary sewer and waste
disposal; transportation charges, including demurrage, for fuel, raw materials,
waste, personnel, equipment, and other items; contract maintenance services,
including electrical, mechanical, civil, chemical and instrumentation and
control; outside shops, warehousing and storage; expendable supplies, including
chemicals, resins, abrasives, lab supplies, protective clothing, paper products,
rags, rope, wire, glue, caulking, soaps, paint, primer and painting supplies,
clean-up supplies and equipment, lubricants and solvents; shop tools and
equipment; equipment rental and leasing; spare and replacement parts, repair and
replacement items and material and upgrading equipment and material;
communications, including telephone, facsimile transmission, postage, express
mail and parcel delivery; office furniture, supplies and equipment, computers
and computer equipment, and reproduction equipment, services and supplies;
mobile equipment and vehicles; insurance premiums; contract employee charges;
community relations programs and expenses; recruiting and training costs,
including advertising, physicals, recruiter fees and the like; professional
services, including legal, accounting, engineering, management and other; safety
arid employee relations expenses (awards, picnics, bonuses, etc.); travel and
business entertainment; taxes (such as sales, property, value added and gross
receipts taxes but excluding taxes based solely on income); and Direct Labor
Costs. Direct Costs shall include but not be duplicative of AES Direct Costs.
"Direct Labor Costs" means all labor costs of the Operator, including
but not limited to salaries, wages, overtime pay, shift differentials, fringe
benefits, profit sharing and pension, holiday pay, vacation pay, bonuses,
termination payments, travel and other similar costs of the Operator personnel
primarily engaged in activities at the Site pursuant to this Agreement. Direct
Labor Costs shall not include (i) labor costs related to Operator personnel who
are not primarily located at the Site or (ii) labor costs related to activities
unrelated to the Operator's performance of this Agreement which are undertaken
by Operator personnel who are primarily engaged in activities at the Site.
Direct Labor Costs shall include, but not be duplicative of, AES Direct Labor
Costs.
"Effective Date" means the date of this Agreement.
"Electric Delivery Point" has the meaning specified in the Power
Purchase Agreement.
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"Financing Parties" means the Trustee, acting on behalf of the
Bondholders, and any and all other lenders providing the construction or
long-term financing or any refinancing of the Facility pursuant to the Financing
Documents, and any trustee or agent acting in their behalf, including the
Collateral Agent. The term "Financing Parties" shall not include the Company,
any Affiliate of the Company or any Affiliate of any Partner.
"Force Majeure Event" shall have the meaning set forth in Section 9.1.
"Indenture" means the Trust Indenture, dated as of June 1, among the
Company, the Trustee and the Depositary Bank.
"LLC Agreement" means the Limited Liability Company Agreement of AES
Ironwood, L.L.C., dated as of November 1, 1998, as such agreement may be
amended, modified or supplemented from time to time.
"Management Fee"' means the monthly fee described in Section
2.2(a)(ii).
"Manager" means AES Ironwood, Inc., the owner of all of the membership
interests in the Company and the Manager of the Company pursuant to the LLC
Agreement.
"Operating and Maintenance Fee" means the monthly fee described in
Section 3.2(a)(ii).
"Operations" means any transaction in the ordinary course of the
Company's business, but does not include the making of Capital Contributions to
the Company or a Capital Event.
"Operator" has the meaning specified in the preamble to this Agreement.
"Operator Costs" means all Direct Costs and Overhead.
"Operator Fees" means, collectively, the Management Fee and the
Operating and Maintenance Fee.
"Overhead" means (to the extent not included in Direct Costs) the
Operator's cost of and any expenses related to employee relations, financial
controls, data processing, management and administration, and other similar
services required for performance by the Operator of its obligations under this
Agreement, including labor costs of the Operator's overhead personnel, if any;
provided, that all Overhead hereunder shall be allocated on a reasonable basis
to services rendered by Operator in the performance of its obligations under
this Agreement. Overhead shall include but not be duplicative of AES Overhead.
Notwithstanding anything herein to the contrary, from and after the Commercial
Operation Date through the remaining term of this Agreement, Overhead payable
under Sections 2.2 and 3.2 with respect to any period shall be deemed in the
aggregate to equal [45%] of Direct Labor Costs for such period.
