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Exhibit 10.17
CONFIDENTIAL
May 7, 1999
Xx. Xxxxx Xxxxxxx
Vice President
AES NY, L.L.C.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxxxx:
Re: Sale of Coal-Fired Stations
This letter is intended to memorialize the understandings
reached between AES NY, L.L.C. ("AES"), and New York State Electric & Gas
Corporation ("NYSEG") and NGE Generation, Inc. ("NGE Gen") (NYSEG and NGE Gen,
collectively, "Sellers"), regarding certain matters related to the Asset
Purchase Agreement dated as of August 3, 1998, as amended ("Asset Purchase
Agreement"), for the sale of Sellers' New York coal-fired generating facilities.
Capitalized terms not defined herein shall be as defined in the Asset Purchase
Agreement. An adjustment related to retirement benefit responsibilities is
reflected in the Estimated Closing Statement.
The Parties hereby agree that, notwithstanding anything to the
contrary contained in the Asset Purchase Agreement:
1. Appendix A hereto contains a clarification of the
responsibilities of each Party under Section 6.10 of the Asset Purchase
Agreement as to the early retirement benefits to be provided after the Closing
by NYSEG's Retirement Plan and AES's clone offset plan.
2. The President of NGE Gen will not be transferred to AES and
AES shall not assume any responsibility with respect to such individual.
3. The rights and obligations of the Sellers with respect to
the Distributed Business System software described in Section 22 of Schedule
2.1(m) of the Asset Purchase Agreement shall not be conveyed to, or assumed by,
AES at Closing and shall be excluded from the sale.
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4. NYSEG and NGE will allow AES to continue work with respect
to the certain Selective Catalytic Reduction and reheater equipment at Xxxxxxx
Station until the Closing Date, provided that the work is performed in
accordance with the terms and conditions of the Pre-Closing Work Agreement
between the Parties dated as of October 1, 1998 and that any communication with
regulatory agencies or communities shall be subject to the prior approval and/or
participation of NYSEG.
5. In connection with the assignment to AES of the Coal Sales
Agreement ("CSA") with Consolidation Coal Company ("Consol") dated December 21,
1983, as amended and assigned, Sellers and AES have used reasonable, good-faith
efforts to provide information and documentation to Consol sufficient to result
in, and otherwise to attempt to procure, Xxxxxx's release of Sellers from any
obligations under the CSA following the assignment of the CSA to AES, or its
affiliate. Despite such efforts, Xxxxxx has refused to so release Sellers prior
to the Closing. Accordingly, Sellers and AES Eastern Energy, L.P. ("AEE") have
entered into the agreement attached hereto as Appendix B.
6. With regard to the Somerset Railroad Corporation ("SRC")
commercial paper program (the "Program"), AES and its affiliates, and their
representatives, with the cooperation of SRC and its representatives, will
prepare and execute such documentation and make all other necessary
arrangements, including those with lending institution(s), so as to permit SRC
to continue the Program (or to establish alternative credit facility
arrangements) once the shares of SRC have been transferred by NGE Gen to AES NY3
at the Closing. NYSEG, NGE and AES waive any technical breaches of
representations that are contained in the Asset Purchase Agreement to the extent
such breaches arise from the arrangements made to continue the Program or to
establish alternative credit facility arrangements.
7. With regard to the vibration condition that has been
observed at the turbine-generator of the Xxxxxxx Station, NYSEG and AEE have
entered into the agreement attached hereto as Appendix C.
8. During the Hickling Unit 2 turbine outage, the HP turbine
rotor was identified to have a condition (excessive cracking in the blade root
dovetails) that
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required, consistent with the manufacturer's recommendation, the removal of the
17th stage rotor buckets. The removal of the 17th stage rotor buckets could
result in the reduction of Unit 2's capability and heat rate. NYSEG's
recommended remediation of this condition would have included (a) the purchase
of a new bare rotor forging from the manufacturer, and (b) re-installation of
the existing turbine buckets from the present rotor to the new shaft, including
the removed 17th stage and a new 18th stage. Such a course of remediation would
(c) require a 24-week lead time for the new rotor forging and a 5-week outage to
complete once the rotor forging is ready, and (d) enhance the production and
efficiency of Unit 2 as compared to its current "as is, where is" condition.
Accordingly, NYSEG will re-install the turbine rotor (without
the 17th stage rotor buckets) in Unit 2 to permit the unit to operate until AES
can commence the above-described remediation, and AES will accept a purchase
price adjustment (included in the Estimated Closing Statement) to recognize the
cost, including lost production and heat rate efficiency losses, associated with
undertaking the above-described remediation.
9. NYSEG and AES have amended the Interconnection Agreement
to, among other things, reflect NYSEG's intent to purchase frequency and
regulation response on the open market, thereby relieving AES of its obligation,
which would have required the reservation of 40 MW of capacity, to provide such
ancillary service to NYSEG. Additionally, NYSEG will net supplemental service
consumption against gross plant output at the Xxxxxx, Xxxxxxxxx and Xxxxxxxx
generating stations (when each such plant is operating) for a period of two (2)
years from the Closing Date. At the conclusion of that two-year period, NYSEG
will bill AES for such supplemental service consumption, if any, in accordance
with NYSEG's applicable tariff.
10. When a final DEC opacity consent decree is issued, all
penalties relating to violations prior to Closing shall be considered an
Excluded Liability under the Asset Purchase Agreement, and shall be paid by
NYSEG.
11. With respect to the Xxxxx landfill, NYSEG shall (a)
remediate the ash spill at such landfill which occurred during the 1998/1999
winter season at NYSEG's sole
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cost and expense, and (b) based on preliminary estimates made by NYSEG that the
cost of repairing the observed sedimentation pond lining tear is $15,000,
reimburse AES for the cost of repairing the tear in the lining of the Xxxxx ash
sedimentation pond; provided, however, that with respect to NYSEG's undertaking
to so reimburse AES for the cost of repairing the tear and any related cost,
including costs of obtaining any necessary government approvals and costs
associated with re-routing and managing water during such repair process, NYSEG
shall only be responsible for up to $25,000. The actual cost of repairing the
tear in the lining of the Xxxxx ash sedimentation pond, subject to the aforesaid
cap, shall be addressed as a credit to AES in the Post-Closing Statement.
