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EXHIBIT 10.8
EXECUTION COPY
TRANSITION CAPACITY AGREEMENT
BETWEEN
ASTORIA GENERATING COMPANY, L.P.
AND
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Dated as of July 1, 1999
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TABLE OF CONTENTS
Page
----
1. DEFINITIONS......................................................2
2. EFFECTIVENESS, TERM AND TERMINATION..............................4
3. CAPABILITY AND AVAILABILITY REQUIREMENTS.........................5
4. INSTALLED CAPACITY PURCHASE, QUANTITY
AND PAYMENTS.....................................................6
5. SCHEDULING.......................................................8
6. BILLING AND PAYMENT PROCEDURES...................................9
7. FORCE MAJEURE...................................................11
8. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES........................11
9. EXTENSION; WAIVER...............................................12
10. COUNTERPARTS....................................................12
11. GOVERNING LAW...................................................12
12. SEVERABILITY....................................................12
13. AMENDMENT.......................................................13
14. ENTIRE AGREEMENT................................................13
15. FURTHER ASSURANCES..............................................13
16. INDEPENDENT CONTRACTOR STATUS...................................14
17. NOTICES.........................................................14
18. INTERPRETATION..................................................15
19. JURISDICTION AND ENFORCEMENT....................................15
20. CONFLICT........................................................16
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TRANSITION CAPACITY AGREEMENT BETWEEN
ASTORIA GENERATING COMPANY, L.P.
AND
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
This Transition Capacity Agreement ("Agreement") is made and entered into
as of this 1st day of July 1999, by and between Astoria Generating Company L.P.
("Astoria Generating"), a Delaware limited partnership, and Consolidated Edison
Company of New York, Inc. ("Con Edison"), a New York corporation. Astoria
Generating and Con Edison shall each be referred to as a "Party", and shall be
referred to collectively as the "Parties."
WHEREAS, Astoria Generating and Con Edison have entered into a Generating
Plant and Gas Turbine Asset Purchase and Sale Agreement, dated as of March 2,
1999 (the "APA") and certain other agreements specified in the APA relating to
the purchase by Astoria Generating of certain of Con Edison's generating assets
comprised of Generating Plants and Gas Turbines (each as defined in the APA)
(collectively, the "Purchased Assets");
WHEREAS, the rights and obligations of buyers and providers of electric
generating capacity, energy, transmission and ancillary services may be modified
by a proposal (the "Proposal") currently pending before the Federal Energy
Regulatory Commission ("FERC") to restructure the New York Power Pool, which
Proposal contemplates, among other things, (i) the formation of the ISO (as
defined herein) and (ii) the implementation of the ISO Tariff filed on December
19, 1997, in FERC Docket Nos. ER97-1523-000, OA97-470-000 and ER97-4234000, as
such filings may be amended from time-to-time;
WHEREAS, FERC may approve, accept, modify, or reject the Proposal, and its
actions may affect the rights and obligations of the Parties under this
Agreement;
WHEREAS, FERC has accepted for filing certain market power mitigation
measures applicable to sales of capacity, energy and certain other services from
specified electric generating units in New York City in FERC Docket No.
ER98-3169-000 (such measures, as may be modified from time to time, and any
other applicable market power mitigation measures that may be imposed by FERC,
ISO or the New York State Public Service Commission ("PSC"), the "Mitigation
Measures");
WHEREAS, sales of capacity, energy and certain other services from the
Purchased Assets will be subject to, and the rights and obligations of the
Parties under this Agreement may be affected by, the Mitigation Measures; and
WHEREAS, in recognition of Con Edison's installed capacity requirements
for its delivery service customers and its remaining native load customers,
Astoria Generating and Con Edison are entering into this Agreement, whereby
Astoria Generating will maintain the electric generating capability and
availability of the Purchased Assets at specified levels for the term of this
Agreement and whereby, during certain periods, Con Edison will purchase from
Astoria Generating, and Astoria Generating will sell to Con Edison, specified
amounts of Installed Capacity (as defined herein).
