Reciprocal Easement Agreement (Kintigh Station)

RECIPROCAL EASEMENT AGREEMENT


(KINTIGH STATION)


BETWEEN


NEW YORK STATE ELECTRIC & GAS CORPORATION


AND


AES NY, L.L.C.


DATED: AS OF AUGUST 3, 1998 2
TABLE OF CONTENTS


PAGE NO.
-------- ARTICLE 1 Background and Objectives ....................................... 1


ARTICLE 2 Definitions ..................................................... 3
2.1 Definitions in APA and ICA ...................................... 3
2.2 Definitions in this Agreement ................................... 3
2.3 Additional Definitions .......................................... 6
2.4 Interpretation .................................................. 6


ARTICLE 3 Easements ....................................................... 7
3.1 Grant of Easements to NYSEG ..................................... 7
3.2 Grant of Easements to Buyer ..................................... 10
3.3 General Scope of Easements ...................................... 10
3.4 Interpretation .................................................. 12
3.4A Relocation of Easements ......................................... 14
3.5 Electric and Gas Easements ...................................... 15
3.6 Rules and Regulations ........................................... 15
3.7 No Obstruction .................................................. 15
3.8 Repair and Maintenance .......................................... 16
3.9 Effective Date .................................................. 16


ARTICLE 4 Taxes, Assessments, and Other Charges ........................... 16
4.1 Payment of Taxes ................................................ 16
4.2 Personal Property Taxes ......................................... 17
4.3 Timing of Payment ............................................... 17
4.4 Cooperation with respect to Tax Abatements ...................... 17
4.5 Tax Contests .................................................... 18


ARTICLE 5 Mechanics' Liens ................................................ 18
5.1 Notice Regarding Labor and Materials ............................ 18
5.2 Disposition of Liens ............................................ 18


ARTICLE 6 Condemnation .................................................... 19
6.1 Right to Participate ............................................ 19
6.2 Total Taking .................................................... 19
6.3 Disposition of Award ............................................ 19


ARTICLE 7 Defaults ........................................................ 20
7.1 Events of Default ............................................... 20
7.2 Right of Self Help .............................................. 20
7.3 Interest ........................................................ 21
7.4 Enforcement Rights .............................................. 21
7.5 No Forfeiture ................................................... 21


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PAGE NO.
-------- ARTICLE 8 Miscellaneous ................................................... 21
8.1 Exhibits ........................................................ 21
8.2 Headings ........................................................ 21
8.3 Interpretation .................................................. 21
8.4 Governing Law ................................................... 22
8.5 Entire Agreement ................................................ 22
8.6 Modifications, Waivers, Consents ................................ 22
8.7 Binding Effect .................................................. 22
8.8 Covenants not Conditions ........................................ 22
8.9 Severability of Void Provisions ................................. 22
8.10 Estoppel Certificates ........................................... 23
8.11 Notices ......................................................... 23
8.12 Independent Covenants ........................................... 23
8.13 Recording ....................................................... 23
8.14 Counterparts .................................................... 23
8.15 Amendments ...................................................... 24
8.16 No Joint Venture ................................................ 24
8.17 Waivers; Remedies Cumulative .................................... 24


EXHIBITS


EXHIBIT A Buyer Property


EXHIBIT B NYSEG Property


EXHIBIT C Electric and Gas Easements


EXHIBIT D Construction and Work Rules


EXHIBIT E Environmental Investigation and Remediation Work


EXHIBIT F Access Rules


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Exhibit 10.9a
RECIPROCAL EASEMENT AGREEMENT


THIS RECIPROCAL EASEMENT AGREEMENT, dated as of August 3, 1998, by and between NEW YORK STATE ELECTRIC & GAS CORPORATION ("NYSEG"), a corporation organized and existing under and pursuant to the laws of the State of New York and having an office for the transaction of business at Corporate Drive, Kirkwood Industrial Park, Binghamton, New York 13902-5225, and AES NY, L.L.C. ("Buyer"), a limited liability company organized and existing under and pursuant to the laws of the State of Delaware with its principal place of business at 1001 North 19th Street, Arlington, Virginia 22209. NYSEG and Buyer may be referred to individually as a "Party" and collectively as the "Parties."


