Exhibit 10.16
PUBLIC RELEASE VERSION
1999
PURCHASED POWER AGREEMENT
BETWEEN
GEORGIA POWER COMPANY
AND
LG&E ENERGY MARKETING INC.
Dated as of October 6, 1999
1999
PURCHASED POWER AGREEMENT
THIS 1999 PURCHASED POWER AGREEMENT ("Agreement"), dated as of October
6, 1999, is entered into by and between GEORGIA POWER COMPANY, a corporation
organized and existing under the laws of the State of Georgia with its principal
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Georgia Power")
and LG&E ENERGY MARKETING INC., a corporation organized and existing under the
laws of the State of Oklahoma, having its principal place of business at ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("LEM").
W I T N E S E T H:
WHEREAS, Georgia Power is authorized by its Certificate of
Incorporation and by the State of Georgia to engage in the generation,
transmission, sale and distribution of electricity for heat, light and power to
the public;
WHEREAS, Georgia Power intends to construct, own and operate two new
General Electric Frame 7EA natural gas- and oil-fired combustion turbine
electric generating units with approximate capacity of 82.5 MW each located
adjacent to the Georgia Integrated Transmission System, (the "Units"); and
WHEREAS, Georgia Power has agreed to sell to LEM and LEM has agreed to
purchase from Georgia Power capacity and energy which may or may not, at Georgia
Power's sole option, be generated at the Units; all in accordance with the
provisions of this Agreement;
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual
promises and agreements set forth herein and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, Georgia Power and LEM each intending to be legally bound, hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. In addition to the initially capitalized terms
and phrases defined in the preamble of this Agreement, the following initially
capitalized terms and phrases as and when used in this Agreement shall have the
respective meanings set forth below:
1.1.1 "Affiliate" - of any specified entity means any other
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified entity. For purposes of this
definition, "control" when used with respect to any entity means the power to
direct the management and policies of such entity, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
1.1.2 "Availability Status" - shall have the meaning specified in Section
7.1.4 of this Agreement.
1.1.3 "Block" - means the MW associated with the Operating Rating of a Unit
which LEM may schedule in an hour.
1.1.4 "Contract Capacity"- shall have the meaning specified in
Section 4.1.2 of this Agreement.
1.1.5 "Contract Service Commencement Dates" - shall have the meaning
specified in Section 3.2.1 of this Agreement.
1.1.6 "Contract Year"- means a year beginning on June 1 and ending on May
31 and "Year" means a calendar year.
1.1.7 "Costs" - shall have the meaning specified in Section
13.3.2.2 of this Agreement.
1.1.8 "CPT" - means Central Prevailing Time.
1.1.9 "Day" - means a calendar day.
1.1.10 "Defaulting Party" - shall have the meaning specified in Section
13.1 of this Agreement.
1.1.11 "Delivered Energy" - means, either individually or in
combination, the energy in megawatt hours (MWh) by Block (i) generated by the
Units and delivered to the Delivery Points, or (ii) supplied by resources other
than the Units and delivered to the Delivery Points, based on a Schedule
submitted by LEM as described in Article 7 of this Agreement.
1.1.12 "Delivery Points" - means the points anywhere on the
Georgia Integrated Transmission System where Georgia Power shall deliver the
power supplied under this Agreement.
1.1.13 "Dispatch Center" - means the control and dispatching
center designated by Georgia Power from time to time in writing as being the
primary control point for dispatch instructions to Georgia Power.
1.1.14 "Early Termination Date" - shall have the meaning specified in
Section 13.3.2 of this Agreement.
1.1.15 "Eligible Collateral" - shall have the meaning specified in Section
13.1.8.2 of this Agreement.
1.1.16 "Energy Price" - shall have the meaning specified in
Section 5.3.1 of this Agreement.
1.1.17 "Event of Default" - shall have the meaning specified in Section
13.1 of this Agreement.
1.1.18 "FERC" - means the Federal Energy Regulatory Commission
or any Governmental Authority succeeding to the powers and functions thereof
under the Federal Power Act.
1.1.19 "Fuel Costs" - shall have the meaning specified in
Section 5.3.2 of this Agreement.
1.1.20 "Gains" - shall have the meaning specified in Section
13.3.2.3 of this Agreement.
1.1.21 "Georgia Integrated Transmission System" - means the
integrated transmission system, as modified or expanded from time-to-time, as
defined in the Revised and Restated Integrated Transmission System Agreement,
dated as of December 7, 1990, between Georgia Power and Municipal Electric
Authority of Georgia, the Revised and Restated Integrated Transmission System
Agreement, dated as of December 7, 1990, between Georgia Power and City of
▇▇▇▇▇▇, and the Revised and Restated Integrated Transmission System Agreement,
dated as of November 12, 1990, between Georgia Power and Oglethorpe Power
Corporation.
1.1.22 "Georgia Power"- shall have the meaning specified in
the first paragraph of this Agreement, and its permitted successors and assigns.
1.1.23 [redacted].
1.1.24 "Governmental Authority" - means any local, state,
regional or federal administrative, legal, judicial or executive agency, court,
commission, department or other such entity, but excluding any such agency,
court, commission, department or other such entity acting in its capacity as
lender, guarantor or mortgagee.
1.1.25 "Guaranty" - shall have the meaning specified in Section 12.1 of
this Agreement.
1.1.26 "HE"- means hour ending.
1.1.27 "Initial Term" - shall have the meaning specified in
Section 3.1.1 of this Agreement.
1.1.28 "Interest Rate" - means [redacted] for the applicable time period.
1.1.29 "Legal Requirement" - means any law, code, statute,
regulation, rule, ordinance, judgment, injunction, order or other requirement of
a Governmental Authority having jurisdiction over the matter in question, which
is valid and applicable to the matter in question (i) at the time of the
execution of the Agreement, as amended from time to time or (ii) anytime
thereafter during the Term.
1.1.30 "LEM" - shall have the meaning specified in the first
paragraph of this Agreement, and its permitted successors and assigns.
1.1.31 "Losses" - shall have the meaning specified in Section
13.3.2.1 of this Agreement.
1.1.32 "Material Adverse Change" - shall have the meaning specified in
Section 13.1.8.1 of this Agreement.
1.1.33 "Month" - means a calendar month, commencing at the
beginning of the first Day of such calendar month. "Monthly" - has a meaning
correlative to that of Month.
1.1.34 "Monthly Capacity Payment" - for a particular Month of
the Term, means the Monthly amount to be paid by LEM to Georgia Power for LEM's
purchase of the Contract Capacity, as the same is set forth on Exhibit A.
1.1.35 "Monthly Energy Payment" - for a particular Month of
the Term, means the Monthly amount to be paid by LEM to Georgia Power for LEM's
purchase of Delivered Energy, as the same is calculated as provided in Section
5.3 of this Agreement.
1.1.36 "MW" - means megawatts.
1.1.37 "MWh" - means megawatt - hours.
1.1.38 "Non-Defaulting Party" - shall have the meaning specified in Section
13.1 of this Agreement.
1.1.39 "Non-Winter Months" - means the months of April
through November.
1.1.40 "Operating Heat Rate"- shall have the meaning specified in Section
9.1 of this Agreement.
1.1.41 "Operating Rating" - shall have the meaning specified in Section 9.1
of this Agreement.
1.1.42 "Other Indebtedness" - shall have the meaning specified in Section
13.1.5 of this Agreement.
1.1.43 "Party" or "Parties" - means either Georgia Power or
LEM, or both.
1.1.44 "Peak Hours" - shall have the meaning specified in Section 6.8 of
this Agreement.
1.1.45 "Proprietary Information" - of a Party shall mean
information rightfully in the possession of such Party, which information
derives economic value from not being generally known to and not being readily
ascertainable by proper means by another person who can obtain economic value
from its disclosure and use, and which is the subject of reasonable efforts to
maintain its secrecy.
1.1.46 "Prudent Utility Practices" - means, at a particular
time, any of the practices, methods and acts engaged in or approved by a
significant portion of the electric utility industry prior to such time, or any
of the practices, methods and acts which, in the exercise of reasonable judgment
in light of the facts known at the time the decision was made, could have been
expected to accomplish the desired results at the lowest cost consistent with
good business practices, reliability, safety and expedition. Prudent Utility
Practices is not intended to be limited to the optimum practice, method or act
to the exclusion of all others, but rather to be a spectrum of possible
practices, methods or acts expected to accomplish the desired results, having
due regard for, among other things, manufacturers' warranties and the
requirements of Governmental Authorities of competent jurisdiction and the
requirement of this Agreement.
1.1.47 "Renewal Term" - shall have the meaning specified in
Section 3.1.2 of this Agreement.
1.1.48 [redacted].
1.1.49 "Schedule" - as used as a noun, means an energy
schedule submitted by LEM in accordance with the provisions of Article 7 of this
Agreement, and, as a verb, means the act of submitting a Schedule in accordance
with the provisions of Article 7 of this Agreement.
1.1.50 "Service Commencement Date" means the date Georgia
Power declares that a Block is available for scheduling by LEM.
