EXHIBIT 10.FF
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BAYONNE CAPACITY SUPPLY AGREEMENT
BETWEEN
COGEN TECHNOLOGIES NJ VENTURE
AND
EL PASO MERCHANT ENERGY, L.P.
DATED AS OF
OCTOBER 1, 2001
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BAYONNE CAPACITY SUPPLY AGREEMENT
This Bayonne Capacity Supply Agreement (this "Agreement") is
made and entered into as of this 1st day of October, 2001, between Cogen
Technologies NJ Venture ("Bayonne") and El Paso Merchant Energy, L.P. ("EPME")
(each individually referred to as a "Party" and collectively as the "Parties").
RECITALS
WHEREAS, Public Service Electric and Gas Company ("PSE&G") and
Bayonne are parties to a Power Purchase and Operations Coordination Agreement,
dated as of June 5, 1989 (the "Bayonne PPA"), providing for the interconnection
of the Bayonne Facility with PSE&G and the sale by Bayonne and the purchase by
PSE&G of the output of the cogeneration facility located in Bayonne, New Jersey;
WHEREAS, Bayonne and Cedar Brakes II, L.L.C. (formerly known
as Cedar Brakes IV, L.L.C.) ("Cedar Brakes") intend for Cedar Brakes to obtain
Bayonne's interests in the Bayonne PPA;
WHEREAS, Cedar Brakes and PSE&G are parties to an Amended and
Restated Power Purchase Agreement, dated as of May 23, 2001 (the "Amended and
Restated PPA"), providing for the sale by Cedar Brakes and the purchase by PSE&G
of capacity and energy;
WHEREAS, EPME and Cedar Brakes intend to enter into a Power
Purchase Agreement (the "Mirror PPA"), providing for the sale by EPME and the
purchase by Cedar Brakes of capacity and energy sufficient for Cedar Brakes to
meet its obligations under the Amended and Restated PPA;
WHEREAS, EPME and Bayonne are parties to a Power Purchase/Sale
Transaction Confirmation, dated as of the date hereof (the "Bayonne Transaction
Confirmation"), providing for the sale by Bayonne and the purchase by EPME of
energy sufficient for EPME to meet its obligations under the Mirror PPA;
WHEREAS, EPME is entering into this agreement in order to be
able to assure itself of a supply of capacity sufficient to meet its obligations
under the Mirror PPA; and
WHEREAS, as a condition to EPME's obligations under the
Bayonne Transaction Confirmation, Bayonne is required to execute and deliver
this Agreement.
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NOW, THEREFORE, in consideration of the mutual promises set
forth herein, and other good and valuable consideration, the receipt of which is
hereby acknowledged, the Parties hereto agree as follows:
SECTION 1. DEFINITIONS
Unless otherwise specified, capitalized terms used herein but
not defined herein have the respective meanings assigned to such terms in the
Mirror PPA.
SECTION 2. CAPACITY SUPPLY
(a) Bayonne shall arrange for Capacity to be made
available to EPME, which may include, at Bayonne's option, Capacity provided by
the Bayonne Facility or from other sources of such Capacity, such that EPME
shall be credited by PJM with at least forty (40) MW per day of such Capacity
credits through and including October 31, 2008 or the earlier termination of the
Mirror PPA. Bayonne shall take all necessary steps utilizing PJM's "eCapacity"
mechanism, or as otherwise may be required by PJM, such that EPME's account with
PJM shall reflect such Capacity credits as of the Effective Date of the Mirror
PPA and at all times throughout the term thereof. EPME agrees to cooperate with
Bayonne in making any submittals required by PJM.
(b) The amount of Capacity credits to be provided to
EPME above is based on the methodology currently specified in the RAA. If such
methodology is no longer used by PJM, the minimum quantity of Capacity credits
Bayonne is required to provide hereunder (restated in terms of the new unit of
measurement) shall be calculated based upon the new measurement methodology as
specified in Article II(c) of the Mirror PPA. If the Mirror PPA no longer
requires EPME to obtain such Capacity credits, Bayonne shall provide Capacity to
EPME in an amount equal to the amount specified in the measurement methodology
in effect immediately prior to the cancellation of such requirement.
(c) If Bayonne fails for reasons other than a Force
Majeure or in the event of an occurrence described in Article II(D) of the
Mirror PPA, during any Month to provide all or a part of the Capacity to EPME
pursuant to this Agreement, EPME shall use reasonable commercial efforts to
purchase replacement Capacity in the amount of such shortfall, and Bayonne will
be obligated to reimburse EPME for all such replacement costs. In the event that
EPME, in spite of using reasonable commercial efforts, is unable to purchase
such Capacity shortfall, Bayonne shall pay to EPME an amount equal to the
deficiency charge, if any, or other charges, as applicable, payable by EPME
under Article V(E) of the Mirror PPA.
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(d) The foregoing liquidated damages shall be the sole
damages to which EPME shall be entitled as the result of any failure by Bayonne
to provide Capacity under this Agreement. Under no circumstances shall Bayonne
be liable for special, consequential, exemplary, tort or other damages or costs.
SECTION 3. MISCELLANEOUS
(a) Limitation on Remedy. Notwithstanding anything
herein to the contrary, in the event of a default by Bayonne in the performance
of its obligations hereunder, EPME agrees that in no event shall it seek or be
entitled to any amendment, modification set-off or other relief under or with
respect to its rights and obligations under the Mirror PPA.
(b) Representation and Warranty. Bayonne represents and
warrants to EPME that Bayonne has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement.
(c) Notices. Any notice, request, demand, or statement
which any Party may desire to give to the other Party shall be in writing and
except as otherwise provided for in this Agreement shall be considered as duly
delivered when mailed by certified mail or delivered against receipt by
messenger or overnight courier addressed to said Party as follows:
(i) If to EPME:
El Paso Merchant Energy, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: General Counsel
(ii) If to Bayonne:
Cogen Technologies NJ Venture
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: General Manager
(d) Payment. Bayonne shall pay EPME for Capacity
replacement costs, deficiency charges, or other costs that EPME incurs under
Section 2(c) hereof, within thirty (30) days of receipt of a written notice from
EPME stating the amount of such charges or costs. If payment is not made by the
due date specified herein, Bayonne shall pay to EPME an interest charge on
unpaid amounts which shall accrue daily from the due date until the date upon
which payment is made at the Late Payment Rate.
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(e) Entire Agreement. This Agreement constitutes the entire
Agreement of the Parties with respect to the matters contained herein and may
not be modified except by a written instrument duly executed by each of the
Parties.
(f) Term. The term of this Agreement shall run from the
Effective Date of the Mirror PPA until and including October 31, 2008 or the
earlier termination of the Mirror PPA.
(g) Governing Law. This Agreement shall be interpreted,
governed and construed under the laws of the State of New Jersey, exclusive of
its conflict of laws provisions.
(h) Counterparts. This Agreement may be executed in
counterparts. Each counterpart shall be deemed an original but together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date and year first above written.
COGEN TECHNOLOGIES NJ VENTURE
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
EL PASO MERCHANT ENERGY, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice-President
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