ARTICLE 1 BACKGROUND AND OBJECTIVES


NGE Generation, Inc. ("NGE"), NYSEG and the Buyer have entered into an Asset Purchase Agreement ("APA"), dated as of August 3, 1998, for the sale of NGE's fossil-fired generating facilities (the "Fossil Plants") and associated assets and liabilities described therein to the Buyer.


As part of the transactions set forth in the APA, NGE will sell to Buyer the Real Property, Tangible Personal Property, and related assets, liabilities, rights, and obligations comprising NGE's Kintigh Station, all as more specifically set forth in the APA.


Following the Closing contemplated by the APA, NYSEG will continue to own certain real property, Interconnection Facilities, and Excluded Assets situated on or adjacent to Kintigh Station which NYSEG plans to use in the normal conduct of its business. Buyer, in turn, will own certain real and personal property situated on or adjacent to NYSEG's real property which Buyer plans to use in the normal conduct of its business.


Further, NYSEG and the Buyer have entered into an Interconnection Agreement (the "ICA") dated as of August 3, 1998 whereby NYSEG agrees to provide Interconnection Service (as defined in the ICA) to Buyer for the Fossil Plants, including Kintigh Station, and Buyer agrees to provide NYSEG access to the Fossil Plants, including Kintigh Station, for this purpose. 5
In order for NYSEG and Buyer each to (i) enjoy the full benefit of their respective property rights, (ii) fulfill legal requirements, and (iii) comply with their respective agreements under the Interconnection Agreement, each Party requires certain easements, licenses, rights of way, and other rights in, on, over, under, through, to, and above the other's real property and improvements.


NYSEG and Buyer have agreed upon the following specific goals and objectives for this Agreement:


(a) Buyer will grant NYSEG such easements, licenses, rights,
and rights of way over Buyer Property (defined below) as NYSEG deems
reasonably necessary or desirable to enable NYSEG and its employees,
agents, consultants, contractors, and subcontractors to use and/or
operate any and all NYSEG Property, as well as property, facilities,
and equipment owned by third parties, located on or adjacent to the
Buyer's Property in the normal conduct of NYSEG's business, both
current and future.


(b) NYSEG will grant Buyer such easements, licenses, rights,
and rights of way over NYSEG Property (defined below) as Buyer deems
reasonably necessary or desirable to enable Buyer and its employees,
agents, consultants, contractors, and subcontractors to use and/or
operate any and all Buyer Property, as well as property, facilities,
and equipment owned by third parties, located on or adjacent to NYSEG's
Property in the normal conduct of Buyer's business, both current and
future.


(c) Each Party will exercise its rights hereunder in a manner
which will avoid material disruptions in the other Party's business
operations.


(d) Each Party will respect the security and safety of the
other Party's employees, agents, consultants, contractors,
subcontractors, and property in the exercise of its rights under this
Agreement.


(e) Rules governing hours of access and security precautions
will contain terms allowing full and complete access to a Party in
order to safely and efficiently operate the Party's system and/or to


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investigate and rectify both potential and existing emergency
situations.


(f) Each Party will exercise its rights hereunder in a manner
which will avoid placing unreasonable burdens on such Property of the
other Party as is subject to the applicable easement, license, right,
or right of way.


The provisions of this Article 1 are intended to be a general introduction to this Agreement and are not intended to expand the scope of the Parties' rights and obligations under this Agreement or to alter the plain meaning of the terms and conditions of this Agreement. However, to the extent the terms and conditions of this Agreement do not address a particular circumstance or are otherwise unclear or ambiguous, such terms and conditions are to be construed and interpreted so as to give effect to the provisions in this Article 1.