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NOW THEREFORE, in consideration of the mutual agreements and commitments
contained herein, Astoria Generating and Con Edison hereby agree as follows:
1. DEFINITIONS.
(a) The following capitalized terms shall have the meanings set
forth below. Any term used in this Agreement that is not defined herein shall
have the meaning customarily attributed to such term by the electric utility
industry in New York.
"Ancillary Agreements" shall have the meaning ascribed thereto in the APA.
"Business Day" shall mean any day other than Saturday, Sunday or any day which
is a legal holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other governmental action to close.
"Closing" shall mean the closing of the sale of the Purchased Assets and certain
other assets as contemplated by the APA.
"Closing Date" shall mean the date and time at which the Closing actually
occurs.
"Excess Deficiency Charges" shall mean the excess of the installed capacity
deficiency charges imposed by the NYPP or the ISO, as the case may be, on Con
Edison over the payments that would have been due in accordance with Section 4.2
for the amount of capacity in respect of which such deficiency charges were
imposed.
"Governmental Authority" shall mean any court, administrative or regulatory
agency or commission or other government entity or instrumentality or any
department thereof.
"Installed Capacity" shall mean electric generating capacity of the Purchased
Assets that satisfies all of the requirements applicable to installed capacity
established by the NYPP or the ISO, as the case may be, as such requirements
apply to Con Edison.
"ISO" shall mean the New York Independent System Operator, as described in the
Supplemental Filing, or its successors.
"ISO Rules" shall mean the rules and procedures adopted by the ISO pursuant to
the ISO Tariff from time to time in effect and the related ISO agreements.
"ISO Tariff" shall mean the tariff described in the Supplemental Filing, as it
may be amended from time to time.
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"NERC" shall mean the North American Electric Reliability Council or its
successors.
"NYPP" shall mean the New York Power Pool or its successors.
"NPCC" shall mean the Northeast Power Coordinating Council or its successors.
"NYPP Rules" shall mean the rules and procedures of the NYPP from time to time
in effect.
"NYSRC" shall mean the New York State Reliability Council or its successor.
"Replacement Capacity" shall mean installed capacity from resources other than
the Purchased Assets which resources are identified to the NYPP or the ISO, as
the case may be, as sources of installed capacity in Con Edison's periodic
reports required under applicable procedures, provided that such installed
capacity (i) is from resources that are located in New York City or directly
interconnected to Con Edison's electric system in New York City, and (ii) would
satisfy the installed capacity requirements applicable to Con Edison, including
any applicable delivery requirements, established by the NYPP or the ISO, as the
case may be.
"Replacement Capacity Costs" shall mean the excess of Con Edison's costs and
expenses for Replacement Capacity over the payments that would have been due in
accordance with Section 4.2 for an amount of capacity provided by Astoria
Generating equal to such Replacement Capacity.
"Supplemental Filing" shall mean the December 19, 1997 Supplemental Filing to
the Comprehensive Proposal to Restructure the New York Wholesale Electric Market
in FERC Docket Nos. ER97-1523-000, OA97-47000, and ER97-4234-000, as such
filings may be amended from time to time.
"Summer Capability Period" shall have the meaning provided by the NYPP or the
ISO, as the case may be, as may be modified from time to time. Summer Capability
Period is currently May 1 through October 31 of each year.
"Winter Capability Period" shall have the meaning provided by the NYPP or ISO,
as the case may be, as may be modified from time to time. Winter Capability
Period is currently each November 1 through April 30 of the following calendar
year.
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(b) Each of the following capitalized terms has the meaning
specified in the Section set forth opposite such term:
Term Section
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Astoria Generating Preamble
Affiliate 8(a)
Agreement Preamble
APA Recitals
Capacity Payment 4.2
Capacity Deficiency Payments 4.3
Con Edison Preamble
Confidentiality Agreement 14
Demonstrated Installed Capacity 4.1(a)
DMNC 3(a)
FERC Recitals
Force Majeure Event 7(a)
ICAP 4.2
Mitigation Measures Recitals
Party Preamble
PSC Recitals
Proposal Recitals
Purchased Assets Recitals
Required Net Capability 3 (a)
2. EFFECTIVENESS, TERM AND TERMINATION.
2.1 This Agreement shall only become effective upon the consummation
of the Closing.