1.1.51 "Southern Dispatch" - means the ability of Southern
Company Services, Inc. (or other Affiliate of Georgia Power) to schedule and
control, directly or indirectly, manually or automatically, the output of a
generation facility in the Southern control area in order to increase or
decrease the electricity delivered from such generation facility into the
electricity system with which it is interconnected.
1.1.52 "Start-Stop Schedule" - means a Schedule of a Block by
LEM delivered by Georgia Power over consecutive hours where the amount of energy
from the Block in the hour prior to the start of the Schedule is zero, the Block
is loaded to its Operating Rating during the hours of the Schedule, and the
energy in the hour after the Schedule is zero.
1.1.53 "Start-Up Payments" - shall mean the meaning specified in Section
5.4 of this Agreement.
1.1.54 "Support Agreement" - shall have the meaning specified in 12.2 of
this Agreement.
1.1.55 "Term" - means the Initial Term and any Renewal Term or Terms.
1.1.56 "Termination Payment" - shall have the meaning specified in Section
13.3.2 of this Agreement.
1.1.57 "Undelivered Energy" - shall have the meaning specified in Section
6.1 of the Agreement.
1.1.58 "Unit" shall have the meaning specified on page 1 of
this Agreement.
1.1.59 "Variable O&M Amount" - shall have the meaning specified in Section
5.3.1 of this Agreement.
1.1.60 "Winter Months" - means the months of December
through March.
1.2 Interpretation. In this Agreement, unless the context
otherwise requires:
1.2.1 words generally importing the singular shall include the plural and
vice versa;
1.2.2 references to "entity" include, without limitation,
corporations, partnerships, associations and governmental authorities.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations and Warranties. LEM hereby makes the following
representations and warranties to Georgia Power:
2.1.1 LEM is a corporation duly organized, validly existing
and in good standing under the laws of the State of Oklahoma, and, has the legal
power to enter into this Agreement and carry out the transactions contemplated
hereby and perform and carry out all covenants and obligations on its part to be
performed under and pursuant to this Agreement.
2.1.2 [redacted].
2.1.3 The execution, delivery and performance by LEM of this
Agreement and the guarantee by Guarantor have been duly authorized by all
necessary action, and do not and will not require any consent or approval of
LEM's Affiliates, other than that which has been obtained.
2.1.4 The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement do not and will not conflict
with or constitute a breach of or a default under, any of the terms, conditions
or provisions of any Legal Requirements, or any partnership agreement, deed of
trust, mortgage, loan agreement, other evidence of indebtedness or any other
agreement or instrument to which LEM or Guarantor is a party or by which it or
any of its property is bound, or result in a breach of or a default under any of
the foregoing.
2.1.5 This Agreement constitutes the legal, valid and binding
obligation of LEM enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws relating to or affecting the enforcement of creditors' rights
generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
2.1.6 There is no pending, or to the knowledge of LEM,
threatened action or proceeding affecting LEM before any Governmental Authority
which purports to affect the legality, validity or enforceability of this
Agreement as in effect on the date hereof.
2.2 Representations and Warranties of Georgia Power. Georgia Power hereby
makes the following representations and warranties to LEM:
2.2.1 Georgia Power is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, is
qualified to do business in the State of Georgia and has the legal power and
authority to own or lease its properties, to conduct its business and to enter
into this Agreement and carry out the transactions contemplated hereby and
perform and carry out all covenants and obligations on its part to be performed
under and pursuant to this Agreement.
2.2.2 The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement do not and will not conflict
with or constitute a breach of or a default under, any of the terms, conditions
or provisions of any Legal Requirements, or any partnership agreement, deed of
trust, mortgage, loan agreement, other evidence of indebtedness or any other
agreement or instrument to which Georgia Power is a party or by which it or any
of its property is bound, or result in a breach of or a default under any of the
foregoing.
2.2.3 This Agreement constitutes the legal, valid and binding
obligations of Georgia Power enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws relating to or affecting the enforcement of creditors' rights
generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
2.2.4 There is no pending, or to the knowledge of Georgia
Power, threatened action or proceeding affecting Georgia Power before any
Governmental Authority which purports to affect the legality, validity or
enforceability of this Agreement.
ARTICLE 3
TERM OF AGREEMENT
3.1 Term.
3.1.1 This Agreement shall be effective when executed and
delivered by both Georgia Power and LEM and shall remain in full force and
effect until December 31, 2004 ("Initial Term").
3.1.2 LEM may extend the term of this Agreement for an
additional one to five twelve-month periods ("Renewal Term"), beginning January
1, 2005, upon giving at least twenty-four (24) months notice in advance of the
beginning of each such twelve-month period.
3.1.3 If LEM elects not to exercise any annual option to
extend the Term of this Agreement as set forth in Section 3.1.2, LEM shall have
no further option(s) to extend the Term. In any event, this Agreement shall
terminate no later than December 31, 2009. LEM agrees not to schedule any
purchases after any termination date.
3.1.4 If, prior to the date on which LEM may extend the Term
under Section 3.1.2, LEM wishes to enter into a Replacement Contract in lieu of
extending the Term, then LEM first shall give notice to Georgia Power that LEM
wishes to enter into a Replacement Contract. Such notice shall state the term,
amount of capacity in MW, capacity and energy price, and delivery point under
the Replacement Contract, but shall not identify the potential replacement
supplier. Within [redacted] after LEM has given such notice, Georgia Power may,
at its option, give notice to LEM that Georgia Power wishes to provide the
amount of capacity to be purchased under this Agreement under the same terms and
conditions as the Replacement Contract (except for amount of capacity). If
Georgia Power so notifies LEM within such [redacted], then the Parties shall
enter into an agreement under such terms and conditions. If Georgia Power fails
to so notify LEM within such [redacted], then LEM shall be free to enter into
such Replacement Contract without further obligation to Georgia Power.
"Replacement Contract" means a contract under which LEM will have the right to
buy capacity and associated energy which has the following terms: (a) a delivery
point is on the Georgia Integrated Transmission System, the quantity of capacity
is approximately the total of the Blocks' Operating Ratings at the time of the
Replacement Contract, and the term begins no later than June 1 of the Year
immediately succeeding the last Year of the Term and ends no earlier than
September 30 of the Year immediately succeeding the last Year of the Term.
3.1.5 During any extension of the Term of this Agreement after
the Initial Term, the Monthly Capacity Payment shall be in accordance with
Exhibit A, Monthly Energy Payment shall be calculated in accordance with Section
5.3, Start-Up Payments shall be calculated in accordance with Section 5.4, and
the Operating Ratings and Operating Heat Rates shall be calculated in accordance
with the provisions of Section 9.1.
3.1.6 Applicable provisions of this Agreement shall continue
in effect (i) after termination to the extent necessary to provide for final
▇▇▇▇▇▇▇▇ and adjustments, and (ii) as provided herein.
3.2 Service Commencement Dates.
3.2.1 The "Contract Service Commencement Dates" shall mean
June 1, 2000, for one (1) of the Blocks ("Block 6") and June 15, 2000, for one
(1) of the Blocks ("Block 7").
3.2.2 If, for any Block, the Service Commencement Date is
later than the Contract Service Commencement Date, then, for such Block,
(a) LEM shall make the Monthly Capacity Payment beginning on the Contract
Service Commencement Date;
(b) Georgia Power shall not be required to deliver energy from the Block
until the Service Commencement Date. However, during the period between the
Contract Service Commencement Date and the Service Commencement Date, if Georgia
Power does elect to generate any energy from the Unit, Georgia Power shall give
to LEM notice and an opportunity to purchase such energy as follows. By 9:00
a.m. CPT the Day before such energy is to be generated, Georgia Power shall give
to LEM a schedule of the expected energy output for the following Day. By 10:00
a.m. CPT, LEM shall give to Georgia Power notice of whether or not LEM elects to
take any of such energy and, if so, what quantities and which hours LEM elects
to take it. The price of any such energy delivered shall be the Energy Price.
Georgia Power shall have no liability for failure to generate and deliver the
energy for any reason and such energy shall not be considered Undelivered Energy
under Article 6, except that Georgia Power shall not have the right to generate
and sell such energy to a third party without first giving LEM notice as set
forth hereinabove.
(c) Georgia Power shall pay to LEM liquidated damages in the amount of
[redacted] for each Day that elapses between the Contract Service Commencement
Date and the Service Commencement Date;
(d) during the period between the Contract Service Commencement Date and
the Service Commencement Date, LEM may Schedule an amount of energy equivalent
to a Block, and Georgia Power will deliver such energy unless such deliveries
cause Georgia Power to interrupt deliveries under Georgia Power's tariff-based
interruptible sales. [redacted]. Failure by Georgia Power to deliver energy
pursuant to this Subsection 3.2.2(d) shall not constitute Undelivered Energy.
3.2.3 Georgia Power may change the Contract Service
Commencement Date for Block 7 to a date no earlier than June 1, 2000, and no
later than June 14, 2000, by delivering to LEM written notice at least
[redacted] days prior to the new Contract Service Commencement Date. If Georgia
Power does change the Contract Service Commencement Date for Block 7, all the
provisions of this Agreement shall apply as currently written, except that the
Contract Service Commencement Date shall be as set forth in Georgia Power's
notice [redacted].
