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EXHIBIT 10.61
EXECUTION COPY
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ARTHUR KILL CONTINUING SITE AGREEMENT
By and Between
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
and
NRG ENERGY, INC.
Dated as of
January 27, 1999
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ARTHUR KILL CONTINUING SITE AGREEMENT (including the Schedules hereto,
this "Agreement") dated as of January 27, 1999, by and between CONSOLIDATED
EDISON COMPANY OF NEW YORK, INC., a New York corporation ("Seller"), and NRG
ENERGY, INC., a Delaware corporation ("Buyer", and collectively with Seller, the
"Parties").
WHEREAS Seller and Buyer are entering into a Generating Plant and Gas
Turbine Asset Purchase and Sale Agreement dated as of even date herewith (the
"Sale Agreement") for the sale of certain of Seller's generating assets;
WHEREAS Seller intends to continue to conduct its transmission and
distribution operations from their present locations;
WHEREAS pursuant to the Sale Agreement, Seller has agreed to transfer to
Buyer certain designated properties and assets located at the Parcels (as
defined below) pertaining to Seller's generating operations and to retain
certain designated properties and assets; and
WHEREAS Seller and Buyer wish to define the continuing responsibilities
and obligations of the Parties to one another with respect to their respective
properties and assets located at the Parcels and other matters.
NOW, THEREFORE, in order to carry out the transactions contemplated by
the Sale Agreement and this Agreement, and in consideration of the mutual
representations, covenants and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Agreement, all capitalized
terms shall have the meanings ascribed to them in the Sale Agreement unless
otherwise defined in this Agreement and the following terms shall have the
following meanings:
"Agreement" shall have the meaning set forth in the Preamble.
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"Applicable Legal Requirements" shall have the meaning set forth in
Section 2.01.
"Astoria Parcel" shall have the meaning ascribed to the term "Parcels" in
the Astoria Declaration of Easements.
"Buyer" shall have the meaning set forth in the Preamble.
"Buyer Operations Manager" shall have the meaning set forth in Section
3.14(a).
"Buyer Parcel" shall have the meaning ascribed thereto in the Arthur Kill
Declaration of Easements Agreement.
"Confidential Information" shall have the meaning set forth in Section
5.03(a).
"Delivery Revenue Meter" means a Revenue Meter that comprises part of a
Delivery Revenue Meter System.
"Delivery Revenue Meter Systems" means Revenue Meter Systems used to
measure the transfer of energy from Seller to Buyer.
"Disclosing Party" shall have the meaning set forth in Section 5.03(a).
"Emergency Low Gas Pressure Trip Switch" means the main supply header
emergency low gas pressure trip switch that monitors natural gas pressure to the
Generating
"Parcel" shall have the meaning ascribed thereto in the Arthur Kill
Declaration of Easements Agreement.
"Party" shall have the meaning set forth in the Preamble.
"Points of Interconnection" means the points 6n the Transmission System
where electrical power generated by Buyer will be delivered by Buyer to the
Transmission System or, under certain circumstances, where electric power will
be delivered from the Transmission System to Buyer.
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"Receiving Party shall have the meaning set forth in Section 5.03(a).
"Remedial Action means any action proposed or performed at the Buyer
Parcel that Seller deems necessary under Environmental Laws (including locating
necessary equipment on the Buyer Parcel) to investigate, study, report on,
monitor, remediate, remove, treat, control or prevent the migration of, or
defend litigation or claims arising from, Hazardous Substances which are
Released from or directly as a result of the Transformer Incident.
"Remediate" means to engage in any or all of the following activities to
the extent they relate to or arise from the presence, Release or threatened
Release of Hazardous Substances at a Parcel: (i) monitoring, investigation,
cleanup, containment, removal, mitigation, response or restoration work; (ii)
obtaining any Permits necessary to conduct any such activity; (iii) preparing
and implementing any plans or studies for any such activity; and (iv) obtaining
a written notice from the Governmental Authority with jurisdiction over the
Parcel under applicable Environmental Laws that no material additional work is
required by such Governmental Authority.
"Representatives" shall have the meaning set forth in Section 5.03(a).
"Revenue Meter Systems" means Revenue Meters and associated current
transformers and potential transformers.
"Sale Agreement" shall have the meaning set forth in the Recitals.
"Seller" shall have the meaning set forth in the Preamble.
"Seller Operations Manager" shall have the meaning set forth in Section
3.14(b)
"Seller Parcel" shall have the meaning ascribed thereto to in the Arthur
Kill Declaration of Easements Agreement.
"Substation Interface Cables" means (i) control cables and associated
conduits located in a Substation which connect the Generating Facilities with
Buyer Assets located in the Substation and (ii) control and low voltage power
cables and associated conduits located in a Substation which connect Seller
Assets with Buyer Assets.
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"Switching Rules" shall have the meaning set forth in Section 3.11.
"System Integrity" means the adequate and reliable state of operation of
the Transmission System providing electronic service to customers who purchase
power and related services delivered through the Transmission System.
"Transformer Incident" means the fire involving a light and power
transformer at Arthur Kill on September 7, 1998.
"Transmission System Operator" means the Seller's Energy Control Center
staff operating all or any portion of the Transmission System.
"Trip-Out" means the automatic opening of disconnecting devices located
in a Substation or the Generating Facilities, such as circuit breakers, which is
caused by the Protective Relaying System in order to isolate faulty facilities,
equipment or systems.
ARTICLE II
General
Section 2.01. Compliance with Laws and Good Industry Practice.
Notwithstanding any other provision in this Agreement, Seller shall conduct all
its operations in connection with and maintain the Seller Assets, and buyer
shall conduct all its operations in connection with and maintain the Buyer
Assets (a) in accordance with Applicable Legal Requirements and (b) pursuant to
Good Industry Practice. Each of Buyer and Seller shall make all modifications to
facilities, equipment or systems that could reasonably be expected to impact the
Generating Facilities or the Transmission System in accordance with Good
Industry Practice. Except as otherwise provided herein, Seller shall not be
responsible for the operation or maintenance of, or for providing, procuring or
storing spare parts for, the Buyer Assets and Buyer shall not be responsible for
the operation or maintenance of, or for providing, procuring or storing spare
parts for, the Seller Assets, regardless of the location of such Buyer Assets or
Seller Assets, as applicable. "Applicable Legal Requirements" means all laws,
rules, regulations and orders of any Governmental Authority, including
Environmental Laws, from time to time in effect applicable to Seller or Seller
Assets or Buyer or Buyer Assets, as applicable. "Good Industry Practice" means
any of the applicable acts, practices or methods from time to time (i)(A)
required by the NYPP, NYSRC, NPCC or NERC or the ISO or any successor
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thereto, or any other organization with similar duties, including any local,
state, regional, national or international reliability organization, or required
by any rules issued pursuant to the authority of any such organization, in each
case, with jurisdiction or authority in respect of Seller or Seller Assets or
Buyer or Buyer Assets and whether or not the Party whose conduct is at issue is
a member thereof, or by any other person acting pursuant to the authority of any
of the foregoing entities or organizations or (B) required by the provisions of
the Sale Agreement, this Agreement or any other Ancillary Agreement or (ii)
engaged in or approved by a significant portion of the electric utility industry
in the United States at the relevant time, including reliability, operating,
planning and engineering specifications, if in any case there are no acts,
practices or methods required by clauses (i) (A) and (i) (B) applicable at such
time; provided, however, that, in the event of any conflict among the
requirements of the foregoing clauses (i) (A) and (i) (B), Good Industry
Practice shall be determined by reference exclusively to the requirements and
terms of clause (i) (A) and not by reference to clause (i) (B).
