EXHIBIT 10.1.9.2
THIS LEASE AGREEMENT IS
CONFIDENTIAL AND PROPRIETARY
EXECUTION COPY
CONFIDENTIAL AND PROPRIETARY
LEASE AGREEMENT
Dated as of November 14, 2000
BETWEEN
HAWKEYE FUNDING, LIMITED PARTNERSHIP
as Lessor
and
NEWINGTON ENERGY, L.L.C.
as Lessee
THIS LEASE HAS BEEN ASSIGNED AS SECURITY
FOR INDEBTEDNESS OF THE LESSOR. SEE SECTION 20.
This Lease has been manually executed in 40 counterparts, numbered consecutively
from 1 through 40, of which this is No. ___. To the extent, if any, that this
Lease constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction) no security
interest in this Lease may be created or perfected through the transfer or
possession of any counterpart other than the original executed counterpart which
shall be the counterpart identified as counterpart No. 1.
10.1.9.2.DOC
THIS LEASE AGREEMENT IS
CONFIDENTIAL AND PROPRIETARY
SECTION 1. DEFINED TERMS......................................................1
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE...............17
SECTION 3. LEASE OF THE PROJECT..............................................29
SECTION 4. OPERATING LEASE...................................................30
SECTION 5. ABSOLUTE OBLIGATION...............................................31
SECTION 6. LEASE TERM........................................................33
SECTION 7. RENT AND OTHER PAYMENTS...........................................33
SECTION 8. RESTRICTED USE; COMPLIANCE WITH LAWS..............................34
SECTION 9. MAINTENANCE, IMPROVEMENT AND REPAIR OF THE PROJECT................37
SECTION 10. INSURANCE.........................................................39
SECTION 11. INDEMNITIES.......................................................46
SECTION 12. LESSEE'S RIGHT TO TERMINATE.......................................51
SECTION 13. LESSEE'S RIGHTS OF PURCHASE AND RENEWAL...........................55
SECTION 14. LESSOR'S RIGHT TO TERMINATE.......................................56
SECTION 15. LOSS OF OR DAMAGE TO THE PROJECT..................................58
SECTION 16. CONDEMNATION AND DEDICATION OF THE PROJECT; EASEMENTS.............59
SECTION 17. SURRENDER OF THE PROJECT..........................................59
SECTION 18. EVENTS OF DEFAULT.................................................60
SECTION 19. RIGHTS UPON DEFAULT...............................................62
SECTION 20. SALE OR ASSIGNMENT BY LESSOR......................................65
SECTION 21. INCOME TAXES......................................................66
SECTION 22. NOTICES AND REQUESTS..............................................66
SECTION 23. COVENANT OF QUIET ENJOYMENT.......................................68
SECTION 24. RIGHT TO PERFORM FOR LESSEE.......................................68
SECTION 25. MERGER, CONSOLIDATION OR SALE OF ASSETS...........................68
SECTION 26. EXPENSES..........................................................68
SECTION 27. PERMITTED CONTESTS................................................68
SECTION 28. INTENTIONALLY OMITTED.............................................69
SECTION 29. MISCELLANEOUS.....................................................69
SECTION 30. NO RECOURSE.......................................................72
SECTION 31. NO MERGER OF ESTATES..............................................73
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SECTION 32. INDUSTRIAL CORRIDOR ROAD..........................................73
Exhibit A - Legal Description of Premises and Easements
Exhibit B - List of Project Contracts
Exhibit C - List of Project Authorizations
Exhibit D - Semi-Annual Rent Component
Exhibit E - Pledge Agreement
Exhibit F - Easements
Exhibit G - CEI Note
Exhibit H - Section 12(c) Percentages
Schedule 2(f) - Public Filings of the Guarantor
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THIS
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CONFIDENTIAL
LEASE AGREEMENT
Lease Agreement, dated as of November 14, 2000 (as the same may be amended,
restated, modified or supplemented from time to time, "THIS LEASE"), between
HAWKEYE FUNDING, LIMITED PARTNERSHIP (the "LESSOR"), a Delaware limited
partnership formed by Hawkeye Funding, Inc., its general partner, as lessor, and
NEWINGTON ENERGY, L.L.C., a Delaware limited liability company, as lessee (the
"LESSEE").
SECTION 1. DEFINED TERMS.
Unless the context otherwise requires, each term defined in this
Section 1 shall, when used in this Lease, have the meaning indicated:
"ACCRUED DEFAULT OBLIGATIONS" has the meaning set forth in Section 19
hereof.
"ACQUISITION COST" means, on the Effective Date, the Acquisition
Cost (as defined in the Agreement for Lease) under the Agreement for Lease after
making the Final Advance plus the Completion Amount.
"ADDITIONAL RENT" has the meaning set forth in paragraph (d) of
Section 7 hereof.
"ADJUSTED ACQUISITION COST" means, at the time of determination, the
Acquisition Cost of the Project less (i) the aggregate amount of all Semi-Annual
Rent Components theretofore included as portions of Basic Rent for any periods
for which Basic Rent has been paid, and less (ii) any reduction in Adjusted
Acquisition Cost provided for under subsection 2.3(b) of the Agreement for Lease
(as adjusted pursuant to Section 3 of this Lease) or paragraph (b) of Section 16
of this Lease.
"AFFILIATE" of any Person means any other Person controlling,
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "CONTROL," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.
"AGREEMENT FOR LEASE" means the Agreement for Lease, dated as of the
date hereof, between the Lessor, as owner, and the Lessee, as agent, providing
for the acquisition, construction and equipping of the Project, as the same may
be amended, restated, modified or supplemented from time to time.
"APPRAISAL PROCEDURE" means the following procedure whereby an
independent appraiser shall be appointed by the Lessor and the Lessee, with the
consent of Assignee, to determine (A) the amount of wear and tear in excess of
that attributable to normal use of the Project to which the provisions of
paragraph (b)(iii) or paragraph (c)(iii) or paragraph (d) of
THIS
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Section 12 apply or (B) the fair market value of the Project, if such
determination is required under paragraph (d) of Section 13 of this Lease. If no
such appraiser is appointed by the mutual agreement of the Lessor and the Lessee
within thirty (30) days of the written request of either the Lessor or the
Lessee that an appraiser be appointed, the Lessor and the Lessee shall each
appoint an independent appraiser within thirty (30) days thereafter, and the two
appraisers so appointed shall appoint a third independent appraiser. Each
appraiser appointed pursuant to the foregoing procedure shall, within thirty
(30) days after appointment of the last appraiser, independently determine the
amount of wear and tear in excess of that attributable to normal use or the fair
market value of the Project, as the case may be. If the Lessor or the Lessee
shall fail to appoint an independent appraiser within the above-mentioned thirty
(30) day period, the appraiser appointed by the other party shall determine such
amount or value. If a single appraiser is appointed, such appraiser's
determination shall be final. If three appraisers are appointed, the amounts or
values determined by the three appraisers shall be averaged, the amount or value
which differs the most from such average shall be excluded, the remaining two
amounts or values shall be averaged and such average shall be final. The
expenses of all appraisers shall be paid by the Lessee. Each appraiser appointed
pursuant to an "Appraisal Procedure" shall have experience in appraising
generation facilities similar to the Project.
"ASSETS" means the Lessee's interest in any and all assets or property
of any kind, real or personal, tangible or intangible, now owned or hereafter
acquired by the Lessee.
"ASSIGNEE" means the Collateral Trustee and any successor to the
Collateral Trustee. For purposes of the definition of "Material Adverse Effect",
paragraphs (i)(d), (i)(j), (i)(p), (i)(cc) and (ii)(i) of Section 2, paragraphs
(a) and (b) of ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (▇) ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (▇) of Section
9, clauses (iii) and (iv) of paragraph (b) of Section 10, the last sentence of
clause (ii) of paragraph (d) of Section 10, clause (iv) (other than the last
reference to Assignee therein) of paragraph (d) of Section 10, paragraph (h) of
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ (▇) of Section 14, the last
sentence of paragraph (b) of Section 20, Section 26, and clause (iii) of
paragraph (a) and paragraph (b) of Section 27, the term "Assignee" shall include
each of the purchasers and holders from time to time of the Lessor's Senior
Secured Notes issued under the Note Purchase Agreement and each lender or other
Person providing credit support to Owner under a Financing Arrangement entered
into after the date hereof, and for purposes of paragraph (d) of Section 8, the
term "Assignee" shall include each of the Qualifying Noteholders (as defined in
the Note Purchase Agreement).
"ASSIGNMENT" means each assignment agreement referred to in Section 20
hereof, between the Lessor and a third party, pursuant to which the Lessor
assigns certain of its rights under this Lease to such third party, as the same
may be amended, restated, modified or supplemented from time to time.
"ASSUMED INDEBTEDNESS AMOUNT" has the meaning set forth in paragraph
(d) of Section 12 hereof.
"BASIC RENT" means:
(a) At each Basic Rent Payment Date during the Initial Term and any
Extended Term, and in respect of the semi-annual period ending on June 30 or
December 30 in
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which such Basic Rent Payment Date occurs, the sum of the Semi-Annual Rent
Component plus an amount (the "VARIABLE COMPONENT OF BASIC RENT") equal to the
sum of (X) plus (Y) plus (Z), where (X), (Y) and (Z) have the following
meanings:
(X) (i) the Equity Capital before payment of Basic Rent for such
semi-annual period, multiplied by
(ii) a fraction having a numerator equal to 180 and a denominator
of 360, multiplied by
(iii) the decimal equivalent of a percentage equal to the LIBOR
Rate plus 2%.
(Y) (i) the Debt Capital before payment of Basic Rent for such
semi-annual period, multiplied by
(ii) a fraction having a numerator equal to 180 and a denominator
of 360, multiplied by
(iii) the decimal equivalent of a percentage equal to the
Semi-Annual Cost of Project Debt.
(Z) (i) the Adjusted Acquisition Cost before payment of Basic Rent
for such semi-annual period, multiplied by
(ii) a fraction having a numerator equal to the number of days in
such semiannual period and a denominator of 365, or in a
leap year, 366, multiplied by
(iii) 0.00147.
(b) For any partial semi-annual period during the Initial Term and
any Extended Term, an amount equal to the sum of (X) plus (Y) plus (Z), where
(X), (Y) and (Z) have the following meanings:
(X) (i) the Equity Capital, multiplied by
(ii) a fraction having a numerator equal to the number of days the
Project is under lease during such partial semi-annual period
(provided that, each full calendar month during such partial
semi-annual period shall be deemed to be a 30-day month) and a
denominator of 360, multiplied by
(iii) the applicable decimal referred to in paragraph (a)(X)(iii)
above; PROVIDED that, if the Effective Date falls on or after
the Lease Rate Date during such partial semi-annual period such
decimal shall be the decimal determined as of the next
succeeding Lease Rate Date.
(Y) (i) the Debt Capital multiplied by
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(ii) a fraction having a numerator equal to the number of days the
Project is under lease during such partial semi-annual period
(provided that, each full calendar month during such partial
semi-annual period shall be deemed to be a 30-day month) and a
denominator of 360, multiplied by
(iii) the decimal equivalent of a percentage equal to the Semi-Annual
Cost of Project Debt; PROVIDED that, if the Effective Date
falls on or after the Lease Rate Date during such partial
semi-annual period, the Semi-Annual Cost of Project Debt shall
be determined as of the next succeeding Lease Rate Date.
(Z) (i) the Adjusted Acquisition Cost, multiplied by
(ii) a fraction having a numerator equal to the number of days the
Project is under lease during such partial semi-annual period
and a denominator of 365, or in a leap year, 366, multiplied by
(iii) 0.00147.
(c) For each semi-annual period during the Renewal Term of the
Project, if any, an amount equal to the fair market rental value thereof,
determined as provided in paragraph (d) of Section 13 hereof.
"BASIC RENT PAYMENT DATE" means June 20th and December 20th during the
Initial Term, the Extended Term or Renewal Term, or, if such day is not a
Business Day, the next succeeding Business Day.
"BUDGET" has the meaning set forth in the Agreement for Lease.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the City of New York are authorized by law to
close.
"CAPITAL EXPENDITURES" means, for any period, the sum of the aggregate
amount of all expenditures of the Lessee (other than expenditures made with the
proceeds of casualty insurance) for fixed or capital assets made during such
period which, in accordance with GAAP, would be classified as capital
expenditures.
"CASH PROCEEDS" has the meaning set forth in paragraph (a) of Section
12 hereof.
"CEI NOTE" means the Promissory Note, dated November 16, 2000, from
the Guarantor, as borrower, in favor of the Lessor, as lender, evidencing the
advances made by the Lessor to the Guarantor thereunder, and any promissory note
or notes of the Guarantor issued in substitution thereof, a copy of which is
attached as Exhibit G hereto.
"CERCLA" has the meaning set forth in paragraph (i)(o) of Section 2
hereof.
"CERCLIS" has the meaning set forth in paragraph (i)(o) of Section 2
hereof.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL INDENTURE" means the Indenture of Trust, Security
Agreement and Collateral Assignment of Contracts, dated as of the date hereof,
entered into by the Lessor and the Collateral Trustee, pursuant to which the
Lessor has granted a security interest in certain collateral to the Collateral
Trustee, as the same may be amended, restated, modified or supplemented from
time to time in accordance with the terms thereof.
"COLLATERAL TRUSTEE" means The Bank of New York, in its capacity as
collateral trustee under the Collateral Indenture, and its successors.
"COMPLETION AMOUNT" has the meaning set forth in paragraph (b) of
Section 3 hereof.
"COMPUTATION PERIOD" has the meaning set forth in the definition of
Semi-Annual Cost of Project Debt in this Section 1.
"CONTAMINANT" means any pollutant or substance that is or may be
harmful to human health, natural resources or the environment and any hazardous
substance, radioactive substance, hazardous material, toxic substance, hazardous
waste, medical waste, radioactive waste, special waste, industrial waste,
petroleum or petroleum-derived substance or waste, asbestos, PCBs or any
hazardous or toxic constituent thereof defined as such or, regulated under
Environmental Requirements as harmful to human health, natural resources or the
environment.
