INFRASTRUCTURE USE AGREEMENT
(WATER SUPPLY SYSTEM AND WASTEWATER DISPOSAL SYSTEM)
AUGUST 12, 1999
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND CONSTRUCTION...............................-2-
SECTION 1.1. Definitions................................................-2-
SECTION 1.2. Rules of Construction......................................-4-
ARTICLE II
LEASE AND USE OF PUBLIC WATER SUPPLY SYSTEM
AND PUBLIC WASTEWATER DISPOSAL SYSTEM......................-5-
SECTION 2.1. Lease of Public Water Supply System and Public
Wastewater Disposal System.................................-5-
SECTION 2.2. Future Additional Users....................................-5-
SECTION 2.3. Maintenance of Easements, Permits and
Regulatory Approvals.......................................-8-
SECTION 2.4. Term.......................................................-9-
SECTION 2.5. Usage Charges..............................................-9-
SECTION 2.6. Right to Pursue Legal Action..............................-10-
SECTION 2.7. Covenant of Quiet Enjoyment and Restriction
Against Impairment........................................-10-
SECTION 2.8. [Intentionally left blank]................................-11-
SECTION 2.9. Liens.....................................................-11-
SECTION 2.10. Real Property Interests...................................-12-
ARTICLE III
OPERATIONS, MAINTENANCE, TAXES AND INSURANCE...................-13-
SECTION 3.1. Lessee's Obligations to Operate, Maintain and
Repair, Insure and Comply with Laws.......................-13-
SECTION 3.2. Taxes.....................................................-15-
SECTION 3.3. [Intentionally Omitted]...................................-15-
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SECTION 3.4. Remodeling and Improvements...............................-15-
SECTION 3.5. Substituted Equipment.....................................-16-
SECTION 3.6. Installation of Lessee's Own Machinery and
Equipment.................................................-16-
ARTICLE IV
DAMAGE, DESTRUCTION AND CONDEMNATION......................-17-
SECTION 4.1. Damage and Destruction....................................-17-
SECTION 4.2 Condemnation..............................................-17-
SECTION 4.3. Insufficient Net Proceeds.................................-19-
SECTION 4.4 Condemnation of Lessee-Owned Property.....................-19-
ARTICLE V
SPECIAL COVENANTS.........................................-19-
SECTION 5.1. [Intentionally Omitted]...................................-19-
SECTION 5.2. Indemnification...........................................-19-
SECTION 5.3. Maintenance of Existence..................................-20-
SECTION 5.4. Scope of Execution........................................-21-
SECTION 5.5. Further Assurances and Corrective Instruments
Recordings and Filings....................................-21-
SECTION 5.6. Depreciation..............................................-22-
SECTION 5.7. Permitted Contests........................................-22-
ARTICLE VI
ASSIGNMENT................................................-22-
SECTION 6.1. Assignability.............................................-22-
SECTION 6.2. Assignment by Public Owner................................-23-
ARTICLE VII
DEFAULT AND REMEDIES......................................-24-
SECTION 7.1. Default by the Lessee.....................................-24-
SECTION 7.2. Remedies..................................................-25-
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ARTICLE VIII
MISCELLANEOUS..........................................-26-
SECTION 8.1. Notices................................................-26-
SECTION 8.2. Recordation............................................-27-
SECTION 8.3. Amendments.............................................-28-
SECTION 8.4. Applicable Law.........................................-28-
SECTION 8.5. Arbitration............................................-28-
SECTION 8.6. Forum Selection........................................-28-
SECTION 8.7. Counterparts...........................................-28-
SECTION 8.8. Headings...............................................-28-
SECTION 8.9. Entire Agreement.......................................-28-
SECTION 8.10. Statutory References...................................-29-
SECTION 8.11. Severability...........................................-29-
SECTION 8.12. Authority..............................................-29-
SECTION 8.13. No Personal Liability..................................-29-
SECTION 8.14. Force Majeure..........................................-30-
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INFRASTRUCTURE USE AGREEMENT
(WATER SUPPLY SYSTEM AND WASTEWATER DISPOSAL SYSTEM)
PREAMBLE
This Infrastructure Use Agreement (Water Supply System and Wastewater
Disposal System) ("USE AGREEMENT"), dated as of August 12, 1999, is made and
entered into effective as of the Effective Date, by and among the following
(collectively the "PARTIES"): the Mississippi Major Economic Impact Authority
("AUTHORITY"), a division of the Mississippi Department of Economic and
Community Development ("MDECD"), acting for and on behalf of the State of
Mississippi ("STATE"); Panola County, Mississippi ("COUNTY"), acting by and
through its Board of Supervisors; the Industrial Development Authority of the
Second Judicial District of Panola County, Mississippi, acting for and on behalf
of the County ("▇▇▇"); and LSP Energy Limited Partnership, a Delaware limited
partnership (individually and specifically the "COMPANY" and collectively with
its successors and assigns hereunder the "LESSEE").
This Use Agreement is contemplated by that certain Inducement Agreement
of even date herewith ("INDUCEMENT AGREEMENT") made and entered into by and
among, INTER ALIOS, the Authority, MDECD, State, County, ▇▇▇, City and the
Company.
NOW, THEREFORE, in consideration of: the foregoing; the mutual
covenants, promises, agreements, and undertakings herein expressed; the
Company's substantial capital investment in the County, and State through the
location of the Facility therein and the increased ad valorem tax revenues to
the County and sales tax revenues to the State resulting therefrom; the new
temporary construction jobs and permanent jobs, as well as new indirect jobs,
and the increased personal income tax and sales tax revenues generated thereby,
resulting from the Facility; the Company's undertakings herein to operate and
maintain (or cause to be operated and maintained) the Public Water Supply System
and the Public Wastewater Disposal System in accordance with Section 3.1;
various other direct and indirect economic benefits to be realized by the County
and State as a result of the Project; of other mutual benefits to be realized by
the Parties pursuant hereto; and other good and valuable consideration
(collectively "CONSIDERATION"), each to the other given -- the receipt and
sufficiency of all of which the Parties hereby expressly acknowledge, the
Parties hereto, intending legally to be bound, do hereby mutually agree as
follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
SECTION 1.1. DEFINITIONS. All capitalized words and phrases used herein
which are not specifically otherwise defined herein but which are defined in the
Inducement Agreement shall have the same meaning in this Use Agreement as in the
Inducement Agreement. In addition to the words and terms elsewhere defined in
this Use Agreement, the following words and terms, as used in this Use
Agreement, shall have the following meanings unless the context or use indicates
another or different meaning or intent:
"EFFECTIVE DATE" means the last date of execution of this Use Agreement
by the respective Parties hereto, determined by reference to the dates set forth
opposite their respective names on the signature pages attached hereto.
"EXCESS CAPACITY" means the capacity of the Public Water Supply System
and the Public Wastewater Disposal System, as the case may be, in excess of the
respective Facility Capacity and intended for the use by Additional Users, in an
amount equal to (a) in the case of the Public Water Supply System, 1,300 gal/min
and (b) in the case of the Wastewater Disposal System 500 gal/min.
"FACILITY CAPACITY" means the maximum capacity of the Public Water
Supply System and the Public Wastewater Disposal System, as the case may be,
which is necessary for the Company to operate the Facility at its maximum
capacity, in an amount equal to (a) in the case of the Public Water Supply
System, 6,250 gal/min and (b) in the case of the Public Wastewater Disposal
System, 1,500 gal/min.
"GOVERNMENTAL AUTHORITY" means any federal, State or local government,
political subdivision thereof, or any governmental department, commission,
board, bureau, authority, agency or instrumentality thereof, domestic or
foreign.
"NET PROCEEDS," when used with respect to any insurance or condemnation
award, means the proceeds from the insurance or condemnation award with respect
to which that term is used remaining from the gross proceeds thereof after the
payment of all expenses (including attorney's fees) incurred in the collection
thereof.
"PERSON" means any individual, corporation, partnership, joint venture,
business trust, joint stock company, trust, limited liability company,
unincorporated association or other
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organization, firm, or Governmental Authority or any other legal entity of
whatever nature as in the context may be appropriate.