3.3.3 Georgia Power shall not be required to deliver energy from Block
7 until the Service Commencement Date. However, for Block 7, for any day during
the period of June 1, 2000, through June 14, 2000, which is prior to the Service
Commencement Date the following will apply:
(a) Each Business Day LEM may call by 9:00 a.m. CPT to request the
estimated day ahead hourly prices for Georgia Power's incremental cost. Each Day
LEM may provide by 9:30 a.m. CPT to Georgia Power an energy schedule equivalent
to a Block by hour for the succeeding Day or Days. The schedule shall be for a
minimum duration of eight hours and shall be for continuous hours. The hourly
estimates and corresponding schedules for Saturday, Sunday and Monday shall be
determined on the preceding Friday. Georgia Power will deliver such energy
unless such deliveries cause Georgia Power to interrupt tariff-based
interruptible sales. [redacted]. Failure by Georgia Power to deliver energy
pursuant to this Subsection 3.3.3 (a) shall not constitute Undelivered Energy.
Start-up Payments under Section 5.4 will not apply to this subsection 3.3.3.
(b) If Georgia Power elects to generate any energy from the unit
associated with Block 7, Georgia Power shall give to LEM notice and an
opportunity to purchase such energy as follows. By 9:00 a.m. CPT the Day before
such energy is to be generated, Georgia Power shall give to LEM a schedule of
the expected energy output for the following Day. By 10:00 a.m. CPT, LEM shall
give Georgia Power notice of whether or not LEM elects to take any such energy
and, if so, what quantities and which hours LEM elects to take it. The price of
any such energy delivered shall be the Energy Price. Georgia Power shall have no
liability for failure to generate and deliver the energy for any reason and such
energy shall not be considered Undelivered Energy under Article 6, except that
Georgia Power shall not have the right to generate and sell such energy to a
third party without first giving LEM notice as set forth hereinabove.
ARTICLE 4
SALE OF CAPACITY AND ENERGY
4.1 Contract Capacity.
4.1.1 Unless excused as set forth in Article 11, Georgia Power
agrees to sell to LEM and LEM agrees to purchase the Contract Capacity as set
forth below and continuing for the remainder of the Term.
4.1.2 Contract Capacity shall consist of (i) 83 MW commencing
June 1, 2000, and (ii) 82 MW commencing June 15, 2000, for a total of 165 MW.
While various performance, timing and entitlement provisions of this Agreement
are determined by reference to the Units, the Delivered Energy sold hereunder
shall be supplied by Georgia Power from any generation resources it may choose
at its sole option.
4.2 Delivered Energy.
4.2.1 Beginning on the Service Commencement Date for each
Block, LEM shall be entitled to, but shall not be obligated to, schedule and
purchase, and unless otherwise excused by a Force Majeure Event, Georgia Power
shall sell and deliver energy in one or two Blocks, at LEM's option and on an
hourly basis, as scheduled by LEM in accordance with the provisions of Article 7
hereof. For each Year, the total number of hours which LEM shall be entitled to
schedule and receive energy at the Energy Price from Blocks 6 and 7 after the
Service Commencement Date shall not exceed [redacted].
4.2.2 Georgia Power, at its sole discretion, shall supply
Delivered Energy (i) from the Units; or (ii) from sources other than the Units
at the Delivery Points.
4.2.3 Title to electricity and risk of loss shall pass from
Georgia Power to LEM at the Delivery Points.
ARTICLE 5
PAYMENTS
5.1 General. LEM shall pay Georgia Power for each Month of the Term a
Monthly Capacity Payment, Monthly Energy Payment and Start-Up Payments in
accordance with this Article.
5.2 Capacity Payments. For each month beginning with the Contract
Service Commencement Date and continuing through the remaining Term, unless
excused by an Excused Force Majeure Event, LEM shall make a Monthly Capacity
Payment to Georgia Power in the amounts set forth on Exhibit A.
5.3 Energy Payments.
5.3.1 Each month, LEM shall make a Monthly Energy Payment to
Georgia Power equal to MWh of Delivered Energy during the applicable month
multiplied by the Energy Price. "Energy Price" equals Fuel Costs as determined
below plus the Variable O&M Amount for the applicable month as set forth on
Exhibit A.
5.3.2 "Fuel Costs" equal the applicable Operating Heat Rate
multiplied by the sum of (i) the appropriate gas or fuel oil index as set forth
below, plus (ii) fuel transportation costs as set forth below, and (iii) all
federal, state and local taxes on natural gas or fuel oil deemed to be used
hereunder. For Non-Winter Months, the applicable Operating Heat Rate shall be
the Operating Heat Rate for natural gas. For Winter Months, the applicable
Operating Heat Rate shall be the Operating Heat Rate for fuel oil unless LEM
elects to purchase firm gas transportation under Section 5.3.4 in which case the
applicable Operating Heat Rate shall be the Operating Heat Rate for natural gas.
5.3.3 For Non-Winter Months, the appropriate index shall be
[redacted]. Gas transportation costs shall be determined by application of the
Transco IT tariff rate including, but not limited to, all commodity and
surcharges such as GRI, ACA, and Great Plains Surcharge for receipt at
[redacted] and delivery to [redacted] or such [redacted] as including the State
of Georgia. However, in lieu of applying such tariff rate, LEM has the option to
purchase firm gas transportation, designating Georgia Power as its agent for
fuel delivery and notifying Georgia Power of such designation. To the extent LEM
purchases such transportation, Fuel Costs shall not include any fuel
transportation costs.
5.3.4 For Winter Months, the appropriate index shall be
[redacted]. LEM shall pay actual fuel oil transportation capped at [redacted].
However, in lieu of applying the Winter fuel index, LEM has the option to
purchase firm gas transportation, designating Georgia Power as its agent for
fuel delivery and notifying Georgia Power of such designation. To the extent LEM
purchases such transportation, Fuel Costs shall not include any fuel
transportation costs, the applicable fuel index shall be the Non-Winter fuel
index, and the applicable Operating Heat Rate shall be the Operating Heat Rate
for natural gas.
5.4 Start-Up Payments. LEM shall make Start-Up Payments for each Start-Stop
Schedule [redacted] at the rates set forth in Exhibit A.
ARTICLE 6
AVAILABILITY
6.1 Undelivered Energy. After the Service Commencement Date, if LEM
schedules energy in accordance with the provisions of Article 7 hereof during
any Peak Hours on any Day, and Georgia Power fails to deliver such energy due to
an Unexcused Force Majeure Event, then the quantity of such energy in MWhs shall
be referred to herein as "Undelivered Energy." Energy which Georgia Power fails
to deliver due to an Excused Force Majeure Event shall not be Undelivered Energy
(except as specifically provided in Section 11.2.4), but shall be governed by
Section 11.2. Energy which Georgia Power fails to deliver in the absence of any
Force Majeure Event shall not be Undelivered Energy but shall be governed by
Section 13.4.
6.2 [redacted]. If there is Undelivered Energy of more than the product
of [redacted] and the average Operating Rating of the Blocks for the applicable
Month [redacted] in any rolling period of [redacted], then Georgia Power shall
pay [redacted] after such [redacted] is reached and until there are [redacted].
6.3 Monthly Maximum. If the Undelivered Energy in any Month exceeds the
product of [redacted] and average Operating Rating of the Blocks for the
applicable Month (the "Maximum Monthly Undelivered Energy"), then [redacted].
6.4 Annual Maximum. If the Undelivered Energy in any Year exceeds the
product of [redacted] and the average Operating Rating of the Blocks for the
applicable Year multiplied by two (2) (the "Maximum Annual Undelivered Energy"),
[redacted].
6.5 Summer Maximum. If the Undelivered Energy during the period of June
1 through September 30 (the "Summer") of any Year exceeds the product of
[redacted] and the average Operating Rating of the Blocks for the applicable
months (the "Summer Maximum Undelivered Energy"), the [redacted] for each whole
multiple by which the Undelivered Energy exceeds the Summer Maximum Undelivered
Energy. [redacted]. However, during the Summer of such subsequent Year, if
Undelivered Energy is reduced by any MWh amount below the Summer Maximum
Undelivered Energy (or any multiple of the Summer Maximum Undelivered Energy),
LEM shall [redacted]. If, during the Summer of the Year following the Year in
which the Summer Maximum Undelivered Energy shall have been exceeded, for each
whole multiple of Summer Maximum Undelivered Energy that is again exceeded, LEM
shall [redacted].
6.6 Remedy. LEM's sole and exclusive monetary remedy for Undelivered
Energy exceeding the maximum levels set forth in Sections 6.2, 6.3, 6.4 and 6.5,
respectively, are cumulative with respect to each other but collectively set
forth LEM's exclusive remedies for Undelivered Energy. Such remedies are in
addition to LEM's remedies for any Georgia Power failure to deliver energy in
breach of this Agreement. However, for any single MWh of Undelivered Energy,
Georgia Power's liability hereunder will not exceed [redacted]. The remedy set
forth in this Section 6.6 is in addition to any rights LEM may have under
Article 13.