"Prime-Based Rate" means the interest rate equal to the sum of (i) the
prime commercial lending rate announced by Citibank NA as in effect from time to
time, and (ii) two (2) percentage points, provided that such interest rate shall
in no event be greater than the maximum interest rate permitted by applicable
law.
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"Unpaid Fee Amount" shall have the meaning set forth in Section 4.1.
ARTICLE II
DEVELOPMENT AND CONSTRUCTION MANAGEMENT
SECTION 2.1 Development and Construction Management Services.
The Parties acknowledge that, under the Financing Documents and the
Project Contracts, the Company has certain obligations to develop and construct
the Facility. In order to assist the Company in the performance of such
obligations, but subject to Section 2.2(b), the Operator shall from the date
hereof until the Commercial Operation Date (i) supervise and manage the
development of the Facility, and the design, engineering and construction of the
Facility in accordance with (a) generally accepted engineering practices, (b)
generally accepted construction procedures, (c) the plans and standards set
forth in the EPC Contract, (d) the requirements of the Power Purchase Agreement
and (e) applicable law; (ii) exercise all rights of the Company under the EPC
Contract and any other contracts for the construction of the interconnection or
other facilities related to the Facility (including, but not limited to,
operational responsibilities arising prior to the Commercial Operation Date);
and (iii) use commercially reasonable efforts to provide the services and
perform the obligations the Company is then obligated to provide and perform
under the EPC Contract and to procure or provide any goods and services
necessary for the completion of the Facility for which provision is not made in
the EPC Contract.
SECTION 2.2 Payment for Development and Construction Management
Services.
(a) On the tenth (10th) Business Day of each calendar month following
the date of this Agreement, the Company, upon receipt of an invoice, shall pay
in arrears to the Operator, in consideration for the services provided in the
previous month and described in Section 2.1, as follows:
(i) Until the first calendar month following the Commercial
Operation Date, all Operator Costs after the Effective Date up to said
calendar month, to the extent the Operator has not been previously paid
therefor and to the extent it submits cost substantiation therefor, it
being understood that payment of certain cost items included in
Operator Costs may be made by the Collateral Agent pursuant to the
Financing Documents; and
(ii) A Management Fee of $125,000 for each calendar month (or
a pro rata portion of such fee for any portion of each calendar month)
from the Effective Date through the Commercial Operation Date (at which
date such fee shall cease) for services rendered during such calendar
month (or portion thereof).
(b) The Operator may suspend the performance of its obligations
hereunder during such time as any amount payable pursuant to Sections 2.2(a)(i)
or (ii) is more than 60 days past due; provided, however, that the Operator
shall not so suspend performance of its obligations hereunder if the amount
payable that is more than 60 days past due hereunder is subject to a good faith
dispute by the Company as to whether the cost in question was in fact incurred
by the Operator.
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ARTICLE III
OPERATION AND MAINTENANCE
SECTION 3.1 Operating and Maintenance Personnel and Other Services.
The Parties acknowledge that, under the Financing Documents and the
Project Contracts, the Company has certain obligations to maintain and operate
the Facility and in order to assist the Company therewith, but subject to
Section 3.2(c), the Operator shall provide operating personnel and other support
services necessary for the Company to perform its obligations arising out of or
in connection with, the ownership, management, maintenance and operation of the
Facility, including without limitation the following obligations:
(a) Operating and maintaining the Facility in accordance with the Power
Purchase Agreement, the Financing Documents and the practices, standards and
procedures customary in the independent power industry with respect to natural
gas and fuel oil-fired combined cycle electric generating facilities;
(b) Obtaining and maintaining insurance as required under the Financing
Documents and the Project Contracts, without limiting the rights of each of the
Company and the Operator to provide independently for its own additional
insurance coverage;
(c) Maintaining full and complete records of accounts and of technical
operations of the Facility and preparing all reports, statements, data and
information that may be required from time to time under the Financing
Documents, the Project Contracts or by any federal, state, or local governmental
authorities, and retaining records relating to a given year during the term
hereof, other than those records which are necessary to provide a history of the
operation and maintenance of the Facility (which the Operator agrees to retain
for the full term of this Agreement), for a period of at least three years after
the end of such year;
(d) Opening and maintaining bank accounts and performing cash
management functions in connection with the operation of the Facility,
including, subject to the provisions of the Financing Documents, the receipt of
revenues generated by the Company and the payment of all costs, expenses,
rentals and taxes incurred by the Company;
(e) Preparing all federal, state and local tax returns of the Company;
and
(f) Inspecting and testing metering devices used to measure and record
fuel oil and natural gas delivered to the Facility pursuant to the Power
Purchase Agreement and electricity delivered to the Electric Delivery Point
pursuant to the Power Purchase Agreement.