12. With respect to the coal tar reserve account maintained by
NYSEG with the DEC with respect to the burning of alternate fuels at Hickling
and Xxxxxxxx, (a) the reserve account currently has a balance of approximately
$75,000, (b) NYSEG will withdraw and retain those funds from that account in
excess of $37,500 on or before the Closing, to reflect the fact that the
applicable alternate fuel permit that was renewed for Hickling (and effective
March 28, 1999) does not contain a provision for the maintenance of such an
account, and (c) NYSEG will transfer its right to access the remaining $37,500
in that account pertaining to Xxxxxxxx to AES Creative Resources, L.P. ("ACR")
on the Closing. In the event that, after the Closing, the applicable alternate
fuel permit issued to ACR for Xxxxxxxx does not contain a provision for the
maintenance of such an account, ACR shall (d) if the Xxxxxxxx permit is issued
within the sixty (60) day period following Closing, agree to record a credit of
$37,500 in NYSEG's favor in the Post-Closing Statement, or (e) if the Xxxxxxxx
permit is issued later than that date which is sixty (60) days after the
Closing, ACR shall remit the amount of $37,500 to NYSEG within five (5) days
after the permit is issued. In the event that, after the Closing, the applicable
alternate fuel permit issued to ACR for Xxxxxxxx does contain a provision for
the maintenance of such an account, ACR shall have no obligation to credit or
remit such remaining funds to NYSEG.
13. With respect to the brine concentrator located at
Xxxxxxxx, NYSEG and AEE have entered into an agreement pursuant to which NYSEG
has agreed to indemnify AEE with respect to various matters related to the brine
concentrator and a certain contract entered into between
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Xxxxxx Brothers Corporation and NYSEG. A copy of that agreement is attached
hereto as Appendix D.
14. AES, and AEE, and ACR hereby consent to the assignment by
NGE Gen to NYSEG of all of NGE Gen's rights and obligations under the Asset
Purchase Agreement and, upon such assignment, AES, AEE and ACR shall be deemed
to have released NGE Gen from all obligations and liabilities under the Asset
Purchase Agreement.
15. From and after the Closing, NYSEG will provide backup and
supplemental power to AES under NYSEG Tariff SC-11. AES disagrees that this is
the applicable tariff and NYSEG acknowledges that AES has the right to petition
the New York Public Service Commission to apply a different tariff.
16. Sellers acknowledge that, in accordance with Section 6.2
of the Asset Purchase Agreement, after the Closing AES will have reasonable
access to the books and records related to the Purchased Assets with respect to
periods prior to the Closing. Sellers agree that such access shall include
access to books and records and Sellers' employees for the purpose of preparing
and reviewing financial statements for the Purchased Assets as of the dates and
for the periods prior to the Closing Date conforming with generally accepted
accounting principles and the requirements of Regulation S-X of the Securities
and Exchange Commission; provided that such access and responsibility for
Sellers' costs shall otherwise be in accordance with the terms of Section 6.2 of
the Asset Purchase Agreement; and provided further that it is understood that
Sellers shall only be required to provide existing data and shall not be
required to create or compile data that does not currently exist.
17. A new Estimated Closing Statement will be prepared by
Sellers reflecting an Estimated Adjustment as of the Closing Date.
18. Except for the foregoing, the terms and conditions of the
Asset Purchase Agreement remain unchanged in all respects. This letter agreement
shall constitute an amendment to the Asset Purchase Agreement.
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[This space left blank intentionally.]
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If the foregoing accurately reflects our agreement, please so
indicate by signing all three copies of this letter in the space provided below.
Two copies should be returned to NYSEG, while the other copy is for your files.
Very truly yours,
NEW YORK STATE ELECTRIC & GAS
CORPORATION
By
Xxxxxx X. Xxxxxx
Vice President and Secretary
NGE GENERATION, INC.
By
Xxxxxxx X. Xxxxxxxx
Executive Vice President
AGREED TO:
AES NY, L.L.C.
By
Name:
Title:
AES EASTERN ENERGY, L.P.
BY AES NY, L.L.C.,
as General Partner
By
Name:
Title:
AES CREATIVE RESOURCES, L.P.
BY AES NY, L.L.C.,
as General Partner
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By
Name:
Title:
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APPENDIX A
The following is a clarification of the responsibilities and
duties of each party under Section 6.10 of the Asset Purchase Agreement as such
section relates to the benefits to be provided by each of the Retirement Benefit
Plan for Employees of NYSEG (the "NYSEG DB Plan") and the "defined benefit plan"
which is identical to the NYSEG DB Plan to be established by AES pursuant to the
terms of Section 6.10 of the Asset Purchase Agreement (the "Clone-Offset Plan").
(Capitalized term used herein without definition are used herein as defined in
the Asset Purchase Agreement.)
A) Clone-Offset Plan. AES shall, as of the Closing Date,
establish a "defined benefit plan" which is identical to the NYSEG DB Plan under
which the ultimate benefits provided to the Transferred Employees shall be
offset by the value of the "Accrued Benefit", as such term is defined in Article
H, Section I of the NYSEG DB Plan, for each such Transferred Employee. AES
acknowledges and agrees that the Clone-Offset Plan shall be solely responsible
for any early retirement benefits to be provided by the Clone-Offset Plan, which
benefits will be identical to the early retirement benefits provided pursuant to
the terms of Article IV of the NYSEG DB Plan (the "Early Retirement Subsidy"),
subject to the offset provided by subsection B below.
The following example illustrates how these benefits will be
provided:
A Transferred Employee has earned a vested benefit of $1,000
per month under the NYSEG DB Plan by the time of Closing and earns an
additional $300 per month vested benefit under the Clone-Offset Plan by
August 1, 1999 (or some other date between Closing and June 30, 2000).
Assume that the Transferred Employee becomes age 55 and has at least 10
years service (including the service credited from the NYSEG DB Plan)
on August 1, 1999 (or such other date between Closing and June 30,
2000) and elects to retire. The Transferred Employee would be eligible
to receive 85% of the vested monthly benefit of $1,300 per month
($1,105 per month) under the Clone-Offset Plan, offset by the
actuarially-reduced vested benefit payable from the NYSEG DB Plan
(i.e., 37.9% of the $1,000 age 65 vested benefit or $379).