2.2 This Agreement shall expire on the later of (a) the earlier of
(i) December 31, 2002 or (ii) the date on which Astoria Generating receives
written notice from the ISO to the effect that none of the electric capacity of
the Purchased Assets is required for meeting the installed capacity requirements
in New York City as determined by the ISO, or (b) the end of the capability
period immediately preceding the capability period covered by the first auction
for capacity sponsored by the ISO that occurs after the Closing Date.
2.3 Astoria Generating and Con Edison agree that, notwithstanding
any other provision of this Agreement, the APA or any other Ancillary Agreement,
this Agreement may not be terminated prior to its expiration by either Party
under any circumstances, including as a result of a breach, whether or not
material, by the other Party, except pursuant to an agreement in writing
executed by each Party.
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2.4 If any Governmental Authority having jurisdiction over this
Agreement requires any modification to, or imposes any condition on acceptance
or approval of, this Agreement, then the Parties shall engage in good faith
negotiations in order to amend this Agreement to satisfy, or otherwise address,
such modification or condition.
3. CAPABILITY AND AVAILABILITY REQUIREMENTS.
(a) During the term of this Agreement, Astoria Generating will use
commercially reasonable efforts to maintain the electric generating capability
and availability of the Purchased Assets (i) to provide an amount of Installed
Capacity, after any adjustment set forth in the ISO Rules to reflect the failure
by the Purchased Assets to satisfy the minimum generator availability targets
established by the ISO Rules applicable to the Purchased Assets, which shall be
no less than 100 percent of the Installed Capacity for the first Summer
Capability Period immediately following the Closing Date as reported by Astoria
Generating to the NYPP or ISO, as the case may be, based upon a Dependable
Maximum Net Capability ("DMNC") test of the Purchased Assets performed by
Astoria Generating in accordance with applicable procedures of the NYPP or ISO,
as the case may be, but in no event greater than the summer net capacity amount
of 1855 MW (the amount of Installed Capacity to be determined in accordance with
this subsection (a)(i) to be referred to as "Required Net Capability") and (ii)
to satisfy all criteria, standards and requirements applicable to providers of
installed capacity (including locational, seasonal and other performance
requirements and compliance with all applicable tariffs, rules and practices)
established by the NYSRC, NPCC, NERC and by the NYPP or the ISO, as applicable.
(b) For each capability period in which Astoria Generating fails to
maintain the capability and availability of the Purchased Assets to provide an
amount of Installed Capacity of no less than the Required Net Capability as
required under Section 3(a)(i), as such amount of Installed Capacity is
demonstrated by a DMNC test and adjusted, if necessary, in accordance with the
ISO Rules to reflect the failure by the Purchased Assets to satisfy the
applicable minimum generator availability targets, Astoria Generating shall pay
to Con Edison a deficiency charge equal to the product of (i) the amount (in MW)
by which the Installed Capacity provided is deficient, less any Replacement
Capacity purchased by Astoria Generating for the applicable capability period,
to the extent such Replacement Capacity is not otherwise required to meet the
installed capacity requirements for New York City under applicable ISO Rules in
such capability period, and (ii) the deficiency charge per MW applicable under
the NYPP Rules or the ISO Rules, as the case may be, for failure by providers of
installed capacity to satisfy applicable installed capacity requirements;
provided, however, that in the event that the obligations of the Parties under
Section 4 are terminated before the obligation of Astoria Generating under
Section 3 are terminated, the deficiency payments due by Astoria Generating to
Con Edison under this Section 3(b) shall be reduced, or shall be refunded if
already paid to Con Edison, by any amount Astoria Generating must pay to the ISO
or third parties for such deficiency in accordance with ISO Rules in the nature
of the Capacity Deficiency Payment that otherwise would have been due hereunder.
Payment of such deficiency charges shall be due at the end of the first month
following the end of the capability period for which the deficiency charged is
assessed.