SECTION 3.2 Payment for Operating and Maintenance Services.
(a) (i) On the tenth (10th) Business Day of each calendar month
following the Commercial Operation Date through the remaining term of this
Agreement, the Company shall pay in arrears to the Operator, in consideration
for the services provided in the previous month and described in Section 3.1,
all Operator Costs incurred prior to and after the Commercial Operation Date up
to said calendar month to the extent the Operator has not been previously paid
therefor and to the extent it submits cost
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substantiation therefor, it being understood that payment of certain cost items
included in Operator Costs may be made by the Collateral Agent directly pursuant
to the Financing Documents; and
(ii) On each Bond Payment Date commencing with the first Bond Payment
Date after the Commercial Operation Date, and through the remaining term of this
Agreement, the Company shall pay in arrears to the Operator, in consideration
for the services provided in the previous months comprising the most recent
quarter and described in Section 3.1, an Operating and Maintenance Fee of
$400,000, as adjusted pursuant to Section 3.2(b), for each calendar month of
such quarter (or a pro rata portion of such fee for any portion of each calendar
month) for services rendered during such calendar month (or portion thereof);
provided, however, the Operating and Maintenance Fee shall be payable to the
Company only to the extent that funds are available for such payment pursuant to
the Collateral Agency Agreement and in accordance with Section 4.1.
(b) (i) Effective on each Annual Adjustment Date, the Operating and
Maintenance Fee shall be adjusted in accordance with the following formula:
AOMF = $400,000 x EGDP
O&M Base GDP --------
WHERE:
AOMF = The adjusted Operating and Maintenance Fee.
EGDP = The Manager's good faith estimate of the GDPIPD for the
calendar quarter immediately preceding such Annual
Adjustment Date.
O&M Base GDP = The GDPIPD for the second quarter 1999.
(ii) Effective on each Annual Revision Date, the Operating and
Maintenance Fee for the calendar year in which such calculation is made shall be
recalculated in accordance with the following formula:
RAOMF = $400,000 x AGDP
---------
O&M Base GDP
WHERE:
RAOMF = The readjusted Operating and Maintenance Fee.
AGDP = The actual GDPIPD for the calendar quarter
immediately preceding such Annual Adjustment
Date.
O&M Base GDP = The GDPIDP for the second quarter 1999.
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(iii) The Operating and Maintenance Fee payable pursuant to
Section 3.2(a)(ii) for the first two calendar months of each calendar
year shall be calculated in accordance with Section 3.2(b)(i). The
Operating and Maintenance Fee payable pursuant to Section 3.2(a)(ii)
for each calendar month of each calendar year commencing with the third
calendar month of such calendar year shall be calculated in accordance
with the formula set forth in this Section 3.2(b)(ii) and the monthly
amounts to be paid to the Operator by the Company over the remainder of
such calendar year shall be equitably adjusted by an allocation
thereover of the amount equal to the difference between (x) the sum of
the monthly fee calculated pursuant to Section 3.2(b)(i) and payable in
accordance with the first sentence of this Section 3.2(b)(iii) for the
first two calendar months of such calendar year and (y) the sum of the
monthly fees that would have been payable for the first two calendar
months of such calendar year if such monthly fees had been calculated
pursuant to Section 3.2(b)(ii).
(c) The Operator may suspend performance of its obligations during such
time as any amount payable pursuant to Section 3.2(a)(i) is more than 60 days
past due; provided, however, that the Operator shall not so suspend performance
of its obligations hereunder if the amount payable that is more than 60 days
past due hereunder is subject to a good faith dispute by the Company as to
whether the cost in question was in fact incurred by the Operator.
(d) The Operator may suspend the performance of its obligations
hereunder during such time as any amount payable pursuant to Section 3.2(a)(ii)
is past due for more than 60 days; provided, however, that the Operator shall
not so suspend performance of its obligations if the amount payable pursuant to
Section 3.2(a)(ii) is past due as a result of the application of Section 4.1 of
this Agreement and the provisions of the Collateral Agency Agreement.