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B) NYSEG DB Plan. NYSEG and NGE hereby acknowledge and agree
that, as required by the terms of the Internal Revenue Code of 1986, as amended
(the "Code") and the Employee Retirement Income Security Act of 1974, as amended
("ERIISA"), the NYSEG DB Plan shall be responsible for providing the Early
Retirement Subsidy (as determined on the Transferred Employee's benefit
commencement date from the Clone-Offset Plan) on the Accrued Benefit (as
determined on the Closing Date) for any Transferred Employees who would be
eligible to receive such Early Retirement Subsidies if they retired on the
Closing Date and that no Early Retirement Subsidy shall be provided to any other
Transferred Employees by the NYSEG DB Plan. NYSEG and NGE shall take all actions
necessary to accomplish this result, including, but not limited to,
administering the NYSEG DB Plan in a manner consistent with the foregoing
sentence or adopting an amendment to the NYSEG DB Plan to provide benefits in
accordance with the terms of the foregoing sentence, as NYSEG and NGE, in their
sole and absolute discretion, deem necessary to comply with the terms of the
foregoing sentence.
The following examples illustrate the operation of the
foregoing paragraph:
A Transferred Employee is age 55 and has 10 years of service
on the day before the date of Closing. At that time, his vested age 65
benefit is $1,000 per month, so that, if he retired on the day before
the date of Closing, he would be entitled to 85% of such benefit due to
the Early Retirement Subsidy or $850 per month from the NYSEG DB Plan.
However, this same Transferred Employee elects not to retire
prior to Closing and continues to work for AES until June 30, 2000. At
that time, he is age 57 and has 12 years of combined service with
NYSEG/NGE and AES. Assume his vested age 65 benefit is now $1,200 per
month. Due to the Early Retirement Subsidy terms, he would be entitled
to 91% of that amount, or $1,092 per month from the Clone-Offset Plan,
reduced by the $910 per month offset (as determined above on the date
of Closing) payable by the NYSEG DB Plan. The Clone-Offset Plan would
pay the remaining $182 per month to the Transferred Employee.
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APPENDIX B
Agreement Regarding Consol Coal Sales Agreement
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AGREEMENT
THIS AGREEMENT made as of this 30th day of April, 1999 (the
"Agreement") by and among New York State Electric & Gas Corporation ("NYSEG"), a
New York corporation and NGE Generation, Inc. ("NGE Gen"), a New York
corporation (NYSEG with NGE Gen collectively referred to as the "Sellers"), and
AES Eastern Energy, L.P., a Delaware limited partnership ("AEE").
W I T N E S S E T H :
WHEREAS, the Sellers and AES NY, L.L.C., a Delaware limited
liability company ("AES NY") entered into a certain Asset Purchase Agreement
dated as of August 3, 1998 (as the same may be modified, supplemented or amended
from time to time, the "APA") pursuant to which the Sellers agrees to sell and
AES NY agrees to purchase the Purchased Assets; and
WHEREAS, the APA requires the Sellers to assign, and AES NY to
assume, without recourse to the Sellers, a certain Coal Sales Agreement dated
December 21, 1983, by and between NYSEG and Consolidation Coal Company
("Consol") (as the same may be modified, supplemented or amended from time to
time, the "CSA"); and
WHEREAS, the APA provides for the assignment of the CSA by the
Sellers to AES NY to be effected pursuant to the Assignment and Assumption
Agreement; and
WHEREAS, AES NY has assigned certain of its rights and
obligations under the APA with respect to the Xxxxxxx Station to AEE; and
WHEREAS, pursuant to the terms of the APA AEE is required to
assume, without recourse to the Sellers, the obligations of the Sellers under
the CSA arising or accruing on and after the Closing Date; and
WHEREAS, Xxxxxx, claiming a lack of creditworthiness of AEE,
has refused to release the Sellers from liability under the CSA following the
assignment of the CSA from the Sellers to AEE.
NOW THEREFORE, in consideration of the premises and the mutual
undertakings and agreements hereinafter set
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forth and intending to be legally bound hereby, the Sellers and AEE agree as
follows:
1. Definitions. Capitalized terms used herein shall, except as
otherwise specifically provided herein, have the respective meanings ascribed
thereto under the APA.
2. AEE Acknowledgments. AEE acknowledges and agrees that (a)
Xxxxxx's consent is not required for Sellers to assign the CSA to AEE, (b) the
CSA constitutes an Assigned Contract under the APA, (c) the assignment of the
CSA by the Sellers to AEE, and the assumption by AEE of all obligations and
liabilities under the CSA arising or accruing on and after the Closing Date,
constitutes an Assumed Liability under the APA, and (d) the assignment of the
CSA by the Sellers to AEE, and XXX's assumption of the CSA, will be effected
under the Assignment and Assumption Agreement in accordance with the terms of
the APA.
3. CSA Obligations. AEE shall assume and discharge when due,
all of the Sellers' liabilities and obligations, direct or indirect, known or
unknown, absolute or contingent, under the CSA to the extent arising or accruing
on and after the Closing Date.
4. AES Warranties and Covenants. AEE warrants and covenants to
the Sellers that (a) AEE shall not breach, default, or in any material respect
violate, the CSA in a manner that shall cause a claim for damages, or otherwise
for a sum of money, to be demanded from Sellers, or either Seller, under the
CSA, (b) AEE shall immediately deliver to NYSEG (in accordance with the
provisions of Section 9 of this Agreement) any notice, written or otherwise,
received from Consol that declares or claims that AEE is in breach of, in
default under, or otherwise in violation of the CSA, (c) AEE shall
contemporaneously deliver to NYSEG any notice delivered by AEE under the CSA
related to any breach, default, or violation of the CSA, (d) AEE shall not
extend the term of the CSA without first obtaining the prior approval of NYSEG,
which shall not be unreasonably withheld, delayed or conditioned, and (e) AEE
shall not modify, revise, or waive any right or obligation under the CSA, or
agree to so modify, revise or waive any right or obligation under the CSA, in a
manner that materially and adversely affects Sellers.