Section 2.02.Inspections. Maintenance. Access and Information. (a)
Inspections and Maintenance. Except as otherwise provided herein, each Party
shall have the right, from time to time upon reasonable advance notice and in
accordance with Applicable Legal Requirements and Good Industry Practice, to
perform routine inspections, measurements, meter readings and maintenance of any
facilities, equipment or. systems owned by such Party that are located on the
premises of the other Party, and such inspecting Party shall reimburse the other
Party for its reasonable costs and expenses in connection therewith, including
that of any escort designated by such other Party to observe such inspection;
provided, however, that the Party performing such inspections, measurements,
meter readings and maintenance shall use its reasonable best efforts to ensure
that such activities do not interfere with the other Party's ordinary course
operations.
(b) Access. Notwithstanding any provision to the contrary in the Arthur
Kill Declaration of Easements Agreement and except as provided for herein or
otherwise consented to in advance by the other Party, in no event shall any
employee, contractor, agent or other representative of either Party (the
"Entering Party") enter into or be present on the premises of such other Party
for any purpose without being accompanied by an escort designated by such other
Party. To the extent any such employee, contractor, agent or other
representative enters or is present on the premises of such other Party pursuant
to the foregoing sentence, it shall comply in all respects with, and perform any
service or maintenance work in respect of any facilities, equipment or systems
located on the premises of such other
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Party in accordance with such other Party's work rules and procedures, including
in respect of the issuance of and requirements for work permits, and other
safety, security and operating protocols and procedures, from time to time in
effect, and the Entering Party shall reimburse such other Party for its
reasonable costs and expenses in connection therewith, including that of any
escort designated by such other Party; provided, however, that Seller shall not
be required to reimburse Buyer in :co1mection therewith to the extent the
Entering Party enters or is present on the premises of Buyer from Monday through
Friday from 7:00 A.M. to 4:00 P.M., or at such times as otherwise agreed by the
Parties. Each Party agrees to be solely responsible, and assume all liability,
for the safety and supervision of its employees, contractors, agents and other
representatives.
(c) Information. (i) General. Each Party shall, upon the reasonable
request of the other Party, provide such other Party with information reasonably
necessary for such requesting Party to perform its obligations under this
Agreement.
(ii) Generating Facilities Output Reduction or Termination. Buyer shall
give Seller reasonable advance notice of any maintenance activities (including
scheduled outages of Generating Facilities), equipment tests, installation,
construction or other modification that could reasonably be expected to result
in a reduction or termination of output from the Generating Facilities.
Section 2.03. No Interference. (a) Except as otherwise permitted in the
Sale Agreement, this Agreement or any other Ancillary Agreement, neither Buyer
nor Seller shall service, repair or otherwise maintain any facilities, equipment
or systems owned by the other. To the extent that pursuant to the terms of this
Agreement or any Ancillary Agreement, a party services, repairs or otherwise
maintains or has any other obligations in respect of any facilities, equipment
or systems owned by the other Party, it shall perform such services, repairs and
maintenance, and otherwise discharge such duties in accordance with Applicable
Legal Requirements and Good Industry Practice and in a manner consistent with
that which it applies to facilities, equipment or systems it owns.
(b) Buyer shall not operate the Generating Facilities and Seller shall
not operate the Transmission System in any manner that has caused or could
reasonably be expected to cause physical damage to the Seller Assets or the
Buyer Assets, respectively, or otherwise results in or could reasonably be
expected to result in personal injury or loss of life, physical damage or
physical harm to property, the
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Generating Facilities, the Transmission System or any other transmission system
to which it is interconnected, or damage or harm to System Integrity or public
safety.
Section 2.04. Emergency Procedures. (a) If an emergency results in or
could reasonably be expected to result in personal injury or loss of life or
damage or harm to property, the Generating Facilities, the Transmission System
or another transmission system to which it is interconnected, System Integrity
or public safety, the Party recognizing such emergency shall provide immediate
verbal notification (to be confirmed in writing as soon as reasonably
practicable) to the other Party, and the Parties agree to cooperate in good
faith (including in respect of the sharing of information) in order to prevent,
avoid or mitigate personal injury or loss of life or damage or harm to property,
the Generating Facilities, the Transmission System or another transmission
system to which it is interconnected, System Integrity or public safety.
(b) Without limiting the generality of Section 2.04(a) and to the
extent permitted by Applicable Legal Requirements and Good Industry Practice, in
the case of a Trip-Out, each Party shall provide the other Party with immediate
verbal notification, which verbal notification (to be confirmed in writing as
soon as reasonably practicable) shall include, to the extent possible, all
information necessary to determine the cause of the Trip-Out and the steps
necessary for the restoration of service.
(c) To the extent Buyer and Seller utilize a common entrance and guard
facility for pedestrian vehicular access, ingress and egress to and from their
respective premises, Buyer and Seller shall cooperate in the establishment and
implementation of evacuation procedures designed to account for, and ensure the
safety of, all Buyer and Seller employees and their respective invitees and
licensees in the event of an emergency on the Buyer Parcel or the Seller Parcel,
as the case may be.
Section 2.05. Additional Agreements. The Parties agree to, from time to
time upon the reasonable request of either Party, negotiate in good faith and
execute and deliver such additional contracts, agreements, instruments and
documents to implement the terms of this Agreement, including in order to
establish any necessary operating procedures to implement the terms of this
Agreement, and the Parties agree to cooperate in making such filings or
submissions in connection with such amendments, contracts, agreements,
instruments and documents with the appropriate Governmental Authority or other
organization as are required.
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ARTICLE III
Continuing Rights, Obligations and Responsibilities
Section 3.01. Testing and Maintenance. (a) Buyer's Equipment. Buyer shall
at appropriate intervals (at its own expense) or more frequently upon Seller's
reasonable request (in which case Seller shall reimburse Buyer for its
reasonable costs and expenses in connection therewith) (i) test, calibrate,
adjust and maintain pursuant to Good Industry Practice the telemetering, data
acquisition, Protective Relay Systems owned by Buyer and control equipment or
other facilities, equipment or systems or software that Buyer owns and is
connected or related to the Transmission System, or has or could be reasonably
expected to have a material adverse effect on the Transmission System or any
other transmission system to which it is interconnected or on System Integrity,
and (ii) promptly supply Seller with copies of inspection reports, installation
and maintenance documents, test and calibration records, verifications and
validations with respect thereto.