ARTICLE IV
PAYMENT OF FEES
SECTION 4.1 Payment of Fees.
Notwithstanding anything to the contrary contained herein, the
Operating and Maintenance Fee payable pursuant to Section 3.2(a)(ii) shall be
payable by the Company if and to the extent that funds are available in the
Revenue Account for such payment after giving effect to the transfers and
payments (other than payment of such Operating and Maintenance Fee) specified in
paragraphs first through fifth of Section 3.10(b) of the Collateral Agency
Agreement. In the event that the Company is at any time unable to make payment
of the Operating and Maintenance Fee due pursuant to Section 3.2(a)(ii) because
of the unavailability of funds under the Collateral Agency Agreement, such
unpaid Operating and Maintenance Fee shall accumulate and shall accrue interest
at the Prime-Based Rate (or, if lower, the maximum rate permitted by applicable
law), compounded annually (the "Unpaid Fee Amount"). Until such time as the
Unpaid Fee Amount equals zero, if any amount of funds are available therefor
pursuant to Section 3.10(b) of the Collateral Agency Agreement, the Company
shall, after payment of the current quarter's Operating and Maintenance Fee on a
Bond Payment Date, pay to the Operator, on such Bond Payment Date (but only to
the extent that funds are available therefor pursuant to the Collateral Agency
Agreement and this Section 4.1), an amount equal to the lesser of such available
funds and the Unpaid Fee Amount.
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ARTICLE V
TERM, TERMINATION AND RELATIONSHIP OF PARTIES
SECTION 5.1 Term.
The term of this Agreement shall commence as of the Effective Date and,
except as otherwise provided herein, shall terminate upon the earlier of (i) the
last day of the month in which the twenty-seventh anniversary of the Effective
Date occurs, (ii) the date which is sixty (60) days after receipt by Operator of
a notice from the Collateral Agent specifying that (a) a Trigger Event under the
collateral Agency Agreement has occurred and the Collateral Agent, any Financing
Party or any agent, assignee or designee thereof has commenced the exercise of
remedies in respect of such Trigger Event and (b) the Collateral Agent has been
devoted by the Required Senior Partner to terminate this Agreement, and (iii)
the date specified by mutual written agreement of the Parties hereto.
SECTION 5.2 Termination.
This Agreement may be terminated by either Party upon the failure of
the other Party to perform any of its material obligations hereunder; provided,
that the Party seeking to terminate this Agreement under this Section 5.2 has
given the breaching Party 120 days' prior written notice of such breach, and
such breach has not been remedied within such 120-day period. Furthermore, this
Agreement may be terminated upon written notice by either Party upon the
bankruptcy, reorganization, dissolution or liquidation of the other Party. Upon
termination of this Agreement pursuant to this Section 5.2, the Operator agrees
to provide to the Company originals or copies of all records retained by the
Operator in accordance with Section 3.1(c) pertaining to the services rendered
by the Operator hereunder up to and including the date of such termination.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Representations and Warranties of the Operator.
Operator represents and warrants as follows:
(a) It is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified to do business and is in good standing in the Commonwealth of
Pennsylvania;
(b) It has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement, which action has not been
superseded or terminated, and this Agreement constitutes the legal, valid and
binding obligation of the Operator, enforceable against the Operator in
accordance with the terms hereof, except as the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other such laws affecting the rights of creditors generally or by general
equitable principles;
(c) The execution, delivery and performance of this Agreement do not
violate (i) the Operator's certificate of formation or Limited Liability Company
Agreement or any resolution of
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its members, (ii) any contract to which it is a party or (iii) any law, rule,
regulation, order, writ, judgment, injunction, decree or determination binding
upon the Operator or any of its properties; and
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body (other than those
which have been obtained) are required for the due execution, delivery and
performance by the Operator of this Agreement.
SECTION 6.2 Representations and Warranties of the Company.
The Company represents and warrants as follows:
(a) It is a limited liability company duly organized and validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business and is in good standing in the Commonwealth of
Pennsylvania;
(b) It has taken all necessary Company action to authorize the
execution, delivery and performance of this Agreement, which action has not been
superseded or terminated, and this Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with the terms hereof, except as the enforceability hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other such laws
affecting the rights of creditors generally or by general equitable principles;
(c) The execution, delivery and performance of this Agreement do not
violate (i) the Company's certificate of formation or Limited Liability Company
Agreement or any rules of any committee charged thereunder with the governance
of its affairs, (ii) any contract to which it is a party or (iii) any law, rule,
regulation, order, writ, judgment, injunction, decree or determination binding
upon the Company or any of its properties; and
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body (other than those
which have been obtained) are required for the due execution, delivery and
performance by the Company of this Agreement.