"DEBT CAPITAL" means, at the time of determination, an amount equal to
Adjusted Acquisition Cost minus Equity Capital.
"DEBT YIELD-MAINTENANCE PREMIUM" means an amount equal to the amount
of Make-Whole Premium (as defined in the Note Purchase Agreement) payable by the
Lessor at any time pursuant to the terms of the Note Purchase Agreement.
"EASEMENTS" means the easements listed on Exhibit F attached hereto,
which easements have been or will be assigned and/or transferred to the Lessor,
as such easements may be amended, restated, modified or supplemented from time
to time in accordance with the terms hereof.
"EFFECTIVE DATE" means the date provided in paragraph (a) of Section 3
of this Lease.
"ENVIRONMENTAL APPROVALS" means all Governmental Actions, Permits,
consents, licenses, and other approvals or authorizations required under
applicable Environmental Requirements.
"ENVIRONMENTAL DAMAGES" means any and all claims, judgments, damages
(including, without limitation, punitive damages), losses, penalties, fines,
interest, fees, liabilities (including, without limitation, strict liability),
taxes (other than taxes imposed by Section 59A of the Code or other taxes of
general application which are not taxes in respect of an environmental
condition), obligations, encumbrances, liens, costs and expenses (including,
without limitation,
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costs and expenses of investigation and defense of any claim, whether or not
such claim is ultimately defeated, and of any good faith settlement or
judgment), of whatever kind or nature, contingent or otherwise, matured or
unmatured, foreseeable or unforeseeable, direct or indirect, including, without
limitation, reasonable attorneys' fees and disbursements and consultants' fees
(collectively "DAMAGES"), any of which are asserted, imposed or incurred at any
time pursuant to Environmental Requirements, including, without limitation:
(i) Damages arising from the existence of Contaminants at any
location or compliance or noncompliance with, or violation of, Environmental
Requirements;
(ii) Damages for personal injury or threatened personal injury
(including sickness, disease or death), or injury or threatened injury to
property or natural resources, foreseeable or unforeseeable, including, without
limitation, the cost of demolition and rebuilding of any improvements on real
property;
(iii) Reasonable fees incurred for the services of attorneys,
consultants, contractors, doctors, experts, laboratories and all other
reasonable costs incurred in connection with any damages as described in
subparagraphs (i) and (ii) of this definition, and the investigation or
remediation of Contaminants or the suspected presence of Contaminants or the
violation or threatened violation of Environmental Requirements, including, but
not limited to, the preparation of any feasibility studies or reports or the
performance of any investigation, cleanup, treatment, remediation, removal,
response, abatement, containment, closure, storage, disposal, transport,
restoration or monitoring work required by any federal, state, local or foreign
governmental agency or political subdivision, or otherwise expended in
connection with such conditions, and including, without limitation, any
reasonable attorneys' fees, costs and expenses incurred in enforcing this Lease
or the Agreement for Lease or collecting any sums due hereunder or thereunder;
(iv) Damages associated with Environmental Matters; and
(v) Liability to any third person or Governmental Authority to
indemnify such person or Governmental Authority for costs expended in connection
with the items referenced in subparagraphs (i), (ii), (iii) and (iv) of this
definition.
"ENVIRONMENTAL EVENT" has the meaning set forth in paragraph (ii)(m)
of Section 2 hereof.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for any (a) liability under any Environmental Requirement, or (b)
damages arising from, or costs incurred by, such Governmental Authority in
response to a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL MATTERS" means any matter, fact or situation relating
to or arising from (a) any violation or alleged violation of, or failure to
meet, an Environmental Requirement relating to the Project, (b) any Release or
threatened Release of any Contaminant on, under, emanating to or from the
Project or the presence of any Contaminant which has come to be located on, from
or under the Project from another location, (c) the generation, treatment,
transport or disposal of any Contaminant at, to or from the Project, (d) any
injury to human
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health or safety or the environment by reason of the matters described in
clauses (a), (b) and (c) above, or (e) any revocation, expiration, termination
or failure to obtain or maintain any Environmental Approval applicable to or
required for the Project.
"ENVIRONMENTAL REPORTS" means collectively, (i) the Environmental Site
Assessment Report dated May 21, 1998 with respect to the ▇▇▇▇▇ ▇▇▇▇ Site located
in Newington, New Hampshire and an environmental update thereto dated November
6, 2000 and (ii) the Environmental Site Assessment Report dated March 1, 2000
with respect to the River Road Site located in Newington, New Hampshire, each
prepared by TRC Environmental Corporation and delivered to the Lessor and
Assignee pursuant to Section 4 of the Agreement for Lease.
"ENVIRONMENTAL REQUIREMENTS" means all applicable federal, state,
local and foreign laws (including duties under the common law), statutes, codes,
ordinances, rules, regulations, directives, binding policies, permits,
authorizations or orders relating to or addressing the environment, natural
resources or human health, including, but not limited to, any law, statute,
code, ordinance, rule, regulation, directive, binding policy, permit,
authorization or order relating to (a) the use, handling, disposal, Release or
threatened Release of any Contaminant or (b) worker health.
"EPC CONTRACT" means the Engineer, Procure and Construct Contract,
dated as of May 24, 2000, between the Lessor and the General Contractor, as the
same may be amended, restated, modified or supplemented from time to time in
accordance with the terms hereof.
"EPC GUARANTY" means each guaranty (or payment or performance bond
issued in lieu thereof) jointly and severally executed and delivered by Fluor
Corporation and Duke Energy Capital pursuant to Section 9.4 of the EPC Contract,
as the same may be amended, restated, modified or supplemented from time to time
in accordance with the terms hereof.
"EQUITY CAPITAL" means, at the time of determination, the aggregate
amount of cash contributions to the Lessor's capitalization made by the Lessor's
general partner and limited partners constituting a part of Adjusted Acquisition
Cost, plus any undistributed Return on Equity Capital (as defined in the
Agreement for Lease), less the aggregate amount of any returns of capital made
to such partners at such time.
"ERISA" has the meaning set forth in paragraph (i)(m) of Section 2
hereof.
"EVENT OF DEFAULT" has the meaning set forth in Section 18 hereof.
"EVENT OF LOSS" means any of the following events: (a) loss of all or
a substantial portion of the Project or the use thereof due to destruction,
damage beyond economical repair or rendition of the Project permanently unfit
for the use contemplated by the Project Contracts on a commercially feasible
basis for any reason whatsoever; and (b) any event which results in an insurance
settlement with respect to the Project on the basis of a total loss or
constructive total loss. A loss of a "substantial portion" of the Project or the
Premises shall be deemed to occur if after such event, the remainder is not
sufficient to permit operation of the Project on a commercially feasible basis.
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"EWG" means an Exempt Wholesale Generator, as defined in Section
32(a)(1) of the 1935 Act.
"EXTENDED TERM" has the meaning set forth in paragraph (b) of Section
6 hereof.
"FERC" means the Federal Energy Regulatory Commission, or any
successor agency thereto.
"FINAL SURVEY" has the meaning set forth in the Agreement for Lease.
"FINANCIAL STATEMENTS" means the financial statements accompanying the
Guarantor's Annual Report on Form 10-K or the Guarantor's Quarterly Reports on
Form 10-Q filed from time to time with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"FINANCING ARRANGEMENT" means each credit agreement, note purchase
agreement, subordinated loan agreement, security agreement, indenture, mortgage,
deed of trust and each other agreement or arrangement between the Lessor and a
lender or lenders to the Lessor or other Person or Persons providing credit
support to the Lessor or to debt issued by or on behalf of the Lessor related to
the financing or refinancing of the Project, as any of the same may be amended,
restated, modified or supplemented from time to time.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, applied on a consistent basis.
"GE GUARANTY" means the guaranty, dated as of November 15, 2000, from
General Electric Company to the Lessee, guaranteeing the obligations of General
Electric International, Inc. under the O&M Agreement, as the same may be
amended, restated, modified or supplemented from time to time in accordance with
the terms hereof.
"GENERAL CONTRACTOR" means Duke/Fluor ▇▇▇▇▇▇, a North Carolina
partnership.
"GOVERNMENTAL ACTION" has the meaning set forth in paragraph (i)(d) of
Section 2 hereof.
"GOVERNMENTAL AUTHORITY" means any agency, department, court or other
administrative, legislative or regulatory authority of any federal, state, local
or foreign governmental body.
"GUARANTOR" means Consolidated Edison, Inc., a New York corporation,
and its successors.
"GUARANTOR'S CONSENT" means the Consent and Agreement, dated as of
November 14, 2000, by and among the Guarantor, the Lessor and the Collateral
Trustee, as the same may be amended, restated, modified or supplemented from
time to time.
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"GUARANTY" means the Guaranty, dated as of the date hereof, from the
Guarantor in favor of the Lessor and its successors and assigns, as the same may
be amended, restated, modified or supplemented from time to time.
"INDEBTEDNESS" means, for any Person, without duplication, (i) all
obligations of such Person for borrowed money or under any lease which, in
either case, is recognized as debt on the balance sheet of such Person in
accordance with GAAP, (ii) all obligations of such Person to pay the deferred
purchase price of property or services, including any such obligations created
under or arising out of any conditional sale or other title retention agreement
(other than property and services obtained in the ordinary course of business or
operations), (iii) all non-contingent obligations of such Person under
reimbursement or similar agreements with respect to the issuance of letters of
credit and (iv) all obligations of any other Person of the type specified in
clause (i), (ii) or (iii) above, (A) the payment or collection of which such
Person has guaranteed (except by reason of endorsement for collection in the
ordinary course of business), (B) in respect of which such Person is liable,
contingently or otherwise, including, without limitation, liable by way of
agreement to purchase products or securities, to provide funds for payment, to
maintain working capital or other balance sheet conditions or otherwise to
assure a creditor against loss, or (C) secured by any Lien upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person; PROVIDED, HOWEVER, that Indebtedness shall not include Non-Recourse Debt
(including, without limitation, Securitized Debt).
"INDEMNIFIED PERSON" has the meaning set forth in Section 11 hereof.
"INDEPENDENT ENGINEER" means any nationally recognized engineering
firm appointed as independent engineer by the Lessor and Assignee.
"INDUSTRIAL CORRIDOR ROAD" has the meaning given to such term in the
Agreement for Lease.
"INITIAL TERM" has the meaning set forth in paragraph (a) Section 6
hereof.
"INSURANCE REQUIREMENTS" means all insurance required to be obtained
with respect to the Project pursuant to Section 10 hereof and all terms of any
insurance policy covering or applicable to the Project, all requirements of the
issuer of any such policy, all statutory requirements and all orders, rules,
regulations and other requirements of any governmental body related to insurance
applicable to the Project.
"INTELLECTUAL PROPERTY RIGHTS" means, collectively, all patents,
patent applications, trademarks (whether registered or not), trademark
applications, trade names, proprietary computer software or copyrights (or any
licenses, permits or agreements with respect to any of the foregoing) necessary
to construct, operate, lease or use the Project or any part thereof.
"JDA" has the meaning given to such term in the Agreement for Lease.
"INTERCONNECTIONS" means the interconnections at or available to the
Project for transmission of electricity and the supply of water, natural gas,
and other necessary utilities and services.
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"LEASE RATE DATE" has the meaning set forth in paragraph (b) of
Section 7 hereof.
"LEASE TERM" means the Initial Term plus the Extended Term.
"LEGAL REQUIREMENTS" means all laws, judgments, decrees, ordinances
and regulations and any other governmental rules, orders and determinations and
all requirements having the force of law, now or hereinafter enacted, made or
issued, whether or not presently contemplated, and all agreements, covenants,
conditions and restrictions, applicable to the Project or the construction,
ownership, operation or use thereof, including, without limitation, all
requirements of labor laws and Environmental Requirements, compliance with which
is required at any time from the date hereof through the Lease Term and any
Renewal Term, whether or not such compliance shall require structural,
unforeseen or extraordinary changes to the Project or the operation, occupancy
or use thereof.
"LESSEE" has the meaning set forth in the first paragraph of this
Lease.
"LESSEE'S CONSENT" means the Consent and Agreement, dated as of
November 14, 2000, by and among the Lessee, the Lessor and the Collateral
Trustee, as the same may be amended, restated, modified or supplemented from
time to time.
"LESSOR" means Hawkeye Funding, Limited Partnership or any successor
or successors to all of its rights and obligations as the Lessor hereunder and,
for purposes of Section 11 hereof, shall include any partnership (general or
limited), corporation, limited liability company, trust, individual or other
entity which computes its liability for income or other taxes on a consolidated
basis with Hawkeye Funding, Limited Partnership or the income of which for
purposes of such taxes is, or may be, determined or affected directly or
indirectly by the income of the Lessor or its successor or successors.
"LESSOR LIEN" means any Lien or disposition of title (a) arising as a
result of any act or omission of the Lessor, or (b) which is otherwise claimed
by or through the Lessor and which is not related to the Project leased
hereunder or the business of the Lessee, and which, in either case, is not
permitted or contemplated by this Lease, the Agreement for Lease, any Financing
Arrangement, the Project Contracts or the transactions contemplated thereby.
"LETTER OF CREDIT" means any letter of credit issued in favor of the
Lessor pursuant to Section 7.1(A) of the EPC Contract.
"LIBOR RATE" means the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/16th of 1%) quoted by The Bank of New York to the
Lessor at or before 10:00 a.m. (New York, New York time) (or as soon thereafter
as practicable), for the offering to The Bank of New York by prime banks in the
London Eurodollar interbank market, at the time of determination and in
accordance with the then usual practice in such market, of deposits in dollars
for delivery on such date and having a maturity equal to six months. Each
determination by the Lessor of the LIBOR Rate shall be conclusive and binding,
absent manifest error, and may be computed using any reasonable averaging and
attribution method.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other), or other security agreement
of any kind or nature
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THIS LEASE AGREEMENT IS
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whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing).