"PUBLIC FACILITY COMPONENTS" means, collectively, the Public
Water Supply System and the Public Wastewater Disposal System.
"PUBLIC OWNER" means the Governmental Authority owning the Public Water
Supply System or the Public Wastewater Disposal System and the related Public
Easements from time to time. The Parties presently anticipate that the Public
Water Supply System and the Public Wastewater Disposal System will initially be
constructed, and the Public Water Supply System and the Public Wastewater
Disposal System and the related Public Easements will be owned during the
construction period, by the County but that, upon completion of their
construction, the ownership of the Public Water Supply System and the Public
Wastewater Disposal System and the related Public Easements will be conveyed by
the County to the ▇▇▇ in accordance with the terms of the Inducement Agreement
and subject to this Use Agreement (which will also be assigned by the County to
the ▇▇▇ in connection with such transfer) and the Usage Easements.
"PUBLIC WASTEWATER DISPOSAL SYSTEM" means the Wastewater Disposal
System owned by the Public Owner; provided that the Wastewater Disposal System
is not a Former Facility Component.
"PUBLIC WATER SUPPLY SYSTEM" means that portion of the Water Supply
System owned by the Public Owner; provided that the Water Supply System is not a
Former Facility Component.
"REGULATED CLASSIFICATION" means the classification or regulation of
any of the Public Water Supply Systems, the Public Wastewater Disposal System,
the Facility or the Company as a "public utility," "public service corporation,"
"public carrier," "utility holding company" or any similar designation or the
failure of the Company to be classified as an "EWG" or the failure of the
Facility to be classified as an "Eligible Facility" for ad valorem tax purposes,
for regulatory purposes (State or Federal), or for any other purpose which would
have a material detrimental impact on the business, operations or costs of the
Company.
"SUBSTANTIAL COMPLETION DATE" means the date when the Facility is
substantially complete, as evidenced by a certificate of substantial completion
issued by the independent engineer retained by the Lenders.
"TERM" means the duration of the obligations created in this Use
Agreement as specified in Section 2.4.
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"USE AGREEMENT" means this Infrastructure Use Agreement(Water Supply
System and Wastewater Disposal System) and any amendments and supplements
hereto.
SECTION 1.2. RULES OF CONSTRUCTION.
(a) "Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words and phrases refer to this Use Agreement
and not solely to the particular portion thereof in which any such word is used.
(b) The definitions set forth in Section 1.1 include both the singular
and plural.
(c) Whenever the content of this Use Agreement requires, the number of
all words and pronouns used herein shall include both the singular and plural,
and the gender of all words and pronouns used herein shall include the
masculine, feminine and neuter.
(d) The captions and headings in this Use Agreement are for convenience
only and in no way define, limit or describe the scope or intent of any
provisions, articles or sections of this Use Agreement.
(e) All references in this Use Agreement to particular articles or
sections shall be references to articles or sections of this Use Agreement
unless some other reference is indicated or otherwise established.
ARTICLE II
LEASE AND USE OF PUBLIC WATER SUPPLY SYSTEM
AND PUBLIC WASTEWATER DISPOSAL SYSTEM
SECTION 2.1. LEASE OF PUBLIC WATER SUPPLY SYSTEM AND PUBLIC WASTEWATER
DISPOSAL SYSTEM. The Public Owner does hereby lease to the Lessee, and the
Lessee does hereby take and lease from the Public Owner, upon the terms and
conditions set forth in this Use Agreement, (a) the Public Water Supply System
and the Public Wastewater Disposal System, and (b) all Public Easements
belonging or in anywise appertaining thereto. The foregoing lease shall include
the right, on the part of the Lessee, to use and enjoy the Public Water Supply
System and the Public Wastewater Disposal System up to the respective Facility
Capacity (as specified in Section 7(2) of the Inducement Agreement, 6,250
gal/min with respect to the Public Water Supply System and 1,500 gal/min with
respect to the Public Wastewater Disposal System). The Public
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Owner does hereby retain (subject to the other terms and provisions of this Use
Agreement) for its own benefit the right to use and enjoy the Public Water
Supply System and the Public Wastewater Disposal System up to the respective
Excess Capacity (as specified in Section 7(2) of the Inducement Agreement, 1,300
gal/min with respect to the Public Water Supply System and 500 gal/min with
respect to the Public Wastewater Disposal System).
SECTION 2.2. FUTURE ADDITIONAL USERS.
(a) The Public Owner may lease or otherwise allocate the use of the
Excess Capacity of the Public Water Supply System and/or the Public Wastewater
Disposal System to future additional users (including the City and County)
("ADDITIONAL USER"); provided, that no Additional Users shall be connected to
such Public Facility Component and allowed to use any Excess Capacity thereof
unless:
(i) such proposed Additional User obtains, and presents
evidence satisfactory to the Company of receipt of, all necessary and
appropriate permits and regulatory approvals for the construction (if any) on
and/or use of such Public Facility Component, with the Company specifically
reserving the right to contest any permit and approval applications for any
other electrical generation facility proposing to connect to the Public Facility
Component;
(ii) the Company reasonably determines that such proposed
connection to and use of such Public Facility Component (A) will not result in a
Regulated Classification or (B) that it would be able to successfully avoid such
Regulated Classification by causing such Public Facility Component to be
operated and maintained on behalf of the Public Owner by a third-party operator
to be designated by the Company and approved by the Public Owner in writing;
provided, that, at the election of the Company, (1) such third-party operator
shall (in satisfaction of the Company's obligations under Section 3.1(b)) enter
into an operating and maintenance agreement with the Public Owner (with such
operating and maintenance agreement with the Public Owner to be on terms
reasonably acceptable to the Public Owner) and the Company's rights (including,
without limitation, the right to use such Public Facility Component up to the
Facility Capacity) and obligations under this Use Agreement shall otherwise
remain in full force and effect or (2) the Company shall transfer and assign to
such third-party operator, and such third-party operator shall assume, all of
the Company's rights (including, without limitation, the right to use such
Public Facility Component up to the Facility Capacity) and obligations under
this Use Agreement and the Company shall enter into a use agreement with such
third-party operator for the use of such Public Facility Component up to the
Facility Capacity;
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provided, further, that no such prior written approval by the Public Owner shall
be required if the third-party operator so designated by the Company is an
affiliate of the Company. The Parties acknowledge that the Company may, pursuant
to the terms of the Inducement Agreement, concurrently with any transfer or
assignment of its interests hereunder, transfer or assign its interests in the
Usage Easements related to such Public Facility Component to such third-party
operator.
(iii) the Company gives its written consent thereto, which
consent:
(1) may be withheld by the Company if, in the Company's
reasonable opinion, the construction (if any) on and/or use by such
Additional User proposing to connect to such Public Facility Components
would have a material detrimental impact on the Company's use and
enjoyment of the Facility Capacity or Public Facility Component or on
the costs of the Company with respect to the use of such Public
Facility Component, or would render the Public Facility Component
insufficient for the Company's use of the Facility Capacity, as
specified in Section 7(2) of the Inducement Agreement, whether due to a
reduction (temporary or otherwise) in the capacity of the Public
Facility Component available to the Company or the time of such
proposed Additional User's usage thereof;
(2) may also be conditioned upon such Additional User entering
into an agreement with the Company reasonably satisfactory to the
Company, which agreement will provide, INTER ALIA, for (A) standards to
be met concerning the use of such Public Facility Component by such
Additional User and (B) with respect to any Additional User other than
the County or the City, an express indemnification of the Company for
any loss or additional costs which may result to the Company from
any material detrimental impact caused by such construction (if any) on
and/or use of the Facility Capacity or the Public Facility Component by
such Additional User;
(3) may also be conditioned upon such Additional User entering
into an operating and maintenance agreement with a third-party operator
of such Public Facility Component; and
(4) may also be conditioned upon such Additional User entering
into an agreement satisfactory to the Company in which such Additional
User expressly acknowledges and agrees that its use of such Facility
Component is subject to the terms and provisions of, and to the
Company's rights under, this Use Agreement, the Inducement Agreement,
and the Usage Easements; and
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(b) The Company shall, unless expressly agreed to the contrary in
writing, nevertheless thereafter retain the lease and use of such Public
Facility Component at the minimum in all cases equal to the Facility Capacity
(as specified in Section 7(2) of the Inducement Agreement), subject to the terms
and provisions hereof.