(b) Seller's Equipment. (i) General. Buyer shall, at its own expense,
have the right to inspect or observe testing, calibration and maintenance and
similar activities in respect of, and installation, construction or other
modifications to, Protective Relaying Systems, Revenue Meters and Substation
Interface Cables in order to verify the adequate protection and safe operation
thereof. Seller shall give Buyer reasonable advance notice of any such
activities that it is planning to undertake.
(ii) Protective Relaying Systems. Seller shall test, calibrate, adjust
and maintain pursuant to Good Industry Practice at appropriate intervals, or
more frequently upon Buyer's reasonable request, all Protective Relaying Systems
owned by Seller and all auxiliary and monitoring relays and alarms relating
thereto which are owned by Seller and located in the Substations. Buyer shall
have the right, upon the completion of such testing, calibration, adjustment and
maintenance, to approve any necessary re-sealing of such Protective Relays and,
upon written request to Seller, to receive copies of relevant settings, tests
and work order data sheets. Seller reserves the right to take any such
Protective Relaying System out of service as may be reasonably necessary and
agrees to use its reasonable best efforts to provide Buyer with reasonable
advance notice thereof. Buyer shall have the sole responsibility to provide,
procure or store spare parts for such Protective Relaying Systems and Seller
shall have no responsibility in respect thereof. Buyer shall reimburse Seller
for its reasonable costs and expenses incurred pursuant to this Section 3.01(b)
(ii).
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(iii) Substation Interface Cables. Seller shall maintain the Substation
Interface Cables pursuant to Good Industry Practice, and Buyer shall reimburse
Seller for its reasonable costs and expenses incurred in connection therewith.
Section 3.02. Work on Substatiion Property. Seller shall in accordance
with Good Industry Practice operate all facilities, equipment or systems owned
by Buyer that are located in the Substations, including pressurizing plants,
cooling plants, disconnect switches and ground switches, to the extent such
facilities, equipment or systems are operated locally, and such operations shall
be performed in accordance with Section 2.03(a). Buyer shall not operate any
such facilities, equipment or systems, except to the extent operated remotely,
and Seller shall be permitted to monitor such remote operation. Buyer shall
reimburse Seller for its reasonable costs and expenses incurred in connection
with this Section 3.02.
Section 3.03. New Construction or Modifications. (a) Right to Modify or
Construct Retained. Except as otherwise provided in this Agreement or in any
other Ancillary Agreement, Seller shall be permitted to add to or modify, or
undertake new construction in respect of, the Transmission System in accordance
with Applicable Legal Requirements and Good Industry Practice and Buyer shall be
permitted to modify or add to the Generating Facilities in accordance with
Applicable Legal Requirements and Good Industry Practice.
(b) Certain Installations, Modifications or Construction. Subject to
the proviso in Section 3.04(a) and notwithstanding Section 3.03(a), no
installation of, modifications to, or new construction of, facilities,
equipment, systems or access thereto, including rights of way, fences and gates,
shall be made by either Party which results in or could be reasonably expected
to result in physical damage to Seller' Assets or Buyer Assets, as the case may
be, or otherwise results in or could be reasonably expected to result in
personal injury or loss of life, physical damage or physical harm to property,
the Generating Facilities, the Transmission System or any other transmission
system to which it is interconnected, or damage or harm to System Integrity or
public safety, without (i) prior written consent (which consent shall not be
unreasonably withheld) and (ii) compliance by such Party with the information
requirements of Section 3.03 (c).
(c) Modifications Affecting the Transmission System or Generating
Facilities. In respect of all construction work, modifications or circuit
changes involving new or existing facilities, equipment, systems or circuits
that could
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reasonably be expected to affect the operation of the Transmission System, Buyer
shall provide Seller with drawings, plans, specifications and other relevant
documentation for review during the design phase of such work and Buyer shall
not undertake any such work without the Seller's consent to the proposed design
(which consent shall not be unreasonably withheld). In respect of all
construction work, major modifications or circuit changes involving new or
existing facilities, equipment, systems or circuits located in a Substation that
could reasonably be expected to affect the operations of the Generating
Facilities, Seller shall provide Buyer with drawings, plans, specifications and
other relevant documentation for review during the design phase of such work.
Each Party shall be responsible for its own construction work, modifications and
circuit changes, and the other Party's review of, comments on, or consent to any
documents, drawings, plans, specifications or other documentation provided by
the initiating Party, shall not relieve the initiating Party of, or affect in
any way, its responsibility for the work to be performed. The reviewing or
consenting Party shall have no liability whatsoever with respect to any review
or nonreview of, or consent to, any drawings or other documentation submitted to
it by the other Party.
(d) Seller Facilities and Buyer Facilities. Without limiting the
generality of Sections 3.03(a), (b) and (c), the applicable Party shall be
permitted to upgrade, expand, enlarge, relocate or otherwise modify the Seller
Facilities or Buyer Facilities, as applicable, (i) in any manner that could not
reasonably be expected to impose a substantial additional, or substantially
different, physical burden on the Buyer Parcel or Seller Parcel, as applicable,
beyond those in existence on the Closing Date, or otherwise interfere with any
current or planned use thereof or (ii) otherwise as expressly permitted pursuant
to Schedule 2.01(a) of the Arthur Kill Declaration of Easements Agreement.
Section 3.04. Interconnection of Transmission System and Generating
Facilities. (a) Subject to Section 3.04(b) below, Seller shall permit the
Generating Plants to be interconnected with the Transmission System in
accordance with the terms of this Agreement; provided, however, that (i) any new
Generating Facilities or any expansion of generating capacity (including in
respect of any repowering of any Generating Plants) will require a separate
agreement with Seller for interconnection and (ii) all costs associated with
establishing such interconnection for any new Generating Facilities or other
expansion of generating capacity, including any costs associated with any
studies of, reinforcements to, or other expenditures with respect to, the
Transmission System (or any studies regarding the same) shall be borne in all
respects by Buyer.
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(b) The interconnection of the Generating Plants with the Transmission
System shall be subject to interruption upon the activation of facilities,
equipment and systems designed to protect any of the Generating Facilities or
the Transmission System or System Integrity and may otherwise be subject to
extended outages due to the failure of facilities, equipment or systems or for
other reasons; provided, however, that Seller shall use its reasonable best
efforts in accordance with Good Industry Practice to restore such
interconnection. Seller shall give Buyer reasonable advance notice of any
scheduled interruption of interconnection of the Generating Plants with the
Transmission System. Notwithstanding any other provision in the Sale Agreement,
this Agreement or any other Ancillary Agreement to the contrary, except to the
extent that any such outage or other interruption in interconnection results in
whole or in part from the gross negligence or wilful or wanton acts or omissions
to act of Seller, Seller shall in no event have any liability whatsoever,
whether direct or indirect, to Buyer therefor, including in respect of lost
revenues or lost power or capacity charges or in respect of deficiency charges.
