EXHIBIT 10.25
Execution Copy
TERMINATION AGREEMENT
This TERMINATION AGREEMENT (this
“ Agreement ”) is entered into on the 2nd day of
June, 2004, by and between COMMONWEALTH ELECTRIC COMPANY, a
Massachusetts corporation having its principal place of business at
800 Boylston Street, Boston, Massachusetts 02199 (“
Commonwealth ”), and PITTSFIELD GENERATING COMPANY,
L.P. (f/k/a Altresco Pittsfield, L.P.), a Delaware limited
partnership with a principal place of business at 235 Merrill Road,
Pittsfield, Massachusetts (“ Pittsfield
”).
W I T N E S
S E T H :
WHEREAS, Commonwealth and Pittsfield
are parties to that certain Power Sale Agreement, dated
February 20, 1992, as amended by an Amendment to Power Sale
Agreement dated as of November 7, 1994 and a Second Amendment
to Power Purchase Agreement dated as of November 21, 1996 (as
so amended, the “ Power Purchase Agreement ”),
pursuant to which Pittsfield sells to Commonwealth, and
Commonwealth purchases from Pittsfield, a seventeen and two-tenths
per cent (17.2%) entitlement to the capacity and associated
electric energy produced by Pittsfield’s facility situated in
Pittsfield, Massachusetts (the “ Facility ”);
and
WHEREAS, Pittsfield and Commonwealth
desire to terminate the Power Purchase Agreement pursuant to, and
in accordance with, the terms and provisions contained
herein.
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Definitions
. Capitalized terms used
herein without definition shall have the respective meanings given
to such terms in the Power Purchase Agreement. In addition, the
term “ Business Day ” shall mean a day other
than a Saturday, Sunday or any other day which is a legal holiday
or a day on which banking institutions are authorized or required
by law to close or be closed in Massachusetts.
2. Effectiveness
.
2.1. The “ Effective
Date ” shall be the third Business Day after the first
date on which all of the following conditions have been satisfied:
(i) approval by the Massachusetts Department of
Telecommunications and Energy (“ DTE ”), in form
and substance reasonably satisfactory to the parties, of
(A) this Agreement, including but not limited to the
termination of the Power Purchase Agreement pursuant to the terms
hereof, and (B) the full recovery of the Termination Payments
through Commonwealth’s Transition Charge (as defined under
G.L. c. 164, Section 1G), and either (x) the expiration
of any appeal periods applicable to such DTE approval, or
(y) if an appeal of such approval is filed within any such
applicable appeal period, the issuance of a final ruling denying
such appeal or resolving such appeal on terms acceptable to both
parties (collectively, the “ Commonwealth Approvals
”): (ii) notice of termination (the “
FERC
1
Execution Copy
Notice ”) of the Power Purchase Agreement is
provided by Pittsfield to the Federal Energy Regulatory Commission
(“ FERC ”) consistent with FERC’s
requirements therefore and such FERC Notice becomes effective;
(iii) Commonwealth and Pittsfield shall have given (or been
deemed to have given) notice that the Commonwealth Approvals are
acceptable pursuant to Section 2.2; and (iv) Commonwealth
and Pittsfield shall have given (or been deemed to have given)
notice that the final order or other determination approving,
disapproving or ruling in any way on the FERC Notice is acceptable
pursuant to Section 2.3; provided, however, that
notwithstanding satisfaction of the foregoing conditions, the
Effective Date shall be no earlier than October 1, 2004.
Notwithstanding the foregoing, this Agreement shall terminate and
be of no further force or effect whatsoever (including, without
limitation, the provisions of Sections 3, 4, and 5 hereof) as
provided in Section 7.
2.2. No later than five
(5) Business Days after the issuance by DTE or any appellate
court or other judicial body with jurisdiction over the DTE, of any
order or other determination approving, disapproving or ruling in
any way on this Agreement, Commonwealth shall provide Pittsfield
with: (i) written notice of such order or determination
including a copy thereof; and (ii) certification of an
authorized officer of Commonwealth as to whether such order or
determination is reasonably acceptable to Commonwealth. No later
than five (5) Business Days after receipt of such notice and
documentation, Pittsfield shall provide Commonwealth with a
certification of an authorized officer of Pittsfield as to whether
such order or determination is reasonably acceptable to Pittsfield.
Failure by either party to provide such written certification
within five (5) Business Days of a written request by the
other party shall constitute certification that such order or
determination is reasonably acceptable to such party.
2.3 No later than five
(5) Business Days after the issuance by FERC or any appellate
court or other judicial body with jurisdiction over the FERC, of
any order or other determination approving, disapproving or ruling
in any way on the termination of the Power Purchase Agreement,
Pittsfield shall provide Commonwealth with: (i) written notice
of such order or determination including a copy thereof any; and
(ii) certification of an authorized officer of Pittsfield as
to whether such order or determination is reasonably acceptable to
Pittsfield. No later than five (5) Business Days after receipt
of such notice and documentation, Commonwealth shall provide
Pittsfield with a certification of an authorized officer of
Commonwealth as to whether such order or determination is
reasonably acceptable to Commonwealth. Failure by either party to
provide such written certification within five (5) Business
Days of a written request by the other party shall constitute
certification that such order or determination is reasonably
acceptable to such party.