(c) In the event that the construction or use by or operations of any
Additional User so approved by the Company connected to a Public Facility
Component has a material detrimental impact on, or otherwise interferes with,
the Company's use and enjoyment of the Facility Capacity or Public Facility
Component, has a material detrimental impact on the costs of the Company with
respect to the use, operation, or maintenance of such Public Facility Component,
or renders the Public Facility Component insufficient for the Company's Facility
Capacity, or such Additional User fails to pay any amounts due to the Company,
then the Company may take any and all actions against such Additional User that
it deems to be necessary under the circumstances in order to protect its rights
hereunder, such as, for example, but not limited to, exercising set-offs against
any payments due to, or terminating the use of, or the right to use, the Public
Facility Components by, such Additional User.
(d) The Company shall not be required to pay any amounts which are
needed to finance capital improvements to any portion of the Public Facility
Components which are made to accommodate the initial use by such Additional User
of such Public Facility Component. Any additional expenses (including, but not
limited to, increased maintenance and operating expenses) which arise
specifically as a result of the use of any Public Facility Component by
Additional Users shall be the responsibility of such Additional Users or the
Public Owner of such Public Facility Component, and a proportionate share (based
on assigned capacity) of the common expenses related to the use of any Public
Facility Component by Additional Users shall be the responsibility of such
Additional Users, with the Company not being required to pay any of such
expenses related to such usage by such Additional Users.
(e) Any Additional User so approved by the Company pursuant to Section
2.2(a) shall enter into a lease or other use agreement directly with the then
Public Owner of the applicable Public Facility Component, and not with the
Company, with respect to the other terms and provisions of its use of the Excess
Capacity of such Public Facility Component, and the Company shall not, and is
not required to, enter into, and any agreements executed between the Company and
any such Additional User pursuant to Section 2.2(a) shall not constitute or be
deemed to constitute, a sublease of any portion of the Facility Capacity, Public
Facility Components, or Facility Component Sites.
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SECTION 2.3. Maintenance of Easements, Permits and Regulatory
Approvals.
(a) The County agrees that it will, at the request and at the expense
of the Lessee and at no cost to the County and at all times until the transfer
thereof to the ▇▇▇, obtain and maintain, in full force and effect, any and all
Public Easements and Regulatory Approvals necessary for the ownership and
construction by the County of such Public Components and the Public Easements
related thereto. Subsequent to the transfer of the Public Easements and Public
Facility Components by the County to the ▇▇▇, the ▇▇▇ agrees that it will, at
the request and at the expense of the Lessee and at no cost to the County and
▇▇▇, at all times during the Term, obtain and maintain, in full force and
effect, any and all Public Easements and Regulatory Approvals necessary for the
ownership and operation by the ▇▇▇ of such Public Facility Components and the
Public Easements related thereto.
(b) Nothing contained in this Section 2.3 shall be construed to imply
that the County or ▇▇▇ has any obligation to expend any funds for the purpose of
obtaining or transferring any Permits or Easements with respect to the Public
Facility Components or the Facility Component Sites except for such funds as are
available from Impact Proceeds. The Authority, County, and ▇▇▇ agree, however,
that the costs of obtaining and maintaining any and all such Permits and
Easements paid by the Lessee shall, subsequent to completion of construction, be
considered an operating expense with respect to the Public Facility Components
under Section 3.1.
SECTION 2.4. TERM. The initial term of this Use Agreement shall
commence on the Effective Date and shall continue thereafter for and until a
period of thirty (30) years after the Substantial Completion Date of the
Facility. The Lessee may renew this Use Agreement for successive ten (10) year
terms thereafter, with the total, aggregate maximum term hereof being limited
only by the maximum actual operational life of the Facility.
SECTION 2.5. USAGE CHARGES. The Lessee shall pay all fees and expenses
(or, pursuant to Section 3.1(b) reimburse the Public Owner for all fees and
expenses incurred by the Public Owner) for the operation and maintenance of the
Public Facility Components, including the cost of property and casualty and
public liability insurance for the Public Facility Components. Except to the
extent provided in Sections 3.1 and 3.2, with respect to expenses for operation
and maintenance, taxes, and insurance, the Lessee shall incur no additional
costs for the lease and use of the Public Facility Components and the related
Public Easements. No additional fees of any type are due and payable by Lessee
to the State, City, County, or ▇▇▇ (or any other Public Owner), for, including,
but not
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limited to, the Public Water Supply System or the Public Wastewater Disposal
System, and the Lessee shall be a "utility" customer thereof only with respect
to the potable water service referenced in Section 7(1)(b)(i) of the Inducement
Agreement and the sanitary sewer services referenced in Section 7(1)(b)(ii) of
the Inducement Agreement, for which the Lessee will pay the City its standard
fees for such utility-type services. The Lessee agrees that it shall be
responsible for obtaining and paying for its industrial water supply from ▇▇▇▇
▇▇▇▇ by arranging therefor with the Corps, and the State, County, City, and ▇▇▇
expressly acknowledge and agree that they have no rights in or claim on, to, or
against the Lessee's industrial water supply rights obtained from the Corps.
SECTION 2.6. RIGHT TO PURSUE LEGAL ACTION. To the extent permissible
under applicable law, the Lessee may, at its own cost and expense, in its own
name prosecute or defend any act or proceedings or take any other action, or
participate in any prosecution, defense, proceeding or any other action made or
taken by the Public Owner, involving third Persons which the Lessee deems
reasonably necessary in order to secure or protect its right of possession, use
and occupancy of the Public Facility Components, Public Easements, Facility
Components Sites, Usage Easements, and other rights or obligations hereunder;
provided, that in the event the Public Owner prosecutes or defends any such
action or proceeding or takes any such other action, and whether or not the
Lessee so participates therein, the Public Owner shall not voluntarily settle or
consent to any settlement with respect to the Lessee's right of possession, use
and occupancy of the Public Facility Components, Public Easements, Facility
Component Sites, Usage Easements or other rights or obligations hereunder
without the prior written consent of the Lessee. Nothing contained herein shall
be construed to prevent or restrict the Lessee from asserting any rights which
the Lessee may have against the Public Owners for any material breach of this
Use Agreement, the Inducement Agreement, the Usage Easements, or under any
provision of law.
SECTION 2.7. COVENANT OF QUIET ENJOYMENT AND RESTRICTION AGAINST
IMPAIRMENT. The State, County, ▇▇▇ and any other Public Owner (and their
successors, representatives, and assigns) each hereby grant and warrant to the
Lessee the right quietly and peaceably to enjoy the Public Facility Components,
Public Easements, Facility Component Sites, and Usage Easements, without any
interruption, interference, or disturbance, and hereby expressly covenant not to
create, suffer, agree to, or take any right, interest, or action that could
revoke, impede, impair, disturb, or diminish the Lessee's possession, use,
control, operation, and quiet and peaceable enjoyment of its rights in the
Public Facility Components, Public Easements, Facility Component Sites, and
Usage Easements pursuant to and in accordance with the
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terms and provisions of, and during the Term and any renewals of, this Use
Agreement, and the Public Owner (and its successors, representatives, and
assigns) does hereby restrict the real property interests comprising the Public
Facility Components and the related Facility Component Sites and Public
Easements which are necessary for the use, operation, maintenance, repair, or
other support of the Public Facility Components, and does hereby bind such real
property interests to the foregoing covenant during the entire Term of this Use
Agreement and any renewals thereof. This Section 2.7 is not intended to limit in
any manner or to any extent the rights reserved by the Lessee in the Usage
Easements upon its partial assignment of the Public Easements to the County.
SECTION 2.8. [Intentionally left blank].