NOW, THEREFORE, the Parties hereto, in consideration of the mutual covenants contained herein and in the APA and ICA, and for ONE DOLLAR ($1.00) and other good and valuable consideration, the receipt whereof and sufficiency of which are hereby acknowledged, each intending to be legally bound and to bind their respective successors and assigns, hereby mutually agree as follows:


ARTICLE 2 DEFINITIONS


2.1 Definitions in APA and ICA. Except for terms separately defined in this Agreement, capitalized terms used in this Agreement will have the same meanings provided for such terms in the APA and ICA.


2.2 Definitions in this Agreement. As used in this Agreement:


(a) "Access" shall mean, subject to the conditions set forth
in this Agreement and a Party's right to impose reasonable security and
safety restrictions protecting its employees, agents, consultants,
contractors, subcontractors, invitees, property, and confidential
information, full and unimpeded access, in common with the grantor
(defined below), over and through such roads, paths, walkways,


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corridors, hallways, doorways, and other means of entry or exit as
exist now and from time to time on the grantor's property, or, where no
means of access exist, over and through those areas of the grantor's
property which are (i) reasonably necessary for achieving the grantee's
underlying purpose, and (ii) least likely to impede or damage the
grantor's property or operations; it shall also include access and
right of way for the grantee's employees, agents, consultants,
contractors, subcontractors, invitees, cars, vehicles, trucks,
trailers, heavy machinery, equipment, materials, and all other
apparatus and items reasonably necessary for achieving the grantee's
underlying purpose. This term is as defined whether or not capitalized
in this Agreement.


(b) "Affiliate" shall have the meaning set forth in Rule 1
2b-2 of the General Rules and Regulations under the Exchange Act.


(c) "Agreement" shall mean this Reciprocal Easement Agreement.


(d) "Buyer" shall mean AES NY, L.L.C., its Affiliates,
successors, and assigns, as well as their respective employees, agents,
consultants, contractors, and subcontractors.


(e) "Buyer Improvements" shall mean any and all buildings,
structures, and facilities now situated or hereafter erected on the
Buyer Property, excluding any Excluded Assets and NYSEG Interconnection
Facilities.


(f) "Buyer Property" shall mean the real property described in
Exhibit A, attached hereto and incorporated herein, as well as any and
all Buyer Improvements.


(g) "Communication Facilities" shall mean wires, cables, fiber
optic cables, devices, poles, lines of poles, towers, lines of towers,
supporting structures, switches, and other related equipment,
facilities, and appurtenances, both above-ground and underground,
whether owned by a Party hereto or by a third party, and which are used
for the transmission of voice communications, data, and/or information.


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(h) "Electric Facilities" shall mean towers, poles, lines of
towers, lines of poles, supporting structures, cables, crossarms,
overhead and underground wires, guys, braces, Communication Facilities,
and all related above-ground and underground facilities, appurtenances,
and equipment located on the Buyer Property, and/or which NYSEG may
reasonably require now and from time to time on the Buyer Property for
the transmission and/or distribution of electric current and for
communication purposes, for public or private use, including those
facilities identified on Exhibit C, attached hereto and incorporated
herein.


(i) "Gas Facilities" shall mean underground pipelines, pipes,
hand/man holes, ducts, conduits, Communication Facilities, and all
related above-ground and underground facilities, appurtenances, and
equipment located on the Buyer Property, and/or which NYSEG may
reasonably require now and from time to time on the Buyer Property for
the transmission and/or distribution of natural and/or manufactured gas
and for communications purposes, for public or private use, including
those facilities identified on Exhibit C, attached hereto and
incorporated herein.


(j) "Grantee" shall mean the party who enjoys the principal
benefit of the applicable easement, license, right, or right of way.
This term is as defined whether or not capitalized in this Agreement.