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(c) Following each capability period, and at such other times as may
reasonably be requested by Con Edison, Astoria Generating shall provide Con
Edison access to, or copies of, such relevant plant data and other documents and
records reasonably requested by Con Edison as is necessary to verify the
electric generating capability and availability of the Purchased Assets, and any
deficiency in the amount of Installed Capacity provided, for such capability
period or for another period as may be reasonably requested by Con Edison. If
Astoria Generating's obligations under Section 4 terminate earlier than its
obligations under this Section 3, the only data, documents and records to which
this provision shall apply shall be those related to the DMNC tests and plant
availability referred to in subsection (b) of this Section 3.
(d) Without affecting Astoria Generating's obligations under Section
4 below, the obligations under Section 3 shall not apply to any portion of the
electric generating capacity of the Purchased Assets with respect to which
Astoria Generating receives a written notice from the ISO that such capacity is
no longer required for meeting the installed capacity requirements in New York
City as determined by the ISO.
4. INSTALLED CAPACITY PURCHASE, QUANTITY AND PAYMENTS.
4.1 Capacity Purchase Quantity
(a) From the Closing Date until the later of (i) the end of
the 1999 Summer Capability Period or (ii) the end of the capability period
immediately preceding the capability period covered by the first auction for
capacity for or including New York City sponsored by the ISO that occurs after
the Closing Date, Astoria Generating will sell to Con Edison and Con Edison will
purchase from Astoria Generating an amount of Installed Capacity equal to 100
percent of the Installed Capacity as demonstrated by the Purchased Assets based
upon the applicable summer period DMNC testing, performed in accordance with
applicable procedures of the NYPP or the ISO, as the case may be, adjusted, if
necessary, in accordance with the ISO Rules to reflect the failure by the
Purchased Assets to satisfy the applicable minimum generator availability
targets established by the ISO Rules, such amount referred to herein as the
"Demonstrated Installed Capacity"; provided, however, that the amount of
Demonstrated Installed Capacity to be provided under this Section 4.1(a) shall
be no less than the Required Net Capability. Astoria Generating shall notify Con
Edison five days prior to the conduct of any DMNC test, and Con Edison shall
have the right to observe such test. The "applicable summer period DMNC testing"
referred to in this subsection (a) shall mean, from the Closing Date until
Astoria Generating conducts and reports such testing to the NYPP or the ISO, as
the case maybe, the most recent testing conducted and reported by Con Edison to
the NYPP or the ISO, as the case may be, prior to the Closing Date; thereafter,
it shall mean, retroactively to the beginning of the capability period for which
such testing is applicable, such testing conducted and reported by Astoria
Generating.
(b) If the 1999-2000 Winter Capability Period is covered by an
auction for capacity for or including New York City sponsored by the ISO,
Astoria Generating will sell to Con Edison and Con Edison will purchase from
Astoria Generating 454 MW of Demonstrated Installed Capacity during the
1999-2000 Winter Capability Period.
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(c) Subject to Astoria Generating 's obligations under
Section 3(a), and to the extent permitted by NYPP Rules
or ISO Rules, as the case may be, Astoria Generating may
use Replacement Capacity to supply the Installed
Capacity required to be provided to Con Edison under
this Section 4.1.
4.2 Capacity Payments
The monthly payment from Con Edison to Astoria Generating for
Installed Capacity ("Capacity Payment") shall equal the product of (a) the ICAP,
(b) a daily per-MW rate which, on an annualized basis, is equivalent to
$105/kW-Year and (c) the number of days in the applicable month (or portion
thereof, if applicable). "ICAP" is the amount of Demonstrated Installed
Capacity, in MW, plus Replacement Capacity.