SECTION 2.9. LIENS.
(a) Each of the State, MDECD, Authority, County and ▇▇▇ (and their
successors, representatives and assigns) acknowledge that the Lessee has granted
or may grant one or more deeds of trust on its real property interests in the
Facility Site, Facility Component Sites, Usage Easements and this Use Agreement
and its leasehold interests in the Public Facility Components and Public
Easements in connection with any financing arrangements it has or will enter
into in connection with the Project; provided, however, that the Lessee agrees
that (i) any such deeds of trust so granted by the Lessee shall expressly
exclude the Public Owner's interest in any and all easements on the Facility
Site so granted or to be granted by the Lessee to the County and the ▇▇▇ and
(ii) the Public Easements related to the Public Water Supply System and the
Public Wastewater Disposal System will be released (except with respect to any
leasehold interests granted to the Lessee under this Use Agreement) from such
deed of trust thereon by the Lenders upon the transfer by the Lessee of the
Public Easements to the County. The County and ▇▇▇ acknowledge that any such
deed of trust shall provide the beneficiary thereunder with the right to
foreclose on the Lessee's interest in the Facility Site and on the Lessee's
interest in the Public Facility Components, the Public Easements, the Facility
Component Sites, the Usage Easements, and this Use Agreement, in each case on
the occurrence of an event of default on the part of the Lessee under the
related financing arrangements.
(b) Each of the State, MDECD, Authority, County, and ▇▇▇ (and their
successors, representatives, and assigns) covenant and agree not to
intentionally create or to assume or suffer to exist a lien on, or with respect
to, its respective interest in the Public Facility Components or the related
Facility Component Sites and Public Easements.
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SECTION 2.10. REAL PROPERTY INTERESTS. With respect to the Company's
use of the Public Facility Components and the related Facility Component Sites
and Public Easements in connection with the Company's Facility which is located
on the Facility Site and with respect to the exercise of the Company's other
rights, duties and obligations hereunder and under the Usage Easements, the
Company, the County, and the ▇▇▇ (and their successors, representatives, and
assigns) each hereby expressly acknowledge and agree that the Usage Easements
retained by the Company (and its successors and assigns) constitute an interest
in, and result in and constitute the retention by the Company (and its
successors and assigns) of a joint, undivided, partial easement for such
purposes in, the real property comprising the Facility Component Sites and the
Public Facility Components constructed thereon and therein and that the primary
beneficiary of the Usage Easements is the Facility Site itself. The County and
the ▇▇▇ (and their successors, representatives, and assigns) each also hereby
expressly acknowledge and agree that the Usage Easements, as well as all of the
other covenants, terms, conditions, restrictions and other provisions of this
Use Agreement (specifically including, but not limited to, the right to use the
Public Facility Components and Facility Component Sites of Section 2.1 and the
covenants and restrictions granted and imposed in Section 2.7) (collectively the
"COVENANTS"), are real and benefit and burden, and inure to the benefit of, the
land comprising the Facility Site, run with and follow the land comprising the
Facility Site, constitute easements appurtenant and covenants appurtenant,
respectively, to and for the benefit of the land comprising the Facility Site in
favor of the Company (and its successors and assigns) and the Facility Site;
that the Covenants are real and also benefit and burden, and shall run with, the
real property interests comprising the Usage Easements for the Facility
Component Sites on which the Public Facility Components are located; that the
transfer of any ownership rights in the Public Facility Components, Facility
Component Sites, and/or the Public Easements shall not impair the rights of the
Company (and its successors and assigns) under this Use Agreement and the Usage
Easements; and that the Usage Easements and Covenants will pass with the
Facility Site to all subsequent successors and assigns of the Company and
subsequent grantees of the Facility Site, and shall inure to the benefit of, and
be enforceable by, the Company (and its successors and assigns). The Parties
acknowledge and agree that both the Usage Easements and the Public Easements are
commercial (as opposed to personal) in nature and are both for their joint
economic benefit and for the public benefit. The intention of the Parties is
that neither the partial assignment, appointment, and division of the Easements
into the Usage Easements and the Public Easements pursuant to the Inducement
Agreement shall, or shall be deemed or interpreted to, result in any additional
or increased burden on or use of the servient estate in
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the Facility Component Sites.
ARTICLE III
OPERATIONS, MAINTENANCE, TAXES AND INSURANCE
SECTION 3.1. LESSEE'S OBLIGATIONS TO OPERATE, MAINTAIN AND REPAIR,
INSURE AND COMPLY WITH LAWS.
(a) The Lessee shall operate and maintain the Public Facility
Components (without regard to the operating status of the Facility) as follows:
(i) Except due to events beyond the reasonable control of the
Lessee, including, but not limited to, those Force Majeure events described in
Section 8.14, the Lessee agrees that, subject to the provisions of Sections
3.1(b), 3.4, 3.5, and 3.6, during the Term of this Use Agreement it will at its
own expense operate and maintain, or cause to be operated and maintained, the
Public Facility Components in good condition, repair, and working order,
ordinary wear and tear excepted, in accordance with good utility practices, and
will make or cause to be made from time to time all necessary repairs thereto
(including external and structural repairs) and renewals and replacements
thereto and perform or cause to be performed all necessary maintenance thereon.
Each of the Company and the Lessee acknowledges and agrees that none of the
State, County or ▇▇▇ shall have any responsibility for the payment of expenses
of the Facility.
(ii) The Lessee shall obtain or cause to be obtained on and
after the effective date hereof and maintain or cause to be maintained
throughout the Term property and casualty insurance in the amount of the
replacement costs of, and with respect to all portions of, the Public Facility
Components in order to insure the interests therein of both the Public Owner and
the Lessee against loss or damage to the Public Facility Components, all of
which property and casualty insurance policies insuring the interests of the
Lessee therein shall contain a standard mortgagee clause in favor of the
Lenders. The Lessee shall provide such property and casualty insurance on behalf
of the Public Owner for any Public Facility Components through a member of the
Chubb or CIGNA insurance groups or through another commercial insurance company
of the Lessee's choice and approved by the Public Owner (which approval shall
not be unreasonably withheld) which shall be licensed under the laws of the
State to sell and to issue property and casualty insurance policies in the
State. So long as no event of default by the Lessee has occurred or is
continuing under this
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Use Agreement or the Inducement Agreement and the Public Owner has not exercised
its remedies thereunder, all claims on such insurance, regardless of amount, may
be adjusted by the Lessee with the insurers, and the proceeds of all insurance
policies for loss or damage to the Public Facility Components shall be payable
to the Lessee and the Public Owner as their interests may appear for application
as provided in Section 4.1. The Lessee and the Public Owner shall carry their
own public liability insurance policies. The Parties recognize, however, that
the cost of providing public liability insurance for the Public Facility
Components and Facility Component Sites shall nevertheless be paid by the Lessee
and any Additional Users thereof as an additional component of the operation and
maintenance costs of the Public Facility Components and that, consequently, the
Lessee shall have the option to provide such public liability insurance on
behalf of the Public Owner through Wausau Insurance or through another
commercial insurance company of the Lessee's choice and approved by the Public
Owner (which approval shall not be unreasonably withheld) which shall be
licensed under the laws of the State to issue public liability insurance
policies in the State. Each Party shall, however, to the extent permitted by
applicable law, be named as an additional insured under the public liability
insurance policies of the other Parties with respect to the Public Facility
Components and Facility Component Sites. The Net Proceeds of such liability
insurance shall be applied toward extinguishment or satisfaction of the
liability with respect to which such insurance proceeds may be paid.
(iii) The Lessee shall, during the Term of this Use Agreement
and any renewals thereof and, at no expense to the Public Owner, promptly comply
or cause compliance with all laws, ordinances, orders, rules, regulations and
requirements of duly constituted public authorities which may be applicable to
the Public Facility Components or to the repair and alteration thereof, or to
the use or manner of use of the Public Facility Components; provided, however,
that such laws, ordinances, orders, rules, regulations and requirements made by
the State, County, City and ▇▇▇ shall not discriminate against the Lessee.
