1
EXECUTION COPY
EXHIBIT 10.62
================================================================================
ASTORIA GAS TURBINE CONTINUING SITE AGREEMENT
By and Between
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
and
NRG ENERGY, INC.
Dated as of
January 27, 1999
================================================================================
2
ASTORIA GAS TURBINE 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 1.1. 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.
3
"Applicable Legal Requirements" shall have the meaning set forth in
Section 2.01.
"Arthur Kill Parcel" shall have the meaning ascribed to the term
"Parcel" in the Arthur Kill Declaration of Easements Agreement.
"Buyer" shall have the meaning set forth in the Preamble.
"Buyer Operations Manager" shall have the meaning set forth in Section
3.15(a).
"Buyer Parcel" shall have the meaning ascribed to the term "Parcel C" in
the Astoria Declaration of Easements.
"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 Facilities and under certain circumstances interrupts natural
gas supply to the Generating Facilities.
"Energy Control Center" means the headquarters of Seller's transmission
and distribution operations.
"Entering Party" shall have the meaning set forth in Section 2.02(b).
"Force Majeure Event" shall have the meaning set forth in Section
5.02(a).
2
4
"Gas System" means the Seller's system of distribution mains and service
lines through which natural gas is distributed to Seller's customers in
Seller's natural gas service territory.
"Generating Facilities" means the Gas Turbines and any additional
generating plants, gas turbines or other generating facilities constructed by
Buyer after the Closing Date at the Buyer's Parcel.
"Good Industry Practice" shall have the meaning set forth in Section
2.01(a).
"Inside Meter" shall have the meaning set forth in Section 3.05(b) (ii).
"ISO Rules" means the rules and procedures adopted by the ISO pursuant
to the ISO tariff from time to time in effect and the related ISO agreements.
"NERC" means North American Electric Reliability Council or any
successor.
"NPCC" means the Northeast Power Coordinating Council or any successor.
"NYPP" means New York Power Pool or any successor.
"NYPP Rules" means the rules, standards, procedures and practices of the
NYPP from time to time in effect.
"NYSRC" means the New York State Reliability Council or any successor.
"Output Revenue Meter" means a Revenue Meter that comprises part of an
Output Revenue Meter System.
"Output Revenue Meter Systems" means Revenue Meter Systems used to
measure the transfer of energy output by Generating Facilities and delivered to
Points of Interconnect ion.
"Parcel" shall have the meaning ascribed thereto in the Astoria
Declaration of Easements.
3
5
"Party" shall have the meaning set forth in the Preamble.
"Points of Interconnection" means the points on 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.
"Receiving Party" shall have the meaning set forth in Section 5.03(a).
"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
3.15(b).
"Seller Parcel" shall have the meaning ascribed to the term "Parcel A"
in the Astoria Declaration of Easements.
"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.
4
6
"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 electric service to customers who purchase
power and related services delivered through the Transmission System.
"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 2.1. 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 thereto, or any other organization with similar duties, including any
local, state, regional, national or international reliability organization, or
required by any rules
5
7
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 2.2. 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
Astoria Declaration of Easements 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 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
6
8
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 connection 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 2.3. 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 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.
7
9
SECTION 2.4. 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 and 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 2.5. Additional Agreement. 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.
ARTICLE III
8
10
Continuing Rights, Obligations and Responsibilities
SECTION 3.1. 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).
9
11
(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 3.2. Work on Substation 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 3.3. 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
10
12
involving new or existing facilities, equipment, systems or circuits that could
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 Astoria Declaration of Easements.
SECTION 3.4. Interconnection of Transmission System and Generating
Facilities. (a) Subject to Section 3.04(b) below, Seller shall permit the Gas
Turbines 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 Gas Turbines) 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.
11
13
(b) The interconnection of the Gas Turbines 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 Gas Turbines 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 its 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 3.5. 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
12
14
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
13
15
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 3.6. Information Reporting Systems and Obligations. (a) General.
Without limiting the generality of Section 2.02(c), Buyer shall supply
14
16
(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, Gas 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.
(c) Gas Telemetry Interruptions. If Buyer is notified by Seller of any
data interruption relating to gas telemetry, Buyer shall (i) immediately
investigate the source of such interruption, provide a preliminary status
report to Seller within one hour of such notification and (ii) to the extent
the applicable gas telemetry interruption is caused by the failure of the
telecommunications links between Seller-owned gas revenue meter telemetry
equipment and the Energy Control Center, take all necessary steps to restore
gas telemetry data transmission as soon as possible. During any such gas
telemetry data interruption, Buyer shall, at its cost and expense, read all
meters necessary to estimate gas flows into the Generating Facilities, and
shall give Seller hourly telephonic reports of such readings and the aggregate
estimated gas flow amount until such time ~s such interruption ends or Seller
informs Buyer that the results of such readings are no longer necessary. Seller
shall reimburse Buyer for its reasonable costs and expenses incurred in
connection with any data interruption resulting from the failure of
Seller-owned gas revenue meter telemetry equipment.