(c) If Buyer fails to operate and maintain it, Generating Facilities as
provided in this Agreement, Seller may discontinue Buyer's interconnection with
the Transmission System until such failure has been corrected, to the extent
that such failure has or could be reasonably expected to have a material adverse
effect on, any Substation, or otherwise result in personal injury or loss of
life or physical damage or physical harm to property, the Generating Facilities,
the Transmission System or any other transmission system to which it is
interconnected, or damage or harm to System Integrity, or public safety.
Section 3.05. Revenue Metering. (a) (i) Seller shall install and own all
Revenue Meter Systems and shall read all Revenue Meters. Buyer shall reimburse
Seller for its reasonable costs and expenses in connection with reading Revenue
Meters that are part of Output Revenue Meter Systems and processing data
received thereby. Seller and Buyer acknowledge that a Revenue Meter System may
be both a Delivery Revenue Meter System and an Output Revenue Meter System.
(ii) With respect to Delivery Revenue Meter Systems, Buyer shall
reimburse Seller for its reasonable costs and expenses in connection with the
installation thereof (but not including the costs of providing any equipment) to
the maximum extent permitted by Applicable Legal Requirements and any applicable
tariff. With respect to Output Revenue Meter Systems, Buyer shall reimburse
Seller for its reasonable costs and expenses (including in respect of any
adverse New York
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State tax consequences) in connection with providing such Output Revenue Meter
Systems and the installation thereof, to the maximum extent permitted by
Applicable Legal Requirements. Buyer's obligation to reimburse Seller pursuant
to this Section 3.05(a) (ii) shall be without regard to whether such costs or
expenses were incurred prior to or after the Closing Date.
(iii) Seller shall provide, install and maintain the Delivery Revenue
Meter Systems (including, at Seller's option, dedicated telephone service from
each Delivery Revenue Meter with telemetry capability) and the Output Revenue
Meter Systems, in each case, listed on Schedule 3.05(a) (iii). Seller shall at
appropriate intervals, or more frequently upon Buyer's reasonable request, test,
calibrate and maintain Output Revenue Meter Systems and Buyer shall reimburse
Seller for its reasonable costs and expenses in connection therewith.
(iv) Seller shall arrange for the installation and maintenance of
dedicated telephone service from each Output Revenue Meter, and Buyer shall
reimburse Seller for its reasonable costs and expenses in connection therewith.
Buyer shall be responsible for keeping such telephone service in place. Buyer
shall be permitted in accordance with Applicable Legal Requirements and any
applicable tariff to arrange at its own expense for Seller to install and
maintain appropriate equipment for Buyer to obtain access to pulse output from
each Revenue Meter.
(b) (i) The Parties agree that if any Revenue Meter and associated
Point of Interconnection are not at the same location and if all facilities,
equipment and systems between such Point of Interconnection and such Revenue
Meter are the property of the Party receiving the service measured by such
Revenue Meter, such Revenue Meter shall be appropriately adjusted to account for
energy losses between such Revenue Meter and such Point of Interconnection.
(ii) If either Party takes electric service at a Point of
Interconnection after the location of the Revenue Meter, Seller shall provide
and install a Revenue Meter (an "Inside Meter") at such Point of Interconnection
and measure the service taken by such Party. The cost responsibility for each.
Inside Meter and installation thereof shall be determined by the function of the
meter (whether delivery or output) in accordance with paragraph (a) (ii) above.
Buyer shall reimburse Seller for its reasonable costs and expenses in connection
with Inside Meters in accordance with Section 3.05(a)(ii). In any case where an
Inside Meter is installed, neither Party shall be charged for any electric
service to the extent such charges relate to a service delivered to the other
Party. For billing purposes, the Party
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receiving service measured by the Revenue Meter shall be credited for energy and
demand registered on the Inside Meter in an amount determined by reference to
the rates and charges for the service classification applicable to the inside
meter service under the rate schedule applicable to the service measured by the
applicable Revenue Meter.
(c) If, at any time, any Delivery Revenue Meter is found to be
inaccurate by a margin greater than that allowed under Applicable Legal
Requirements Seller shall repair or replace such Delivery Revenue Meter and
adjust the readings. Seller and Buyer agree that PSC regulations with respect to
Delivery Revenue Meters accuracy shall be applicable to Output Revenue Meters as
well. Buyer shall reimburse Seller for its reasonable costs and expenses in
connection with such repair or replacement of Output Revenue Meter System
equipment. Readings from a Revenue Meter for any period of inaccuracy shall be
adjusted to eliminate the effect of such inaccuracy to the extent the duration
of such period can be reasonably ascertained; provided, however, that unless
such duration can be reasonably ascertained, readings made during the first half
of the period between the last successful test of such Revenue Meter and its
repair or replacement shall not be so adjusted.
(d) Each Party shall, upon reasonable notice from the other Party
except in the case of an emergency, comply with any reasonable request of the
other concerning the scheduling and performance of manual Revenue Meter
readings, the sealing of Revenue Meters, the presence of a representative of the
other Party when Revenue Meters are read, Revenue Meter seals are broken and
tests are conducted, and other matters affecting the accuracy of the measurement
of electricity delivered to or from the Generating Facilities. Without limiting
the generality of the foregoing, Buyer shall have the right to witness all
manual reading and testing, calibration, adjustment and maintenance of Revenue
Meters and, upon completion thereof, to approve any necessary resealing of
Revenue Meters. If either Party believes that there has been a failure or
stoppage of any Revenue Meter or any associated data acquisition and
transmission equipment, it shall immediately notify the other Party verbally,
such notice to be promptly confirmed in writing, and the Parties shall cooperate
in taking all necessary steps to restore to operation all Revenue Meters and
associated data acquisition and transmission equipment as soon as reasonably
possible, and Buyer shall, subject to Section 3.05(a) (ii) above, reimburse
Seller for its reasonable costs and expenses in connection therewith.
Section 3.06. Information Reporting Systems and Obligations. (a) General.
Without limiting the generality of Section 2.02(c), Buyer shall supply
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(using facilities, equipment and systems and software compatible with, and in a
format comprehensible to, Seller's facilities, equipment and systems) accurate,
complete and reliable information from time to time identified by Seller
necessary for operations, maintenance activities, equipment testing and
calibration, compliance by Seller with Applicable Legal Requirements and
analysis of the Transmission System and steam system, including metered values
for MW, Mvar, voltage, amperage, frequency, protective relay and control
settings, breaker status indication, gas flow, automatic generation control
status, maximum generation alarm status, load checks, operation of facilities
with less than design relay protection, fast load pick-up status or any other
information reasonably required by Seller for reliable operation of the
Transmission System pursuant to Applicable Legal Requirements and Good Industry
Practice. Information pertaining to generation, transmission and distribution
operating parameters shall be gathered for electronic transmittal to Seller
using supervisory control and data acquisition, remote terminal unit equipment
or remote access pulse recorders or using such other facilities, equipment or
systems reasonably acceptable to Seller from time to time. Seller shall not use
or disclose to any other person such information received pursuant to this
Section 3.06(a) other than in accordance with Applicable Legal Requirements.