(b) In connection with its obligation to operate and maintain the
Public Facility Components in accordance with Section 3.1(a), the Lessee may
satisfy such obligation, at its election, either (i) by operating and
maintaining all or some of such Public Facility Components directly itself or
indirectly through a subcontractor therefor or (ii) if the Lessee determines
that the proposed addition of any Additional Users to a Public Facility
Component may result in a Regulated Classification, by causing all or some of
such Public Facility Components to be operated and maintained on behalf of the
Public Owner by a third-party operator pursuant to
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Section 2.2(a)(ii). Except for any portion of the cost and/or compensation
payable to such a third-party operator allocable to Additional Users, the Lessee
shall reimburse to the Public Owner all of the cost and/or compensation payable
by the Public Owner to such third-party operator. Notwithstanding the foregoing,
the Lessee shall have the option, exercisable in its sole discretion, to enter
into an operating and maintenance agreement with a third-party operator for such
proportional interest in the Public Facility Component(s) as shall be subject to
its lease and use.
SECTION 3.2. TAXES. The Lessee shall be responsible for the payment of
any Taxes on the Lessee's assessable interest, if any, in the Public Facility
Components and the related Public Easements to the extent that the Lessee or its
interest therein is not otherwise exempt therefrom or subject to a
fee-in-lieu-of-taxes with respect thereto; provided, however, the Lessee shall
not be responsible for any Taxes assessable against the Public Owner or any
Additional User.
SECTION 3.3. [Intentionally Omitted].
SECTION 3.4. REMODELING AND IMPROVEMENTS. The Lessee may remodel the
Public Facility Components or make substitutions, additions, modifications or
improvements thereto from time to time as it, in its discretion, deems
desirable, so long as such remodeling, substitutions, additions, modifications,
or improvements do not cause the Public Facility Components to fail to meet or
exceed the original design capacity, quality and criteria. The cost of such
remodeling, substitutions, additions, modifications or improvements shall be
paid by the Lessee, but the same shall be the property of the Public Owner and
be included under the terms of this Use Agreement as part of the Public Facility
Components. Any property for which a substitution or replacement is made
pursuant to this Section or Sections 3.1 and/or 3.5 may be disposed of by the
Lessee in any manner and in the Lessee's sole discretion, with any funds
received from such disposition being credited against the cost of such
substitute or replacement property. In no event shall the Lessee in connection
with or as a result of any actions taken under this Section 3.4 create, assume
or suffer to exist a lien on, or with respect to, the Public Owner's interest in
the Public Facility Components or the related Facility Component Sites and
Public Easements.
SECTION 3.5. SUBSTITUTED EQUIPMENT. The Lessee may from time to time
(on behalf of the Public Owner) substitute machinery and equipment for any
existing equipment that comprises part of the Public Facility Components, so
long as such substitutions do not cause the Public Facility Components to fail
to meet or exceed the original design quality and criteria. Any such substitute
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machinery and equipment shall be promptly conveyed by the Lessee to the Public
Owner, shall be installed at the Facility Components Sites and shall become a
part of the Public Facility Components and be included under the terms of this
Use Agreement. The Lessee shall deliver to the Public Owner an executed
counterpart of one or more bills of sale conveying such machinery and equipment
to the Public Owner. In no event shall the Lessee in connection with or as a
result of any actions taken under this Section 3.5 create, assume or suffer to
exist a lien on, or with respect to, the Public Owner's interest in the Public
Facility Components or the related Facility Component Sites and Public
Easements.
The Public Owner and Lessee agree to execute and deliver such documents
as the Public Owner or Lessee may reasonably request in connection with any
action taken by the Public Owner or Lessee under this Section. The Lessee will
not remove or permit the removal of any of the equipment comprising part of a
Public Facility Component from the related Facility Component Sites except in
accordance with this Section.
SECTION 3.6. INSTALLATION OF LESSEE'S OWN MACHINERY AND EQUIPMENT. The
Lessee may, from time to time in its sole discretion and at its own expense,
install additional machinery, equipment and other tangible personal property on
the Public Facility Components or elsewhere on the Facility Component Sites. Any
such machinery and equipment so installed by the Lessee, if integral to the
Public Facility Components, shall be the property of the Public Owner and shall
be included under the terms of this Use Agreement as part of the Public Facility
Components. In no event shall the Lessee in connection with or as a result of
any actions taken under this Section 3.6 create, assume or suffer to exist a
lien on, or with respect to, the Public Owner's interest in the Public Facility
Components or the related Facility Component Sites and Public Easements.
ARTICLE IV
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 4.1. DAMAGE AND DESTRUCTION. If the Public Facility Components
are destroyed or damaged (in whole or in part) by fire or other casualty, the
Parties agree that the Lessee may elect, so long as no event of default by the
Lessee has occurred or is continuing under this Use Agreement and the Public
Owner has not exercised its remedies hereunder, to promptly repair, rebuild or
restore the property so damaged or destroyed. If the Lessee elects to so repair,
rebuild or restore the Public Facility Components, the Net Proceeds of any
insurance resulting from claims for such losses shall be paid to and held by the
Lessee or the County (it
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being understood that the County shall hold such proceeds in the event that
public bidding or procurement laws are applicable), as applicable, for the
purposes of repairing, rebuilding or restoring, subject to any applicable public
bidding or procurement laws, the property so damaged or destroyed to
substantially the same condition as existed prior to the event causing such
damage or destruction, with such changes, alterations and modifications
(including the substitution and addition of other property) as may be desired by
the Lessee and as will not result in the Public Facility Components failing to
meet or exceed original capacity, quality and design criteria. If the Lessee
elects not to so repair, rebuild, or restore the Public Facility Components,
then the Net Proceeds of any such insurance resulting from claims for such
losses shall be paid (a) for so long and to the extent obligations remain
outstanding under the Impact Bonds, to the State and (b) otherwise, to the
Public Owner. In no event shall the Lessee in connection with or as a result of
any actions taken under this Section 4.1 create, assume or suffer to exist a
lien on, or with respect to, the Public Owner's interest in the Public Facility
Components or the related Facility Component Sites and Public Easements.
SECTION 4.2 CONDEMNATION. In the event that title to, or the temporary
use of, the Public Facility Components or the related Public Easements or
Facility Components Sites or any part of either thereof shall be taken under the
exercise of eminent domain by a Governmental Authority or by any Person acting
under a Governmental Authority, the Public Owner will cause the Net Proceeds
received by it from any awards made in such eminent domain proceedings to be
paid to and held by the Lessee or to any other Person as required by law, and
the Lessee shall, subject to any applicable public bidding or procurement laws,
apply such Net Proceeds received by the Lessee to the acquisition, by
construction or otherwise, on behalf of the Public Owner of other improvements
deemed necessary by the Lessee on or adjacent to the Facility Component Sites
(which improvements shall be deemed a part of the Public Facility
Components and available for use and operation hereunder by the Lessee without
the payment of any additional fees other than herein provided to the same extent
as if such other improvements were specifically described herein); provided,
however, that, in the event it becomes necessary for the State, County, City,
and/or ▇▇▇ to take any action to condemn the Public Facility Components, the
related Public Easements or Facility Component Sites, or any part thereof or
interest, if any, or right of the Lessee therein or in the Usage Easements, then
the State, County, City, and ▇▇▇ agree that they shall negotiate in good faith
with the Lessee and use their best efforts in order otherwise to give effect to,
to enable the Lessee to realize and utilize, and to provide to the Lessee, to
the maximum extent possible, the benefits and rights intended to be
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granted to the Lessee under this Use Agreement and the Inducement Agreement or
such additional benefits which are of substantially equivalent benefits as such
lost benefits. In no event shall the Lessee in connection with or as a result of
any actions taken under this Section 4.2 create, assume or suffer to exist a
lien on, or with respect to, the Public Owner's interest in the Public Facility
Components or the related Facility Component Sites and Public Easements.