"MARITIMES AGREEMENTS" means, collectively, (i) the Precedent
Agreement for Firm Transportation of Natural Gas to be entered into by and
between Maritimes & Northeast Pipeline, L.L.C. and the Lessee and (ii) the other
agreement or agreements to be entered into by and between Maritimes & Northeast
Pipeline, L.L.C. and the Lessee pursuant to the Precedent Agreement with respect
to the transportation of gas to the Project, as each of the same may be amended,
restated, modified, or supplemented from time to time.
"MATERIAL ADVERSE EFFECT" where such definition is used means (a) the
total common shareholders equity of the Guarantor and its subsidiaries as
determined on a consolidated basis and as reflected in accordance with GAAP on
the Guarantor's then most recent Financial Statements shall fall below
$4,610,510,000, (b) the fair market sales value of the Project shall decrease by
an amount equal to or greater than 7.5% of the Adjusted Acquisition Cost of the
Project, or (c) the Lessor or any Assignee shall become, by virtue of the
transactions or activities contemplated by this Lease and the Agreement for
Lease, subject to financial, rate or other similar regulation as, a public
utility, or an electric utility or a public utility holding company under a
Legal Requirement (including any Legal Requirement (i) under the 1935 Act, (ii)
imposed by any state or local public utility commission or other similar
regulatory body, authority or group having jurisdiction over the Lessor or the
Lessee or any such transactions or activities or (iii) under the Federal Power
Act, as amended).
"MATERIAL SUBSIDIARY" means any Subsidiary with shareholders' equity
for financial reporting purposes in excess of $500,000,000.
"MEMORANDUM" means the Confidential Private Placement Memorandum dated
September 2000 prepared with respect to the offering of the Notes sold pursuant
to the Note Purchase Agreement, together with the appendices thereto, any
documents incorporated therein by reference, as supplemented by a Supplementary
Update on or about September 21, 2000.
"MERRILL" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc., a Delaware
corporation.
"MERRILL LEASING" means ML Leasing Equipment Corp., a Delaware
corporation.
"▇▇▇▇▇▇▇ ▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc., a Delaware
corporation.
"MODIFIED CALL PREMIUM" means an amount equal to the amount of
Modified Call Premium (as defined in the Note Purchase Agreement) payable by the
Lessor at any time pursuant to the terms of the Note Purchase Agreement.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto which is a nationally recognized statistical rating organization.
"1935 ACT" means the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations issued, published or promulgated from
time to time thereunder.
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THIS LEASE AGREEMENT IS
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"NON-RECOURSE DEBT" means, for any Person, obligations of such Person
of the type specified in clauses (i)-(iv) of the definition of "Indebtedness"
(not exceeding the cost of the acquisition, construction or creation of the
relevant asset, project or property) incurred or existing in connection with the
financing or refinancing of any asset, project or property, the repayment of
which obligations is to be made from the revenues arising out of, or other
proceeds of realization from, the acquired or created asset, project or
property, with recourse to those revenues and proceeds and assets forming the
subject matter of such asset, project or property (including, without
limitation, insurance contracts and shares or other rights of ownership in the
entity(ies) which own the relevant assets, projects or properties) and other
assets and properties ancillary thereto but without recourse to any other asset
or property or otherwise to such Person; PROVIDED that recourse liability shall
not be deemed to exist by reason of normal and customary sponsor support
arrangements.
"NOTE PURCHASE AGREEMENT" means, collectively, the several Note
Purchase Agreements, each dated as of the date hereof, between the Lessor and
the purchasers of the Lessor's Senior Secured Notes due 2022 (collectively, the
"NOTES") in respect of an aggregate principal amount of $340,971,000, as the
same may be amended, restated, modified or supplemented from time to time.
"NOTES" has the meaning set forth in the definition of "Note Purchase
Agreement" in this Section 1.
"NPL" has the meaning set forth in paragraph (i)(o) of Section 2
hereof.
"O&M AGREEMENT" means the Operation and Maintenance Agreement, dated
as of December 20, 1999, between the Lessee and the Operator, relating to the
operation and maintenance of the Project, as the same may be amended, restated,
modified or supplemented from time to time in accordance with the terms hereof.
"OPERATING ACCOUNT" has the meaning set forth in the Collateral
Indenture.
"OPERATOR" means General Electric International Inc., a Delaware
corporation, or such other entity designated as successor operator of the
Project by the Lessee in accordance with the terms hereof.
"PCBs" has the meaning set forth in paragraph (i)(o) of Section 2
hereof.
"PERMITTED CONTEST" has the meaning set forth in paragraph (a) of
Section 27 hereof.
"PERMITTED INDEBTEDNESS" means the following indebtedness or other
obligations of the Lessee: (i) letters of credit and other financial obligations
arising under the Project Contracts, (ii) trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary course
of business so long as such trade accounts payable are payable within ninety
(90) days of the date the respective goods are delivered or the respective
services are rendered and (iii) purchase money obligations incurred to finance
certain items of discrete equipment not comprising an integral part of the
Project that can be installed and removed from the Project without diminishing
the value, utility or remaining economic useful
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THIS LEASE AGREEMENT IS
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life which the Project would have had at such time had such equipment not been
installed and removed, which obligations extend only to the equipment being
financed in an aggregate amount of secured principal and capitalized lease
obligations not exceeding $5,000,000 at any one time outstanding.
"PERMITTED LIENS" means the following Liens and other matters
affecting the Project: (a) Liens securing the payment of taxes, assessments and
other governmental charges or levies which are either not delinquent or, if
delinquent, are being contested by the Lessee in good faith as a Permitted
Contest (PROVIDED that the Lessee is in compliance with any security
requirements under paragraph (b) of Section 27 hereof relating thereto); (b)
zoning and planning restrictions, subdivision and platting restrictions,
easements, rights-of-way, licenses, reservations, covenants, conditions,
waivers, restrictions on the use of the Project, minor encroachments or minor
irregularities of title, none of which individually or in the aggregate could
reasonably be expected to materially impair the intended use or value of the
Project; (c) reservations of mineral interests, none of which individually or in
the aggregate could reasonably be expected to materially impair the intended use
or value of the Project; (d) the Liens created pursuant to any Financing
Arrangement; (e) leases, easements and licenses in effect with respect to the
Project which are permitted by this Lease or which are delivered to and accepted
by the Lessor and Assignee prior to the Effective Date provided they are
appurtenant to or benefit the use and operation of the Project; (f) other
exceptions to the title of the Project as set forth in the title insurance
policy delivered to the Lessor and Assignee under Section 4 of the Agreement for
Lease (for the period prior to Substantial Completion) and in a notice of
continuation or endorsement to the title insurance policy delivered to the
Lessor and Assignee under Section 6 of the Agreement for Lease (for the period
on and after Substantial Completion) other than Liens securing the payment of
taxes, assessments and other governmental charges or levies; (g) deposits or
pledges to secure statutory obligations or appeals and release of attachments,
stay of execution or injunction, performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, or for purposes of like
general nature in the ordinary course of business, in each case for which the
Lessee has set aside adequate reserves (to the extent required by GAAP), none of
which individually or in the aggregate could reasonably be expected to
materially impair the intended use or value of the Project; (h) liens in
connection with workers' compensation, unemployment insurance or other social
security or pension obligations for which the Lessee has set aside adequate
reserves (to the extent required by GAAP), none of which individually or in the
aggregate could reasonably be expected to materially impair the intended use or
value of the Project; (i) legal or equitable encumbrances deemed to exist by
reason of the existence of any litigation or other legal proceeding if the same
is the subject of a Permitted Contest (excluding any attachment prior to
judgment, any judgment lien or any attachment in aid of execution on a
judgment), for which the Lessee has set aside adequate reserves (to the extent
required by GAAP), none of which individually or in the aggregate could
reasonably be expected to materially impair the intended use or value of the
Project; (j) materialmen's, mechanics', worker's, repairmen's, employees', or
similar Liens incurred in good faith and in the ordinary course of business
which are the subject of a Permitted Contest; (k) liens securing purchase money
obligations of the type described in clause (iii) of the definition of
"Permitted Indebtedness"; and (l) such other or additional matters as may be
approved in writing by the Lessor and each Assignee.
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THIS LEASE AGREEMENT IS
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"PERSON" means any individual, corporation, partnership, limited
liability company, private limited company, joint venture, association,
joint-stock company, trust, unincorporated organization of government or any
agency or political subdivision thereof.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
hereof, by and between the Lessee, as pledgor, and the Lessor, as pledgee, as
the same may be amended, restated, modified or supplemented from time to time, a
copy of which is attached as Exhibit E hereto.
"POTENTIAL DEFAULT" means any event which, but for the lapse of time
or giving of notice, or both, would constitute an Event of Default.
"PREMISES" means collectively (a) the real property acquired by the
Lessor pursuant to the Deeds (as defined in the Agreement for Lease), and (b)
the Easements, each as more particularly described in Exhibit A hereto.
"PROJECT" means the Premises and the improvements and equipment
(including all related appliances, appurtenances, accessions, controls,
interconnection facilities, transmission lines, wiring, furnishings, materials
and parts, and other related facilities and equipment, along with any
replacements thereof) constructed thereon pursuant to the EPC Contract (or any
other construction contracts entered into by the Lessor or the Lessee) and the
Agreement for Lease, which constitute an approximately 525 megawatt nominal
combined-cycle dual fuel-fired power generation facility known as the Newington
Power Project, consisting of two GE Frame 7FA gas turbine generators, two heat
recovery steam generators, one steam turbine generator and related equipment.
"PROJECT CONTRACTS" means the EPC Contract, the EPC Guaranty, the GE
Guaranty, the O&M Agreement, any Replacement O&M Agreement and replacement
guaranty (from and after the date such Replacement O&M Agreement and replacement
guaranty become effective), any replacement EPC Contract (from and after the
date such replacement EPC Contract becomes effective), the Letter of Credit (if
any), the Maritimes Agreements (from and after the date each such Maritimes
Agreement becomes effective), and any other agreement or agreements entered into
by the Lessee and necessary for the construction of the Project (from and after
the date each such agreement becomes effective). A list of the Project Contracts
as in existence on the date hereof is attached as Exhibit B hereto.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended from time to time, and the rules and regulations issued, published or
promulgated from time to time thereunder.
"RELEASE" means the release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migrating into
the indoor or outdoor environment of any Contaminant through or in the air,
soil, surface water, groundwater, or any structure.
"RELEASE PARCEL" has the meaning set forth in paragraph (a) of Section
32 hereof.
"REMEDIAL ACTION" means actions required or otherwise undertaken by a
Governmental Authority, or which are appropriate as a matter of prudent business
practice and commercial reasonableness, to (i) clean up, remove, treat or in any
other way address
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THIS LEASE AGREEMENT IS
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Contaminants in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release or minimize the further Release of Contaminants; (iii)
investigate and determine if a remedial response is needed; or (iv) design such
a response and post-remedial investigation, monitoring, operation, maintenance
and care.
"REMOVABLE IMPROVEMENTS" has the meaning set forth in paragraph (b) of
Section 8 hereof.
"RENEWAL NOTICE" has the meaning set forth in paragraph (c) of Section
13 hereof.
"RENEWAL TERM" has the meaning set forth in paragraph (c) of Section
13 hereof.
"REPLACEMENT O&M AGREEMENT" means any agreement relating to the
operation and maintenance of the Project, entered into by the Lessee and a third
party in accordance with the provisions of paragraph (ii)(n) of Section 2 hereof
upon the termination of the O&M Agreement or the expiration of the O&M Agreement
in accordance with its terms.
"RESPONSIBLE OFFICER" shall mean the President, Vice President or
Secretary of the Lessee and any other officers or similar officials of the
Lessee responsible for administering the obligations of the Lessee hereunder as
designated in writing by the Lessee to the Lessor.
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., and any successor thereto which is a nationally recognized
statistical rating organization.
"SEC" means the Securities and Exchange Commission.
"SECURITIZED DEBT" means, for any Person, obligations of such Person
of the type specified in clauses (i)-(iv) of the definition of "Indebtedness"
secured by a Lien on one or more assets or rights to receive revenues, in each
case in respect of Stranded Costs (or related items) of such Person where the
holders of such obligations do not have recourse to any other assets, properties
or rights of such Person to receive revenue, in each case in respect of Stranded
Costs (or related items) of such Person.
"SEMI-ANNUAL COST OF PROJECT DEBT" means the weighted average
percentage cost per annum (including as part of such cost any fees payable under
or pursuant to any Financing Arrangements, but net of any investment earnings of
the Lessor applied to the payment of costs) of borrowings outstanding under any
Financing Arrangements (whether or not interest is accruing at a default rate)
at any time during the period from and including the first day of the first
month in the semi-annual period for which Basic Rent is being computed to and
including the last day of the last month of the semi-annual period for which
Basic Rent is being computed (the "COMPUTATION PERIOD") to finance or refinance
the acquisition and ownership of the Project.
"SEMI-ANNUAL RENT COMPONENT" means, with respect to each semi-annual
period during the Lease Term, the amount set forth on Exhibit D hereto, as such
Exhibit D may be amended from time to time pursuant to the terms of this Lease.
"STRANDED COSTS" means (i) charges in respect of prior utility
investments or commitments in fossil-fueled and nuclear generating plants or
operations, (ii) commitments for
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THIS LEASE AGREEMENT IS
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decommissioning fossil-fueled and nuclear generating plants or operations, (iii)
charges with respect to contracts with non-utility generators for electric power
and energy, (iv) charges in respect of prior utility investments or commitments
in steam systems or operations and (v) charges with respect to contracts with
non-utility steam suppliers.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, joint venture, or other entity of which more than 50% of the
outstanding capital stock or other ownership interest (irrespective of whether
or not at the time capital stock or other equity interest of any other class or
classes of such corporation, partnership, joint venture, or other entity shall
or might have voting power upon the happening of any contingency) is at the time
owned directly or indirectly by such Person; unless otherwise specified,
"Subsidiary" means a Subsidiary of the Guarantor.