(b) Seller Maintained Equipment. Buyer agrees that Seller shall
maintain all system operations computer control system cabinets located at the
Generating Facilities and any associated equipment contained therein, and Buyer
shall reimburse Seller for its reasonable costs and expenses in connection
therewith.
Section 3.07. Nondispatchability Notification. If any unit of any of the
Generating Facilities experiences a full or partial forced outage, Buyer shall
immediately notify Seller's Energy Control Center verbally, such notice to be
promptly confirmed in writing, of such unit's outage and the expected duration
thereof.
Section 3.08. Miscellaneous Services. (a) Services Provided by Seller.
(i) Subject to any suspension in accordance with Section 3.08(a) (ii), Seller
shall upon the request of Buyer provide to Buyer in respect of facilities,
equipment and systems owned by Buyer located on Substation property (A) light
and power service in accordance with the applicable tariff or any other charges
in respect thereof reasonably agreed to by Seller and Buyer and (B) SF(6) gas,
nitrogen gas, compressed air and dielectric fluid, in connection with which
Buyer shall reimburse Seller for a reasonable estimate of its use thereof;
provided, however, that Seller shall not charge Buyer for transmission and
distribution services for power provided in connection
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with clause (i) (A) above to the extent such charges relate to power transmitted
by Seller on its own behalf.
(ii) Seller may from time to time temporarily suspend the services set
forth in Section 3.08(a) (i) and shall provide Buyer reasonable advance notice
of any scheduled temporary suspension of services to be provided pursuant to
this Section 3.08(a) (ii) reasonably in advance of such suspension. Such
notification shall include an estimated time duration for a return to normal
conditions. In the event of any unplanned or forced suspension of the services
set forth in this Section 3.08, Seller shall immediately notify Buyer verbally,
such notice to be promptly confirmed in writing. In the event of any suspension
pursuant to this Section 3.08(a) (ii), Seller shall use its reasonable best
efforts to restore such services.
(b) Services Provided by Buyer. Buyer acknowledges that any feeders
owned by Buyer and associated electrical facilities, equipment, systems
and transformers owned by Buyer and connected thereto providing light and power
to the Substations and current transformers and potential transformers owned by
Buyer and used in relay protection circuits that protect Seller Assets are
critical for the sale of Buyer's electric energy and delivery of such electric
energy over the Transmission System and to Seller's operations and System
Integrity and shall take all measures reasonably required for such feeders,
facilities, equipment, systems and transformers to at all times remain in
service. Notwithstanding Section 2.02(b), to the extent that any such feeder,
current transformer or potential transformer fails to remain in service and
Buyer fails to promptly take any :necessary corrective measures, Seller reserves
the right, but shall have no obligation, to take any such measures or perform
servicing or repairs as may be reasonably required in order to cause such feeder
or relay protection circuits to resume service. Buyer shall reimburse Seller for
its reasonable costs and expenses incurred in connection with such corrective
measures and servicing and repairs.
Section 3.09. Communications Equipment. (a) General. Seller shall, after
providing notice to Buyer, have the right to remove, replace, modify, add or
upgrade, at no cost to Buyer, communication facilities, equipment and systems
including antennae, wave guides and cables located on Buyer's structures or in
Buyer's Generating Facilities; provided, however, that any modification or
upgrade to such modification or upgrade shall be subject to Section 3.03.
(b) Access to Communications Rooms. Buyer and Seller shall cooperate in
the implementation of procedures designed to control access to all
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communications rooms on Buyer's premises in which communications facilities,
equipment or systems owned by Seller are located, including the designation and
periodic review of a list of personnel authorized to enter into and remove,
replace, modify, add or maintain the channel 6 radios which can be~ used by
Buyer to communicate with Seller's Energy Control Center.
Section 3.10. Existing Telecommunications Facilities of Seller. (a) To
the extent permitted by Applicable Legal Requirements, Seller shall or shall
cause one of its Affiliates to, at no cost to Buyer, provide to Buyer for 12
months following the Closing Date, access, solely in connection with the
operation of the Generating Facilities, to the corporate communications network
owned by Seller in existence immediately prior to the Closing Date solely to
maintain the link between the Generating Facilities and Seller's Energy Control
Center for the purpose of providing Seller's Energy Control Center with
information regarding the Generating Facilities; provided, however, that Seller
or such Affiliate, as the case may be, may terminate such access at any time
upon three months' notice; provided further, however, that Seller or such
Affiliate, as the case may be, shall in no event have any liability whatsoever
to Buyer for any failure of any such network. Buyer acknowledges that Seller or
such Affiliate,, as the case may be, may interrupt such access if so required
under Applicable Legal Requirements or if providing such access is determined to
be discriminatory or preferential pursuant to the ISO Rules. Seller shall not
use or disclose any information it receives pursuant to this Section 3.10(a)
other than in accordance with Applicable Legal Requirements.
(b) Buyer shall at all times have available for its sole use two
diverse and redundant, in respect of each other, telecommunications links
between the Generating Facilities and Seller's Energy Control Center (one of
which may be Seller's existing corporate communications network pursuant to
Section 3.10(a) above) for the purpose of providing Seller's Energy Control
Center with information regarding the Generating Facilities.
Section 3.11. Switching. Tagging and Grounding. Subject to Section 2.01,
each Party shall comply with Seller's General Instructions Governing Work on
System Electrical Equipment, as from time to time in effect (the "Switching
Rules"), promulgated pursuant to the requirements of 29 C.F.R. Section 1910.269
(1998), or any successor thereto or replacement thereof. Seller shall have no
liability to Buyer in connection with the compliance by Buyer with the Switching
Rules and Buyer agrees to hold Seller harmless from any liability as a result
thereof.
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Section 3.12. Environmental Matters. (a) Cooperation. Seller and Buyer
agree to cooperate with each other concerning (i) any site plans, surveys,
permits and other similar matters that affect or concern the premises of both
Parties, including any plans to prevent or respond to spills of oil or hazardous
substances into navigable waters or to control and monitor stormwater discharges
associated with industrial or construction activities, required by any
Governmental Authority and (ii) the selection of a response measure or remedial
action and any follow-up or other reports required under applicable
Environmental Laws in connection with any Release described in paragraphs (b)
and (c).