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5. Assignment. AEE shall not assign the CSA without the prior
written consent of NYSEG, which consent shall not be unreasonably withheld,
delayed or conditioned. Any attempted assignment of the CSA by AEE in violation
of the preceding sentence shall be deemed void. In the event of any assignment
of the CSA by AEE, AEE shall not be released from liability under the CSA or
this Agreement. For purposes of this Section 5, an assignment of the CSA shall
include both an assignment of rights or a delegation of duties or both. AEE
hereby consents to NGE Gen's assignment of its rights and obligations under this
Agreement to NYSEG, and NYSEG's assumption of such rights and obligations and,
upon such assignment and assumption, AEE will be deemed to have released NGE Gen
from all liability under this Agreement.
6. Sellers' Representations and Covenants. Sellers represent
that (a) no default, or event or occurrence which, upon the giving of notice, or
passage of time, or both, would constitute a default under the CSA, exists on
the date hereof, (b) Sellers shall immediately deliver to AEE (in accordance
with the provisions of Section 9 of this Agreement) any notice, written or
otherwise received from Consol, or a third party, in connection with the CSA,
and (c) Sellers shall not intentionally cause any default under or in connection
with the CSA from and after the date hereof.
7. Indemnity and Limitation of Liability. The parties agree
that Article VIII of the APA applies to the CSA as an Assumed Liability. Seller
shall indemnify, defend and hold harmless AEE with respect to the CSA in
accordance with the provisions of Article VIII of the APA. AEE shall indemnify,
defend and hold harmless the Sellers with respect to the CSA in accordance with
the provisions of Article VIII of the APA. The provisions of this Section 7
shall survive any expiration or termination of this Agreement. Sellers'
liability to AES under this Agreement in connection with the CSA shall be
limited to direct damages, if any, suffered by AEE as a result of Sellers'
material breach of this Agreement.
8. Termination. This Agreement may only be terminated by AEE
(a) upon written notice by AEE to the Sellers, following the receipt by the
Sellers from Consol of a written, unconditional acknowledgement, in form and
substance reasonably acceptable to the Sellers, that any or
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all liability of the Sellers under the CSA has been fully released, or (b) upon
expiration of the CSA, or (c) upon a lawful termination of the CSA which is
expressly agreed upon by Xxxxxx. This Agreement may be terminated by NYSEG upon
written notice to AEE under the circumstances described in Section 8(b) and 8(c)
above.
9. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given and effective if delivered
personally or by facsimile transmission or mailed by overnight courier or
registered or certified mail (return receipt requested), postage prepaid, to the
recipient party at its following address (or at such other address or facsimile
for a Party as shall be specified by like notice; provided, however, that
notices of a change of address shall be effective only upon receipt thereof):
(a) If to NYSEG, to:
New York State Electric & Gas Corporation
Legal Services Department
Corporate Drive - Kirkwood Industrial Park
P.O. Box 5224
Binghamton, N.Y. 13902-5224
Attn: Xxxxxx X. Xxxxxx
with a copy to:
Xxxxx Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 10158
Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
(b) If to AEE, to:
AES Eastern Energy, L.P.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Project Manager
with a copy to:
Xxxxxxxxxx & Xxxxx L.L.P.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, X.X. 10112
Attn: Xxxxxxx Xxxxxx, Esq.
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10. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York (regardless of the
law that might otherwise govern under applicable New York principles of
conflicts of law).
11. Forum Selection. The parties hereto agree that venue in
any and all actions and proceedings related to the subject matter of this
Agreement shall be in the State and federal courts in and for New York County,
New York, which courts shall have exclusive jurisdiction for such purpose, and
the parties hereto irrevocably submit to the exclusive jurisdiction of such
courts and irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding. Service of process may be made in
any manner recognized by such courts. Each of the parties hereto irrevocably
waives its right to a jury trial with respect to any action or claim arising out
of any dispute in connection with this Agreement or the transactions
contemplated hereby.
12. Dispute Resolution. In the event a dispute arises between
the Sellers and AEE regarding the application or interpretation of any provision
of this Agreement, the provision for settlement of disputes set forth in Section
10.1 of the APA shall apply and such provision is incorporated herein by
reference thereto and made a part of this Agreement.
13. Amendments. Subject to applicable law, this Agreement may
be amended, modified or supplemented only by written agreement of the Sellers
and AEE.
14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Relationship to APA. Nothing in this Agreement shall be
construed as in any way affecting the Sellers' or AEE's rights or remedies under
the APA; provided, however, that notwithstanding Section 8.1(f) of the APA, the
rights and remedies of the Sellers and AEE with respect to the CSA shall be
deemed supplemented by this Agreement. In the event of a conflict between the
terms and conditions of this Agreement and the APA shall be resolved in favor of
this Agreement.
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16. Representations. AEE and Sellers each represent that this
Agreement constitutes the legal, valid and binding obligation of each such party
and is enforceable in accordance with its terms.
17. Interpretation. The section headings contained in this
Agreement are solely for the purpose of reference are not part of the agreement
of the parties had shall not in any way affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the Sellers and AEE have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first written above.
NEW YORK STATE ELECTRIC & GAS CORPORATION
By
Name:
Title:
NGE GENERATION, INC.
By
Name:
Title:
AES EASTERN ENERGY, L.P.
By
Name:
Title:
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APPENDIX C
Agreement Regarding Xxxxxxx Station Vibration Condition
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AGREEMENT
AGREEMENT made as of the 13th day of April, 1999 ("Agreement") between and
among NGE GENERATION, INC., a New York corporation ("NGE"), NEW YORK STATE
ELECTRIC & GAS CORPORATION, a New York corporation ("NYSEG", with NGE and NYSEG
being collectively referred to as "Sellers") and AES EASTERN ENERGY, L.P., a
Delaware limited partnership ("AEE").