"SUBSTANTIAL COMPLETION" has the meaning set forth in the Agreement
for Lease.
"TAKING" has the meaning set forth in paragraph (a) of Section 16
hereof.
"TERMINATION COVENANTS" means the following covenants made by the
Lessee to the Lessor as a condition to the sale of the Project pursuant to
Section 12 hereof: on the date of such sale (a) no Event of Loss, Taking,
Termination Event, Event of Default or Potential Default shall have occurred and
be continuing; (b) the Project shall not be undergoing any repairs, additions or
alterations that could reasonably be expected to diminish the fair market value,
utility or remaining economic useful life which the Project would have had at
such time had such repair, addition or alteration not been undergoing (assuming
the Project is in the condition required hereby); (c) the Project shall be in
compliance with all Legal Requirements; (d) the Lessee shall, at its expense,
deliver to the Lessor an environmental audit satisfactory in scope and content
to the Lessor and Assignee (in each case in their reasonable discretion), to the
effect that (i) no Environmental Matters exist with respect to the Project or
the Premises as a result of the construction, operation and maintenance of the
Project and (ii) the Project may be operated in accordance with the Project
Contracts and in compliance with Environmental Requirements; and (e) the Lessee
shall deliver to the Lessor and Assignee a report of the Independent Engineer
reasonably satisfactory to the Lessor and Assignee, to the effect that the
Project (i) has been maintained in accordance with the terms and conditions of
Section 9 of this Lease and (ii) is capable of being operated and maintained in
accordance with (1) the design specifications required by the EPC Contract, (2)
all Legal Requirements and (3) prudent industry practices.
"TERMINATION EVENT" has the meaning set forth in paragraph (a) of
Section 14 hereof.
"TERMINATION NOTICE" has the meaning set forth in paragraph (a) of
Section 12 hereof.
"UNRECOVERED LIABILITIES AND JUDGMENTS" means all liabilities of an
Indemnified Person, including, without limitation, taxes, losses, obligations,
claims, damages (including, without limitation, Environmental Damages),
penalties, premiums, make-whole payments, causes of action, suits, costs and
expenses (including, without limitation, reasonable attorneys', experts',
consultants' and accountants' fees and expenses) or judgments of any nature
against an
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THIS LEASE AGREEMENT IS
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Indemnified Person relating to or in any way arising during the term of the
Agreement for Lease and relating to or in any way arising out of (i) the
Lessor's acquisition, ownership and financing of the Project, (ii) the Lessor's
acquisition of a fee interest in the Premises, (iii) the Lessee's construction
of the Project, (iv) the operation or use of the Premises or the Project by the
Lessee or any agent or subcontractor of the Lessee or (v) the Project Contracts,
in each case to the extent that such Indemnified Person has not received full
indemnification for such liabilities or judgments by the Lessee; PROVIDED,
HOWEVER, that this definition of Unrecovered Liabilities and Judgments shall not
include any taxes for which the Lessee is not obligated to indemnify such
Indemnified Person under the provisions of paragraph (b) of Section 11 hereof.
"VARIABLE COMPONENT OF BASIC RENT" has the meaning set forth in the
definition of Basic Rent in Section 1 hereof.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE.
(i) The Lessee represents and warrants to the Lessor:
(a) CORPORATE MATTERS. The Lessee (i) has been duly formed and is
validly existing as a limited liability company in good standing under the laws
of the State of Delaware, (ii) has full power, authority and legal right to own
and operate its properties and to conduct its business as presently conducted
and to execute, deliver and perform its obligations under this Lease, the
Agreement for Lease, the Project Contracts, the Pledge Agreement and the
Lessee's Consent, and (iii) is duly qualified to do business as a foreign
limited liability company in good standing in the State of New Hampshire and in
each other jurisdiction in which its ownership or leasing of properties or the
conduct of its business requires such qualification.
(b) BINDING AGREEMENT. This Lease has been duly authorized,
executed and delivered by the Lessee and, assuming the due authorization,
execution and delivery of this Lease by the Lessor, this Lease is a legal, valid
and binding obligation of the Lessee, enforceable according to its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(c) COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance by the Lessee of this Lease, the Project Contracts, the Pledge
Agreement and the Lessee's Consent will not result in any violation of any
provision of the certificate of formation or the operating agreement of the
Lessee, do not require member approval or the approval or consent of any trustee
or holders of indebtedness of the Lessee except such as have been obtained prior
to the date hereof and will not conflict with or result in a breach of any terms
or provisions of, or constitute a default under, or result in the creation or
imposition of any Lien (other than a Permitted Lien) upon any property or assets
of the Lessee under, any indenture, mortgage or other agreement or instrument to
which the Lessee is a party or by which it or any of its property is bound, or
any existing applicable law, rule, regulation, license, judgment, order or
decree of any government, governmental body or court having jurisdiction over
the Lessee or any of its activities or properties.
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THIS LEASE AGREEMENT IS
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(d) GOVERNMENTAL CONSENTS. There are no consents, licenses, orders,
authorizations, approvals, Environmental Approvals, Permits (as defined in the
Agreement for Lease), waivers, extensions or variances of, or notices to or
registrations or filings with any governmental or public body or authority (each
a "GOVERNMENTAL ACTION"), (i) which are or will be required in connection with
the valid execution, delivery and performance of this Lease or the Project
Contracts, (ii) which are or will be required in connection with any
participation by the Lessor or Assignee in the transactions contemplated by the
Project Contracts or this Lease, (iii) which are or will be required in
connection with the acquisition or ownership by the Lessor of the Project and
all equipment for use with respect thereto, (iv) which are or will be required
for the lease of the Project or the operation of the Project in accordance with
and as contemplated by the Project Contracts and this Lease or (v) which are or
will be required to be obtained by the Lessor, the Lessee, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Leasing, Assignee or any Affiliate of the foregoing, during the term of this
Lease, the Agreement for Lease or the Project Contracts, with respect to the
Project or the Project Contracts, except such Governmental Actions (A) each of
which either (1) has been duly obtained, given or accomplished, is in full force
and effect, is final and is not under appeal, with a true copy thereof delivered
to the Lessor or (2) is to be obtained but is not now required (but which will
be able to be obtained in the ordinary course of business on or before the time
required), (B) as may be required by applicable law not now in effect, (C) which
may be required as a result of the business, properties or activities of the
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, Assignee or any Affiliate of the
foregoing and which are not solely dependent on the nature of the Project or the
business of the Lessee, or (D) the failure to obtain which, individually or in
the aggregate, (x) will not subject either the Lessor or any Assignee to any
danger of civil liability for which the Lessor or such Assignee is not
adequately indemnified or subject the Lessor or any Assignee to any danger of
criminal liability, provided that, in the case of any such danger of criminal
liability, any grace period in which to cure such failure shall not be
applicable and (y) could not reasonably be expected to have a material adverse
effect on (a) the construction, operation, maintenance, leasing, ownership, use,
value or regulatory status of the Project (provided, that a material adverse
effect with respect to the regulatory status of the Project shall only be deemed
to occur if, as a result of the failure to obtain such Governmental Actions, the
Lessee is unable to comply with the provisions of paragraphs (i)(cc) and (ii)(i)
of Section 2 hereof or a Termination Event shall occur), (b) the ability of the
Lessee to observe and perform its obligations under this Lease, the Agreement
for Lease or the Project Contracts in a timely manner or the ability of the
Guarantor to perform its obligations under the Guaranty in a timely manner, (c)
the business, assets, properties, financial condition, operations or prospects
of the Guarantor, or (d) the rights or interests of the Lessor or Assignee under
this Lease, the Agreement for Lease, the Guaranty or the Project Contracts.
(e) FINANCIAL STATEMENTS. The Lessee has furnished to the Lessor
copies of the Guarantor's Reports on Form 10-K for the year ended December 31,
1999 and the Guarantor's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2000 and June 30, 2000. The financial statements contained in such
documents fairly present the financial position, results of operations and
consolidated statements of cash flows of the Guarantor as of the dates and for
the periods indicated therein and have been prepared in accordance with GAAP.
(f) CHANGES. Except as disclosed in the Memorandum or in public
filings made by the Guarantor with the SEC after the date of the Memorandum and
prior to the date hereof, copies of which are attached as Schedule 2(f) hereto,
since December 31, 1999, there has
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THIS LEASE AGREEMENT IS
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been no change in the business, assets, properties, revenues, financial
condition, operations or prospects of the Project or the Guarantor which has
caused, directly or indirectly, the total common shareholders equity of the
Guarantor and its subsidiaries as determined on a consolidated basis and as
reflected in accordance with GAAP on the Guarantor's most recent Financial
Statements to fall below $4,610,510,000.
(g) LITIGATION. There is no action, suit, claim, counterclaim,
proceeding or investigation, at law or in equity, by or before any court,
governmental body, agency, commission or other tribunal now pending or, to the
Lessee's knowledge, threatened against or affecting the Project, the Lessee, the
Guarantor or any subsidiaries of the Guarantor, or any property or rights of the
Lessee or the Guarantor or questioning the enforceability of this Lease or the
Project Contracts, which, if adversely determined, will result, directly or
indirectly, in a Material Adverse Effect.
(h) INTELLECTUAL PROPERTY. All Intellectual Property Rights
required for the construction and operation of the Project in accordance with
and as contemplated by the Project Contracts or this Lease, have been or will in
the ordinary course of business be timely obtained and, once obtained, will
remain in full force and effect. The Lessee owns or has the right to use all
technology, licenses, patents and other proprietary rights that are material and
are required to perform the Lessee's obligations under the Project Contracts
without any conflict with the rights of others.
(i) PROJECT CONTRACTS. Each Project Contract to which the Lessee is
a party has been duly authorized, executed and delivered by the Lessee and,
assuming the due authorization, execution and delivery of the Project Contracts
by the other parties thereto, is a legal, valid and binding obligation of the
Lessee, enforceable according to its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law). The Lessee has not received
notice from, nor is there any basis for the receipt of a notice from, any party
to a Project Contract that (i) such party is terminating any Project Contract,
(ii) a default has occurred under any Project Contract or any Person has alleged
that a default has occurred under any Project Contract or (iii) there are any
claims for damages existing as a result of the Lessee's performance of or its
failure to perform any of its obligations under any Project Contract. No default
has occurred and is continuing under any Project Contract on the date hereof.
(j) COMPLIANCE WITH LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS.
The construction, operation, use, and physical condition of the Project (i) are
in full compliance with all Insurance Requirements and all premiums due with
respect to such Insurance Requirements have been paid, and (ii) are in full
compliance with all Legal Requirements, except any Legal Requirements, the
noncompliance with which, individually or in the aggregate, (A) will not subject
either the Lessor or any Assignee to any danger of civil liability for which the
Lessor or such Assignee is not adequately indemnified or subject the Lessor or
any Assignee to any danger of criminal liability, provided that, in the case of
any such danger of criminal liability, any grace period in which to cure such
non-compliance shall not be applicable and (B) could not reasonably be expected
to have a material adverse effect on (a) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project
(provided, that a
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material adverse effect with respect to the regulatory status of the Project
shall only be deemed to occur if, as a result of the failure to comply with such
Legal Requirements, the Lessee is unable to comply with the provisions of
paragraphs (i)(cc) and (ii)(i) of Section 2 hereof or a Termination Event shall
occur), (b) the ability of the Lessee to observe and perform its obligations
under this Lease, the Agreement for Lease or the Project Contracts in a timely
manner or the ability of the Guarantor to perform its obligations under the
Guaranty in a timely manner, (c) the business, assets, properties, financial
condition, operations or prospects of the Guarantor, or (d) the rights or
interests of the Lessor or Assignee under this Lease, the Agreement for Lease,
the Guaranty or the Project Contracts.
(k) LIENS. The Project is not subject to any Lien, except for
Permitted Liens, and none of such Permitted Liens could reasonably be expected
to materially interfere with the use or possession of the Project or the use or
exercise by the Lessor of its rights under this Lease or any other document
contemplated hereby or entered into in connection herewith.
(l) AGREEMENT FOR LEASE. The Project has been built in accordance
with the terms of the Agreement for Lease. The representations and warranties of
the Lessee, as agent, in the Agreement for Lease (other than the representation
and warranty contained in subsection 8.10 thereof), are true and correct in all
material respects (except to the extent such representations and warranties
expressly relate specifically to an earlier date, in which case such
representations and warranties were true and correct in all material respects as
of such earlier date).
(m) ERISA. The Lessee has not established and does not maintain or
contribute to any employee benefit plan that is covered by Title IV of the
Employee Retirement Income Security Act of 1974, as amended from time to time
("ERISA").
(n) STATUS OF LESSEE. A majority of the membership interests of the
Lessee is owned (directly or indirectly) beneficially and of record by the
Guarantor.
(o) ENVIRONMENTAL MATTERS.
(i) Except as expressly identified in the Environmental Reports,
the Lessee and the Project comply and have at all times complied with all
material Environmental Requirements applicable to the Project. The Lessee
and the Project shall at all times comply with all material Environmental
Requirements applicable to the Project, including, without limitation, the
use, maintenance and operation of the Project, and all activities and
conduct of business related thereto, including, without limitation, the
treatment, remediation, removal, transport, storage or disposal of any
Contaminant, and no material capital expenditures not included in the
Budget are anticipated to maintain or achieve compliance with Environmental
Requirements;
(ii) The Lessee has obtained or has taken appropriate and timely
steps, as required by Environmental Requirements, to obtain, and shall
obtain and maintain all Environmental Approvals necessary for the
construction and operation of the Project, all such Environmental Approvals
already obtained are in good standing, and the Lessee and the Project are
currently in material compliance and shall remain in material compliance
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with all terms and conditions of such Environmental Approvals. No material
change in the facts or circumstances reported or assumed in the
applications for or the granting of such Environmental Approvals exists.