(b) Notice: Each Party shall upon discovery immediately notify the
other Party verbally, such notice to be promptly confirmed in writing, of any
Release or threatened Release of Hazardous Substances Ci) onto or under, or
reasonably likely to migrate onto or under, the other Party's premises or (ii)
originating from, or relating to, any facilities, equipment or systems owned by
the other Party that are located on the premises of, and is operated by, the
notifying Party. In the event of any such Release, such notifying Party shall
make all initial notifications to Governmental Authorities required under
applicable Environmental Laws and shall take all appropriate initial response
measures to contain and isolate any such Release, and to the extent it is
ultimately responsible under this Agreement for remediation of such Release or
threatened Release, the other Party shall reimburse the notifying Party for its
reasonable costs and expenses incurred in connection with any such initial
response measures. The Parties shall cooperate in good faith in order to reduce
to the extent reasonably practicable any adverse operational and financial
impact of such initial response measures.
(c) Remediation. Each Party shall Remediate in accordance with
Environmental Laws any Release or threatened Release of Hazardous Substances
which is the responsibility of such Party pursuant to the Sale Agreement or
results, in whole or in part, from the gross negligence or wilful or wanton acts
of or omissions to act by such Party.
(d) Transformer Incident. (i) Buyer shall give Seller and its directors,
officers, employees, contractors, agents and other representatives reasonable
access to the Buyer Parcel in order to take any Remedial Action, and Buyer shall
fully cooperate with Seller in order that Seller may fulfill its obligations
under this Section 3.l2(d).
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(ii) As between Buyer and Seller, Seller shall retain exclusive control
over, and Buyer shall have no right or responsibility to approve or participate
in, any Remedial Action, including communications or agreements with
Governmental Authorities, the selection of consultants and contractors and the
selection and management of any Remedial Action, and Seller shall be solely
responsible for any filings or reports required under any Environmental Law in
connection with any Remedial Action; provided, however, that Seller shall
provide Buyer with (A) any plan for any Remedial Action, any filing or report to
be transmitted~to any Governmental Authority regarding any Remedial Action and
any agreement with any Governmental Authority in connection with any Remedial
Action and (B) copies of any correspondence with any Governmental Authority
regarding any Remedial Action.
(iii) No Remedial Action taken by Seller pursuant to this Section 3.12(d)
shall obligate Seller to conduct any other testing or remediation that is not
required under any Environmental Law in connection with any Remedial Action, nor
shall this Section 3.12(d) create any obligation to any third party.
(iv) In conducting any Remedial Action, Seller agrees to comply in all
material respects with any applicable Environmental Laws.
Section 3.13. Voltage and Frequency Requirements. Unless otherwise agreed
to in writing by the Parties or specified by the ISO, Buyer shall (a) operate
its interconnected Generating Facilities (i) with automatic voltage regulators
and minimum excitation limiters and shall maintain voltage at the Points of
Interconnection in accordance with Good Industry Practice and (ii) at frequency
settings from time to time specified by Seller with reasonable advance notice to
Buyer and (b) operate within the underfrequency, overfrequency, undervoltage or
overvoltage limits in respect of relays from time to time specified by Seller
with reasonable advance notice to Buyer.
Section 3.14. Authorized Representation. (a) Buyer Representatives. Buyer
shall designate an individual or individuals who have authority to bind Buyer
hereunder and Seller shall be entitled to rely upon such designation. Buyer
shall also designate an individual or individuals who will be available at the
Generating Facilities 365 days per year and 24 hours per day and shall be
empowered by Buyer to make operational decisions hereunder on Buyer's behalf
("Buyer Operations Manager"). Seller shall also be entitled to rely on
statements, actions and decisions of
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the Buyer Operations Manager as those of Buyer, unless Buyer specifies otherwise
in writing with respect to certain events.
(b) Seller Representatives. Seller shall designate an individual or
individuals who have authority to bind Seller hereunder and Buyer shall be
entitled to rely upon such designation. Seller shall also designate an
individual or individuals who will be available at the Seller's Energy Control
Center 365 days per year and 24 hours per day and shall be empowered by Seller
to make operational decisions hereunder on Seller's behalf ("Seller Operations
Manager"). Buyer shall also be entitled to rely on statements, actions and
decisions of the Seller Operations Manager as those of Seller, unless Seller
specifies otherwise in writing with respect to certain events.
Section 3.15. Insurance. (a) The Parties agree to carry, at their own
cost and expense and throughout the term of this Agreement, policies of
insurance covering fire, liability, worker's compensation, property all-risk,
comprehensive bodily injury, property damage liability and automobile liability,
products, completed operations, explosion and collapse, contractual and personal
injury liability and other forms of insurance relating to, in the case of Buyer,
the Buyer Assets and, in the case of Seller, the Seller Assets. Such insurance
shall be in such amounts, have such deductibles and retentions and be
underwritten by such companies as would be obtained by a reasonably prudent
electric power business and shall be primary and noncontributory with any
insurance carried by the other Party and it shall not require that such other
Party pay any premium thereunder. Notwithstanding the foregoing, either Party
may self-insure against any of the liabilities set forth in the first sentence
of this Section 3.15 if such Party satisfies all applicable statutory and
regulatory criteria with respect to the self-insurance of the relevant
liability. Upon receipt of any notice of cancellation or expiration of any such
insurance policy, the Party receiving such notice shall immediately give written
notice to the other Party.
(b) The Parties agree to furnish each other with certificates of
insurance evidencing the insurance coverage set forth in this Section 3.15 and,
upon reasonable request, a copy of any insurance policy referred to therein.
(c) Except for worker's compensation insurance, each Party and its
Affiliates shall be named as additional insureds under the general liability
insurance policies maintained by each Party pursuant to Section 3.15 (a).
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(d) Each Party on behalf of itself and its Affiliates shall exclude any
right of subrogation under its insurance policies for any liability it hat
agreed to assume under the Sale Agreement, this Agreement or any other Ancillary
Agreement. Evidence of this requirement shall be noted on all certificates of
insurance.
Section 3.16. Energy Received by Generating Facilities. (a) Buyer agrees
that energy received front any feeder owned by Buyer that receives energy from
Substations shall be used only to provide light and power to the Generating
Facilities and shall not be used in connection with any transmission or
distribution service and that it shall not sell or otherwise supply such energy
to any third party.
(b) Without limiting the generality of Section 3.16(a) above, Buyer
agrees that it will use energy derived from any Generating Facility as its usual
and customary source of light and power, and that it shall use energy supplied
from the Substations by feeders owned by Buyer for light and power only when the
applicable light and power transformer or associated equipment is out of
service.