6.7 [redacted].
6.7.1 [redacted].
6.7.2 [redacted].
6.8 Peak Hours. This Article 6 shall not apply to failure to deliver
energy during any hours which are not Peak Hours. For the purpose of applying
all of the provisions of Article 6, hours which are not Peak Hours shall be
excluded from all calculations. "Peak Hours" shall mean the hours between
[redacted] inclusive during the Non-Winter Months and the hours between
[redacted] inclusive and between [redacted] inclusive during the Winter Months.
However, LEM shall have the right to change the Peak Hours for the Winter Months
by giving notice to Georgia Power at least [redacted] before the beginning of
the applicable Winter Months; provided that the total number of Peak Hours for a
Day shall not exceed[redacted] and such change is subject to Georgia Power's
consent which shall not be unreasonably withheld.
6.9 Availability Bonus.
6.9.1 For the Summer of each Year, LEM shall pay to Georgia
Power a lump sum bonus of [redacted].
6.9.2 If the Service Commencement Date is later than the
Contract Service Commencement Date for any Block, then, for all Peak Hours
between the Contract Service Commencement Date and the Service Commencement
Date, there shall be considered to be Undelivered Energy for such Block for the
purpose only of calculating Availability for the applicable Summer under this
Section 6.9.
6.9.3 If Georgia Power declares an Excused Force Majeure Event
for any Unit during the Summer, then, for all Peak Hours during the suspension
due to the Excused Force Majeure Event, there shall be considered to be
Undelivered Energy for the Block associated with such Unit for the purpose only
of calculating Availability for the applicable Summer under this Section 6.9.
ARTICLE 7
SCHEDULING AND PSEUDO GAS BALANCING
7.1 Energy Scheduling.
7.1.1 There shall be two Blocks known as Block 6 and Block 7,
respectively.
7.1.2 Each business Day LEM will provide by 9:30 a.m. CPT to
Georgia Power a forecast of the number of Blocks which LEM expects to Schedule
by hour for the succeeding Day or Days through the next business Day. [redacted]
7.1.3 LEM will submit hourly a Schedule for each Block for
each Day. For each Day, Blocks shall be Scheduled in ascending order and such
Schedules shall be ended in ascending order. For example, if LEM wishes to
Schedule one Block for a given hour, then Block 6 shall be Scheduled for such
hour. During a later hour, if LEM wishes to schedule two blocks, then Block 6
and Block 7 shall be scheduled. If, during a later hour, LEM wishes to schedule
only one Block, then the schedule for Block 6 will be ended for such hour.
7.1.4 Georgia Power immediately will give notice to LEM of any
change in Availability Status. The Availability Status of a Unit is either (a)
available and on-line, (b) available and not on-line, or (c) unavailable. When
the Availability Status of a Unit changes to unavailable, Georgia Power will
give to LEM any information relating to the cause of the unavailability, Georgia
Power's estimate of when the Unit may become available, and an indication of
Georgia's Power's willingness to supply Blocks from resources other than the
Units during the period of unavailability. The information given by Georgia
Power set forth in the immediately preceding sentence will not be binding in any
way on Georgia Power and will not limit any rights Georgia Power may have under
this Agreement.
7.1.5 If LEM has received notice from Georgia Power that a
Block is available for the applicable hour, LEM may Schedule the Block for
delivery or continuing delivery, as applicable, no later than [redacted] before
the beginning of such hour. Once Georgia Power accepts a Schedule, such Schedule
[redacted]. All Schedules will take effect at the top of the hour. Schedules
shall extend for a minimum of [redacted].
7.1.6 If LEM has received notice that a Block is unavailable
[redacted]. If Georgia Power rejects a Schedule for an hour due to an Unexcused
Force Majeure Event, the applicable Block will be Undelivered Energy for such
hour.
7.1.7 In the event LEM first receives notice of unavailability
of a Block [redacted]. If Georgia Power rejects a Schedule for an hour due to an
Unexcused Force Majeure Event, the applicable Block will be Undelivered Energy
for such hour.
7.1.8 If a Unit fails during a Schedule, [redacted].
7.1.9 If Georgia Power rejects a Schedule for an hour,
[redacted].
7.1.10 In the event a Schedule is rejected due to Unit
unavailability due to an Unexcused Force Majeure Event, a Block will be
considered Undelivered Energy until such time as a Schedule for an available
Block is ended by LEM.
7.1.11 If Georgia Power accepts a Schedule for an hour for
which Georgia Power knows that a Unit is unavailable, then the price paid for
such energy shall be the Energy Price.
7.2 Pseudo Gas Balancing.
7.2.1 Each business Day during the Non-Winter Months (and
during Winter months when LEM purchases firm gas transportation for use in this
Agreement), LEM will submit by 9:30 a.m. CPT to Georgia Power its request for
gas for the succeeding Day or Days through the next business Day in MMBtus based
on the quantity of gas which LEM would purchase if the Units were operated to
produce the quantity of energy to be Scheduled for delivery hereunder.
7.2.2 At the end of each Month, LEM's fuel requests will be balanced.
[redacted]. LEM shall have no responsibility or claims to Transco or to Georgia
Power for actual fuel imbalances.
7.2.3 In the event that Transco issues an Operational Flow
Order ("OFO") for the succeeding Day, Georgia Power shall immediately notify LEM
of said event. If LEM elects to Schedule energy during the period covered by the
OFO, then LEM must submit to Georgia Power a forecast of the daily volume of MWh
that LEM will be obligated to take. LEM shall provide such forecast of daily
volume of MWh no later than [redacted]. LEM shall Schedule and Georgia Power
shall deliver such energy in accordance with this Article 7. LEM shall not be
liable for any imbalance charges or penalties provided that it has submitted
Schedules that equal the daily volume of MWh submitted in its forecast subject
to the OFO, and it has received timely notice of the issuance of said OFO from
Georgia Power.
ARTICLE 8
BILLING AND PAYMENT
8.1 Capacity, Energy and Start-Up Billing and Payment.
8.1.1 Georgia Power shall send LEM an invoice as soon as
practicable after the end of each Month during the Term stating the Monthly
Capacity Payment, Monthly Energy Payment and Monthly Start-Up Payment for the
immediately previous Month. If circumstances require that the invoice be an
estimated ▇▇▇▇, Georgia Power may render an estimated ▇▇▇▇ and any adjustments
required shall be made in ensuing invoices. Each Monthly invoice shall contain a
statement explaining in reasonable detail how the invoice was calculated.
8.1.2 All such invoices shall be due and payable by LEM on or
before the [redacted] of the Month that the invoice is rendered or the date
which is [redacted] after the invoice is rendered, whichever is later. Georgia
Power may render invoices by means of facsimile, and receipt shall be deemed to
have occurred upon transmission if confirmed in writing (by
manually-or-machine-generated confirmation notice within one Day after facsimile
transmission). Subject to the provisions of Section 8.2, LEM shall make payment
to Georgia Power in accordance with such invoices and all other amounts payable
to Georgia Power hereunder on or before the date due in immediately available
funds, through wire transfer of funds to an account designated by Georgia Power,
or other means acceptable to Georgia Power.
8.1.3 If Georgia Power owes LEM for Replacement Costs or any
other amounts hereunder, then LEM will deliver to Georgia Power a statement
showing such amounts with reasonable detail showing how such amounts were
calculated. Subject to Section 8.2, such amounts will be credited against any
invoices.
8.2 Billing Disputes and Final Accounting.
8.2.1 If either Party after receiving a statement or ▇▇▇▇
reasonably questions or contests the amount or propriety of any payment or
amount claimed by the billing Party to be due pursuant to this Agreement, the
billed Party shall provide the billing Party with written notice of the disputed
amount. [redacted].
8.2.2 In the event that the billed Party questions or contests
the correctness of any such charge or credit, the billing Party shall promptly
review the questioned charge or credit and shall notify the billed Party of any
error in its determination of amounts owed and the amount of any payment that
the billed Party is required to make in respect of such redetermination. Not
later than the [redacted] after receipt by LEM of any such notice from Georgia
Power as to the amount of any Monthly Capacity Payments, Monthly Energy Payments
or Start-Up Payments that LEM is required to make, LEM shall make payment to
Georgia Power in immediately available funds. Not later than the [redacted]
after receipt by Georgia Power of any such notice from LEM as to the amount of
any payment [redacted] that Georgia Power is required to make, Georgia Power
shall make payment or credit as appropriate, to LEM in immediately available
funds. If the billed Party disagrees with the billing Party's resolution of a
question or contest, then the dissatisfied billed Party may seek settlement
through further negotiations or legal action, subject to the provisions of
Section 8.3. Payments made by a Party under this Section 8.2.2 shall include
interest at the Interest Rate from the date the original payment was due until
the date such payment together with interest at the Interest Rate is made. The
billed Party shall have until the end of [redacted] after its receipt of any
invoice or statement to question or contest the correctness of any charge or
credit on such invoice or statement.