W I T N E S S E T H :
WHEREAS, the Sellers and AES NY, L.L.C., a Delaware limited liability
company ("AES NY") entered into a certain Asset Purchase Agreement dated as of
August 3, 1998 (as the same may be modified, supplemented or amended from time
to time, the "APA") pursuant to which Sellers agree to sell and AES NY agrees to
purchase the Purchased Assets. Capitalized terms used herein shall, except as
otherwise specifically provided herein, have the respective meanings ascribed
thereto under the APA;
WHEREAS, a vibration condition has been observed in the number 9 bearing of
the turbine-generator at the Xxxxxxx Station (the "Vibration Condition"), which
condition, in the opinion of AEE, differs from the vibration condition that
existed at the Xxxxxxx Station turbine-generator as of the date of the APA;
WHEREAS, the Vibration Condition may be satisfactorily addressed by
maintenance and repair to the Xxxxxxx Station turbine-generator that will be
performed during the AEE Turbine Outage (hereinafter defined);
WHEREAS, the parties recognize that the possibility exists that
satisfactorily addressing the Vibration Condition will require inspection of,
and maintenance and repair to, the Xxxxxxx Station turbine-generator in addition
to that which is customarily performed during a scheduled 10-year outage such as
the AEE Turbine Outage;
WHEREAS, the Vibration Condition may also have further material
implications for revenue to be derived from the Xxxxxxx Station from and after
the Closing Date in that such possible additional inspection, repair and
maintenance
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required to satisfactorily address the Vibration Condition may require the
Xxxxxxx Station turbine-generator to be unavailable to produce power for a
period extending beyond the duration of the planned AEE Turbine Outage and the
planned AEE Boiler Outage (hereinafter defined);
WHEREAS, AES NY has assigned certain of its rights and obligations under
the APA with respect to the Xxxxxxx Station to AEE (the "AEE Assignment") and
has assigned certain other of its rights and interests under the APA with
respect to the Xxxxxxx Station to the owner trusts more specifically described
in Exhibit A attached hereto (collectively, the "Owner Trusts");
WHEREAS, AEE will be the lessee, under various lease agreements to be
entered into between AEE and the Owner Trusts (the "Lease Agreements"), of the
rights and interests to be acquired by the Owner Trusts in and to the Xxxxxxx
Station, which lease agreements will grant AEE operational control over such
rights and interests held by the Owner Trusts in the Xxxxxxx Station;
WHEREAS, as of the Closing Date, AEE will be the entity entitled to
exercise control over the operations of the Xxxxxxx Station as a result of the
execution and delivery of the Lease Agreements and the conveyance to AEE of the
other interests in and to the Xxxxxxx Station by Sellers under the APA pursuant
to the AEE Assignment, NGE will assign its rights and obligations under this
Agreement to NYSEG, and NYSEG shall assume such rights and obligations;
WHEREAS, AEE will conduct an outage (the "AEE Turbine Outage") for the
Xxxxxxx Station, to commence on or about May 1, 1999, to perform repair and
periodic maintenance to the Xxxxxxx Station turbine-generator consistent with a
10-year wear and tear factor from the baseline data contained in the GE Power
Generation Services "Inspection Report" dated Fall 1990, FSR 306T015 (the "1990
Inspection Report");
WHEREAS, AEE will, and will cause AES NY to, close under the APA
notwithstanding the Vibration Condition and uncertainty on the date of this
Agreement regarding the precise nature of the cause of the Vibration Condition,
the nature of addressing the Vibration Condition and the magnitude of the impact
the Vibration Condition may have on
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repair costs and future revenues from the Xxxxxxx Station, based upon the
undertakings of Sellers hereinafter set forth;
WHEREAS, Sellers wish to insure that AEE and AES NY will close under the
APA, based upon the undertakings of Sellers hereinafter set forth,
notwithstanding the Vibration Condition and the uncertainty on the date of this
Agreement regarding the precise nature of the cause of the Vibration Condition,
the nature of addressing the Vibration Condition, and the magnitude of the
impact the Vibration Condition may have on repair costs and future revenues from
the Xxxxxxx Station.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings and agreements hereinafter set forth and intending to be legally
bound hereby, Sellers and AEE agree as follows:
1. As used in this Agreement, the following terms shall have the meanings
specified below:
"Xxxxxxx Station" shall mean the Xxxxxxx Generating Station consisting of a
coal-fired, steam turbine generating unit with a net generating capacity of 675
MW located in Xxxxxx, New York, and associated facilities.
"Lost Net Revenues" for any period shall mean net revenues that would have
been received by AEE during such period assuming that the Xxxxxxx Station would
have operated during that period consistent with its average dispatch curve over
the then most-recent 12-month period, and that the output (installed net
capacity and energy) that the Xxxxxxx Station would have produced during that
period would have been sold at a price equal to the applicable price set forth
in the "Daily-Western New York" index contained in "Power Market Weekly" (the
"Index"). For purposes of this definition of Lost Net Revenue, (a) if the Index
provides a range of installed net capacity and/or energy prices applicable to
all or part of the period in question, then the price that shall be used for
purposes of calculating Lost Net Revenue shall be the average of the prices set
forth in that range, and (b) if the Index should cease to be published, or if
the Index is not published for all or part of the period, then the applicable
price for installed net capacity and energy at PJM Western Hub for that period
shall be used for calculating Lost Net Revenue.
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"Completion Date" shall mean the date on which an independent engineering
consultant (the "Consultant") retained by NYSEG and AEE and selected by NYSEG
and AEE from the list attached hereto as Exhibit B (or such other consultant as
mutually agreed to by NYSEG and AEE), has confirmed in writing, provided to both
AEE and NYSEG, its professional engineering opinion that the Vibration Condition
has been satisfactorily addressed in that the Xxxxxxx Station turbine-generator
can be reasonably expected, given the assumptions that the Consultant may
reasonably find appropriate for such an opinion, to operate for a period of 10
years from the Completion Date without the re-occurrence of the Vibration
Condition outside of the manufacturer's operating specifications. AEE and NYSEG
shall share the cost of the Consultant equally. AEE and NYSEG shall cause the
Consultant to issue the aforesaid opinion as soon as possible after the
completion of those steps taken by AEE, and agreed to be NYSEG, to address the
Vibration Condition.