ARTICLE VII
ARBITRATION
SECTION 7.1 Arbitration.
In the event of a dispute between the Parties under this Agreement,
such dispute shall be submitted to a single arbitrator pursuant to the
commercial arbitration rules of the American Arbitration Association, and the
Parties shall proceed diligently so that the arbitrator shall render a decision
within 90 days from the filing of a demand for arbitration. This Agreement shall
not be terminated on the basis of any disputed matter until the arbitrator has
rendered his decision. Such arbitration shall be conducted in Washington, D.C.,
unless a related arbitration shall be contemplated under the provisions of any
of the Financing Documents or Project Contracts, in which event arbitration
hereunder shall be conducted where such related arbitration is conducted and,
whenever expedient, shall be consolidated with such related arbitration.
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ARTICLE VIII
LIMITATIONS OF LIABILITY
SECTION 8.1 No Consequential Damages.
Neither Party shall be liable to the other for any indirect, special,
incidental or consequential damages arising from or connected with its
performance hereunder or any breach of its obligations hereunder.
SECTION 8.2 Limitation of Operator's Liability.
The total aggregate liability of the Operator to the Company for all
liability, including without limitation the Operator's indemnity obligations
hereunder, arising out of or in connection with the performance of services
under this Agreement in any calendar year shall not exceed the amount of the
Operator Fees earned and paid for that calendar year.
ARTICLE IX
FORCE MAJEURE
SECTION 9.1 Force Majeure.
Notwithstanding any other provision of this Agreement to the contrary,
if the performance of the obligations of either Party under this Agreement, or
the fulfillment of any of the conditions hereof, shall be wholly or partially
prevented by any act or event beyond the reasonable control of the Party
alleging disability to perform obligations or fulfill conditions under this
Agreement, including without limitation, an act of God, nuclear emergency,
explosion, fire, epidemic, landslide, lightning, earthquake, flood or similar
cataclysmic occurrence, an act of public enemy, war, blockade, insurrection,
riot, civil disturbance, sabotage, unavailability of labor, fuel, power or raw
materials, strike, lockout or other labor disturbance, restrictions or
restraints imposed by law or by rule, regulation, or order of governmental
authorities, whether federal, state, or local, delays or interruptions in
transportation and interruption or loss of utilities ("Force Majeure Event"),
the Party alleging inability to perform obligations or fulfill conditions
hereunder shall be excused from whatever performance is affected by the Force
Majeure Event to the extent so affected; provided, however, that (i) economic
hardship shall not constitute a Force Majeure Event and (ii) no obligations of
either Party which arose before the Force Majeure Event causing the suspension
of performance and no payment obligations of either Party shall be excused as a
result of the Force Majeure Event. In the event that a Force Majeure Event
occurs:
(a) the non-performing Party shall give the other Party prompt written
notice describing the particulars of the Force Majeure Event, including but not
limited to the nature of the occurrence and its expected duration, and shall
continue to furnish timely regular reports with respect thereto during the
period of the Force Majeure Event;
(b) the suspension of performance shall be of no greater scope and of
no longer duration than is required by the Force Majeure Event; and
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(c) the non-performing Party shall use its best efforts to remedy its
inability to perform.
ARTICLE X
INDEMNIFICATION
SECTION 10.1 Indemnification.
Each Party shall indemnify, defend and hold the other Party and its
successors, assigns and agents harmless from and against all damages, losses or
expenses of every kind or character suffered or paid as a result of any and all
claims, demands, suits, penalties, causes of action, proceedings, judgments,
administrative and judicial orders and liabilities (including reasonable counsel
fees incurred in any litigation or otherwise) assessed, incurred or sustained by
or against such other Party and its successors, assigns and agents to the extent
arising out of any negligence or willful misconduct by the indemnifying Party in
performing its obligations hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Further Assurances.
If either Party reasonably determines or is reasonably advised that any
further instruments (including without limitation a consent to assignment for
the benefit of the Financing Parties or any similar documents) or actions are
necessary or desirable to carry out the terms of this Agreement, the other Party
shall execute and deliver all such instruments and perform all such actions
reasonably necessary and proper to carry out the terms of this Agreement.