8.3 Interest. If a Party does not make a payment required by this
Agreement when due, then interest shall be added to the overdue payment from the
date such overdue payment was due until such overdue payment together with
interest at the Interest Rate is paid. If a Party makes a payment required by
the Agreement and it is later determined that such payment was not due, then
such amount shall be refunded or credited with interest at the Interest Rate.
8.4 Billing and Payment Records. Each Party will until the end of
[redacted] after its receipt of any invoice make available to the other Party
upon written request, and each Party may audit, such books and records of the
other Party (or other information to which such Party has access) as are
reasonably necessary for such Party to calculate and determine the Monthly
Energy Payments shown on such invoice and thereby to verify the accuracy and
appropriateness of the amounts billed to LEM and the information provided by LEM
to Georgia Power. The Parties shall maintain their respective books and records
in accordance with generally accepted accounting principles applicable from time
to time.
ARTICLE 9
OPERATIONS
9.1 Operating Rating and Operating Heat Rate.
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9.1.1 While the Parties acknowledge that Georgia Power may
construct the Units, energy actually delivered under this Agreement may be
provided from any generation resource available to Georgia Power in Georgia
Power's sole discretion, and except where specifically noted, operation of the
Units may not necessarily be tied directly to scheduling of power in Blocks by
LEM.
9.1.2 (i) Prior to manufacturer's testing, or (ii) if Georgia
Power gives notice under Section 9.5, the Operating Heat Rate and Operating
Rating shall be as follows:
Operating Heat Rate Operating Rating
Winter:
Natural Gas [redacted] [redacted]
Fuel Oil [redacted] [redacted]
Non-Winter:
Natural Gas [redacted] [redacted] If Georgia Power constructs the
Units, the Operating Rating and Operating Heat Rate are subject to modification
based on final manufacturer's testing.
9.1.3 Final manufacturer's testing will occur no later than
the [redacted] of Unit operation. Test results shall be measured at the
terminals of each of the Units. [redacted]. The results of such test shall be
known as the "Test Operating Heat Rate" and "Test Operating Rating." Georgia
Power shall give notice to LEM of the dates and times that the final
manufacturer's test of the Units will occur. At LEM's discretion, an LEM
representative may observe the final manufacturer's test. [redacted].
9.1.4 For Non-Winter Months, after testing, the Operating
Rating of each Unit shall be equal to [redacted]. The Operating Rating
associated with each Block shall be the sum of the Operating Ratings of the
Units divided by the number of Units. To the extent that such calculation
produces partial MW ratings, the Operating Rating of Block 7 shall be set at the
next lowest whole MW amount, the remaining partial MW shall be added to the
Operating Rating of Block 6, and the Block 6 Operating Rating shall then be set
at the next lowest whole MW amount.
9.1.5 For Winter Months, after testing, the Operating Rating
shall be [redacted]. If LEM elects to purchase firm gas transportation under
Section 5.4.4, then the Operating Rating for Winter Months shall be based on
burning fuel oil and shall be [redacted]. Partial MW ratings shall be applied as
set forth in Section 9.1.4.
9.1.6 For Non-Winter Months, after testing, the Operating Heat
Rate of each Unit shall be [redacted]. The Operating Heat Rate of each Block
shall be the sum of the Operating Heat Rates of the Units divided by the number
of Units and rounded to the nearest whole number of Btu/kWh.
9.1.7 For Winter Months, after testing, the Operating Heat
Rate of each Unit shall be [redacted]. The Operating Heat Rate of each Block
shall be the sum of the Operating Heat Rates of the Units divided by the number
of Units and rounded to the nearest whole number of Btu/kWh. If LEM purchases
firm gas transportation pursuant to Section 5.3.4, then the Operating Heat Rate
for Winter Months shall be [redacted].
9.1.8 Prior to the beginning of each Month, the cumulative
hours of delivery of energy to LEM shall be determined and the degradations from
Exhibit B shall be applied to modify the Operating Ratings and Operating Heat
Rates for the next Month.
9.2 Transmission.
9.2.1 Georgia Power shall be responsible for making all
arrangements for transmission service, including ancillary services, for
delivery of capacity and energy to the Delivery Points. Georgia Power shall be
responsible for all costs, loses, and any liability associated with such
transmission.
9.2.2 LEM shall be responsible for making all arrangements for
transmission service, including ancillary services, for delivery of capacity and
energy from the Delivery Points. LEM shall be responsible for all costs, losses
and any liability associated with such transmission.
9.3 Maintenance. Georgia Power shall not schedule normal planned
outages of the Units during January, February, May through September and
December. Georgia Power shall provide LEM a one year ahead schedule for planned
outages of the Units and within [redacted] of receipt of such a schedule by LEM,
LEM may request schedule adjustments. Georgia Power shall make reasonable
accommodations to such schedule adjustments requested by LEM. [redacted].
9.4 Inventory. Georgia Power shall maintain sufficient [redacted] fuel
oil inventory on the site of the Units to sustain LEM's Scheduled energy
deliveries for a minimum of [redacted]. Further, Georgia Power shall demonstrate
to LEM's reasonable satisfaction that its fuel oil transportation plan will
sustain all deliveries of energy which LEM may Schedule hereunder.
9.5 Existing Units. In lieu of constructing the Units, Georgia Power
may notify LEM prior to [redacted], of the need for LEM to select one or more of
the units from the list in Section 9.5.2 ("Existing Units").
9.5.1 Georgia Power warrants that the units listed in Section
9.5.2 meet the following criteria as of the date of this Agreement:
9.5.1.1 The units are combustion turbine units.
9.5.1.2 The Equivalent Availability Factor, as defined in the Generation
Availability Data System as maintained by the North American Electric
Reliability Council [redacted].
9.5.1.3 The commercial operation dates of the units
were January 1, 1990 or later.
9.5.2 The units from which LEM may select Existing Units are
listed as follows:
[redacted]
9.5.3 In the event that Georgia Power gives the notice
described in Section 9.5, then LEM shall have the right to review and inspect
the units and relevant information relating to the units. Within [redacted]
after receipt of Georgia Power's notification, LEM shall give to Georgia Power
notice of the Existing Units selected. Upon such notice being given by LEM, the
selected units will be treated as the "Units" for all purposes under this
Agreement.
9.6 Site Visits. LEM shall have the right to visit the site of the
Units with a Georgia Power escort to observe the status or operation of the
Units after giving reasonable notice to the person identified in Section 16.4.
ARTICLE 10
CHANGE IN LAW, MODIFICATION OF AGREEMENT
10.1 Change in Law.
10.1.1 "Change in Law" means a new law or regulation, or a
change in or change in interpretation of a law or regulation, including, but not
limited to, environmental laws and regulations and energy taxes applicable to
wholesale sales, [redacted].
10.1.2 "Material Change in Law" means a Change in Law (a)
enacted after the date this Agreement is fully executed and delivered and (b)
which increases or decreases Georgia Power's costs of owning or operating the
Units by [redacted]. The annual cost of capital expenditures required by a
Change in Law shall be calculated on a reasonable basis taking into account the
useful life of the equipment or improvements required to be procured which may
extend beyond the Term.
10.1.3 If there is a Material Change in Law [redacted],
Georgia Power will give notice to LEM which identifies the Material Change in
Law [redacted] with documentation of such costs and which requests negotiation
of an amendment to this Agreement in accordance with Section 10.1.4. If LEM
reasonably believes that a Material Change in Law has occurred, LEM may request
information from Georgia Power which will show whether or not a Material Change
in Law has occurred. Georgia Power will provide such information subject to
reasonable confidentiality restrictions.
10.1.4 If there has been a Material Change in Law and notice
has been given, the Parties promptly will negotiate and agree upon an amendment
to this Agreement which will have the effect of passing through to LEM
[redacted] costs resulting from Georgia Power's actions taken or proposed
actions to be taken in accordance with Prudent Utility Practices, to address or
comply with such Change in Law. Such amendment will be agreed upon as soon as
possible, but no later than [redacted] after the notice referenced in Article
10.1.3 is given. Such amendment will be effective on the effective date of the
Material Change in Law and will be retroactive, if necessary.
10.1.5 In the event the Parties have not reached agreement on
an amendment to this Agreement during the [redacted] period set forth in Section
10.1.4, (i) Georgia Power shall make a good faith calculation of the effect on
costs of the Material Change in Law and corresponding price adjustments
hereunder; (ii) Georgia Power shall adjust all ▇▇▇▇▇▇▇▇ accordingly, effective
as of the effective date of the Material Change in Law, subject to the
provisions of Sections 8.2 and 8.3, provided that in applying Section 8.2, the
Party seeking the adjustment shall be treated as the Party rendering the invoice
or statement.
10.1.6 Any dispute arising out of or relating to the
provisions in this Section 10.1 shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. However, neither Party may
initiate arbitration until after the expiration of the [redacted] negotiation
period referenced in Section 10.1.4.