4.3 Capacity Deficiency Payments
(a) Whenever ICAP provided by Astoria Generating to Con Edison
is less than the amount of Demonstrated Installed Capacity that Astoria
Generating is required to sell to Con Edison under Section 4.1, Astoria
Generating shall pay to Con Edison deficiency payments ("Capacity Deficiency
Payments"), which shall equal:
The sum of (i) all Excess Deficiency Charges; (ii) Con Edison's
Replacement Capacity Costs that are reasonably incurred if, and to
the extent that, Astoria Generating fails to provide Replacement
Capacity and Con Edison obtains such Replacement Capacity; (iii) all
other directly related costs and expenses, to the extent not
included in (i) and (ii), that are reasonably incurred by Con
Edison; in all cases incurred as a direct result of Astoria
Generating 's failure to provide Con Edison with the required amount
of Installed Capacity; provided, however, that any Capacity
Deficiency Payments will be credited against deficiency charges due
to Con Edison under Section 3(b).
(b) If Con Edison incurs any reasonable costs and expenses
described in Section 4.3(a) over a period greater than one calendar month, Con
Edison shall, subject to Astoria Generating 's approval, which shall not be
unreasonably withheld, allocate those costs on a monthly basis.
4.4 Con Edison shall pay all taxes, surcharges, adjustments or other
assessments imposed by law, rule or regulation which are of general
applicability and imposed on the sales of Installed Capacity hereunder to the
extent that Con Edison can, based on a ruling from the PSC, collect such taxes,
surcharges, adjustments or other assessments from its customers.
4.5 Billing and payments of the Capacity Payment due under Section
4.2 and the Capacity Deficiency Payments due under Section 4.3 shall be made in
accordance with Section 6.
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4.6 Subject to the terms and conditions set forth herein, Astoria
Generating shall satisfy all requirements applicable to suppliers of installed
capacity established by the NYPP or the ISO, as the case may be, including any
applicable locational and seasonal requirements and compliance with and
satisfaction of all applicable tariffs, rules and practices, so that Con Edison
will receive the amount of Installed Capacity specified in Section 4.1.
4.7 Subject to the terms and conditions set forth herein, Con Edison
shall satisfy all requirements applicable to purchasers of installed capacity
established by the NYPP or ISO, as the case may be. Notwithstanding the
provisions of Section 4.3, Con Edison shall have no obligation to obtain
Replacement Capacity if Astoria Generating fails to supply all or part of the
Installed Capacity required under Section 4.1 or to obtain Replacement Capacity
for any shortfall in such Installed Capacity.
4.8 In the event the Closing occurs after July 31, 1999 and the
1999-2000 Winter Capability Period is covered by an auction for capacity for or
including New York City sponsored by the ISO, Astoria Generating will sell to
Con Edison and Con Edison will purchase from Astoria Generating an additional
182 MW of Demonstrated Installed Capacity during the 1999-2000 Winter Capability
Period, on a pro rata basis, for each month or portion thereof after July 31,
1999, until the Closing Date, which obligation shall be in addition to the
obligations to sell and purchase Installed Capacity pursuant to Section 4.1(b)
and shall be otherwise subject to the same terms and conditions as such
obligations; provided, however, that the additional obligation pursuant to this
Section 4.8 to purchase Installed Capacity shall (a) in no event exceed 546 MW
and (b) not be applicable if such delay in Closing is caused solely by Astoria
Generating.
5. SCHEDULING.
Consistent with the procedures of the NYPP or ISO, as the case may
be, and consistent with Astoria Generating 's obligations under Section 4.1 and
4.6, Astoria Generating shall specify to Con Edison in writing, for each Summer
Capability Period and for each Winter Capability Period, the generating units of
the Purchased Assets and Replacement Capacity that Astoria Generating will use
to supply Installed Capacity to Con Edison for such Summer Capability Period or
Winter Capability Period, as the case may be, and the amount of Installed
Capacity to be supplied from each generating unit, or any change thereto, at
least 30 days before the date Con Edison is required to report such information,
or any changes thereto, to the NYPP or the ISO, as the case may be.
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6. BILLING AND PAYMENT PROCEDURES.
6.1 Billing and Payments
(a) In respect of each calendar month ending after the Closing
Date, Astoria Generating shall, on or prior to the twentieth day of the
following month, prepare and render an invoice to Con Edison for the Capacity
Payment due from Con Edison to Astoria Generating for the preceding calendar
month, calculated in accordance with Section 4.2. The Capacity Payment owed
shall be due and payable on or before the later of (i) the last day of such
following month, or (ii) 10 Business Days after Con Edison receives an invoice.