SECTION 11.2 Entire Agreement.
This Agreement contains the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all prior agreements,
negotiations and understandings. Neither of the Parties shall be bound by or be
deemed to have made any representations, warranties or commitments except those
contained herein.
SECTION 11.3 Counterparts.
This Agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
SECTION 11.4 Governing Law.
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, without regard to principles of conflicts of
laws.
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SECTION 11.5 Assignability.
Neither this Agreement, nor the respective rights, obligations and
duties of either Party hereunder are assignable by such Party without the prior
written consent of the non-assigning Party, and any assignment without such
written consent shall be void, except (i) that the Operator may engage agents or
subcontractors to provide the services described herein, and may enter into the
Services Agreement, (ii) the Operator may assign any and all of its rights to
payments made, due or to become due hereunder, and (iii) the Company may assign
its rights and obligations hereunder to the Financing Parties pursuant to the
Financing Documents.
SECTION 11.6 Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of
the Parties hereto and their respective successors and permitted assigns. This
Agreement is not made for the benefit of any person or entity not a Party
hereto, and nothing in this Agreement shall be construed as giving any person or
entity, other than the Parties hereto and their respective successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof.
SECTION 11.7 Headings.
The headings used in this Agreement are for convenience only and shall
not affect the construction of any of the terms of this Agreement.
SECTION 11.8 Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and shall be deemed sufficiently given (i) upon
delivery, if delivered personally, (ii) five days after deposit in a U.S. Postal
Office mail box, (iii) the day it is received, if it is delivered by overnight
courier or (iv) upon the effective sending of electronic transmission,
facsimile, telex or telegram, to the addresses set forth below or such other
address as the addressee may have specified in a notice duly given to sender as
provided herein:
If to the Operator:
AES Prescott, L.L.C.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx, Vice President
(Telephone): 000-000-0000
(Facsimile): 000-000-0000
12
If to the Company:
AES Ironwood, L.L.C
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Project Manager
(Telephone): (000) 000-0000
(Facsimile): (000) 000-0000
SECTION 11.9 Amendment.
Neither Party hereto shall be bound by any termination, amendment,
supplement, waiver or modification of any term hereof unless such Party shall
have consented thereto in writing. This Agreement may not be amended, modified
or supplemented without the consent of the Financing Parties to the extent such
consent is required under the Financing Documents.
SECTION 11.10 No Implied Waiver.
No delay or failure on the part of either Party in exercising any
rights hereunder, and no partial or single exercise thereof, shall constitute a
waiver of such rights or of any other rights hereunder.
SECTION 11.11 Overdue Obligations to Bear Interest.
Except as provided in Section 4.1, all amounts due hereunder, whether
as damages, credits, revenue or reimbursements, that are not paid when due shall
bear interest at the Prime-Based Rate or, if lower, the maximum interest rate
permitted by law, on the amount outstanding from time to time, on the basis of a
365-day year and the actual number of days elapsed.
SECTION 11.12 Independent Contractor.
The Operator shall at all times act as and be deemed an independent
contractor and shall not act as nor be deemed to be an agent, servant or
employee of the Company.
SECTION 11.13 Access.
The Company and its representatives shall have the right at all times
to visit and inspect the Facility and the Site, and shall have the right, upon
reasonable notice and at reasonable times, to take visitors onto the Site and
into the Facility; provided, however, that such visits shall be conducted in a
manner so as to minimize interference with the Operator's performance hereunder
and to be in accordance with reasonable rules and procedures prescribed by the
Operator for such visits; and provided, further, that the Company and its
representatives and invitees shall have the right to enter the Facility and the
Site without notice or obligation to minimize interference with the Operator's
performance in the event of an emergency, including fire, vandalism or other
threats to public health or safety. During the term of this Agreement, the
Company shall provide the Operator and its agents, employees, subcontractors and
consultants full and free access at all times to the Facility to the extent
required to perform the services required by this Agreement.
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IN WITNESS WHEREOF, each of the Parties hereto, intending to be legally
bound, has caused this Agreement to be duly executed on its behalf on the date
first above written.
AES Prescott, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
AES Ironwood, L.L.C.,
By AES Ironwood, Inc.
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
[DEVELOPMENT AND OPERATIONS SERVICES AGREEMENT]