10.2 Modification of Agreement. In the event the FERC or any other
Governmental Authority modifies this Agreement, the Parties agree to make all
changes necessary to preserve as nearly as possible the bargain contained in
this Agreement, including but not limited to, the total amounts of capacity and
energy delivered to LEM and the total amount of revenues to be received by
Georgia Power.
ARTICLE 11
FORCE MAJEURE
11.1 Definition of Force Majeure. "Force Majeure Event" means an Excused
Force Majeure Event or an Unexcused Force Majeure Event.
11.2 Excused Force Majeure.
---------------------
11.2.1 An "Excused Force Majeure Event" means with respect to
a Unit, a flood in excess of the applicable one hundred year flood plain,
earthquake, volcanic eruption, forest fire, military invasion, civil war, civil
insurrection, tornado, hurricane in excess of 130 miles per hour, military or
usurped power, or failure of contractors or suppliers of materials or fuel when
caused by such events, which renders Georgia Power unable to deliver energy from
a Unit or the Units at the Delivery Points or LEM unable to take delivery of
energy at the Delivery Points or transmit energy from the Delivery Points.
Excused Force Majeure Events shall not include (i) changes in market conditions
that affect the cost or price of energy or cost of the Unit's primary or
secondary fuel; (ii) loss of load or disruption of electricity markets; or (iii)
difficulty or inability to make payments.
11.2.2 Either Party shall be excused from performance and
shall not be construed to be in default in respect of any obligation hereunder
(other than the obligation to pay money) for so long as failure to perform such
obligation shall be due to an Excused Force Majeure Event. An Excused Force
Majeure Event affecting any one Unit shall excuse Georgia Power's performance
with respect to only one (1) Block.
11.2.3 During the suspension of performance due to or
resulting from an Excused Force Majeure Event declared by Georgia Power,
[redacted].
11.2.4 [redacted]. Any continued failure to deliver energy
hereunder thereafter shall be treated for all purposes as if it were due to an
Unexcused Force Majeure Event under the provisions of Section 11.3. Georgia
Power may declare the termination of the suspension due to the Excused Force
Majeure Event even if the applicable Unit(s) is not operational. However,
Georgia Power may not thereafter reinstate the suspension due to the Excused
Force Majeure Event for the same Excused Force Majeure Event.
11.3 Unexcused Force Majeure.
11.3.1 An "Unexcused Force Majeure Event" as to a Party means
any occurrence, nonoccurrence or set of circumstances, whether or not
foreseeable, that is beyond the reasonable control of such Party and is not
caused by such Party's negligence or lack of due diligence, and that has not
been properly declared by Georgia Power to be an Excused Force Majeure Event,
including, without limitation: unplanned Unit outages not caused by Georgia
Power's failure to adhere to Prudent Utility Practices, any strike, stoppage in
labor, failure of contractors or suppliers of materials caused by force majeure
as defined in the applicable contract; ice, windstorm, fire; explosion;
equipment failure; sabotage or vandalism; order of any Governmental Authority;
or act of God or of a public enemy which renders Georgia Power unable to deliver
energy from one or more of the Units at the Delivery Points or LEM unable to
take delivery of energy at the Delivery Points or transmit energy from the
Delivery Points. The term Unexcused Force Majeure Event shall not include (i)
changes in market conditions that affect the cost or price of energy or cost of
the Units' primary or secondary fuel; (ii) loss of load or disruption in
electricity markets; or (iii) difficulty or inability to make payments.
11.3.2 Either Party shall be excused from performance and
shall not be construed to be in default in respect of any obligation hereunder
(other than the obligation to pay money) for so long as failure to perform such
obligation shall be due to an Unexcused Force Majeure Event. An Unexcused Force
Majeure Event affecting any one Unit shall excuse Georgia Power's performance
with respect to only one (1) Block.
11.3.3 During the suspension of performance due to or
resulting from an Unexcused Force Majeure Event, LEM shall continue to make
Monthly Capacity Payments. During such suspension period, LEM may submit
Schedules in accordance with the provisions of Article 7, and Georgia Power may
supply such Schedules from other generating resources.
11.3.4 Georgia Power's failure to deliver energy due to an
Unexcused Force Majeure further shall have the consequences set forth in Article
6.
11.4 Mitigation. Following the occurrence of a Force Majeure Event, the
affected Party shall:
11.4.1 give the other Party notice thereof, followed by
written notice if the first notice is not written, as promptly as possible after
such Party becomes aware of such Force Majeure Event, describing the particulars
of such Force Majeure Event;
11.4.2 use its best efforts to remedy its inability to perform
as soon as practicable; provided, however, that this Section 11.4.2 shall not
require the settlement of any strike, walkout, lockout or other labor dispute on
terms which in the sole judgment of the Party involved in the dispute, are
contrary to its interest; provided further, that the settlement of strikes,
lockouts or other labor disputes shall be entirely within the discretion of the
Party having the difficulty; and
11.4.3 when it is able to resume performance of its
obligations under this Agreement, give the other Party written notice to that
effect.
11.5 Suspension of Performance. The suspension of performance due to a
Force Majeure Event shall be of no greater scope and of no longer duration than
is required by such Force Majeure Event. No Force Majeure Event shall extend
this Agreement beyond its stated Term.
11.6 Limitation on Force Majeure. Notwithstanding any other provision
of this Article 11, if a Unit is under construction and Georgia Power declares
the Service Commencement Date for any Unit prior to the declared commercial
operation date for such Unit, or, if after the declared commercial operation
date for such Unit Georgia Power accepts a Schedule for an hour for which
Georgia Power knows that a Unit is unavailable, then a "Force Majeure Event"
shall be [redacted].
ARTICLE 12
CREDIT
12.1 Guaranty. Simultaneously with the execution of this Agreement, LEM
shall cause [redacted] to execute and deliver a Guaranty Agreement in the form
of that attached hereto as Exhibit C ("Guaranty").
12.2 Designation Letter. Simultaneously with the execution of this
Agreement, LEM shall cause [redacted] to execute and deliver a Designation
Letter in the form of that attached hereto as Exhibit ▇. ▇▇▇ covenants that it
shall cause to remain in effect during the Term (i) the Support Agreement, dated
as of September 5, 1997, by and between [redacted] (the "Support Agreement") and
(ii) the Designation Letter described in this Section 12.2; provided, however,
that these documents may be replaced with other documents providing comparable
assurance to Georgia Power with Georgia Power's consent, which consent shall not
be unreasonably withheld.
ARTICLE 13
EVENTS OF DEFAULT AND DAMAGES FOR NON-PERFORMANCE
13.1 Events of Default. "Event of Default" means the occurrence of any
of the following events with respect to a Party (the "Defaulting Party", the
other Party being the "Non-Defaulting Party"), Defaulting Party in the case of
LEM including [redacted].
13.1.1 The Defaulting Party fails to make any payment which it
is obligated to make pursuant to this Agreement to the Non-Defaulting Party
which nonpayment continues for [redacted] after written notice of such default
is given by the other Party;
13.1.2 Any representation or warranty of the Defaulting Party
pursuant to this Agreement or the Guaranty shall prove to have been false or
misleading in any material respect when made or deemed made; unless (i) the
fact, circumstance or condition that is the subject of such representation or
warranty is made true within [redacted] after notice thereof has been given to
the Defaulting Party and (ii) such cure removes any adverse effect on the
Non-Defaulting Party of such fact, circumstance or condition being otherwise
than as first represented, or unless such fact, circumstance or condition being
otherwise than as first represented does not materially adversely affect
Non-Defaulting Party.
13.1.3 A court having jurisdiction shall enter (i) a decree or
order for relief in respect of Defaulting Party in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or (ii) a decree or order adjudicating
Defaulting Party bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of Defaulting Party under any applicable Federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of Defaulting Party or of any substantial part of its
affairs; or
13.1.4 Defaulting Party shall (i) commence a voluntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent, or (ii) consent to the entry of a decree or
order for relief in respect of Defaulting Party in any involuntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or (iii) file any petition, answer or
consent seeking reorganization or relief under any applicable Federal or state
law, or (iv) consent to the filing of any petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official or (v) make an assignment for the benefit of
creditors, or (vi) be unable, or admit in writing its inability, to pay its
debts as they become due, or (vii) take any action in furtherance of any of the
foregoing.
13.1.5 Defaulting Party shall default on (i) obligations under
one or more agreements or instruments in respect of borrowed money or (ii)
obligations to a Lender, as defined in the Support Agreement ("Other
Indebtedness"), and such default continues after the applicable grace period, if
any, specified in such agreement or instrument if the principal amount exceeds
[redacted], and default results in such Other Indebtedness becoming, or becoming
capable at such time of being declared, due and payable prior to its stated
maturity, whether or not such Other Indebtedness is in fact declared due and
payable.
13.1.6 The Support Agreement shall cease to be in full force
and effect, and shall not be replaced with comparable assurance to Georgia
Power, with Georgia Power's consent, which consent shall not be unreasonably
withheld.
13.1.7 [redacted] shall fail to perform any covenant set forth
in the Guaranty, or the Guaranty shall expire and shall not be replaced with
comparable assurance to Georgia Power, with Georgia Power's consent, which
consent shall not be unreasonably withheld.