The Public Owner shall cooperate fully with the Lessee in the handling
and conduct of any prospective or pending condemnation proceeding with respect
to the Public Facility Components or the related Public Easements or Facility
Component Sites or any part thereof and will, to the extent it may lawfully do
so, permit the Lessee to participate in any such proceeding. In no event will
the Public Owner voluntarily settle, or consent to the settlement of, any
prospective or pending condemnation proceeding with respect to the Public
Facility Components or the related Public Easements or Facility Component Sites
or any part thereof without the written consent of the Lessee.
SECTION 4.3. INSUFFICIENT NET PROCEEDS. If the Net Proceeds are not
sufficient to pay in full the costs of repair, rebuilding, or restoration
referred to in Section 4.1 (if the Lessee elects under Section 4.1 to so repair,
rebuild, or restore the Public Facility Components) or the costs of acquisition
referred to in Section 4.2, the Lessee will nevertheless complete the work
thereof and will pay that portion of the costs thereof in excess of the amount
of said Net Proceeds. The Lessee shall not, by reason of the payment of such
excess costs, be entitled to any reimbursement from Public Owner.
SECTION 4.4 CONDEMNATION OF LESSEE-OWNED PROPERTY. The Lessee shall
also be entitled to the Net Proceeds of any condemnation award or portion
thereof made for damages to or takings of its own property not included in the
Public Facility Components, provided that any Net Proceeds resulting from
damages to or taking of all or a portion of the interest, if any, or rights of
the Lessee in the Public Facility Components created by this Use Agreement shall
be paid and applied in the same manner provided in Section 4.2.
ARTICLE V
SPECIAL COVENANTS
SECTION 5.1. [Intentionally Omitted].
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SECTION 5.2. INDEMNIFICATION. The Lessee ("INDEMNITOR") agrees, to the
extent permitted by law, to indemnify, defend and hold harmless the MDCCD, the
Authority and the Public Owner, as well as their respective employees, officers,
directors, trustees, agents, representatives and elected or appointed public
officials ("INDEMNITEE"), from and against third party causes of action, legal
or administrative proceedings, claims, demands, damages, liabilities, judgments,
interest, attorney's fees, costs and expenses of whatsoever kind or nature
arising out of or in connection with or resulting from or caused by the
negligent acts or omissions of the Indemnitor or its employees or agents or
anyone else acting under its direction and control or on its behalf with respect
to the performance of its rights, duties, obligations, and responsibilities
under this Use Agreement (including the operation and maintenance of the Public
Facility Components in accordance herewith), provided that the Indemnitor, as
the real party in interest in any such action, is allowed to participate in the
defense in any such action and whether or not the Lessee so participates, the
Public Owner does not voluntarily settle or consent to any settlement of any
such claim without the prior written consent of the Lessee; provided further,
however, that the decision not to allow the Indemnitor to participate in the
defense in any such action shall not be deemed to be, and shall not constitute,
a waiver of any other indemnification rights to which the Indemnitee may
otherwise be entitled outside of the terms and provisions of this Use Agreement.
The indemnity provisions expressed in this Section 5.2 shall apply to the
fullest extent permitted by law and shall in no manner amend, abridge, modify,
or restrict any other obligation of the Parties expressed elsewhere in this Use
Agreement. The provisions of this Section shall survive the termination of this
Use Agreement.
SECTION 5.3. MAINTENANCE OF EXISTENCE. The Lessee agrees that during
the Term of this Use Agreement it shall continue to be duly qualified to do
business in the State (as a foreign entity or otherwise) and in any other state
in which the nature of its business so requires it to be so qualified, will
maintain its entity existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another entity or permit one or more entities to consolidate with or merge into
it without the prior written approval of the State and the County; provided,
that the Lessee may, without violating the foregoing, consolidate with or merge
into another entity, or permit one or more entities to consolidate with or merge
into it, or transfer all or substantially all of its assets to another such
entity (and thereafter dissolve or not dissolve, as the Lessee may elect) if the
entity surviving such merger or resulting from such consolidation, or the entity
to which
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all of substantially all of the assets of the Lessee are transferred, as the
case may be,
(a) is an entity organized under the laws of the United States of America,
or any state, district or territory thereof, and qualified to do
business in the State;
(b) has expressly assumed in writing all the obligation of the Lessee
contained in this Use Agreement; and
(c) has a consolidated tangible net worth (after giving affect to such
consolidation, merger or transfer) of not less than the tangible net
worth of the Lessee immediately prior to such consolidation, merger or
transfer.
The term "CONSOLIDATED TANGIBLE NET WORTH," as used in this Section,
shall mean the difference obtained by subtracting total consolidated liabilities
(not including as a liability any capital or surplus item) from total
consolidated tangible assets, computed in accordance with generally accepted
accounting principles.
SECTION 5.4. SCOPE OF EXECUTION. The Parties acknowledge that, during
the construction of the Public Facility Components by the County, this Use
Agreement is effective among the Lessee, the Authority, and the County and among
the Authority, the County, and the ▇▇▇, with the County and ▇▇▇ entering into
this Use Agreement to indicate their acknowledgment and approval of the terms
and conditions hereof. Subject, however, to the transfer of title to the Public
Facility Components and Public Easements by the County to the ▇▇▇, the ▇▇▇
agrees to accept the transfer of title to the Public Facility Components and
Public Easements from the County, subject to the terms and provisions of this
Use Agreement, the Usage Easements, the Inducement Agreement and the Liens, and
to accept the assignment hereof from the County. In addition, subject to the
conveyance of the Public Facility Components and Public Easements by the County
to the ▇▇▇, the ▇▇▇ is also entering into this Use Agreement to acknowledge and
to indicate its agreement that any such Public Facility Components and Facility
Component Sites so conveyed thereto shall be provided to the Lessee by the ▇▇▇
in accordance with, and subject to, the terms and provisions of this Use
Agreement, the Usage Easements, and the Inducement Agreement.
SECTION 5.5. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS RECORDINGS
AND FILINGS. The Public Owner and the Lessee will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered, at
the expense of the Lessee, such supplements hereto and such further instruments
as may reasonably be required for correcting any inadequate or incorrect
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description of the Public Facility Components, Facility Component Sites, Public
Easements, or Usage Easements hereby provided or intended so to be or for
carrying out the intention of or facilitating the performance of this Use
Agreement. Each of the Public Owner and the Lessee agrees to execute and
deliver, at the request of the other, such instruments, properly authorized and
in recordable form, as are necessary to confirm, of record, the covenants and
restrictions granted or imposed in Sections 2.7, 2.9, and 2.10 of this Use
Agreement.
The Lessee shall cause this Use Agreement, any security instruments,
financing statements and all supplements thereto and any other instrument as may
be required from time to time to be kept recorded and filed in such manner and
in such places as may be required by law to fully preserve and protect the
security of the Public Owner.
SECTION 5.6. DEPRECIATION. The Public Owner agrees that any
depreciation with respect to any Public Facility Components paid for in whole or
in part by the Lessee under the Inducement Agreement or this Use Agreement shall
be made available to the Lessee, and the Public Owner will fully cooperate with
the Lessee in any effort by the Lessee to avail itself or any such depreciation.
SECTION 5.7. PERMITTED CONTESTS. The Lessee may, at its expense and in
its name and behalf in good faith contest (and the Lessee shall notify the
Public Owner of such contest) any law, ordinance, order, rule, regulation or
requirement referred to in Section 3.1(a)(iii).
In the event of such contest, the Lessee may permit such lien,
encumbrance or charge to remain unsatisfied and undischarged during the period
of such contest and any appeal therefrom. The Public Owner shall cooperate fully
with the Lessee in any such contest, except where the Public Owner is an adverse
party to the Lessee.
Each such contest shall be promptly prosecuted to a final conclusion.
No such contest shall subject the Public Owner to the risk of any material civil
liability or any criminal liability, and the Lessee shall give such reasonable
security to the Public Owner as may be demanded by the Public Owner to insure
compliance with the foregoing provisions of this Section. The foregoing shall
not constitute a waiver by the Public Owner of any civil or criminal remedies
otherwise available to the Public Owner against the Lessee.