All payments shall be made in immediately available funds by wire transfer to an
account designated by Astoria Generating .
(b) In respect of each calendar month ending after the Closing
Date, Con Edison shall, on or prior to the twentieth day of the following month,
prepare and render an invoice to Astoria Generating for any Capacity Deficiency
Payments due from Astoria Generating to Con Edison for the preceding calendar
month, calculated in accordance with Section 4.3. The Capacity Deficiency
Payments owed shall be due and payable on or before the later of (i) the last
day of such following month, or (ii) 10 Business Days after Astoria Generating
receives an invoice.
(c) Each Party may set off any undisputed amount owed to the
other Party against any undisputed amount owed to such Party by the other Party
pursuant to this Agreement or other arrangement(s) specifically agreed to
between the parties, including, without limitation, amounts owed by Astoria
Generating to Con Edison under Section 3(b).
(d) If any payment under Sections 3(b), 6.1(a) or 6.1(b) falls
due on a day that is not a Business Day, then the payment shall be made on the
next Business Day.
(e) Interest on unpaid amounts or payments received after the
due date shall accrue at a rate equal to the prime commercial lending rate
established from time to time by Chase Manhattan Bank, N.A., New York, New York,
or its successor, from the due date until the date upon which payment is made.
(f) Any payments owed directly by Astoria Generating to the
NYPP or the ISO, as the case may be, shall be made pursuant to the procedures
established by the NYPP or the ISO, as the case may be. Astoria Generating shall
be solely responsible for making all such payments to the NYPP or ISO.
(g) The Parties shall maintain records, accounts and other
documents sufficient to reflect accurately all transactions hereunder for a
period of four years from the time of the transactions. Each Party shall, at its
own expense, have the right to audit such records, accounts and other documents
of the other Party during such four-year period upon reasonable prior notice to
the other Party.
(h) Astoria Generating may designate other entities which are
affiliated with Astoria Generating to receive any payments due hereunder on
behalf of Astoria
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Generating. Astoria Generating designates Orion Power New York, L.P. to receive
such payments.
6.2 Billing Disputes
If a Party contests the amount billed in accordance with Sections
6.1(a) or (b) before such amount is due, the contesting Party shall pay the
undisputed billed amount when due and promptly provide written notice to the
other Party of the disputed amount and identifying the reason for the dispute.
If neither Party disputes a bill within six months after the due date of such
bill, such bill shall be deemed correct. The Parties shall engage in good faith
negotiations to resolve any disputed amounts within 30 days. If the Parties are
unable to resolve a dispute within such period, disputed amounts shall, if
requested by the billing Party, be paid into an escrow account within 30 days of
such request pending resolution of the dispute. Thereafter, either Party may
exercise such remedies as may be available under this Agreement, at law or in
equity. In addition to any other remedies available to Astoria Generating , in
the event Con Edison fails to pay a disputed bill into such escrow account
within 30 days of a request by Astoria Generating pursuant to the previous
sentence, Astoria Generating may withhold Installed Capacity to be provided to
Con Edison under Section 4.1 until such bill is paid into such escrow account.
Interest at the rate specified in Section 6.1(e) shall accrue on any amount due
hereunder, if any, that is refunded or credited to the contesting Party or that
is released from escrow to the non-contesting Party, when the contested amount
is resolved.
6.3 Survival
The provisions of Section 3, Section 4 and this Section 6 shall
survive termination, expiration, cancellation, suspension, or completion of this
Agreement to the extent necessary to allow for final billing and payment.
6.4 Access to Records
To the extent Con Edison is entitled to reimbursements of costs,
charges or penalties incurred on its own behalf or paid to the NYPP or the ISO,
Astoria Generating shall be entitled to access to, or copies of, all relevant
data records and documents as are reasonably required and requested by Astoria
Generating to verify the costs, charges or penalties claimed by Con Edison.