13.1.8 A Party shall experience a Material Adverse Change;
provided, however, such Material Adverse Change shall not be considered an Event
of Default if the Defaulting Party delivers to the Non-Defaulting Party,
Eligible Collateral in an amount equal to [redacted].
13.1.8.1 As used in this Section 13.1.8, a Material Adverse Change shall
occur when a Party's senior securities are rated below [redacted].
13.1.8.2 As used in this Section 13.1.8, Eligible Collateral shall consist
of an unconditional Letter of Credit from [redacted] (and in a form reasonably
acceptable to Beneficiary), cash or a guaranty from an entity with ratings equal
to or greater than [redacted].
13.1.9 The Defaulting Party materially breaches any obligation
under this Agreement or the Guaranty, and such breach shall continue for a
period of [redacted] after the date on which written notice thereof shall have
been given to the Defaulting Party; except that if it shall be impracticable or
impossible to remedy any such breach within such [redacted] period, such period
shall be extended for an additional period reasonably necessary to remedy such
breach, if during such additional period, the Defaulting Party shall be
diligently pursuing a cure for such breach.
13.2 Rights Under Agreement. Except as otherwise provided herein, each
Party reserves to itself all rights, counterclaims, and other defenses which it
is or may be entitled to arising from or out of this Agreement.
13.3 Remedies.
--------
13.3.1 Upon the occurrence of an Event of Default pursuant to
this Article 13, the Non-Defaulting Party may at its discretion, take either or
both of the following actions: (i) proceed by appropriate proceedings, judicial,
administrative or otherwise at law, in equity or otherwise at law, in equity or
otherwise, to protect and enforce its rights, to recover any damages to which it
may be entitled, and to enforce performance by the Defaulting Party, including
specific performance of Defaulting Party's obligations hereunder; and (ii)
terminate this Agreement by giving written notice thereof to the Defaulting
Party.
13.3.2 In addition to the remedies provided in Section 13.3.1,
the Non-Defaulting Party may, for so long as the Event of Default is continuing,
(i) establish a date [redacted] after the Non-Defaulting Party delivers notice)
(the "Early Termination Date") on which this Agreement shall terminate and
[redacted]
13.3.2.1 [redacted]
13.3.2.2 [redacted]
13.3.2.3 [redacted]
[redacted]. At the time for payment of any amount due under this Section,
each Party shall pay to the other Party all additional amounts payable by it
pursuant to this Agreement. [redacted]
13.4 Damages for Non-Performance. If Georgia Power fails to deliver
energy requested for Scheduling hereunder, and such failure is not excused by a
Force Majeure Event, then, as LEM's sole and exclusive remedy for such failure,
but not to the exclusion of the other remedies provided in this Agreement,
[redacted].
ARTICLE 14
INDEMNIFICATION AND LIMITATION OF LIABILITY
14.1 Indemnity. Subject to Section 14.3 below, each Party expressly
agrees to indemnify, hold harmless and defend the other Party against all
claims, liability, costs or expense for loss, damage or injury to persons or
property in any manner directly or indirectly connected with or growing out of,
the generation, transmission or distribution of Delivered Energy on its own side
of the Delivery Points, unless such loss, damage or injury is the result of
gross negligence or willful misconduct of the Party seeking indemnification.
14.2 No Liability to Third Party. Nothing herein shall create, or be
interpreted as creating, any standard of care with reference to, or any duty or
liability to any person not a Party hereto.
14.3 No Consequential Damages. To the fullest extent permitted by law,
neither Party shall be liable to the other for punitive, indirect,
consequential, or incidental damages including, without limitation, claims of
customers of the indemnified Party arising in connection with this Agreement.
ARTICLE 15
ASSIGNMENT
15.1 Assignment and Assumption of Obligations. Neither Party shall
assign this Agreement or any portion thereof without the prior written consent
of the other Party which such consent shall not be unreasonably withheld;
provided, however, (i) any assignee shall expressly assume assignor's
obligations hereunder and (ii) unless expressly approved by the other Party to
this Agreement, no assignment, whether or not consented to, shall relieve the
assignor, and any guarantor, of their obligations hereunder in the event its
assignee fails to perform and (iii) either Party may assign this Agreement to an
Affiliate without consent.
15.2 Assignment to Lenders.
15.2.1 Notwithstanding Section 15.1, Georgia Power may,
without the consent of LEM, assign this Agreement to a lender for collateral
security purposes in connection with the financing or refinancing of the Units.
15.2.2 In order to facilitate the obtaining of financing of
the Units, LEM shall execute such consents, agreements or similar documents with
respect to a collateral assignment hereof to a lender as lender may reasonably
request in connection with the documentation of the financing or refinancing for
the Units, provided, that any such consents, agreements or similar documents
will be on terms and conditions acceptable to LEM.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 Amendments. This Agreement may be amended by and only by a written
instrument duly executed by each of Georgia Power and LEM, which has received
all approval of Governmental Authorities of competent jurisdiction necessary for
the effectiveness thereof.
16.2 Binding Effect. This Agreement and any extension shall inure to the
benefit of and shall be binding upon the Parties and their respective permitted
successors and assigns.
16.3 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same instrument.
16.4 Notices. Where written notice is required by this Agreement, such
notice shall be in writing and shall be deemed given (i) when mailed by United
States registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
To: LEM: LG&E Energy Marketing Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President
With Copy To: LG&E Energy Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
To: Georgia Power Company Southern Wholesale Energy
c/o Southern Company Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇ ▇▇▇
With Copy To: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
or to such other address as may be designated by the Parties; or (ii) when sent
by facsimile, provided such facsimile is confirmed by mailing a hard copy
confirmation, as provided in clause (i) above, within one (1) business Day after
the sending of the facsimile.
16.5 Entire Agreement. This Agreement constitutes the entire
understanding between the Parties and supersedes any previous agreements between
the Parties. The Parties have entered into this Agreement in reliance upon the
representations and mutual undertakings contained herein and not in reliance
upon any oral or written representations or information provided by one Party to
the other Party not contained or incorporated herein.
16.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
16.7 Waiver. The failure of either Party to enforce at any time any of
the provisions of this Agreement, or to acquire at any time performance by the
other Party of any of the provisions hereof, shall in no way be construed to be
a waiver of such provisions, nor in any way to affect the validity of this
Agreement or any Party hereof, or the right of such Party hereafter to enforce
every such provision. No modification or waiver of all or any part of all or any
part of this Agreement shall be valid unless it is reduced to a writing, which
expressly states that the Parties hereby agree to a waiver or modification as
applicable, and is signed by both Parties.
16.8 No Dedication of System. Nothing contained in this Agreement shall
require Georgia Power to construct any particular facilities. Any undertaking by
Georgia Power under any provisions of this Agreement shall not be construed to
constitute the dedication of Georgia Power's system, or the system of any
Affiliate of Georgia Power, or any portion thereof, to the public or to LEM;
provided, however, the Parties acknowledge that Georgia Power may construct the
Units with respect to service provided under this Agreement. Georgia Power's
provision of Contract Capacity and Delivered Energy under this Agreement does
not constitute a sale, lease, rental, transfer or conveyance of any ownership
interest or entitlement in or to any facilities of any kind. All obligations of
the Parties shall cease upon termination of this Agreement, except as otherwise
expressly provided herein, and LEM shall not attempt to schedule any energy
under this Agreement after its termination.
16.9 Headings. The headings contained in this Agreement are used solely
for convenience and do not constitute a part of the Agreement between the
Parties hereto, nor should they be used to aid in any manner in the construction
of this Agreement.
16.10 Third Parties. This Agreement is intended solely for the benefit
of the Parties hereto. Except as otherwise expressly provided herein, nothing in
this Agreement shall be construed to create any duty to, or standard of care
with reference to, or any liability to, any person not a Party to this
Agreement.
16.11 Agency. This Agreement shall not be interpreted or construed to
create an association, joint venture, or partnership between the Parties to
impose any partnership obligation or liability upon either Party. Neither Party
shall have any right, power or authority to enter into any agreement or
undertaking for, or act on behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the other Party.
16.12 Severability. If any term or provision of this Agreement or the
application thereof to any person, entity, or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provisions to person, entities or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
16.13 Confidentiality.
---------------
16.13.1 The Parties acknowledge that this Agreement contains
Proprietary Information and each Party agrees that for a period of five (5)
years from the date of termination of the Agreement it will not, without the
written consent of the other or as otherwise provided herein, disclose to any
third party (other than to Affiliates of the disclosing party or consultants and
advisors to such Affiliates and the disclosing Party who need to know such
information in connection with the performance of their duties or services for
such Affiliates or the disclosing Party or Lenders to such Affiliates or the
disclosing party), the Proprietary Information except to the extent that
disclosure is required by law, or by a court or by an administrative agency
having jurisdiction over the disclosing party.
16.13.2 The Parties agree to seek confidential treatment of
the Proprietary Information in this Agreement from FERC but acknowledge that
certain Proprietary Information may need to be disclosed in Georgia Power's
filings with FERC which may be publicly available.