(k) "Grantor" shall mean the owner of the property and/or
improvement affected by the applicable easement, license, right, or
right of way. This term is as defined whether or not capitalized in
this Agreement.


(l) "Including" shall mean including without limitation. This
term is as defined whether or not capitalized in this Agreement.


(m) "NYSEG" shall mean New York State Electric & Gas
Corporation, its Affiliates, successors, and assigns, as well as their
respective employees, agents, consultants, contractors, and
subcontractors.


(n) "NYSEG Improvements" shall mean any and all (i) buildings,
structures, and facilities situated or


5 9
erected on the NYSEG Property, (ii) NYSEG Interconnection Facilities
situated or erected on the NYSEG Property, and (iii) the Substation
Improvements; but excluding any and all (x) Buyer Purchased Assets, and
(y) Joint Use Facilities owned by Buyer.


(o) "NYSEG Property" shall mean the real property described in
Exhibit B, attached hereto and incorporated herein, as well as any and
all NYSEG Improvements.


(p) "Qualified Personnel" shall mean individuals trained for
their positions pursuant to Good Utility Practice or other applicable
minimum qualification standards generally recognized within the
relevant field of expertise or endeavor.


(q) "Substation Improvements" shall mean all buildings,
fencing, structures, fixtures, grounding wire and conductors,
facilities, equipment, and other improvements (together with any
subterranean footings, foundations, columns, and piles supporting same,
and any related piping, sumps, and other underground appurtenances that
are an integral part thereof) as well as all incidents and
appurtenances thereto, which are used now or in the future as, or in
connection with, electrical substation(s) by NYSEG, including all
additions, replacements, and expansions thereto.


2.3 Additional Definitions. Additional defined terms not defined in this Article 2 or in the APA and ICA have the meanings set forth elsewhere in this Agreement.


2.4 Interpretation. (a) With respect to any easement, license, right, or right of way created by this Agreement, the words "in," "upon," "to," "on," "over," "above," "through," and/or "under" shall be interpreted to include all of such terms, and (b) the term "use" shall be interpreted to include "use, operate, maintain, repair, upgrade, clean, install, alter, remove, inspect, construct, modify, restore, rebuild, replace, and expand within the defined scope of the easement, license, right, or right of way to meet the current and future needs of a Party hereto."


6 10 ARTICLE 3 EASEMENTS


3.1 Grant of Easements to NYSEG. Buyer does hereby establish, grant, and convey to NYSEG the following easements on the Buyer Property for the following purposes:


(a) An easement (i) permitting any and all NYSEG
Interconnection Facilities and Excluded Assets located on the Buyer
Property to remain in their present locations, and (ii) to use the
NYSEG Interconnection Facilities and Excluded Assets in the manner
described in this Agreement and the ICA and in the normal conduct of
NYSEG's business, both current and future;


(b) An easement (i) permitting any and all Electric Facilities
located on the Buyer Property, along with any Communication Facilities
attached thereto, to remain in their present locations on the Buyer
Property, and (ii) to use the easement, the Electric Facilities, and
the Communication Facilities for the transmission and/or distribution
of electric current and for communications purposes, for public or
private use;


(c) An easement (i) permitting any and all Gas Facilities
located on the Buyer Property, along with any Communication Facilities
situated therewith, to remain in their present locations on the Buyer
Property, and (ii) to use the easement, Gas Facilities, and the
Communication Facilities for the transmission and/or distribution of
natural and/or manufactured gas and for communications purposes, for
public or private use;


(d) An easement (i) permitting any and all Communication
Facilities located on the Buyer Property which are connected to the
NYSEG Property, the NYSEG Interconnection Facilities, Revenue Meters
(defined below), RTUs (defined below), SCADA systems (defined below),
and/or the Excluded Assets, to remain in their present locations, and
(ii) to use the Communication Facilities in the normal conduct of
NYSEG's business, both current and future, including use by, or for the
benefit of, third parties;