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ARTICLE VI
ASSIGNMENT
SECTION 6.1. ASSIGNABILITY. The Lessee may not assign or transfer any
of its rights or obligations under this Use Agreement without the prior written
approval for such assignment from the Authority, on behalf of the State and
MDECD, and from the County on behalf of the ▇▇▇ or any other Public Owner, which
approval shall not be unreasonably withheld; provided, however, that the Lessee
may assign this Use Agreement without such prior written approval(a) as provided
in Section 5.3, (b) as provided in Section 2.2(a)(ii), or (c) as a collateral
assignment to the Lenders. Each of the Parties agrees to execute such documents
(including a consent to assignment agreement), in a form to their reasonable
satisfaction, as may reasonably be requested by any such Lender or subsequent
assignee to evidence and acknowledge its consent and the effectiveness of any
such assignment or lien. Any such assignment shall not only assign the rights of
the assignor under this Use Agreement but shall also contain an acknowledgment
and express assumption by the assignee of the obligations of the assignor under
this Use Agreement and upon any such assignment the Public Owner is hereby
deemed to release the Company in full from any and all obligations and
liabilities of the Company under this Use Agreement thereafter arising.
SECTION 6.2. ASSIGNMENT BY PUBLIC OWNER. The Public Owner shall not
assign, encumber, convey or otherwise dispose of all or any part of its rights,
title and interest in and to the Public Facility Components, the Facility
Component Sites, the Public Easements, and/or this Use Agreement, except to the
Lessee in accordance with the provisions of this Use Agreement, without the
prior written consent of the Lessee; provided, however, that, in any event, any
assignment (whether by operation of law or otherwise as provided herein) shall
be, and is hereby, made subject to the rights of the Lessee (and its successors
and assigns) under this Use Agreement and the applicable terms and provisions of
the Inducement Agreement. Provided, however, that the County may assign its
interest in the Public Facility Components, Facility Components Sites, Public
Easements, and this Use Agreement to the ▇▇▇, but such an assignment by the
County to the ▇▇▇ shall not release the County from any or all of its rights,
duties, and responsibilities under this Use Agreement with respect to the Public
Facility Components and the Facility Components Sites. The various Public
Facility Components may be owned directly by the Public Owner or owned by
another public entity formed thereby for
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such purposes but shall, in any event, be subject to the terms and provisions of
this Use Agreement.
Section 6.3. BINDING EFFECT. Notwithstanding anything to the contrary
in this Use Agreement (including without limitation Sections 5.3 or 6.1), upon
any assignment (whether by operation of law or otherwise as provided herein) of
this Use Agreement, this Use Agreement shall be binding upon, and inure to the
benefit of, the Parties hereto and their respective successors and assigns. In
addition, the Parties hereto expressly recognize, acknowledge, and agree that
all of the terms, conditions, provisions and agreements contained in Article II
are so integrally related one to each of the other terms, conditions, provisions
and agreements contained in Article II that, upon either any assignment of this
Use Agreement by operation of law or any acceptance or rejection of this Use
Agreement in any bankruptcy or insolvency proceeding involving the Lessee, none
of the terms, conditions, provisions and agreements contained in Article II are
capable of being severed from any of the other terms, conditions, provisions and
agreements contained in Article II; that any such assignment, acceptance, or
rejection must be of this entire Use Agreement, such Use Agreement being
indivisible and interdependent for purposes of this sentence, and may not be
solely of any part or parts thereof; and that, therefore, any such assignment
may not be selective but must convey, or any such acceptance or rejection may
not be selective but must be an acceptance or rejection of, all of the terms,
conditions, provisions and agreements contained in Article II, and not of any
part or parts thereof.
ARTICLE VII
DEFAULT AND REMEDIES
SECTION 7.1. DEFAULT BY THE LESSEE. The occurrence of any of the
following shall constitute an event of default with respect to the Lessee:
(a) the Lessee shall fail to keep the Public Facility Components in
good repair and good operating condition as required by Section 3.1; or
(b) the Lessee shall fail to maintain the insurance required by Section
3.1; or
(c) the Lessee shall otherwise fail to comply with any material
provision of this Use Agreement; or
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(d) the Company shall fail to make the payment required to remedy any
action or inaction by the Company under Section 17(4)(b)(iii) of the Inducement
Agreement in the manner and within the cure period set forth therein; or
(e) the Company shall fail to make any payment when due under that
certain Agreement, dated as of the date hereof, between the Company and Panola
Partnership, Inc.;
provided, in each case, the Authority or the Public Owner shall first give the
Lessee a written notice specifying the nature of the Lessee's failure to be in
compliance with its obligations under this Use Agreement and following receipt
by the Lessee of such written notice from the Authority, the Lessee shall have
(other than with respect to the default described in clause (d)) a period of one
hundred eighty (180) days (or fifteen (15) days in the case of a failure of the
Lessee to make a payment required to be made by it hereunder) after receipt of
such written notice within which to cure any such default or failure; provided,
however, that, if any such default or failure cannot be cured within one hundred
eighty (180) days with the exercise of due diligence by the Lessee, and if the
Lessee, within such period submits to the Authority and the County a plan
reasonably designed to correct the default within a reasonable additional period
of time necessary to cure such failure or default (not to exceed six (6) months)
then the Lessee shall not be in default hereunder unless Lessee fails to
diligently pursue such cure or fails to cure such default or failure within the
additional period of time specified by the plan.
SECTION 7.2. REMEDIES. In the event that the Lessee fails to cure such
failure to the reasonable satisfaction of the Authority within such applicable
cure period, then the Authority or the Public Owner may mediate or file suit to
enforce this Use Agreement pursuant to Section 8.5 and for money damages by
giving the Lessee a written notice specifying the nature of the Lessee's failure
to cure. In addition, however, in the event of a default by the Lessee (a) under
Sections 7.1(a) or (b) or (c), the Authority or the Public Owner may (but shall
be under no obligation to) take such action as may be necessary to cure such
failure after first giving five (5) days notice in writing to the Lessee,
including the operation and maintenance of such Public Facility Component or the
advancement of amounts of money, and all amounts so advanced therefor by the
Authority or the Public Owner shall become an additional obligation of the
Lessee to the Public Owner, which amounts, together with interest thereon at the
rate of six percent (6%) per annum, the Lessee agrees to pay on demand and (b)
under Sections 7.1(d) or (e), the Authority or the Public Owner may (i) for so
long as the Company is the Lessee hereunder, terminate this Use Agreement or
(ii) if the Company is not the Lessee hereunder,
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direct the Lessee to terminate its agreement with the Company and/or terminate
this Use Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. All notices, demands and requests which may or
are required to be given to another Party hereunder shall be in writing, and
each shall be deemed to have been properly given when served personally on an
executive officer of the Party to whom such notice is to be given, or when sent
postage prepaid by first class mail, registered or certified, return receipt
requested, by deposit thereof in a duly constituted United States Post Office or
branch thereof located in one of the states of the United States of America in a
sealed envelope addressed as follows:
If to the Lessee or the Company: If to the County:
LSP Energy Limited Partnership President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Board of Supervisors
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Panola County
Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: With a copy to:
General Counsel Board Attorney
LS Power, LLC Board of Supervisors
Two Tower Center, 20th Floor Panola County
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Authority: If to the ▇▇▇
Director Commissioner and President
Mississippi Major Economic Industrial Development
Impact Authority Authority of the
c/o Executive Director Second Judicial
Department of Economic and District of Panola
Community Development County, Mississippi
State of Mississippi Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
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With a copy to: With a copy to:
Legal Counsel Board Attorney
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Department of Economic and Board of Supervisors
Community Development Panola County
State of Mississippi Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
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A duplicate copy of each notice, certificate or other communication
given under any of the foregoing documents to any Party hereunder shall also be
given to the other Parties indicated in this Section. The Parties may, by notice
given hereunder, designate any further or different addresses and to which
subsequent notices, certificates or other communications shall be sent.