16.14 Replacement Index . Whenever any published index or tariff is
referenced herein, the Parties intend to track those costs as faithfully as
commercially practical. Should any such index or tariff be discontinued or no
longer published, the Parties will cooperate in establishing substitute
benchmarks through reference to equivalent indexes or tariffs.
16.15 Public Announcement. The Parties agree that no public or other
announcement concerning the transactions contemplated hereby shall be made
except after mutual consultation and consent, provided, however, that consent
will not be required if either Party determines that disclosure to the public or
to governmental agencies are reasonably necessary to comply with applicable
laws.
16.16 Liquidated Damages. To the extent that any damages required to be
paid under this Agreement are liquidated, the Parties acknowledge that the
damages are difficult or impossible to determine, otherwise obtaining an
adequate remedy is inconvenient, and the liquidated damages constitute
approximation of the expected actual harm or loss.
IN WITNESS WHEREOF, the undersigned Parties hereto have duly executed
this Agreement under seal in Georgia as of the date first above written.
GEORGIA POWER COMPANY
"Georgia Power"
By:
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
Attest:
------------------------
Title:
----------------
LG&E ENERGY MARKETING INC.
"LEM"
By:
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Group Vice President - Energy Marketing
Attest:
---------------------------------------
Title:
-------------------------------
IN WITNESS WHEREOF, the undersigned Parties hereto have duly
executed this Agreement under seal in Kentucky as of the date first above
written.
GEORGIA POWER COMPANY
"Georgia Power"
By:
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
Attest:
---------------------------
Title:
-------------------
LG&E ENERGY MARKETING INC.
"LEM"
By:
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Group Vice President - Energy Marketing
Attest:
Title:
EXHIBIT "A"
PRICE ESCALATION
-------------------------------------------------------------------------------
Start-Stop Cost Monthly Capacity
Payment VOM
$ ($/MWh)
$/MW - Start
June 1, 2000 [redacted] [redacted] [redacted]
June 15, 2000 [redacted] [redacted] [redacted]
July 1, 2000 - May 31, 2001 [redacted] [redacted] [redacted]
June 1, 2001 - May 31, 2002 [redacted] [redacted] [redacted]
June 1, 2002 - May 31, 2003 [redacted] [redacted] [redacted]
June 1, 2003 - May 31, 2004 [redacted] [redacted] [redacted]
June 1, 2004 - May 31, 2005 [redacted] [redacted] [redacted]
June 1, 2005 - May 31, 2006 [redacted] [redacted] [redacted]
June 1, 2006 - May 31, 2007 [redacted] [redacted] [redacted]
June 1, 2007 - May 31, 2008 [redacted] [redacted] [redacted]
June 1, 2008 - May 31, 2009 [redacted] [redacted] [redacted]
June 1, 2009 - Dec. 31, 2009 [redacted] [redacted] [redacted]
EXHIBIT "B"
PERFORMANCE DEGRADATION
Application:
1. Operating Heat Rate as established in Sections 9.1.6 and 9.1.7 times (1
plus table value for applicable hours of Delivered Energy per Block).
2. Operating Rating as established in Sections 9.1.4 and 9.1.5 times (1 minus
table value for applicable hours of Delivered Energy per Block).
------------------------------------------------------------------------------
Cumulative Operating Heat Rate Operating Rating
Delivered Hours Degradation Degradation
------------------------------------------------------------------------------
0 1,000 [redacted] [redacted]
1,001 2,000 [redacted] [redacted]
2,001 3,000 [redacted] [redacted]
3,001 4,000 [redacted] [redacted]
4,001 5,000 [redacted] [redacted]
5,001 6,000 [redacted] [redacted]
6,001 7,000 [redacted] [redacted]
7,001 8,000 [redacted] [redacted]
8,001 9,000 [redacted] [redacted]
9,001 10,000 [redacted] [redacted]
10,001 11,000 [redacted] [redacted]
11,001 12,000 [redacted] [redacted]
12,001 13,000 [redacted] [redacted]
13,001 14,000 [redacted] [redacted]
14,001 15,000 [redacted] [redacted]
15,001 16,000 [redacted] [redacted]
16,001 17,000 [redacted] [redacted]
17,001 18,000 [redacted] [redacted]
18,001 19,000 [redacted] [redacted]
19,001 20,000 [redacted] [redacted]
EXHIBIT "C"
GUARANTY AGREEMENT
[redacted]
EXHIBIT "D"
[redacted]
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS.............................................................................................2
1.1 Certain Definitions........................................................................................2
1.2 Interpretation............................................................................................11
ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS..............................................................12
2.1 Representations and Warranties............................................................................12
2.2 Representations and Warranties of Georgia Power...........................................................13
ARTICLE 3 TERM OF AGREEMENT......................................................................................14
3.1 Term......................................................................................................14
3.2 Service Commencement Dates................................................................................16
ARTICLE 4 SALE OF CAPACITY AND ENERGY............................................................................20
4.1 Contract Capacity.........................................................................................20
4.2 Delivered Energy..........................................................................................20
ARTICLE 5 PAYMENTS...............................................................................................21
5.1 General...................................................................................................21
5.2 Capacity Payments.........................................................................................21
5.3 Energy Payments...........................................................................................22
5.4 Start-Up Payments.........................................................................................23
ARTICLE 6 AVAILABILITY...........................................................................................23
6.1 Undelivered Energy........................................................................................23
6.2 [redacted]................................................................................................24
6.3 Monthly Maximum...........................................................................................24
6.4 Annual Maximum............................................................................................24
6.5 Summer Maximum............................................................................................24
6.6 Remedy....................................................................................................25
6.7 [redacted]................................................................................................25
6.8 Peak Hours................................................................................................25
6.9 Availability Bonus........................................................................................26
ARTICLE 7 SCHEDULING AND PSEUDO GAS BALANCING....................................................................26
7.1 Energy Scheduling.........................................................................................27
7.2 Pseudo Gas Balancing......................................................................................29
ARTICLE 8 BILLING AND PAYMENT....................................................................................30
8.1 Capacity, Energy and Start-Up Billing and Payment.........................................................30
8.2 Billing Disputes and Final Accounting.....................................................................31
8.3 Interest..................................................................................................32
8.4 Billing and Payment Records...............................................................................32
ARTICLE 9 OPERATIONS.............................................................................................33
9.1 Operating Rating and Operating Heat Rate..................................................................33
9.2 Transmission..............................................................................................36
9.3 Maintenance...............................................................................................36
9.4 Inventory.................................................................................................36
9.5 Existing Units............................................................................................37
9.6 Site Visits...............................................................................................38
ARTICLE 10 CHANGE IN LAW, MODIFICATION OF AGREEMENT..............................................................38
10.1 Change in Law............................................................................................38
10.2 Modification of Agreement................................................................................40
ARTICLE 11 FORCE MAJEURE.........................................................................................41
11.1 Definition of Force Majeure..............................................................................41
11.2 Excused Force Majeure....................................................................................41
11.3 Unexcused Force Majeure..................................................................................42
11.4 Mitigation...............................................................................................43
11.5 Suspension of Performance................................................................................44
11.6 Limitation on Force Majeure..............................................................................44
ARTICLE 12 CREDIT................................................................................................45
12.1 Guaranty.................................................................................................45
12.2 Designation Letter.......................................................................................45
ARTICLE 13 EVENTS OF DEFAULT AND DAMAGES FOR NON-PERFORMANCE.....................................................45
13.1 Events of Default........................................................................................46
13.2 Rights Under Agreement...................................................................................49
13.3 Remedies.................................................................................................50
13.4 Damages for Non-Performance..............................................................................51
ARTICLE 14 INDEMNIFICATION AND LIMITATION OF LIABILITY...........................................................51
14.1 Indemnity................................................................................................51
14.2 No Liability to Third Party..............................................................................51
14.3 No Consequential Damages.................................................................................51
ARTICLE 15 ASSIGNMENT............................................................................................53
15.1 Assignment and Assumption of Obligations.................................................................53
15.2 Assignment to Lenders....................................................................................53
ARTICLE 16 MISCELLANEOUS PROVISIONS..............................................................................54
16.1 Amendments...............................................................................................54
16.2 Binding Effect...........................................................................................54
16.3 Counterparts.............................................................................................54
16.4 Notices..................................................................................................54
16.5 Entire Agreement.........................................................................................55
16.6 Governing Law............................................................................................55
16.7 Waiver...................................................................................................55
16.8 No Dedication of System..................................................................................56
16.9 Headings.................................................................................................56
16.10 Third Parties...........................................................................................56
16.11 Agency..................................................................................................57
16.12 Severability............................................................................................57
16.13 Confidentiality.........................................................................................57
16.14 Replacement Index......................................................................................58
16.15 Public Announcement.....................................................................................58
16.16 Liquidated Damages......................................................................................58
EXHIBIT "A" PRICE ESCALATION......................................................................................1
EXHIBIT "B" PERFORMANCE DEGRADATION...............................................................................1
EXHIBIT "C" GUARANTY AGREEMENT...................................................................................i
EXHIBIT "D"......................................................................................................ii