2. During the AEE Turbine Outage, AEE shall inspect the Xxxxxxx Station
turbine-generator and shall address the Vibration Condition in a manner
reasonably satisfactory to AEE and consistent with Good Utility Practices. AEE
will proceed with due diligence and employ Good Utility Practices to address the
Vibration Condition. As part of AEE's obligation to employ due diligence to
address the Vibration Condition, and at NYSEG's expense, AEE shall use
commercially reasonable efforts to place on, or have available at, the Xxxxxxx
Station site, on or before the date that the AEE Turbine Outage will commence,
equipment, machinery, and personnel (including a lifting rig and lathe) that
NYSEG confirms in writing may be required to satisfactorily address the
Vibration Condition during the AEE Turbine Outage. AEE shall employ reasonable
best efforts to satisfactorily address the Vibration Condition during the
duration of the AEE Turbine Outage.
3. AEE will permit representatives and employees of NYSEG and the
Consultant to be present at the Xxxxxxx Station from the date the AEE Turbine
Outage commences through the Completion Date for the purpose of observing the
AEE Turbine Outage, enabling NYSEG to exercise its rights under this Agreement,
and facilitating the Consultant's performance of its functions under and in
connection with this Agreement.
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4. AEE will not undertake any aspect of addressing the Vibration Condition
without first obtaining the consent of NYSEG thereto, which consent shall not be
unreasonably withheld, delayed or conditioned. If NYSEG does not either give its
consent, or refuse, in writing, to give its consent (specifying in such writing,
in reasonable detail, its reason for refusing to give such consent) within 48
hours after AEE's request for such consent (which must be written), NYSEG's
consent shall be deemed given. If NYSEG shall refuse, in writing, to give its
consent to the matter requested, and NYSEG and AEE are unable to resolve their
differences on such matter within an additional 12-hour period, such matter
shall be promptly referred to the Consultant for resolution consistent with the
terms and conditions of this Agreement, and NYSEG and AEE shall require the
Consultant to render a decision on such matter no later than four (4) hours
after the Consultant has received such matter for resolution. The decision of
the Consultant shall be binding on NYSEG and AEE.
5. Subject to paragraph 7, NYSEG shall be responsible for, and shall pay
all costs and expenses reasonably incurred by AEE, up to and including the
Completion Date, in connection with satisfactorily addressing the Vibration
Condition, including, but not limited to, the costs of all necessary replacement
parts, the costs of repair to damaged parts, and all labor and other costs
incurred in connection therewith, to the extent such costs and expenses are
incurred in connection with AEE undertaking repair and maintenance of the
Xxxxxxx Station turbine-generator that is (a) beyond the repair and maintenance
to the Xxxxxxx Station turbine-generator consistent with a 10-year wear and tear
factor from the baseline data contained in the 1990 Inspection Report, or (b)
not activity to address normal wear and tear of the Xxxxxxx Station
turbine-generator. Except as otherwise provided in this paragraph 5, AEE shall
be responsible for all costs and expenses in connection with the AEE Turbine
Outage, including those costs and expenses incurred by AEE in satisfactorily
addressing the Vibration Condition.
6. The AEE Turbine Outage is scheduled to commence on or about May 1, 1999
and end 39 days after it commences (the "Turbine Outage Target Date"). In
addition, AEE has planned an outage at Xxxxxxx Station with respect to the
boiler (the "AEE Boiler Outage") which is scheduled to
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commence on or about May 1, 1999 and end 45 days after it commences (the "Boiler
Outage Target Date").
7. If (a) the Completion Date has not occurred on or prior to the Turbine
Outage Target Date, but it does occur before the Boiler Outage Target Date,
resulting in a loss of revenue due to foregone sales of, or credits for,
installed net capacity and/or energy to AEE from and after the Boiler Outage
Target Date, NYSEG shall provide compensation to AEE for Lost Net Revenues for
and with respect to the period beginning on the Boiler Outage Target Date and
ending on the date that is a number of days after the Boiler Outage Target Date,
that number being equal to the number of days after the Turbine Outage Target
Date that the Completion Date occurs, or (b) the Completion Date occurs after
the Boiler Outage Target Date, resulting in a loss of revenue due to foregone
sales of, or credits for, installed net capacity and/or energy to AEE from and
after the Boiler Outage Target Date, NYSEG shall provide compensation to AEE for
Lost Net Revenue for and with respect to the period beginning on the Boiler
Outage Target Date and ending on a date after the Completion Date that is the
lesser of(AA) six (6) days, or (BB) the number of days needed to complete the
AEE Boiler Outage after the Completion Date, in either case (a) or (b) above to
the extent the delay in achieving the Completion Date prior to the later of
those outage target dates is caused by AEE's need to satisfactorily address the
Vibration Condition and is not caused by (i) repair and maintenance to the
Xxxxxxx Station turbine-generator consistent with a 10-year wear and tear factor
from the baseline data contained in the 1990 Inspection Report, (ii) a breach by
AEE of its obligations under this Agreement, (iii) activity related to
addressing normal wear and tear of the Xxxxxxx Station turbine-generator, (iv)
any repair or maintenance to the Xxxxxxx Station turbine-generator that is
unrelated to the need to satisfactorily address the Vibration Condition, (v) any
negligence or willful misconduct of AEE or any of its representatives,
employees, or contractors, (vi) any event customarily referred to as "force
majeure," or (vii) any independent delay in performing the AEE Turbine Outage or
the AEE Boiler Outage. For purposes of this paragraph 7, AEE shall use
commercially reasonable efforts to complete the AEE Boiler Outage as soon as
possible after the Completion Date.
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8. The sums payable by NYSEG to AEE under this Agreement shall be limited
to those amounts set forth in paragraphs 5 and 7 (and, to the extent such costs
are incurred by AEE, NYSEG's share of the cost of the Consultant or costs
incurred pursuant to paragraph 2) and shall be paid by NYSEG, subject to audit,
within twenty (20) days of written demand therefor, accompanied by reasonable
documentary substantiation of same, in immediately available funds to an account
specified by AEE.