There are no proceedings pending, or threatened, which would jeopardize the
validity of or ability of the Lessee to obtain and comply with any such
Environmental Approvals in a timely manner;
(iii) The Lessee has not received any notice that any of the third
parties with which the Lessee has arranged, engaged or contracted to
accept, treat, transport, store, dispose or remove any Contaminant
generated or present at the Project, or which otherwise participate or have
participated in activities or conduct related to the Project, were not
properly permitted at the relevant time to perform the foregoing activities
or conduct;
(iv) The Lessee has not received any notice that it or the Project
is subject to any investigation, and is not subject to any judicial or
administrative proceeding, notice, order, judgment, decree or settlement,
alleging or addressing in connection with the Project (A) any violation of
any Environmental Requirements, (B) any Remedial Action, or (C) any
Environmental Damages, claims or liabilities and costs arising from the
Release or threatened Release of any Contaminant;
(v) No Environmental Lien has attached to any portion of the
Project, and the Lessee shall not cause or suffer any action or occurrence
that will allow an Environmental Lien to attach to any portion of the
Project;
(vi) The Lessee has not received, and is not otherwise aware of, any
notice, claim or other communication concerning (A) any alleged violation
of any Environmental Requirements at the Project, whether or not corrected
to the satisfaction of the appropriate authority, (B) any alleged liability
of the Lessee for Environmental Damages arising out of or related to the
Project, or (C) any alleged liability of the Lessee arising out of or
related to the Project for the Release or threatened Release of a
Contaminant at any location, and there exists no writ, injunction, decree,
order or judgment outstanding, nor, to the best knowledge of the Lessee,
after due inquiry, any lawsuit, claim, proceeding, citation, directive,
summons or investigation, pending or threatened, relating to the condition,
ownership, use, maintenance or operation of the Project, or the suspected
presence of Contaminants thereon or therefrom, nor does there exist any
basis for such lawsuit, claim, proceeding, citation, directive, summons or
investigation being instituted or filed;
(vii) To the best knowledge of the Lessee, there has been no Release
of any Contaminants which would constitute a violation of any Environmental
Requirement with respect to the Project and the Lessee shall not cause or
suffer any such Release during the term of this Lease;
(viii) The Project is not listed or proposed for listing on the
National Priorities List ("NPL") pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended
("CERCLA"), or listed on the Comprehensive Environmental Response
Compensation Liability Information System List ("CERCLIS")
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or any similar state list of sites, and the Lessee is not aware of any
conditions at the Project which, if known to a Governmental Authority,
would qualify the Project for inclusion on any such list;
(ix) Neither the Lessee nor, to the best knowledge of the Lessee,
after due inquiry, any contractor engaged by the Lessee in connection with
the Project has transported or arranged for the transport of any
Contaminant from the Project to any facility or site for the purpose of
treatment or disposal which (A) is included on the NPL, or, to the best
knowledge of the Lessee (B) is or was, at the time of disposal, subject to
a Remedial Action requirement (other than routine, anticipated regulatory
requirements, including, but not limited to, closure and post-closure
related corrective action obligations affecting closed solid waste
management units at such facility) issued under the federal Resource
Conservation and Recovery Act or any state, local or foreign solid or
hazardous waste regulatory law, or (C) at the time of the disposal was
subject to a governmental enforcement action with respect to alleged
violations of any Environmental Requirements and the Lessee shall use its
best efforts not to suffer or permit any such arrangement for treatment or
disposal during the term of this Lease;
(x) Neither the Lessee nor, to the best knowledge of the Lessee,
after due inquiry, any contractor engaged by the Lessee in connection with
the Project has engaged in or permitted, nor shall the Lessee engage in or
permit, any operations or activities upon, or any use or occupancy of the
Project or any portion thereof, for the purpose of or in any way involving
the illegal or improper release, discharge, refining or dumping of any
Contaminant or the illegal or improper handling, storage, use or disposal
of any Contaminant, nor has the Lessee or any other Person caused any
Contaminant to be deposited, released, stored, disposed, leached or
otherwise come to be located on, under, in or about the Premises, nor to
the knowledge of the Lessee has any Contaminant migrated from the Premises
onto or underneath other properties;
(xi) To the best knowledge of the Lessee, after due inquiry, there
is not constructed, placed, deposited, stored, disposed nor located on the
Project any asbestos in any form which has become or threatens to become
friable. The Lessee shall not cause or suffer the use of any
asbestos-containing material in connection with its management and
operation of the Project during the term of this Lease (other than any
asbestos-containing equipment used by subcontractors of the Lessee during
the construction of the Project in compliance with all Environmental
Requirements and to the extent the Lessor has adequate insurance or
indemnification with respect thereto under the EPC Contract);
(xii) To the best knowledge of the Lessee, after due inquiry, there
is not constructed, placed, deposited, released, stored, disposed, leached
nor located on the Project any polychlorinated biphenyls ("PCBs") or
transformers, capacitors, ballasts, or other equipment which contain
dielectric fluid containing PCBs. The Lessee shall not cause or suffer the
use of any article containing PCBs at or on the Project during the term of
this Lease (other than any equipment containing PCBs used by subcontractors
of the Lessee during the construction of the Project in compliance with all
Environmental Requirements and to the extent the Lessor has adequate
insurance or indemnification with respect thereto under the EPC Contract);
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(xiii) The Lessee has no liability, and has neither received nor is
otherwise aware of any notice, claim or other communication alleging
liability on the part of the Lessee, for the violation of any Environmental
Requirements, for Environmental Damages, or for the Release or threatened
Release of any Contaminant in connection with the Project; and
(xiv) None of the matters identified in the Environmental Reports,
individually or in the aggregate, could reasonably be expected to result,
directly or indirectly, in a Material Adverse Effect.
(p) PROJECT AUTHORIZATIONS. The Lessee has obtained, or shall in
the ordinary course of business obtain prior to the time required, all
certificates, permits, licenses, authorizations and approvals, including
Environmental Approvals, required (i) in the management and operation of the
Project in accordance with and as contemplated by the Project Contracts or this
Lease, (ii) for any change or modification of the use of the Project, (iii) for
construction of any improvements thereto and (iv) for acquisition of equipment
related to the Project for use with respect thereto, except where the failure to
obtain any permits, licenses, authorizations or approvals, individually or in
the aggregate, (A) will not subject either the Lessor or any Assignee to any
danger of civil liability for which the Lessor or such Assignee is not
adequately indemnified or subject the Lessor or any Assignee to any danger of
criminal liability, provided that, in the case of any such danger of criminal
liability, any grace period in which to cure such failure shall not be
applicable and (B) could not reasonably be expected to have a material adverse
effect on (a) the construction, operation, maintenance, leasing, ownership, use,
value or regulatory status of the Project (provided, that a material adverse
effect with respect to the regulatory status of the Project shall only be deemed
to occur if, as a result of the failure to obtain such permits, licenses,
authorizations or approvals, the Lessee is unable to comply with the provisions
of paragraphs (i)(cc) and (ii)(i) of Section 2 hereof or Za Termination Event
shall occur), (b) the ability of the Lessee to observe and perform its
obligations under this Lease, the Agreement for Lease or the Project Contracts
in a timely manner or the ability of the Guarantor to perform its obligations
under the Guaranty in a timely manner, (c) the business, assets, properties,
financial condition, operations or prospects of the Guarantor, or (d) the rights
or interests of the Lessor or Assignee under this Lease, the Agreement for
Lease, the Guaranty or the Project Contracts. A list of all such certificates,
permits, licenses, authorizations and approvals required by all applicable law
in effect on the date hereof is attached as Exhibit C hereto.
(q) COMPLIANCE WITH PROJECT CONTRACTS. The physical condition of
the Project as it is presently constructed complies with all material
requirements of each Project Contract and will enable the Lessee to perform all
obligations under the Project Contracts and this Lease in accordance with their
respective terms.
(r) PLEDGE AGREEMENT. The Pledge Agreement has been duly
authorized, executed and delivered by the Lessee and, assuming the due
authorization, execution and delivery of the Pledge Agreement by the Lessor, is
a legal, valid and binding obligation of the Lessee, enforceable according to
its terms, subject, as to enforceability, to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law). The
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Pledge Agreement creates a valid first priority security interest in the
Collateral (as defined in the Pledge Agreement) now in existence, securing the
payment of the Secured Obligations (as defined in the Pledge Agreement), all
action necessary to perfect the security interest in the Collateral has been
taken, and such security interest has priority over any other Lien on the
Collateral, except for Permitted Liens.
(s) OPERATION OF THE PROJECT. The Project will, on and after the
achievement of Substantial Completion (as such term is defined in the Agreement
for Lease), be able (i) to be operated in compliance with all material
Governmental Actions, the technical parameters and other continuing requirements
of the Project Contracts and this Lease for a period of at least 25 years
thereafter, and (ii) to be mechanically operated in compliance with all existing
material Governmental Actions for a period of at least 30 years thereafter.
(t) UTILITY AVAILABILITY. All utilities, services, facilities and
Interconnections required for the operation of the Project (including, but not
limited to, potable water supply, gas, electric and telephone facilities) are
available for use at the boundaries of the Premises or within a reasonable
distance from the Premises, and arrangements on commercially reasonable terms
have been made for the provision of such services to the Project.
(u) GUARANTY. The Guaranty has been duly authorized, executed and
delivered by the Guarantor and the Guaranty constitutes a legal, valid and
binding obligation of the Guarantor, enforceable according to its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(v) DISCLOSURE. None of the financial statements referred to in
paragraph (i)(e) of Section 2 hereof, or the information described in the
Memorandum (insofar as such information relates to the Lessee, the Guarantor,
any Affiliate of the Guarantor or the Project), contained as of its date any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the representations contained herein or the
statements contained therein not misleading in light of the circumstances under
which they were made.
(w) NO DEFAULT. Neither the Lessee nor the Guarantor is in
violation of or in default under or with respect to any Legal Requirement in any
respect which will result, directly or indirectly, in a Material Adverse Effect.
(x) TAXES. the Lessee has filed or caused to be filed all tax
returns which are required to be filed by it, and has paid all taxes shown to be
due and payable on said returns or on any assessments made against it or any of
its assets and properties and has paid all other taxes, fees or other charges
imposed on it by any Governmental Authority (except taxes, fees and charges
subject to a Permitted Contest).
(y) BUDGETS. All budgets (including the Budget) furnished or to be
furnished to the Lessor and Assignee by or on behalf of the Lessee and the
summaries of significant assumptions related thereto, if any (i) have been and
will be prepared with due care in accordance with prudent business practices,
(ii) fairly present, and will fairly present the
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THIS LEASE AGREEMENT IS
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Lessee's expectations as to the matters covered thereby as of their date, (iii)
are based on, and will be based on, assumptions that are reasonable as to all
factual and legal matters material to the estimates therein (including interest
rates and construction and financing costs) and (iv) are in all material
respects consistent with, and will be in all material respects consistent with,
the provisions of this Lease, the Agreement for Lease and the Project Contracts.
The Budget includes all costs and expenses that could reasonably be expected to
be incurred in connection with the construction of the Project.
(z) NATURE OF LESSEE'S BUSINESS. The Lessee (A) has not engaged in
any business other than as contemplated by paragraph (ii)(j) of Section 2
herein, (B) is not a party to any contract, operating lease, agreement or
commitment other than as contemplated by paragraph (ii)(j) of Section 2 herein
and (C) has not created, assumed or incurred any Indebtedness other than
Permitted Indebtedness.
(aa) CEI NOTE. The CEI Note has been duly authorized, executed and
delivered by the Guarantor and is a legal, valid and binding obligation of the
Guarantor, enforceable according to its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(bb) PUBLIC UTILITY HOLDING COMPANY ACT. The Lessee is not subject
to regulation under the 1935 Act as a "public-utility company" or a "holding
company", within the meaning of the 1935 Act (except that the Lessee may become
an Affiliate of a holding company registered under the 1935 Act so long as the
rights of the Lessee under the Project Contracts and the rights of the Lessor or
Assignee under this Lease or any other document contemplated hereby are not
adversely affected).
(cc) REGULATION. Neither the Lessor nor any Assignee nor any of
their respective Affiliates is or will be, solely by reason of (i) its entering
into this Lease or any other document contemplated hereby, (ii) the acquisition,
ownership, leasing or financing of the Project (or any part thereof) or (iii)
the operation of the Project (or any part thereof) in accordance with and as
contemplated by the Project Contracts and this Lease, during the term of this
Lease or the Agreement for Lease, be subject to financial, rate or other similar
regulation as, a public utility, or an electric utility or a public utility
holding company under a Legal Requirement (including any Legal Requirement (A)
under the 1935 Act, (B) imposed by any state or local public utility commission
or other similar regulatory body, authority or group having jurisdiction over
the Lessor or the Lessee or any such transactions or activities, or (C) under
the Federal Power Act, as amended).
(ii) The Lessee covenants to the Lessor:
(a) LIMITATION ON INDEBTEDNESS. The Lessee will not incur, assume,
suffer to exist, directly or indirectly guaranty or at any time be liable with
respect to any Indebtedness except Indebtedness of the Lessee evidenced by this
Lease, the Agreement for Lease and any Permitted Indebtedness.
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(b) DISTRIBUTIONS IN DEFAULT. So long as an Event of Default
pursuant to paragraph (a) of Section 18 of this Lease has occurred and is
continuing, the Lessee will not make any distributions or return of capital of
any kind to any of its equity investors or any payment of management fees.
(c) MAINTENANCE OF EXISTENCE. The Lessee will remain a validly
existing limited liability company in good standing under the laws of the State
of Delaware until the expiration or other termination of this Lease and the
indefeasible payment of all amounts owing hereunder.
(d) LIENS. The Lessee will not create, incur, assume or permit to
exist any Lien upon any of its Assets, other than Permitted Liens.
(e) SUBSIDIARIES. The Lessee will not acquire or create an equity
interest in any Person.
(f) PENSION PLANS. The Lessee will not establish or become party to
any employee benefit plan that is covered by Title IV of ERISA.