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7. 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 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.
8. 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 Con Edison, to an Affiliate of Con Edison or a third party
that has a contractual or statutory obligation to supply Installed Capacity to
Con Edison's retail customers; (ii) in the case of Astoria Generating, to an
Affiliate of Astoria Generating or a third party in connection with the transfer
of all of Astoria Generating 's right, title and interest in and to the
Purchased Assets to such Affiliate or third party; and (iii) in the case of
either Party, to a lending institution or trustee in connection with a pledge or
granting of a security interest in the Purchased Assets and/or 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. For
purposes of this Agreement, the term "Affiliate" shall have the meaning set
forth in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended.
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(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.
9. EXTENSION; WAIVER.
Either Party may (a) extend the time for the performance of any of
the obligations or other acts of the other Party or (b) 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, such rights shall, solely with respect to such instance, be deemed waived
in respect of such activity.
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.
11. 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).
12. 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 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.
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13. AMENDMENT.
This Agreement may be amended, modified or supplemented only by an
instrument in writing signed on behalf of each of the Parties. This Agreement
shall not be subject to change by application or complaint by any of the Parties
to the FERC or any successor agency pursuant to Section 206 of the Federal Power
Act or any successor provision, or by application or complaint to any court or
state regulatory agency. If the applicable provisions of the NYPP Rules, or the
applicable provisions of the ISO Tariff or ISO Rules, relating to installed
capacity requirements applicable to this Agreement or the implementation of this
Agreement are changed materially, the Parties shall endeavor in good faith to
make conforming changes to this Agreement with the intent to fulfill the
purposes of this Agreement; provided, however, that in no event shall such
changes modify the price for Installed Capacity set forth in Section 4.2 or
excuse Astoria Generating from paying, or otherwise modifying its obligations in
respect of, Capacity Deficiency Payments under Section 4.3. Any such conforming
change to this Agreement shall be subject to all necessary regulatory
authorizations, which the Parties shall request or support, as applicable.
14. ENTIRE AGREEMENT.
This Agreement and the provisions of the APA applicable to Ancillary
Agreements not inconsistent with the terms herein 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 and the provisions of the APA
applicable to Ancillary Agreements supersede all prior agreements and
understandings between the Parties with respect to the transaction contemplated
by this Agreement.
15. FURTHER ASSURANCES.
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 affecting the Purchased Assets or the electric power industry
generally, or such other documents or instruments as may be necessary, in order
to effectuate the transactions contemplated hereby.
16. 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 Con Edison and Astoria Generating other than that of
independent contractors.
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17. 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 Con Edison, to :
Consolidated Edison Company of New York, Inc.
4 Irving Place
New York, NY 10003
Telecopy No.: (212) 677-0601
Attention: Senior Vice President & General Counsel
IF to Astoria Generating , to:
Astoria Generating Company, L.P.
225 Greenfield Parkway, Suite 201
Liverpool, New York 13088
Telcopy Number 315-461-8571
Attention: General Manager
Copy to:
Astoria Generating Company, L.P.
c/o Orion Power Holdings, Inc.
7 East Redwood Street, 10th Floor
Baltimore, Maryland 21201
Telecopy No: 410-234-0994
Attention: Chief Legal Officer
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18. INTERPRETATION.
When a reference is made in this Agreement to an Article or Section,
such reference shall be to an Article or Section of 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, regulations, 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.
19. 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 17 (or such other address specified by such Party from time to time
pursuant to Section 17 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
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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.
20. CONFLICT.
Except as expressly otherwise provided herein or therein, in the
event of any conflict or inconsistency between the terms of this Agreement and
the terms of the APA or any other Ancillary Agreement, the terms of this
Agreement shall prevail.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be signed by their respective duly authorized officers as of the date and year
first above written.
ASTORIA GENERATING COMPANY, L.P.
By: Orion Power New York GP II, Inc.
Its General Partner
By:
----------------------------------------
Name:
--------------------------------------
Title:
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CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
By:
----------------------------------------
Name: Joan S. Freilich
Title: Executive Vice President and CFO
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