(e) An easement (i) permitting any portions of the Substation
Improvements situated on the Buyer


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Property to remain in their present locations, and (ii) to use such
portions of the Substation Improvements in the normal conduct of
NYSEG's business, both current and future;


(f) An easement (i) permitting any and all revenue meters
("Revenue Meters"), remote terminal units ("RTUs"), and SCADA systems
(all as defined in the ICA) owned by NYSEG and located on the Buyer
Property to remain in their present locations, and (ii) to use the
Revenue Meters, RTUs, and SCADA systems in accordance with the ICA
and/or in the normal course of NYSEG's business, both current and
future; the Buyer acknowledges that the easement granted hereunder is
for the benefit of NYSEG and any and all third parties requiring access
to, and use of, the Revenue Meters, RTUs, and/or SCADA systems pursuant
to the ICA;


(g) An easement (i) permitting the future installation of
poles, lines of poles, supporting structures, cables, crossarms,
overhead and underground wires, guys, braces, communication facilities,
and all related above-ground and underground facilities, appurtenances,
and equipment in order to connect two (2) or more electrical
substations owned by NYSEG and located on the Buyer Property, and (ii)
to use such poles, lines of poles, supporting structures, cables,
crossarms, overhead and underground wires, guys, braces, Communication
Facilities, and all related above-ground and underground facilities,
appurtenances, and equipment in the normal conduct of NYSEG's business,
both current and future;


(h) An easement to use the Buyer Property to perform
environmental investigation and remediation work in connection with an
Environmental Condition on the Buyer Property, NYSEG Property, and/or
the property of any third party or parties, arising from or in
connection with NYSEG's use and operation of the NYSEG Property,
including those additional easements and rights and subject to those
conditions set forth in Exhibit E, attached hereto and incorporated
herein;


(i) An easement (i) to permit any drainage pipes and systems
which serve the NYSEG Property to remain in their present locations on
the Buyer Property, and (ii) to allow rainwater and runoff collecting
within


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drainage and collection systems on the NYSEG Property to drain into and
through the drainage systems on the Buyer Property;


(j) An easement to (i) permit any grounding wire or conductor
located around the Substation Improvement(s) and on the Buyer Property
to remain in its present location, or, where no grounding wire or
conductor is installed, an easement to install new grounding wire or
conductor on such portion of the Buyer Property as is located within
six (6) feet of the perimeter fence(s) surrounding the Substation
Improvements, and (ii) use such grounding wire or conductor in the
normal conduct of NYSEG's business, both current and future;


(k) An easement (i) permitting the future installation of
Communication Facilities between the communication facilities of
NYSEG's actual or proposed communication service provider and the NYSEG
Property, the NYSEG Interconnection Facilities, and/or the Excluded
Assets, and (ii) to use such Communication Facilities in the normal
conduct of NYSEG's business, both current and future, including use by,
or for the benefit of, third parties;


(l) An easement for all purposes deemed reasonably necessary
or convenient by NYSEG in exercising any right or fulfilling any
obligation under this Agreement or the ICA, including maintenance of
the NYSEG Interconnection Facilities in the manner described in the
ICA; and


(m) An easement to use on a temporary basis such portions of
the Buyer's parking facilities as are reasonably necessary for the
purpose of parking cars, trucks, vehicles, trailers, heavy machinery,
equipment, materials, and all other apparatus and items belonging to
NYSEG in the exercise of any easement, license, right, or right of way
under this Agreement, including the right to temporarily store
materials needed for the exercise thereof; provided, however, that any
such parking and storage shall be undertaken in such a manner as will
minimize disruption to the Buyer's business and operations and shall be
in accordance with reasonable security and safety rules established by
the Buyer.


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3.2 Grant of Easements to Buyer. NYSEG does hereby establish, grant, and convey to Buyer the following easements on the NYSEG Property for the following purposes:


(a) ...