9. (a) Within fourteen (14) days after the AEE Turbine Outage has
commenced, AEE may provide written notice to NYSEG (the "Outage Notice") to the
effect that, in the opinion of AEE, it is not possible for ARE to complete the
repair and maintenance necessary to address satisfactorily the Vibration
Condition in accordance with the terms and conditions of this Agreement on or
before the Turbine Outage Target Date.
(b) If NYSEG agrees with AEE's opinion expressed in the Outage Notice,
which agreement shall be delivered to AEE in writing within forty-eight (48)
hours after NYSEG's receipt of the Outage Notice, (i) AEE shall have the right
to complete the AEE Turbine Outage without addressing the Vibration Condition,
(ii) AEE shall have the right to schedule a Xxxxxxx Station turbine outage (the
"Subsequent Turbine Outage") to address the Vibration Condition, which outage
shall be scheduled to commence on a date, mutually agreed to by NYSEG and AEE,
during the 12-month period (the "Subsequent Outage Period") commencing with the
later of (AA) the completion of the AEE Turbine Outage, (BB) if the timing of
the Subsequent Turbine Outage is the subject of disagreement, the end of the
good-faith discussion period described in subsection (iii) below, and (CC) if
the timing of the Subsequent Turbine Outage is subject to the determination of
the Consultant under section (c) below, the date that the Consultant renders a
decision, and (iii) NYSEG and AEE shall engage in good-faith discussions, for a
period no longer than forty-five (45) days following NYSEG's receipt of the
Outage Notice, to agree upon the timing of the Subsequent Turbine Outage and the
scope of repair and maintenance to the Xxxxxxx Station turbine-generator that
will be conducted by AEE during the Subsequent Turbine Outage to address
satisfactorily the Vibration Condition.
If AEE so schedules the Subsequent Turbine Outage as agreed by NYSEG and
AEE, or as determined by the
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Consultant, (x) NYSEG shall reimburse AEE for the costs of, and Lost Net Revenue
associated with, the Subsequent Turbine Outage to the same extent as set forth
in paragraphs 5 and 7 of this Agreement, and upon the payment of such sums,
NYSEG shall have no further liability to AEE under this Agreement, (y) AEE shall
use commercially reasonable efforts to commence the Subsequent Turbine Outage
during the Subsequent Outage Period, provided, however, that if AEE cannot so
timely commence the Subsequent Turbine Outage despite such efforts due to the
unavailability of equipment, parts or personnel, then AEE shall have the right,
upon written notice to NYSEG, to commence the Subsequent Turbine Outage during
the six-month period following the expiration of the Subsequent Outage Period on
a date mutually agreeable to NYSEG and AEE, and (z) the terms and conditions of
this Agreement applicable to addressing the Vibration Condition during the AEE
Turbine Outage shall be equally applicable to addressing the Vibration Condition
during the Subsequent Turbine Outage, unless such terms and conditions are
modified by NYSEG and AEE in writing.
(c)(i) If NYSEG disagrees with AEE's opinion expressed in the Outage
Notice, which disagreement shall be conveyed to AEE in writing within
forty-eight (48) hours after NYSEG's receipt of the Outage Notice, or (ii) if
AEE and NYSEG cannot agree, despite a period of forty-five (45) days' good-faith
discussions, on the timing of, and the scope of repair and maintenance to be
performed by AEE during, the Subsequent Turbine Outage to address satisfactorily
the Vibration Condition, then the matter shall be promptly referred to the
Consultant for resolution consistent with the terms and conditions of this
Agreement, and NYSEG and AEE shall require the Consultant to render a decision
no later than four (4) hours after receiving for resolution the matter described
in subsection (c)(i) above, or no later than five (5) days after receiving the
matter for resolution described in subsection (c)(ii) above. The decision of the
Consultant shall be binding on NYSEG and AEE.
10. All notices and other communications hereunder shall be in writing and
shall be deemed given and effective if delivered personally or by facsimile
transmission or mailed by overnight courier or registered or certified mail
(return receipt requested), postage prepaid, to the recipient Party at its
following address (or at such other address or facsimile for a Party as shall be
specified
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by like notice; provided, however, that notices of a change of address shall be
effective only upon receipt thereof):
(a) If to NYSEG, to:
NEW YORK STATE ELECTRIC & GAS
CORPORATION
Legal Services Department
Corporate Drive-Kirkwood Industrial Park
P.O. Box 5224
Binghamton, New York 13902-5224
Attn: Secretary
with a copy to:
Xxxxx Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
(b) If to AEE, to:
AES Eastern Energy, L.P.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Project Manager
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
(it being intended that no separate notice be given to NGE under this
Agreement).
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York (regardless of the
law that might otherwise govern under applicable New York principles of
conflicts of law) as to all matters, including, but not limited to, matters of
validity, construction, effect, performance and remedies. The Parties hereto
agree that venue in any and all actions and proceedings related to the subject
matter of this Agreement shall be in the State and federal courts in and for New
York County, New York, which
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courts shall have exclusive jurisdiction for such purpose, and the parties
hereto irrevocably submit to the exclusive jurisdiction of such courts and
irrevocably waive the defense of an inconvenient forum to the maintenance of any
such action or proceeding. Service of process may be made in any manner
recognized by such courts. Each of the Parties hereto irrevocably waive its
right to a jury trial with respect to any action or claim arising out of any
dispute in connection with this Agreement or the transactions contemplated
hereby.
12. Dispute Resolution. In the event a dispute arises between the Sellers
and AEE regarding the application or interpretation of any provision of this
Agreement, the provision for settlement of disputes set forth in Section 10.1 of
the APA shall apply and such provision is incorporated herein by reference
thereto and made a part of this Agreement.
13. Amendments. Subject to applicable law, this Agreement may be amended,
modified or supplemented only by written agreement of NYSEG and AEE.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Assignment. As between Sellers, NGE may assign all of its rights and
obligations under this Agreement to NYSEG without the consent of AEE and upon
such an assignment, AEE will be deemed to have released NGE from all obligations
and liabilities hereunder.
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16. Interpretation. The Section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
Parties and shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the Sellers and AEE have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
NGE GENERATION, INC.