(g) DELIVERY OF INFORMATION. The Lessee shall deliver to the Lessor
and Assignee from time to time, (i) (A) promptly, and in any event not more than
120 days after the end of each fiscal year of the Lessee, copies of the Lessee's
annual financial statements and promptly, and in any event not more than 60 days
after the end of each fiscal quarter of the Lessee, copies of the Lessee's
quarterly unaudited financial statements, both prepared in accordance with GAAP,
and (B) promptly, and in any event not more than 120 days after each fiscal year
of the Guarantor, copies of the Guarantor's Annual Report on Form 10-K and
promptly, and in any event not more than 60 days after the end of each fiscal
quarter of the Guarantor, copies of the Guarantor's Quarterly Reports on Form
10-Q and promptly, and in any event within 30 days after filing, any current
reports on Form 8-K or other material reports the Guarantor files with the SEC
pursuant to the Securities Exchange Act of 1934, PROVIDED that filing with the
SEC of the Guarantor's Annual Report on Form 10-K and Quarterly Reports on Form
10-Q prepared in compliance with the requirements therefor shall be deemed to
satisfy the requirements of clause (i)(B) of this paragraph (g), (ii) promptly,
and in any event within five Business Days upon request, such other information
with respect to the Lessee's or the Guarantor's operations, business,
properties, assets, financial condition or litigation as the Lessor or Assignee
shall reasonably request, (iii) promptly, and in any event within five Business
Days after a Responsible Officer obtains knowledge of any Event of Default,
Potential Default, Event of Loss, Taking, Termination Event or any default or
alleged default by the other party thereto under any Project Contract, or of any
claims for damages existing as a result of the Lessee's performance of, or its
failure to perform any of its obligations under any Project Contract, a
certificate of a Responsible Officer specifying the nature and period of
existence of such Event of Default, Potential Default, Event of Loss, Taking,
Termination Event or default under any Project Contract, and what action, if
any, the Lessee has taken, is taking, or proposes to take with respect thereto,
(iv) promptly, and in any event within five Business Days after a Responsible
Officer obtains knowledge of any change in the financial condition or business
of the Lessee which will result, directly or indirectly, in a Material Adverse
Effect, or of any liabilities or obligations arising as a result of tortious
action or Environmental Damages or in respect of
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governmental fines or obligations (other than taxes) or liabilities or
obligations arising as a result of Environmental Matters, or of any change in
the financial condition or business of the Guarantor which will result, directly
or indirectly, in a Material Adverse Effect, or of any litigation of the type
described in paragraph (i)(g) of this Section 2, a certificate of a Responsible
Officer describing such change, liabilities, obligations or litigation, as the
case may be, and what action, if any, the Lessee has taken, is taking, or
proposes to take with respect thereto, (v) simultaneously with the delivery of
each set of annual and quarterly financial statements referred to in clause (i)
of this paragraph (g), a certificate of a Responsible Officer stating, to the
best knowledge of such Responsible Officer after reasonable inquiry, whether
there exists on the date of such certificate any Event of Default, Potential
Default, Event of Loss, Taking, Termination Event, default under any Project
Contract, and if any Event of Default, Potential Default, Event of Loss, Taking,
Termination Event, or default under any Project Contract exists, specifying the
nature and period of existence thereof and what action, if any, the Lessee has
taken, is taking, or proposes to take with respect thereto and (vi) promptly,
and in any event within five Business Days after a Responsible Officer obtains
knowledge of any legal, governmental or regulatory proceeding that will result,
directly or indirectly, in a Material Adverse Effect, a certificate of a
Responsible Officer, describing each such proceeding and what action, if any,
the Lessee has taken, is taking, or proposes to take with respect thereto.
(h) PUBLIC UTILITY HOLDING COMPANY ACT. The Lessee is not and shall
not become a "public-utility company" or a "holding company" within the meaning
of the 1935 Act, is not and shall not become an Affiliate of a holding company
registered under the 1935 Act (except that the Lessee may become an Affiliate of
a holding company registered under the 1935 Act so long as the rights of the
Lessee under the Project Contracts and the rights of the Lessor or Assignee
under this Lease or any other document contemplated hereby are not adversely
affected), and is not and shall not become regulated as a public-utility company
or a holding company under any other Federal, state or local Legal Requirement
(except that the Lessee may become regulated as a public utility company so long
as the rights of the Lessee under the Project Contracts and the rights of the
Lessor and any Assignee under this Lease and any other documents contemplated
hereby are not adversely affected).
(i) REGULATION. Neither the Lessor nor any Assignee nor any of
their respective Affiliates shall, solely by reason of (i) its entering into
this Lease or any other document contemplated hereby, (ii) the acquisition,
ownership, leasing or financing of the Project (or any part thereof) or (iii)
the operation of the Project (or any part thereof) in accordance with and as
contemplated by the Project Contracts and this Lease, during the term of this
Lease or the Agreement for Lease, be subject to financial, rate or other similar
regulation as, a public utility, or an electric utility or a public utility
holding company under a Legal Requirement (including any Legal Requirement (A)
under the 1935 Act, (B) imposed by any state or local public utility commission
or other similar regulatory body, authority or group having jurisdiction over
the Lessor or the Lessee or any such transactions or activities, or (C) under
the Federal Power Act, as amended).
(j) LESSEE'S BUSINESS. The Lessee shall not construct or operate
any generation facility that is not subject to the terms of this Lease or the
Agreement for Lease. The Lessee will not enter into any business other than (i)
as contemplated by the terms of the Project Contracts, (ii) the constructing,
operating, maintaining, repairing and equipping of the Project as
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agent of the Lessor pursuant to the Agreement for Lease, (iii) the leasing and
financing of the Project pursuant to this Lease and the documents incidental
hereto, and (iv) matters incidental to the performance of its obligations under
clauses (i), (ii) and (iii) of this sentence. The Lessee shall not enter into
any contract other than those contracts (1) contemplated by this Lease or (2) in
connection with matters contemplated by the foregoing clauses (i), (ii), (iii)
and (iv); PROVIDED that (a) the Lessee shall collaterally assign to the Lessor,
at no cost to the Lessor, all of the Lessee's right, title and interest in such
contracts pursuant to the Pledge Agreement, and (b) if (x) such contract will
adversely affect the Lessee's ability to perform its obligations under this
Lease or the Project Contracts, or (y) unless such contract is related to the
operation, maintenance or repair of the Project, such contract involves
Indebtedness or other obligations (contingent or otherwise) that after the
Project achieves Substantial Completion would exceed in the aggregate $1,000,000
in any four year period, the Lessee shall be required to obtain the consent of
the Lessor and Assignee to such contract prior to its execution.
(k) PROJECT INFORMATION. The Lessee shall furnish to the Lessor and
Assignee:
(i) all material written communications relating to any pending or
threatened investigations, claims or proceedings with respect to any
Governmental Action or proposing to amend, modify or affect any
Governmental Action then required to be in effect with respect to the
Project;
(ii) written notice of the occurrence of any event giving rise (or
that could reasonably be expected to give rise) to a claim under any
insurance policy maintained pursuant to the terms of this Lease in an
amount greater than $1,000,000 together with copies of any document
relating thereto (including copies of any such claim) in the possession or
control of the Lessee;
(iii) promptly upon its execution, a copy of any Replacement O&M
Agreement; and
(iv) promptly upon its execution a copy of any replacement Project
Contract.
(l) CAPITAL EXPENDITURES. The Lessee will not make any Capital
Expenditures other than Capital Expenditures with respect to the Project that
will not result, directly or indirectly, in a Material Adverse Effect.
(m) NOTICE OF ENVIRONMENTAL EVENTS:
(i) The Lessee shall promptly, but in any case within five (5)
Business Days of receiving actual or constructive notice thereof, notify
the Lessor and Assignee if, after the date of this Lease, (A) any
Environmental Matter has occurred involving the Project or any part thereof
(including, but not limited to, the presence, emission or unpermitted
Release of Contaminants or the violation of any applicable Environmental
Requirements) that could reasonably be expected to result in penalties or
other liabilities in excess of $1,000,000 or (B) the Lessee has received
notification that it, the Project or any part thereof is the subject of a
proceeding that could reasonably be expected to result in any ordered
remediation or corrective action or other liability related to an
Environmental
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Matter, the cost of which liability is reasonably expected to exceed
$1,000,000 (each of (A) and (B) an "ENVIRONMENTAL EVENT").
(ii) Following the receipt of a notice pursuant to (i) above, the
Lessor and Assignee, in each case in their sole discretion, may require the
Lessee to cause to be conducted by a qualified environmental consultant
satisfactory in all respects to the Lessor and Assignee, an environmental
audit of the Project or related operation on which the Lessor or Assignee
may rely, the scope of which audit shall be limited to confirming the
magnitude and anticipated cost of the liability resulting from the
Environmental Event and to provide a copy of such environmental
consultant's report on its audit to the Lessor and Assignee.
(iii) The Lessee shall immediately initiate, or cause to be initiated
at no cost to the Lessor or Assignee, such actions as may be necessary to
comply in all respects with all applicable Environmental Requirements and
to alleviate any significant risk to human health or the environment if the
same arises from a condition on or in respect of the Project or any part
thereof, whether existing prior to, on or after the date of this Lease.
Once the Lessee commences such actions, the Lessee shall thereafter
diligently and expeditiously proceed to comply materially and in a timely
manner with all Environmental Requirements and to eliminate any significant
risk to human health or the environment and shall, at the request of the
Lessor or Assignee during the Lease Term, give periodic progress reports on
its compliance efforts and actions.
(n) REPLACEMENT O&M AGREEMENT. The Lessee shall not enter into any
Replacement O&M Agreement on terms and conditions that (i) will result, directly
or indirectly, in a Material Adverse Effect, or (ii) is not consistent with
generally accepted and prudent industry practices for contracts relating to the
operation and maintenance of facilities similar in size and nature to the
Project.
(o) DELIVERY OF FINAL SURVEY. The Lessee shall deliver the Final
Survey to the Lessor and Assignee within forty-five (45) days after the
Effective Date, which shall indicate that no encroachments are to exist by the
Project onto premises outside the boundary lines of the Premises or by existing
improvements located on adjacent premises onto the Premises other than those
that are Permitted Liens or that may have been consented to by the Lessor and
Assignee and all set-back requirements have been complied with; PROVIDED,
HOWEVER, that if any discrepancies exist between the legal description set forth
on the Survey delivered pursuant to paragraph (j) of Section 4 of the Agreement
for Lease and the legal description set forth on the Final Survey, the Lessor
and the Lessee shall cooperate in amending the legal descriptions in all
recorded documents creating or affecting the Premises.
(p) OPERATION OF PROJECT. The Lessee shall obtain in a timely
manner and maintain in full force and effect all Governmental Actions required
to perform its obligations under the Project Contracts and will upon the request
of the Lessor or Assignee provide a copy of each such Governmental Action to the
Lessor and Assignee.
SECTION 3. LEASE OF THE PROJECT
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(a) The date upon which the Lessee receives the Final Advance (as
defined in the Agreement for Lease) under the Agreement for Lease shall be the
"EFFECTIVE DATE". From and after the Effective Date, and during the Lease Term
and any Renewal Term, the Lessor does hereby lease the Project (including a
lease of the Premises) to the Lessee and the Project and the rights and
obligations of the Lessor and the Lessee shall be governed by this Lease and not
the Agreement for Lease, except to the extent otherwise expressly provided in
this Lease and the Agreement for Lease. On the Effective Date, the Lessee shall
be deemed to have certified that all representations and warranties of the
Lessee contained in this Lease (other than the representation and warranty made
in paragraph (i)(f) of Section 2 hereof) are true and correct in all material
respects on and as of the Effective Date. As provided in the Agreement for
Lease, on the Effective Date, Exhibit D to this Lease shall be amended, if
necessary.
(b) Up to three (3) months after the Final Advance (as defined in
the Agreement for Lease), the Lessee may request Completion Advances under the
Agreement for Lease by delivering a Certificate of Increased Cost (as defined in
the Agreement for Lease) to the Lessor and otherwise complying with the terms of
Section 7 of the Agreement for Lease. On or before the fifth Business Day prior
to the date upon which the Lessee receives the Final Advance (as defined in the
Agreement for Lease), the Lessee shall designate the maximum aggregate amount of
all Completion Advances to be requested hereunder (the "COMPLETION AMOUNT").
After such designation the aggregate amount of all Completion Advances shall not
exceed the Completion Amount. The provisions of paragraph (b) of subsection 2.3
and Section 7 of the Agreement for Lease shall govern (i) the designation of the
Completion Amount, (ii) the making of Completion Advances and (iii) any
amendments to Exhibit D to this Lease occasioned thereby. At the time each
Completion Advance is made, the Lessee shall be deemed to have certified that
all representations and warranties of the Lessee contained in this Lease are
true and correct in all material respects on and as of such date.
SECTION 4. OPERATING LEASE.
(a) It is the intent of the Lessee and the Lessor that: (i) this
Lease constitutes an operating lease from the Lessor to the Lessee for purposes
of the SSSSLessee's financial reporting, (ii) this Lease and other transactions
contemplated hereby preserve the ownership of the Project in the Lessee for
federal, state and local income tax and bankruptcy purposes, and (iii) this
Lease grants to the Lessor a Lien on the Project. The Lessee and the Lessor
agree that the Lessor shall be deemed to have a valid and binding security
interest in and Lien on the Project, free and clear of all Liens, other than
Permitted Liens, as security for the obligations of the Lessee under this Lease
and the Agreement for Lease (it being understood and agreed that the Lessee does
hereby ▇▇▇▇▇ ▇ ▇▇▇▇ on, and convey, transfer, assign, mortgage and warrant to
the Lessor and its successors, transferees and assigns, for the benefit of the
Lessor and its successors, transferees and assigns, the Project and any proceeds
or products thereof, to have and hold the same as collateral security for the
payment and performance of the obligations of the Lessee under this Lease and
the Agreement for Lease).