15
17
SECTION 3.7. 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 3.8. 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 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) (i) 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
16
18
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 3.9. Gas Telemetry and 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, gas telemetry or
communications 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. Buyer and Seller shall cooperate in the implementation of
procedures designed to control access to all rooms on Buyer's premises in which
gas telemetry or 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 upgrade
gas telemetry or communications facilities, equipment or systems located in
such rooms. In no event shall Buyer allow any person not previously approved by
Seller to (i) enter into any such room or (ii) remove, replace, modify, add or
upgrade any such gas telemetry or communications facilities, equipment or
systems.
(c) Services. At no cost to Seller, Buyer shall provide Seller with,
and operate and maintain, adequate heating, ventilation, air conditioning,
light and power and other building services for rooms on Buyer's premises in
which gas telemetry or communications facilities, equipment or systems owned by
Seller are located. Without limiting the generality of the foregoing, Buyer
shall at all times operate and maintain air conditioning facilities and
equipment adequate to maintain temperatures at the appropriate levels in
accordance with the applicable manufacturer' s specifications thereof.
(d) Radios. Buyer, in cooperation with Seller's Energy Control Center,
shall from time to time test and maintain the channel 6 radios which can be
used by Buyer to communicate with Seller's Energy Control Center.
17
19
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.
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)
18
20
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 (i) 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.
SECTION 3.13. Remote Operation. Buyer shall at all times maintain the
capability to operate remotely the Gas Turbines from Seller's Energy Control
Center.
SECTION 3.14. 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 under-frequency,
overfrequency, undervoltage or overvoltage limits in respect of relays from
time to time specified by Seller with reasonable advance notice to Buyer.
19
21
SECTION 3.15. 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 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 3.16. 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 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 3.16 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.
20
22
(b) The Parties agree to furnish each other with certificates of
insurance evidencing the insurance coverage set forth in this, Section 3.16
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 .16 (a).
(d) Each Party on behalf of itself and its Affiliates shall exclude
any right of subrogation under its insurance policies for any liability it has
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 3.17. Energy Received by Generating Facilities. (a) Buyer
agrees that energy received from 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 3.17(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.
SECTION 3.18. Seller's Gas Pipe Testing Obligations. Seller shall
inspect, test and maintain all gas service lines and related appurtenances
(including regulators, gas revenue meters, gas revenue telemetering systems
and, from time to time upon reasonable request by Buyer, scrubbers, but not
including trip switches owned by Buyer, non-revenue meter telemetering systems,
motor-operated controls and the telecommunications links between Seller-owned
gas revenue meter telemetry equipment and the Energy Control Center) connecting
Seller's Gas System to Buyer's Generating Facilities, up to the building wall
of the applicable Generating Facilities and in accordance with Applicable Legal
Requirements and Good Industry Practice. Without limiting the generality of
Section 2.03, Buyer shall not service or interfere in any manner whatsoever
with any such gas service lines and related appurtenances (including
regulators, gas revenue meters, gas revenue telemetering systems and scrubbers,
but not including trip switches owned by Buyer, non-revenue
21
23
meter telemetering systems, motor-operated controls and the telecommunications
links between Seller-owned gas revenue meter telemetry equipment and the Energy
Control Center). Buyer shall reimburse Seller for its reasonable costs and
expenses incurred in connection with this Section 3.18.
SECTION 3.19. Emergency Power. Buyer shall, in accordance with Seller's
applicable operating procedures, provide emergency power to Seller's liquefied
natural gas facility located on Seller's premises in the event of a loss of
normal power at such facility, and Seller shall reimburse Buyer for its
reasonable costs and expenses in connection therewith.
ARTICLE IV
Billing Procedures
SECTION 4.1. 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 Astoria Declaration of Easements 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 4.2. 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
22
24
billing Party, pays into an escrow account the disputed portion of the
applicable invoice, pending resolution of such dispute.
ARTICLE V
Miscellaneous Provisions
SECTION 5.1. Effectiveness and Term. (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.
SECTION 5.2. 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 perform as a result of any occurrence or event which is beyond the
reasonable control, and does not result from any fault or
23
25
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 5.3. 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
indemnification 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
24
26
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 5.4. Assignment; No Third Party Beneficiaries. (a) This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns but 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
25
27
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 5.5. 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 5.6. 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 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.
26
28
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, MN 55403-2445
Telecopy No.: (612) 373-5392
Attention: General Counsel
SECTION 5.7. 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 pr other modifications, respectively.
SECTION 5.8. 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.
(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.
27
29
SECTION 5.9. 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.
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
28
30
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 between the Parties with respect to the
transaction contemplated by this Agreement other than the Confidentiality
Agreement.
SECTION 5.14. Severability. 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
29
31
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 Arthur Kill Continuing Site
Agreement), the terms of this Agreement shall prevail.
30
32
SECTION 5.16. Agreement Not Applicable to Arthur Kill 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 Arthur Kill Parcel.
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: President
31