SECTION 8.2. RECORDATION. A memorandum of this Use Agreement and every
assignment and amendment hereof, shall, for notice and information purposes, be
recorded in the office of the Clerk of the Chancery Court of the County, or in
any other such office which may at the time provided by law be the proper place
for the recordation of a deed conveying the Public Facility Components. This
memorandum shall include, without limitation, the names of the Parties, the
Term, the legal descriptions of the Facility Component Sites and the Facility
Site, a general description of the Public Facility Components, a disclosure that
the Public Facility Components and Facility Component Sites are subject to this
Use Agreement and to certain applicable terms and provisions of the Inducement
Agreement, and Sections 2.7, 2.9, and 2.10 of this Use Agreement verbatim.
SECTION 8.3. AMENDMENTS. Any amendments to this Use Agreement shall
be in writing and signed by all Parties who are affected by such amendment or
their respective successors and assigns.
SECTION 8.4. APPLICABLE LAW. This Use Agreement shall be governed by
the laws of the State notwithstanding the fact that one or more of the Parties
to this Use Agreement may be or become a resident or a citizen of, or be or
become domiciled in, a different state.
SECTION 8.5. MEDIATION. If a dispute arises out of or relates to this
Use Agreement, or the breach thereof, and if such dispute cannot be settled by
the applicable Parties through negotiation, then the applicable Parties agree
first to attempt, in good faith, to settle the dispute through mediation before
resorting to litigation. A mediator and site for the mediation acceptable to all
applicable Parties shall be chosen by them no
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later than 20 days following the date of receipt of the written request for
mediation, failing in which the Parties agree that the American Arbitration
Association shall, at the request of any of the applicable Parties, be utilized
to select the mediator and the place for the mediation. If, by the 45th day
following the date of receipt of the written request for mediation, no mediator
has been selected, any applicable Party may proceed to file an action in the
forum referenced below. If a mediator and the place for mediation has been
selected by such 45th day, the mediation session shall be held and concluded not
later than 90 days after selection of the mediator and site. If, following the
earlier of the conclusion of the mediation, or the end of such 90 day period,
any applicable Party is not satisfied with the results of such mediation, any
party may proceed to file an action in the forum referenced below. Except as
modified herein, the mediation shall be conducted pursuant to the Commercial
Mediation Rules of the American Arbitration Association.
SECTION 8.6. FORUM SELECTION. To the extent permitted by law, venue for
any legal action involving the County, ▇▇▇, and/or Lessee arising from this Use
Agreement, shall be in the courts of the United States sitting in the Northern
District of Mississippi.
SECTION 8.7. COUNTERPARTS. This Use Agreement may be executed in two or
more counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
SECTION 8.8. HEADINGS. The use of captions and headings in this Use
Agreement are solely for convenience and shall have no legal effect in
construing the provisions of this Use Agreement.
SECTION 8.9. ENTIRE AGREEMENT. This Use Agreement and the Inducement
Agreement constitute the essential terms of the agreement between the Parties
for the purposes stated herein, and no other offers, agreements, understandings,
warranties, or representations exist between the Parties.
SECTION 8.10. STATUTORY REFERENCES. Unless otherwise specifically
indicated herein to the contrary, all references herein to statutory sections
refer to the Mississippi Code Annotated of 1972, as amended.
SECTION 8.11. SEVERABILITY. Subject to Section 6.3, if any clause,
provision or section of this Use Agreement be held illegal or invalid by any
court, the invalidity of such clause, provision or section shall not affect any
of the remaining clauses, provisions or sections hereof, and this Use Agreement
shall be
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construed and enforced as if such illegal or invalid clause, provision or
section had not been contained herein.
SECTION 8.12. AUTHORITY. The Parties hereto recognize, acknowledge, and
agree that the agreements contained herein have been the subject of arm's length
negotiations between the Parties, and each of the Parties recognizes,
acknowledges, represents, and warrants that, to the extent permissible under
applicable law (as to which no representation or warranty is made or implied,
except as hereinafter indicated), the obligations set forth herein are the valid
and legally and mutually binding reciprocal obligations of such Party,
enforceable in a court of competent jurisdiction against such respective Party
in accordance with the terms hereof, and, based upon the law of the State (as
currently interpreted) that the doctrine of sovereign immunity does not bar
actions for breach of contract brought against the State or its political
subdivisions (including the County, City, and ▇▇▇), the doctrine of sovereign
immunity is thus inapplicable to any contract action, contract liability, and
contract remedies (specifically including, but not limited to, specific
performance) pertaining to this Use Agreement. The Parties and each of the
officers or officials thereof represents and warrants that the terms and
provisions of this Use Agreement applicable to, and his or her execution of this
Use Agreement in the name of and on behalf of, such Party has been authorized
and approved, as required by law, by any and all necessary actions of the
applicable Board of Supervisors, board of directors, or other appropriate
governing body thereof and that such officer or official has been duly
authorized thereby to execute this Use Agreement on behalf of and in the name of
such Party.
SECTION 8.13. NO PERSONAL LIABILITY. The Parties acknowledge and agree
that in no event shall any individual, partner, member, shareholder, owner,
officer, director, employee, affiliate, beneficiary, or elected or appointed
public official of any Party or its affiliates be personally liable to another
Party for any payments, obligations or performance due under this Use Agreement,
or any breach or failure of performance of either Party hereunder and that the
sole recourse for payment or performance of the obligations hereunder shall be
against the Parties themselves and each of their respective assets and not
against any other Person, except for such liability as may be expressly assumed
by an assignee pursuant to an assignment of, or pursuant to, this Use Agreement
in accordance with the terms hereof.
SECTION 8.14. FORCE MAJEURE. For purposes of this Use Agreement, "Force
Majeure" is defined as something beyond a Party's reasonable control, including,
but not limited to, acts of God, governmental acts (including delay or denial of
necessary permits
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or approvals and whether or not within the power of the government or
governmental agency, but excluding any delay or denial of a necessary permit or
approval by a government or a governmental agency which is a Party where the
Party claiming Force Majeure is also a government or a governmental agency),
acts of the public enemy, terrorism, sabotage and civil disturbance, floods,
landslides, earthquakes, fires, washouts, droughts, unusually severe weather
(including, without limitation, lightning, hurricanes, tornadoes, and other
storms), epidemics, quarantine, restrictions, strikes, labor slowdowns, labor
troubles, freight embargoes, and breakdowns or damages to equipment and
necessary facilities (including emergency outages of equipment or facilities
used for making repairs to avoid breakdown, damage, or imminent danger and
specifically excepting economic conditions or events or business decisions or
judgment and failure to make any payment (collectively "FORCE MAJEURE"). A Party
claiming Force Majeure shall promptly notify the other applicable Parties of the
occurrence of the event of Force Majeure and shall exercise reasonable business
efforts to remove the event of Force Majeure; provided, however, that nothing in
this Section 8.14 shall require a Party to settle or resolve any labor dispute
if it deems the settlement to be contrary to its best interests; provided
further, however, that an event of Force Majeure shall not include the failure
of any Governmental Authority which is a Party hereto to take any governmental
act (including, without limitation, delay or denial of necessary permits or
approvals and whether or not within the power of the Government Authority) by
any of the State, the County or the ▇▇▇ unless such failure is itself otherwise
due to an event of Force Majeure.
EXECUTION
IN WITNESS WHEREOF, the undersigned individuals, acting in their indicated
official capacity, have executed this Use Agreement on behalf of and in the name
of their respective entities on the dates set forth opposite their respective
names, having first been duly authorized by such entities so to do.
Mississippi Major Economic Impact
Authority (a Division of the
Mississippi Department of
Economic and Community
Development)
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Date: August 12, 1999 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Director and the
Executive Director of the
Mississippi Department of
Economic and Community
Development
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Panola County, Mississippi
Date: August 12, 1999 By: Board of Supervisors
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
President
Date: August 12, 1999 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(SEAL) Clerk
Industrial Development Authority of
the Second Judicial District of
Panola County, Mississippi
Date: August 12, 1999 By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇
Commissioner and
President
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LSP Energy Limited Partnership
Date: August 12, 1999 By: LSP Energy, Inc.,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
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