(b) Specifically, without limiting the generality of paragraph (a)
of this Section 4, the Lessee and the Lessor intend and agree that in the event
of any insolvency or receivership proceedings or a petition under the United
States bankruptcy laws or any other applicable insolvency laws or statute of the
United States of America or any State thereof
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THIS LEASE AGREEMENT IS
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affecting the Lessee, the Lessor, Assignee or any collection actions relating
thereto, the transactions evidenced by the Agreement for Lease and this Lease
shall be regarded as loans made by the Lessor to the Lessee.
SECTION 5. ABSOLUTE OBLIGATION.
(a) The obligations of the Lessee to pay all amounts payable
pursuant to this Lease (including specifically and without limitation amounts
payable under Sections 7 and 11 hereof) shall be absolute and unconditional
under any and all circumstances of any character, and such amounts shall be paid
without notice, demand, defense, set-off, deduction or counterclaim and without
abatement, suspension, deferment, diminution or reduction of any kind
whatsoever, except as herein expressly otherwise provided. The obligation of the
Lessee to lease the Project and pay Basic Rent, any Debt Yield-Maintenance
Premium or Modified Call Premium, Additional Rent and any other amounts due
hereunder for the Project accepted for lease pursuant to this Lease is without
any warranty or representation, express or implied, as to any matter whatsoever
on the part of the Lessor or any Assignee or any Affiliate of either, or anyone
acting on behalf of any of them.
THE LESSEE HAS SELECTED THE PROJECT ON THE BASIS OF ITS OWN JUDGMENT.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN UPON A TRANSFER OF THE LESSOR'S
INTEREST IN THE PROJECT TO THE LESSEE OR A THIRD PARTY, NEITHER THE LESSOR NOR
ANY ASSIGNEE NOR ANY AFFILIATE OF EITHER, NOR ANYONE ACTING ON BEHALF OF ANY OF
THEM MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE SAFETY, TITLE, CONDITION,
QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO
SPECIFICATION, OR ANY OTHER CHARACTERISTIC, OF THE PROJECT, OR AS TO WHETHER THE
PROJECT OR THE OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH ANY
LAWS, RULES, REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN THE LESSEE AND THE LESSOR, ANY ASSIGNEE OR ANY INDEMNIFIED
PERSON, THE LESSEE ASSUMES ALL RISKS AND WAIVES ANY AND ALL DEFENSES, SET-OFFS,
DEDUCTIONS, COUNTERCLAIMS (OR OTHER RIGHTS), EXISTING OR FUTURE, AS TO THE
LESSEE'S OBLIGATION TO PAY BASIC RENT AND ALL OTHER AMOUNTS PAYABLE HEREUNDER,
INCLUDING, WITHOUT LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF THE PROJECT, LATENT OR NOT;
(B) ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, ABATEMENT, DEFENSE OR
OTHER RIGHT WHICH THE LESSEE MAY HAVE AGAINST THE LESSOR, ANY ASSIGNEE OR ANY
INDEMNIFIED PERSON FOR ANY REASON WHATSOEVER ARISING OUT OF THIS OR ANY OTHER
TRANSACTION OR MATTER;
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THIS LEASE AGREEMENT IS
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(C) ANY DEFECT IN TITLE OR OWNERSHIP OF THE PROJECT OR ANY TITLE
ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE PROJECT;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR
DESTRUCTION OF, OR DAMAGE TO, THE PROJECT, IN WHOLE OR IN PART, OR CESSATION OF
THE USE OR POSSESSION OF THE PROJECT BY THE LESSEE FOR ANY REASON WHATSOEVER AND
OF WHATEVER DURATION, OR ANY CONDEMNATION, CONFISCATION, REQUISITION, SEIZURE,
PURCHASE, TAKING OR FORFEITURE OF THE PROJECT, IN WHOLE OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE, OWNERSHIP,
OCCUPANCY OR POSSESSION OF THE PROJECT BY THE LESSEE;
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST THE LESSEE OR THE LESSOR OR ANY ASSIGNEE;
(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER
TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS,
AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS LEASE OR ANY OTHER
INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF THE LESSOR OR THE LESSEE
TO ENTER INTO THIS CONTRACT;
(I) THE INVALIDITY OR UNENFORCEABILITY OF ANY ▇▇▇▇ OF SALE EXECUTED
IN CONNECTION WITH THIS LEASE OR ANY OTHER INFIRMITY THEREIN OR LACK OF POWER OR
AUTHORITY OF ANY PARTY THERETO TO ENTER INTO SUCH ▇▇▇▇ OF SALE; OR
(J) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER, WHETHER OR NOT
SIMILAR TO ANY OF THE FOREGOING.
THE LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE
CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE, CANCEL, QUIT, RESCIND
OR SURRENDER THIS LEASE EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF. Each
payment of Basic Rent, any Debt Yield-Maintenance Premium, any Modified Call
Premium, Additional Rent and any other amount due hereunder made by the Lessee
shall be final, and the Lessee, without waiving any other remedies it may have,
will not seek or have any right to recover all or any part of such payment from
the Lessor or any Assignee for any reason whatsoever.
(b) Notwithstanding any other provision contained in this Lease, it
is specifically understood and agreed that neither the Lessor nor any Assignee
nor any Affiliate of
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THIS LEASE AGREEMENT IS
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either, nor anyone acting on behalf of any of them makes any warranties or
representations or has any responsibility to disclose any relevant information,
nor, except as set forth in Section 21 of this Lease, has the Lessor or any
Assignee or any Affiliate of either, or anyone acting on behalf of any of them
made any covenants or undertakings or has any other responsibility or duty, as
to the accounting treatment to be accorded the Lessee or as to the U.S. Federal
or any state income or any other tax consequences, if any, to the Lessee as a
result of or by virtue of the transactions contemplated by this Lease.
SECTION 6. LEASE TERM.
(a) The "INITIAL TERM" shall commence on the Effective Date and
shall continue until June 30, 2010, unless terminated earlier pursuant to
Section 12, 13, 14, 15, 16 or 19 hereof.
(b) The "EXTENDED TERM" shall commence on the first day of the
calendar month following the last day of the Initial Term and shall continue
until June 30, 2022, unless terminated earlier pursuant to Section 12, 13, 14,
15, 16 or 19 hereof.
SECTION 7. RENT AND OTHER PAYMENTS.
(a) The Lessee hereby agrees to pay the Lessor on each Basic Rent
Payment Date, in immediately available funds, as provided in paragraph (e) of
this Section 7, Basic Rent for the semi-annual period (or part thereof) ending
in the month in which such Basic Rent Payment Date falls; PROVIDED that, if the
Effective Date is on or after the Lease Rate Date in any first partial
semi-annual period of the Initial Term, Basic Rent for such partial semi-annual
period shall be payable on the next succeeding Basic Rent Payment Date.
(b) The Lessor shall furnish to the Lessee on the 16th day of each
calendar month in which a Basic Rent Payment Date falls the Semi-Annual Cost of
Project Debt for such semi-annual period, or, if such day is not a Business Day,
on the next succeeding Business Day (the "LEASE RATE DATE"). At least four (4)
days prior to each Basic Rent Payment Date the Lessor shall furnish the Lessee
with a summary of the calculations of Basic Rent for such Basic Rent Payment
Date.
(c) The Lessee hereby agrees to pay on demand all amounts (other
than Basic Rent) payable hereunder, including, without limitation, all amounts
payable to any Indemnified Person pursuant to Section 11 hereof.
(d) Without prejudice to the full exercise by the Lessor of its
rights under Sections 18 and 19 hereof, the Lessee shall pay to the Lessor from
time to time, on demand, as additional rent ("ADDITIONAL RENT") (i) amounts
required to reimburse the Lessor for its obligations, costs and expenses (not
previously included in Basic Rent or Acquisition Cost) incurred in acquiring,
financing (including obtaining, maintaining and terminating equity financing and
all fees payable to the Lessor's general partner under its partnership agreement
and, subject to any applicable restriction described in the Lessee's Consent,
all amounts owing by the Lessor to its partners as a result of a sale of limited
partnership interests by a limited partner of the Lessor or a modification of
the terms of such equity financing) and maintaining security for and exercising
remedies in connection with any such financing and leasing the
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THIS LEASE AGREEMENT IS
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Project (including, without limitation, all obligations, costs and expenses of
the Lessor arising in connection with the termination of any Financing
Arrangement (whether as a result of a default thereunder or otherwise)), all
interest (including, without limitation, interest at a default rate), the Debt
Yield-Maintenance Premium, the Modified Call Premium and other costs, fees and
expenses incurred by the Lessor under any Financing Arrangement (including any
such accruing after the commencement of a bankruptcy or similar proceeding) and
amounts owing under any Project Contracts, and (ii) to the extent legally
enforceable, an amount computed by multiplying (A) all sums not paid by the
Lessee to the Lessor as provided in this Lease on or before the date such
payments are due, by (B) the decimal equivalent of the Semi-Annual Cost of
Project Debt as most recently furnished by the Lessor, and by (C) a fraction
having a numerator equal to the number of days in the period from but excluding
such due date to and including the date of payment thereof (provided that, all
full calendar months during such period shall be computed on the basis of a
30-day month) and a denominator of 360. The Lessee shall also pay to the Lessor
on demand an amount equal to any expenses incurred by the Lessor in collecting
such unpaid sums.
(e) Basic Rent, any Debt Yield-Maintenance Premium, any Modified
Call Premium, Additional Rent and any other amount payable by the Lessee to the
Lessor shall be paid such that immediately available funds in the full amount
due are available by not later than 2:00 p.m. (New York City time) on the date
due, to the account of the Lessor at such bank, or to such account of such other
Person at such bank, or otherwise as the Lessor may from time to time designate.
SECTION 8. RESTRICTED USE; COMPLIANCE WITH LAWS.
(a) The Lessee will not do or permit any act or thing which might
impair, other than normal wear and tear arising out of the proper and normal use
thereof, the value or usefulness of the Project.
(b) The Lessee shall promptly and duly execute, deliver, file and
record, at the Lessee's expense, all such documents, statements, filings and
registrations, and take such further action, as the Lessor shall from time to
time reasonably request in order to establish, perfect and maintain the Lessor's
title to and interest in the Project (other than Removable Improvements) and
Assignee's interest in this Lease or the Project as against the Lessee or any
third party in any applicable jurisdiction. Equipment, machinery, apparatus,
fixtures, structures and installations may be substituted for portions of the
Project (other than Removable Improvements) if (i) the Lessor and Assignee
consent to such substitution, such consent not to be unreasonably withheld or
denied, (ii) the Lessor and Assignee shall determine that such substitution is
consistent with prudent business practices and could not reasonably be expected
to adversely affect the Lessee's ability to perform its obligations under this
Lease and the Project Contracts nor result in a reduction in the value, utility
or remaining economic useful life of the Project (assuming the Project is in the
condition required hereby), or (iii) such substitution is performed by the
Lessee or the Operator in the normal course of operating and maintaining the
Project in accordance with the Project Contracts and is consistent with prudent
industry practices. As equipment, machinery, apparatus, fixtures, structures and
installations are added to, or substituted for, portions of the Project (other
than Removable Improvements), title to such additional or substitute equipment,
machinery, apparatus, fixtures, structures and installations shall
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THIS LEASE AGREEMENT IS
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automatically be transferred to the Lessor and such equipment, machinery,
apparatus, fixtures, structures and installations shall become a part of the
Project and shall be subject to this Lease and title to the existing equipment,
machinery, apparatus, fixtures, structures and installations which are being
substituted for (other than Removable Improvements) shall be released by the
Lessor to the Lessee. The Lessee may, so long as no Potential Default, Event of
Default, Event of Loss, Taking or Termination Event has occurred and is
continuing, remove any Removable Improvement in its entirety. "REMOVABLE
IMPROVEMENTS", for the purposes hereof, shall mean any part that (i) is in
addition to, and not in replacement of or substitution for (x) any part
originally incorporated or installed in or attached to the Project on the
Effective Date or (y) any part in replacement of, or substitution for, any such
part, (ii) is not required to be incorporated or installed in or attached or
added to the Project pursuant to the terms of the Plans (as defined in the
Agreement for Lease), the Project Contracts or this Lease and (iii) can be
removed from the Project without causing damage to the Project or any portion
thereof, without adversely affecting the ability of the Project to operate in
accordance with the Project Contracts and this Lease and without diminishing the
value, utility or remaining economic useful life which the Project would have
had at such time had such alteration, modification or addition not been made
(assuming the Project is in the condition required hereby). Upon the removal by
the Lessee of any Removable Improvement as provided in the immediately preceding
two sentences, title thereto shall, without further act, vest in the Lessee and
such Removable Improvement will no longer be deemed part of the Project. Any
Removable Improvement not removed by the Lessee prior to the return of the
Project to the Lessor hereunder shall remain the property of the Lessor.
(c) The Lessee shall use every reasonable precaution to prevent
loss or damage to the Project and to prevent injury to third persons or property
of third persons. The Lessee shall cooperate fully with the Lessor and all
insurance companies providing insurance pursuant to Section 10 hereof in the
investigation and defense of any claims or suits arising from the ownership,
operation, occupancy or use of the Project; PROVIDED that nothing contained in
this paragraph (c) shall be construed as imposing on the Lessor any duty to
investigate or defend any such claims or suits. The Lessee shall comply and
shall cause all Persons using, operating or occupying the Project to comply with
all Insurance Requirements and Legal Requirements applicable to the Project, to
the Lessee or such Person in connection with such Person's use, operation or
occupancy of the Project (as the case may be) and to the acquiring, titling,
registering, leasing, insuring, using, occupying, operating and disposing of the
Project or any part thereof, and the licensing of operators thereof.
(d) The Lessor or Assignee, or any authorized representative of
either, may during reasonable business hours and upon reasonable prior notice
from time to time inspect the Project and deeds, registration certificates,
certificates of title and related documents, including as to Environmental
Matters, covering the Project wherever the same may be located, but neither the
Lessor nor Assignee shall have any duty to make any such inspection.