ARTICLE IV
Billing Procedures
Section 4.01. Billing Procedures. Within five Business Days after the
first day of each month, in the case of metered light and power services, or
quarter, in all other cases, each Party shall prepare an invoice for those
reimbursable costs incurred on behalf of, or services provided to, the other
Party under this Agreement during the preceding month or quarter, as the case
may be. Each invoice shall delineate the month in which such costs or services
were incurred or provided, shall fully describe the costs or services incurred
or rendered and shall be itemized to reflect the incurrence of such costs and
the provision of such services. The amount of Buyer's invoice and amount of
Seller's invoice for such month or quarter, as the case may be, shall be netted,
and Buyer or Seller (as the case may be) shall pay the net amount, if any, to
the other Party on or before the twentieth Business Day following receipt of the
other Party's invoice, and any overdue amounts shall bear interest from such
date through the date of payment at the prime rate of The Chase Manhattan Bank
in effect on such date. All payments shall be made in immediately available
funds by wire transfer to a bank named by such Party. Payment of invoices by
either Party shall not relieve the paying Party from any responsibilities or
obligations it has under this Agreement, the Sale Agreement or the Arthur Kill
Declaration of Ease-
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ments Agreement nor shall it constitute a waiver of any claims arising hereunder
nor shall it prejudice either Party's right to question the correctness of any
billing.
Section 4.02. Payment Default. In the event of a billing dispute, the
Parties shall continue to provide services to each other as long as the paying
Party (i) continues to make all of the payments not in dispute and (ii) if
requested by the billing Party, pays into an escrow account the disputed portion
of the applicable invoice, pending resolution of such dispute.
ARTICLE V
Miscellaneous Provisions
Section 5.01. Effectiveness and Team. (a) This Agreement shall only
become effective upon the consummation of the Closing and, prior to such time,
shall have no force or effect. If the Sale Agreement is terminated for any
reason prior to the Closing, then this Agreement shall also automatically
terminate and be of no further force or effect.
(b) If the Closing occurs, this Agreement shall continue in full force
and effect until the earlier of (i) such time as the permanent cessation of
power generation functions at the Generating Facilities, together with any
associated demolition, removal or restoration of the site (to the extent
required by Applicable Legal Requirements), has been completed by Buyer or (ii)
such time as the permanent cessation of interconnection functions in respect of
the Transmission System, together with any associated demolition, removal or
restoration of the site (to the extent required by Applicable Legal
Requirements), has been completed by Seller. The applicable provisions of this
Agreement shall continue in effect after any termination of this Agreement to
the extent necessary to provide for final billings, billing adjustments and
payments pertaining to liability and indemnification obligations arising from
acts or events that occurred while this Agreement was in effect.
(c) Buyer and Seller agree that, notwithstanding any other provision of
this Agreement, the Sale Agreement or any other Ancillary Agreement, this
Agreement may not be terminated under any circumstances by either Party as a
result of a breach, whether or not material, of the other Party or otherwise,
except pursuant to an agreement in writing executed by each Party.
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Section 5.02. Force Majeure. (a) Notwithstanding anything in this
Agreement to the contrary, neither Party shall have any liability or be
otherwise responsible to the other for its failure to carry out its obligations,
with the exception of any obligation to pay money, under this Agreement if and
only to the extent that it becomes impossible for either Party to so performs as
a result of any occurrence or event which is beyond the reasonable control, and
does not result from any fault or negligence, of the Party affected (each, a
"Force Majeure Event"), including any act of God, strike or any other labor
disturbance, act of a public enemy, war, act of terrorism, riot, any other civil
disturbance, fire, storm, lightning, flood, earthquake, any other natural
disasters, explosion, materials shortage, breakage or accident involving
facilities, equipment or systems, any order or regulation or restriction imposed
by any Governmental Authority, failure of a contractor or subcontractor caused
by a Force Majeure Event and transportation delays or stoppages.
(b) If a Party shall rely on the occurrence of a Force Majeure Event as
a basis for being excused from performance of its obligations under this
Agreement, then the Party relying on such occurrence shall (i) provide prompt
written notice of such Force Majeure Event to the other Party giving an estimate
of its expected duration and the probable impact on the performance of its
obligations hereunder, (ii) exercise its reasonable best efforts to continue to
perform its obligations under this Agreement, (iii) reasonably and expeditiously
take action to correct or cure the Force Majeure Event (provided, however, that
settlement of strikes or any other labor disturbance will be completely within
the sole discretion of the Party affected by such strike or labor dispute), (iv)
exercise its reasonable best efforts to mitigate or limit damages to the other
Party and (v) provide prompt written notice to the other Party of the cessation
of the Force Majeure Event.
Section 5.03. Confidentiality. (a) Each Party (the "Receiving Party")
shall, during the term of this Agreement and for two years after its
termination, keep confidential and shall cause its directors, officers,
affiliates, employees, contractors, agents and other representatives (including
financial advisors, attorneys and accountants) (collectively, the
"Representatives") to keep confidential (except as required by applicable law,
regulation or legal process, and then only after compliance with subsection (b)
of this Section), any and all documents and information (i) relating to (x) in
the case of the Seller, the Buyer Assets or (y) in the case of the Buyer, the
Seller Assets, furnished or disclosed by the other Party (the "Disclosing
Party") in connection with this Agreement or any other Ancillary Agreement or
(ii) learned by the Receiving Party during the course of performance of this
Agreement or any other Ancillary Agreement or in connection with any claim for
indemnifica-
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tion pursuant to Article X of the Sale Agreement (the "Confidential
Information"); provided, however, that the confidentiality obligation hereunder
shall expire two years after any such Confidential Information is first
furnished, disclosed or learned. Except to the extent that any Confidential
Information (i) is or becomes generally available to the public other than as a
result of a disclosure by the Disclosing Party or its Representatives, (ii) is
developed by the Receiving Party or its Representatives independently and
without use of, and does not contain or reflect, information furnished by the
Disclosing Party or its Representatives, or (iii) is or becomes available to the
Receiving Party on a nonconfidential basis from a source (other than the
Disclosing Party or its Representatives) which, to the best of the Receiving
Party's knowledge after due inquiry, is not prohibited from disclosing such
information to the Receiving Party by a legal, contractual or fiduciary
obligation to the Disclosing Party, the Receiving Party shall not release or
disclose such Confidential Information to any person who has not first been
advised of the confidentiality provisions of this Section and has agreed in
writing to comply with such provisions, other than to its Representatives on a
need-to-know basis.
(b) In the event that the Receiving Party or any of its Representatives
is requested pursuant to, or required by, Applicable Legal Requirements,
regulation or legal process to disclose any of the Confidential Information, the
Receiving Party shall notify the Disclosing Party promptly so that the
Disclosing Party may seek a protective order or other appropriate remedy or, in
the Disclosing Party's sole discretion, waive compliance with the terms of this
Section. In the event that no such protective order or other remedy is obtained,
or that the Disclosing Party does not waive compliance with the terms of this
Section, the Receiving Party shall furnish only that portion of the Confidential
Information which the Receiving Party is advised by counsel is legally required
and shall exercise its reasonable best efforts to obtain reliable assurance that
confidential treatment will be accorded the Confidential Information so
furnished.
(c) In the event of litigation relating to the confidentiality
provisions of this Section, if a court of competent jurisdiction determines in a
final, nonappealable order that this Section 5.03 has been breached by a Party
or its Representatives, then such breaching Party shall reimburse the other
Party for its reasonable costs and expenses (including legal fees and expenses)
incurred in connection with all such litigation.