2
Execution Copy
3. Termination of
Agreements .
3.1. Agreement to Terminate .
Pittsfield and Commonwealth hereby agree that, effective as of
12:00:01 am eastern time on the Effective Date, the Power Purchase
Agreement shall be deemed terminated without any further action
being required on the part of either Commonwealth or Pittsfield,
provided that Pittsfield has received confirmation of the transfer
of the initial Termination Payment to be made pursuant to
Section 4 of this Agreement. Upon such termination:
(i) Commonwealth shall have no obligation whatsoever under the
Power Purchase Agreement, including, without limitation, any
obligation to purchase or accept electric energy or capacity
produced by the Facility, and (ii) Pittsfield shall have no
obligation whatsoever under the Power Purchase Agreement,
including, without limitation, any obligation to sell to
Commonwealth any electric energy or capacity produced by the
Facility. Notwithstanding the preceding sentence and said
termination of the Power Purchase Agreement: (a) Commonwealth
shall remain obligated to make payments to Pittsfield pursuant to
the terms of the Power Purchase Agreement on account of any
electric energy and capacity produced by the Facility and supplied
to Commonwealth at any time up to the Effective Date (“
PPA Payments ”), to the extent that any such amounts
remain unpaid on the Effective Date; and (b) Pittsfield shall
remain obligated to make any PPA Refunds. “ PPA
Refunds ” shall be any amounts owed by Pittsfield to
Commonwealth pursuant to the terms of the Power Purchase Agreement
on account of adjustments or reconciliations resulting from errors
in measuring, or calculating charges for, energy or capacity
delivered by Pittsfield to Commonwealth at any time up to the
Effective Date that Commonwealth provides notice of no later than
ninety (90) days after the Effective Date. Any disputes
regarding PPA Payments and/or PPA Refunds shall be resolved
pursuant to the terms of the Power Purchase Agreement. The parties
agree to cooperate with each other in taking any and all actions
that may be reasonably requested by the other in order to
facilitate the approval of this Agreement by the DTE and, if this
Agreement is approved by the DTE in for and substance acceptable to
the parties, the termination of the Power Purchase
Agreement.
3.2. Release of Liens . On
the Effective Date, Commonwealth shall release and discharge any
and all mortgages, security interests, letters of credit and/or
other liens (collectively, “ Liens ”) that it
may have on or with respect to the Facility or Pittsfield,
including without limitation: (a) the Agreement in Lieu of
Second Mortgage dated as of March 20, 1992 among Commonwealth,
Pittsfield and certain other parties; (b) the Declaration of
Easements, Covenants and Restrictions made by Pittsfield and the
owner participant under Pittsfield’s lease financing dated
March 20, 1992; and (c) the Accommodation Agreement dated
as of March 20, 1992 among Pittsfield, Commonwealth and
certain other parties. Commonwealth shall execute and deliver any
and all documents and take any further actions that Pittsfield may
reasonably request in order to effectively release and discharge
all of such Liens.
3
Execution Copy
4. Payments by
Commonwealth .
4.1 Termination Payments .
For and in consideration of Pittsfield’s agreement to
terminate the Power Purchase Agreement, Commonwealth shall pay, and
hereby promises to pay, to the order of Pittsfield the following
monthly payment amounts (collectively, the “ Termination
Payments ”, and individually, each monthly payment a
“ Termination Payment ”); provided that the
first Termination Payment shall be due on the Effective Date and
shall be equal to (x) the monthly payment amount owed for the
month in which the Effective Date occurs multiplied by (y) a
fraction, the numerator of which is the number of days remaining in
such month (including the Effective Date) and the denominator of
which is the number of days in such month.
|
|
|
|
|
Calendar Year During Which
Termination
Payment is Owed
|
|
Termination
Payment Amount
|
|
2004
|
|
|
|
2005
|
|
|
|
2006
|
|
|
|
2007
|
|
|
|
2008
|
|
|
After the Effective Date, Commonwealth shall
make Termination Payments on the first Business Day of each
calendar month beginning with the month following the month in
which the Effective Date occurs and continuing through and
including December 1, 2008. Each Termination Payment shall be
made by wire transfer to an account designated in writing from time
to time by Pittsfield.
4.2 Unconditional Obligation
. Commonwealth’s obligations to make each Termination Payment
when due under this Agreement are subject to the terms and
conditions set forth in this Agreement and are otherwise absolute,
unconditional and irrevocable and are not subject to cancellation,
termination, modification, repudiation, excuse or substitution by
Commonwealth. Commonwealth is not entitled to any abatement,
reduction, offset, defense or counterclaim with respect to the
obligations to make each Termination Payment when due under this
Agreement for any reason whatsoever.
4.3 PPA Payments .
Commonwealth shall pay Pittsfield for: (a) all energy delivered up
to the Effective Date; and (b) any other charges owed by
Commonwealth pursuant to the Power Purchase Agreement with respect
to the month in which the Effective Date occurs, which charges
shall be prorated based on the number of days in such month during
which the Purchase Power Agreement was in effect.
5. Releases
.
5.1. Releases by Commonwealth
. Effective as of midnight on the Effective Date, Commonwealth, for
itself, its successors and assigns, hereby releases and forever
discharges Pittsfield, the general and limited partners of
Pittsfield, all of the officers,
4
Execution Copy
directors,