By __________________________________
Xxxxxxx X. Xxxxxxxx
Executive Vice President
NEW YORK STATE ELECTRIC & GAS
CORPORATION
By __________________________________
Xxxxxxx X. Xxxxxxxx
Executive Vice President
AES EASTERN ENERGY, L.P.
By __________________________________
Xxxxx Xxxxxxx
Vice President
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Exhibit A
Owner Trusts
31
EXHIBIT A
The names of the Owner Trusts are as follows:
Xxxxxxx Facility Trust A-1, A-2, B-1, B-2, C-1, C-2
Xxxxxxxx Facility Trust A-1, A-2, B-1, B-2, C-1, C-2
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Exhibit B
List of Consultants
33
PTI Schenectady, NY
Turbine Consultants Milwaukee, WI
ReAct, Ltd., Team LLC Mount Pleasant, SC
MDA Schnectady, NY
Providence Rotating
Electrical Equip. Services Columbus, OH
Stone & Xxxxxxx Boston, MA
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APPENDIX D
Brine Concentrator Agreement
F:\ATTY\GIANNASC\NYSEG\GenAuction\OMNIBUS_draft050799_vers2.doc
35
APPENDIX D
NEW YORK STATE ELECTRIC & GAS CORPORATION
AND
NGE GENERATION, INC.
CORPORATE DRIVE - KIRKWOOD INDUSTRIAL PARK
P.O. BOX 5224
BINGHAMTON, NEW YORK 13901-5224
May ___, 1999
AES Eastern Energy, L.P.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Xxxxxxxx Station Brine Concentrator
Gentlepersons:
Reference is made to the Asset Purchase Agreement dated as of August 3,
1998 by and among NGE Generation, Inc. ("NGE Generation"), New York State
Electric & Gas Corporation ("NYSEG"), and AES NY, L.L.C. ("AES") (as amended and
assigned, the "Asset Purchase Agreement"). NGE Generation and NYSEG are
individually and collectively referred to in this Letter Agreement as the
"Sellers". Capitalized terms not otherwise defined in this Letter Agreement
shall have the meaning ascribed to them in the Asset Purchase Agreement.
Among the assets to be transferred pursuant to the Asset Purchase Agreement
are a calcium chloride brine concentrating system located in the FGD Building at
the Xxxxxxxx Station (the "Brine Concentrator") and an Agreement for Calcium
Chloride Brine Sales dated as of November 3, 1994 by and between NYSEG and
Xxxxxx Brothers Corporation (the "Xxxxxx Bros. Contract") governing the sale and
removal of brine from the Brine Concentrator. The Xxxxxx Bros. Contract is
subject to litigation in an action in the Supreme Court of the State of New York
for Albany County entitled "Xxxxxx Brothers, Inc. v. New York State Electric &
Gas Corporation" (the "Xxxxxx Bros. Litigation"). The purpose of this Letter is
to establish the indemnity obligations of the Sellers and AES with respect to
certain disputes under the Xxxxxx Bros. Contract and certain potential liability
relating to non-payment of sums relating to the manufacture, installation,
repair or maintenance of the Brine Concentrator.
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The Sellers and AES hereby acknowledge that any and all liabilities
caused by Sellers' breach, if any, of the Xxxxxx Bros. Contract arising prior to
the Closing Date (including any and all liabilities arising under the Xxxxxx
Brothers Litigation) are and shall remain an Excluded Liability as that term is
defined in Section 2.4(c) of the Asset Purchase Agreement. The parties agree
that any and all liabilities related to the Xxxxxx Bros. Contract arising at or
after the Closing Date during the term of the Xxxxxx Bros. Contract based upon a
claim that (i) NYSEG, or any of its successors-in-interest (including without
limitation AES Eastern Energy, L.P. ("AEE")) failed to use its best efforts to
remediate, modify or repair the Brine Concentrator, (whether before or after the
Closing Date); (ii) the effluent discharged from the Brine Concentrator does not
meet the specifications of the Xxxxxx Bros. Contract (whether before or after
the Closing Date); or (iii) the failure of NYSEG, or any of its
successors-in-interest (including without limitation AEE) to use its best
efforts to meet the brine production estimates set forth in Section 3.2 of the
Xxxxxx Bros. Contract, shall each be deemed to be Excluded Liabilities, as that
term is defined in Section 2.4 of the Asset Purchase Agreement. The parties
further agree that neither AES nor any of its affiliates (including without
limitation AEE) shall have any responsibility to repair or maintain the Brine
Concentrator.
Notwithstanding anything to the contrary contained herein, AES shall be
solely liable for the consequences of its own willful misconduct and gross
negligence in connection with the operation of the Brine Concentrator, as well
as AES's own liability in connection with the assumption of and performance
under the Xxxxxx Bros. Contract (which liability shall constitute an Assumed
Liability as defined in Section 2.3 of the Asset Purchase Agreement) unless such
liability constitutes an Excluded Liability.
The Sellers agree, jointly and severally, to indemnify, defend and hold
harmless AES, its officers, directors, employees, shareholders, affiliates and
agents (each, an "AES Indemnitee") from and against any and all Indemnifiable
Losses (as defined in the Asset Purchase Agreement) asserted against or suffered
by any AES Indemnitee relating to, resulting from or arising out of, any claim
for non-payment of sums relating to the manufacture, installation, repair or
maintenance of the Brine Concentrator (whether such claim arises before or after
the Closing Date). In the event that a lien is filed on the Brine Concentrator
in connection with any such claim, Sellers agree to take all actions necessary
to have such lien removed within a ten day period following notice from AES,
including, without limitation, the posting of a bond in an amount sufficient to
have such lien removed.
The parties agree that that the terms and conditions of this letter
agreement shall survive the closing of the transactions contemplated by the
Asset Purchase Agreement.
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Please indicate your approval and acceptance of the terms and
conditions of this letter agreement by signing in the space provided below.
Very truly yours,
NGE GENERATION, INC.
By:___________________
Xxxxxxx X. Xxxxxxxx
Executive Vice President
NEW YORK STATE ELECTRIC
& GAS CORPORATION
By:___________________
Xxxxxx X. Xxxxxx
Vice President and Secretary
Accepted and Agreed to by:
AES Eastern Energy, L.P.
By:___________________________
Title:__________________________
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