Section 5.04. Assignment; No Third Party Beneficiaries. (a) This
Agreement and all of the provisions hereof shall be binding upon and inure to
the
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benefit of the Parties and their respective successors and permitted assigns but
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either Party, including by operation of law, without the
prior written consent of the other Party, except (i) in the case of Seller (A)
to an Affiliate of Seller or a third party in connection with the transfer of
the Transmission System to such Affiliate or third party or (B) to a lending
institution or trustee in connection with a pledge or granting of a security
interest in all or any part of the Transmission System and this Agreement and
(ii) in the case of Buyer (A) to an Affiliate of Buyer in connection with the
transfer of the Auctioned Assets to such Affiliate and (B) to a lending
institution or trustee in connection with a pledge or granting of a security
interest in the Auctioned Assets and this Agreement; provided, however, that no
assignment or transfer of rights or obligations by either Party shall relieve it
from the full liabilities and the full financial responsibility, as provided for
under this Agreement, unless and until the transferee or assignee shall agree in
writing to assume such obligations and duties and the other Party has consented
in writing to such assumption.
(b) Nothing in this Agreement is intended to confer upon any other
person except the Parties any rights or remedies hereunder or shall create any
third party beneficiary rights in any person.
(c) This Agreement shall remain in full force and effect, and
Consolidated Edison Company of New York, Inc. shall be continued to be treated
as the "Seller" for purposes of this Agreement, regardless of whether the sale
of its generating assets (or any other transactions contemplated by the Sale
Agreement) are made through a "qualified intermediary" pursuant to Section
7.06(b) of the Sale Agreement.
Section 5.05. Independent Contractor Status. Nothing in this Agreement is
intended to create an association, trust, partnership or joint venture between
the Parties, or to impose a trust, partnership or fiduciary duty, obligation or
liability on or with respect to either Party and nothing in this Agreement shall
be construed as creating any relationship between Seller and Buyer other than
that of independent contractors.
Section 5.06. Notices. Unless otherwise specified herein,, all notices
and other communications hereunder shall be in writing and shall be deemed given
(as of the time of delivery or, in the case of a telecopied communication, of
confirmation) if delivered personally, telecopied (which is confirmed) or sent
by overnight
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courier (providing proof of delivery) to the Parties at the following addresses
(or at such other address for a Party as shall be specified by like notice)
if to Seller, to
Consolidated Edison Company of New York, Inc.
4 Irving Place
New York, NY 10003
Telecopy No.:(212) 677-0601
Attention: General Counsel
if to Buyer, to
NRG Energy, Inc.
1221 Nicollet Mall, Suite 700
Minneapolis, MM 55403-2445
Telecopy No.:(612) 373-5392
Attention: General Counsel
Section 5.07. Extension; Waiver. Either Party may (i) extend the time for
the performance of any of the obligations or other acts of the other Party or
(ii) waive. compliance by the other Party with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a Party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such Party. The failure of a Party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights. Notwithstanding anything herein to the
contrary, to the extent that either Party fails, in any particular instance, to
take affirmative steps to exercise its rights to witness, inspect, observe or
approve the activities of the other Party as contemplated by this Agreement,
such rights shall, solely with respect to such instance, be deemed waived in
respect of such testing, calibration, adjustment and maintenance interval or
such operation or maintenance activities, equipment tests, installation,
construction or other modifications, respectively.
Section 5.08. Amendment and Modification. (a) This Agreement may be
amended, modified or supplemented only by an instrument in writing signed on
behalf of each of the Parties.
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(b) The Parties agree to, from time to time upon the reasonable request
of either Party, negotiate in good faith and execute and deliver amendments to
this Agreement, including in response to regulatory, technological, operational
or other changes, including in respect of the ISO or the ISO Rules, affecting
the Generating Facilities or the Transmission System or the electric power
industry generally.
Section 5.09. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable principles of conflicts
of law).
Section 5.10. Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 5.11. Interpretation. When a reference is made in this
Agreement to an Article, Section, Schedule or Exhibit, such reference shall be
to an Article or Section of, or Schedule or Exhibit to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation" or equivalent words. The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms. Any agreement, instrument, statute,
regulation, rule or order defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument,
statute, regulation, rule or order as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes, regulations, rules or orders) by
succession of comparable successor statutes, regulations, rules or orders and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
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Section 5.12. Jurisdiction and Enforcement. (a) Each of the Parties
irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of
the State of New York, New York County and (ii) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Each of the Parties agrees to commence any action, suit or
proceeding relating hereto either in the United States District Court for the
Southern District of New York or, if such suit, action or proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the
State of New York, New York County. Each of the Parties further agrees that
service of process, summons, notice or document by hand delivery or U.S.
registered mail at the address specified for such Party in Section 5.06 (or
such other address specified by such Party from time to time pursuant to
Section 5.06) shall be effective service of process for any action, suit or
proceeding brought against such Party in any such court. Each of the Parties
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Supreme Court of the State of New
York, New York County, or (ii) the United States District Court for the
Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
(b) The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement, this being in addition to any other remedy to which they are
entitled at law or in equity.
Section 5.13. Entire Agreement. This Agreement, the Sale Agreement, the
Confidentiality Agreement and the other Ancillary Agreements, including the
Exhibits, Schedules, documents, certificates and instruments referred to herein
or therein and other contracts, agreements and instruments contemplated hereby
or thereby embody the entire agreement and understanding of the Parties in
respect of the transactions contemplated by this Agreement. There are no
restrictions, promises, representations, warranties, covenants or undertakings
other than those expressly set forth or referred to herein or therein. This
Agreement, the Sale Agreement and the other Ancillary Agreements supersede all
prior agreements and understandings
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between the Parties with respect to the transaction contemplated by this
Agreement other than the Confidentiality Agreement.
Section 5.14. Severabi1ity. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
Section 5.15. Conflicts. Except as otherwise provided in the Sale
Agreement, in the event of any conflict or inconsistency between the terms of
this Agreement and the terms of the Sale Agreement, the terms of the Sale
Agreement shall prevail. Except as otherwise provided herein, in the event of
any conflict or inconsistency between the terms of this Agreement and the terms
of any other Ancillary Agreement (other than the Astoria Gas Turbine Continuing
Site Agreement), the terms of this Agreement shall prevail.
Section 5.16. Agreement Not Applicable to Astoria Parcel.
Notwithstanding any other provision herein to the contrary, this Agreement
shall not apply to any of the respective assets or operations of the Parties at
the Astoria Parcel.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed
by their respective duly authorized officers as of the date first above
written.
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.,
By /s/ Joan S. Freilich
----------------------
Name: Joan S. Freilich
Title: Executive Vice President
& CFO
NRG ENERGY, INC.
By /s/ Craig A. Mataczynski
----------------------
Name: Craig A. Mataczynski
Title: Senior Vice President
29