(e) The Lessee shall not, without the prior written consent of the
Lessor, permit, or suffer to exist, any Lien upon the Project, including
mechanics' liens or create any Lien upon the Premises, other than Permitted
Liens or Liens which are subject to a Permitted Contest, nor may it assign any
right or interest herein or in the Project. The Lessee shall not relinquish
possession of the Project or any part thereof, except to the Operator, the
General Contractor and to any other contractor for use in performing work on the
Project for the Lessee
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THIS LEASE AGREEMENT IS
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pursuant to and in accordance with the Project Contracts; PROVIDED that such
relinquishment of possession shall in no way affect the obligations of the
Lessee or the rights of the Lessor hereunder and with respect to the Project.
The Lessee may sublease the Project; PROVIDED that (A) the terms of the
instrument of sublease and the identity of the sublessee shall be subject to the
prior written approval of the Lessor and Assignee, which approval shall not be
unreasonably withheld or delayed, (B) each such sublease shall expressly be made
subject and subordinate to the provisions hereof and shall, at the sole option
of the Lessor and Assignee, by its terms be subject to termination upon the
termination for any reason of this Lease, (C) no such sublease shall modify or
limit any right or power of the Lessor or Assignee hereunder or affect or reduce
any obligation of the Lessee hereunder, and all such obligations shall continue
in full force and effect as obligations of a principal and not of a guarantor or
surety, as though no such subletting had been made, and (D) any such sublease
made otherwise than as expressly permitted by this paragraph (e) shall be void
and of no force and effect. As additional security to the Lessor for the
performance of the Lessee's obligations under this Lease, the Lessee hereby
assigns to the Lessor all of its right, title and interest in and to all
subleases permitted hereby and agrees to cause any sublessee to enter into
attornment agreements with the Lessor as the Lessor shall request. The Lessor
shall have the present and continuing right to collect and enjoy all rents and
other sums of money payable under any such sublease, and the Lessee hereby
irrevocably assigns such rents and other sums to the Lessor for the benefit and
protection of the Lessor; PROVIDED that, unless a Potential Default, Event of
Default, Event of Loss, Taking or Termination Event shall have occurred and be
continuing hereunder, the Lessee shall be entitled to collect and enjoy such
rents and other sums. The Lessee shall, within thirty (30) days after the
execution of any such sublease, deliver a conformed copy thereof to the Lessor.
Nothing contained in this Lease shall be construed as constituting the consent
or request of the Lessor, express or implied, to or for the performance by any
contractor, laborer, materialman or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to the Project or any part thereof. Notice is hereby given
that the Lessor will not be liable for any labor, services or materials
furnished or to be furnished to the Lessee, or to anyone holding the Project or
any part thereof through or under the Lessee, and that no mechanics' or other
liens for any such labor, services or materials shall attach to or affect the
interest of the Lessor in and to the Project.
(f) If any Lien or charge of any kind or any judgment, decree or
order of any court or other Governmental Authority (including, without
limitation, any state or local tax lien affecting the Project), whether or not
valid, shall be asserted or entered which would interfere with the due and
timely payment of any sum payable or the exercise of any of the rights or the
performance of any of the duties or responsibilities under this Lease, the
Lessee shall, upon obtaining knowledge thereof or upon receipt of notice to that
effect from the Lessor, take such action to prevent or terminate such
interference.
(g) So long as this Lease is in effect or thereafter if the Lessee
remains as party to any Project Contract as a result of its failure to assign to
the Lessor (or its designated purchaser) all right, title and interest of the
Lessee in and to such Project Contract pursuant to the terms of this Lease, the
Lessee shall not create, incur, assume or permit to exist any Lien upon the
Lessee's rights or obligations with respect to any Project Contract (other than
the Lien of the Pledge Agreement or any Permitted Lien), or sell or assign the
Lessee's interest in any Project Contract, other than as permitted pursuant to a
Financing Arrangement and the Pledge
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THIS LEASE AGREEMENT IS
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Agreement. The Lessee agrees that without the prior written consent of the
Lessor and Assignee, no amendment, modification, supplement or restatement shall
be made to any Project Contract, nor shall any Project Contract be terminated or
replaced by a substitute agreement, nor shall the Lessee grant or request any
waiver pursuant to any Project Contract other than (i) change orders under the
EPC Contract in the manner and to the extent permitted under the Agreement for
Lease, (ii) the termination of the EPC Contract upon making arrangements for a
replacement construction contract, (iii) the termination of the O&M Agreement
upon making arrangements for replacement operating and maintenance services,
(iv) the replacement of the O&M Agreement by any Replacement O&M Agreement, in
the manner and to the extent permitted under paragraph (ii)(n) of Section 2
hereof, and (v) any amendment, modification, supplement, restatement consent or
waiver which could not reasonably be expected to result, directly or indirectly,
in a Material Adverse Effect.
(h) The Project shall be maintained and operated solely as
contemplated by the Project Contracts. The Lessee shall at its own expense take
all actions as may from time to time be necessary so that neither the Lessor,
Assignee nor any of their Affiliates will, solely as a result of entering into
this Lease or any other document contemplated hereby or entered into in
connection herewith or the transactions contemplated hereby or thereby
(including, without limitation, the acquisition, operation, leasing, ownership
or financing of the Project (or any part thereof) or the delivery of
electricity) be deemed to be, or be subject to regulation as, a public utility,
an electric utility or a public utility holding company under any Legal
Requirement, and the Lessee shall promptly and duly prepare and, if necessary,
execute and file, and prepare for execution and filing by the Lessor, Assignee
or any Affiliate thereof, such notices, applications and other documents as
shall be necessary so that the Lessor, Assignee or any such Affiliate, as the
case may be, shall be free of all such regulation. The Lessor, Assignee or any
Affiliate thereof shall cooperate with the Lessee with respect to all actions of
the Lessee required by this paragraph (h).
SECTION 9. MAINTENANCE, IMPROVEMENT AND REPAIR OF THE PROJECT.
(a) Upon the request of the Lessee, the Lessor will, so long as no
Event of Default shall have occurred and be continuing, assign or otherwise make
available to the Lessee any and all rights the Lessor may have under any
vendor's or manufacturer's warranties or undertakings with respect to any
equipment constituting a part of the Project.
(b) The Lessee shall pay all costs, expenses, fees and charges
incurred in connection with the ownership, use, operation or occupancy of the
Project. Except as otherwise provided in Section 15, the Lessee shall at all
times, at its own expense, and subject to reasonable wear and tear, maintain or
cause the Operator to maintain the Project as contemplated by, and during the
term of, the Project Contracts. The Lessee hereby agrees to indemnify and hold
the Lessor and Assignee harmless from and against all costs, expenses, claims,
losses, damages, fines or penalties, including reasonable counsel fees, arising
out of or due to the Lessee's failure to fulfill its obligations under this
paragraph (b).
(c) The Lessee shall pay and discharge: (i) all taxes, assessments,
levies, fees, water and sewer rents and charges, and all other governmental
charges, general and special,
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THIS LEASE AGREEMENT IS
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ordinary and extraordinary, foreseen and unforeseen, which are, at any time,
imposed or levied upon or assessed against (A) the Project, (B) any Basic Rent,
any Additional Rent or other sum payable hereunder or (C) this Lease, the
leasehold estate hereby created, or which arises in respect of the ownership,
operation, occupancy, possession or use of the Project; (ii) all gross receipts
or similar taxes (i.e., taxes based upon gross income which fail to take into
account all customary deductions (e.g., ordinary operating expenses,
depreciation and interest) relating to the Project) imposed or levied upon,
assessed against or measured by any Basic Rent or any Additional Rent or other
sum payable hereunder and all New York Unincorporated Business Tax owing by the
Lessor; (iii) all sales, value added, use and similar taxes at any time levied,
assessed or payable on account of the acquisition, leasing or use of the
Project; and (iv) all charges of utilities and communications services serving
the Project. Notwithstanding the previous sentence, the Lessee shall not be
required to pay any franchise, estate, inheritance, income or similar tax of the
Lessor or any of its Affiliates (other than any tax referred to in clause (ii)
above) unless such tax is imposed, levied or assessed in substitution for any
other tax, assessment, charge or levy which the Lessee is required to pay
pursuant to this paragraph (c); PROVIDED, HOWEVER, that, if at any time during
the term of this Lease, the method of taxation shall be such that there shall be
levied, assessed or imposed on the Lessor a capital levy or other tax directly
on the rents received therefrom, or upon the value of the Project or any present
or any future improvement or improvements on the Project, then all such taxes,
assessments, levies or charges or the part thereof so measured or based, shall
be payable by the Lessee, and the Lessee shall pay and discharge the same as
herein provided. The Lessee will furnish to the Lessor, promptly after demand
therefor, proof of payment of all items referred to above which are payable by
the Lessee. If any such assessments may legally be paid in installments, the
Lessee may pay such assessment in installments. The Lessee will pay and
discharge, or cause to be paid and discharged, all taxes, assessments and
governmental charges or levies imposed upon it or its income or properties,
prior to the date on which penalties attach thereto, except to the extent that
any such tax, assessment, governmental charge or levy is the subject of a
Permitted Contest. The Lessor shall cooperate in good faith with the Lessee with
respect to all matters described in this paragraph (c). Notwithstanding anything
contained herein to the contrary, this paragraph (c) is not intended to increase
the Lessee's obligations to pay any tax under this Lease beyond those taxes for
which the Lessee is obligated to indemnify the Lessor or any other Indemnified
Person under the provisions of paragraph (b) of Section 11 hereof. In addition,
any refund of local real estate taxes payable to the Lessor with respect to the
Project shall be promptly paid over to the Lessee.
(d) So long as no Event of Default, Event of Loss, Taking or
Termination Event shall have occurred and be continuing, the Lessee may, at its
expense, make or permit additions to and alterations to the Project; PROVIDED
that the Lessee has obtained the prior approval of the Lessor and Assignee that
during construction and upon completion of such additions or alterations (i)
neither the fair market value of the Project shall be lessened thereby nor the
condition of the Project impaired, below the value, utility or condition thereof
immediately prior to such action (assuming the Project was then of a condition
and repair required to be maintained pursuant to paragraph (b) of Section 9
hereof), (ii) such work shall be completed in a good and workmanlike manner in
accordance with generally accepted and prudent engineering and construction
practices and in compliance with all applicable Legal Requirements and Insurance
Requirements and (iii) at all times the Project will be capable of delivering
electricity at or above the level of its capability prior to the undertaking of
such
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additions or alterations and will continue to be able to fully perform under
(without any default or excuse to performance) all Project Contracts and this
Lease.
(e) The Lessee agrees to, or to cause the Operator to, maintain at
the Project at all times the necessary equipment in such condition so as to
enable the Project to be operated and maintained in accordance with generally
accepted and prudent industry practices and any other standards required by the
Project Contracts and this Lease. The Lessee shall obtain or cause to be
obtained in a timely manner and maintain or cause to be maintained in full force
and effect all Governmental Actions required for the ownership, construction,
leasing, operation and maintenance of the Project in accordance with and as
contemplated by the Project Contracts and this Lease and as otherwise necessary
to perform its obligations under the Project Contracts and will promptly upon
the request of the Lessor or Assignee provide a copy of each such Governmental
Action to the Lessor and Assignee. The Lessee shall obtain and maintain, or
cause to be obtained and maintained, all patents, licenses and proprietary
rights and technology necessary in connection with the construction, operation
and maintenance of the Project.
(f) The Lessee shall give notice to the Lessor and each Assignee
promptly upon the receipt of any notices from any party to any Project Contract
that (i) such party is amending, modifying or waiving or has proposed to amend,
modify or waive any term of any Project Contract, (ii) such party is commencing
or proposes to commence any dispute resolution procedure under the terms of any
Project Contract, (iii) such party is terminating or has proposed to terminate
any Project Contract, (iv) a default or a force majeure event has occurred under
any Project Contract or any Person has alleged that a default or a force majeure
event has occurred under any Project Contract, or (v) there are claims for
damages existing as a result of the Lessee's performance of or its failure to
perform any of its obligations under any Project Contract.
SECTION 10. INSURANCE.
(a) Insurance pursuant to the Project Contracts. The Lessee shall
maintain or cause to be maintained in full force and effect at all times
insurance required by the terms of the Project Contracts.
(b) Insurance by the Lessee.
(i) The Lessee shall procure (or cause to be procured) at its own
cost and expense and maintain (or cause to be maintained) in full force and
effect at all times on and after the Effective Date (except with respect to
the physical damage described in clause (ii) below), and continuing
throughout the term of this Lease insurance policies with responsible
insurance companies with a Best Insurance Reports rating of "A-" or better
and a financial size category of "X" or higher, or if not rated by Best, an
S&P claims paying ability rating of BBB+ or higher, or, if not rated by
either of the foregoing, the Lessee's insurance companies shall be of
substantially equivalent financial strength and creditworthiness of
insurance companies that maintain such ratings (or such other company
acceptable to the Lessor and each Assignee), with such deductibles as are
approved by the Lessor and each Assignee, and with such limits and coverage
as is
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consistent with prudent industry practices, but in no event less than the
limits and coverage provisions set forth below:
(1) Workers' Compensation Insurance. Workers' compensation
insurance, if the Lessee has any employees, in accordance with
and as required under the laws of the State of New Hampshire.
(2) Employer's Liability Insurance. Employer's liability insurance,
if the Lessee has any employees, providing compensation for
occupational diseases and for injuries sustained by or death
resulting to employees of the Lessee as required by law,
including the laws of each state wherein any work is performed
under the Lease and where employment contracts of such
employees were made, including employer's liability insurance
coverage with a $2,000,000 minimum limit per accident.
(3) General Liability Insurance. Liability insurance on an
occurrence (or AEGIS or EIM claims-made form) basis against
claims for bodily injury (including death) and property damage.
Such insurance shall provide coverage for products-completed
operations, contractual liability, explosion, collapse and
underground coverage, broad form property damage, personal
injury insurance, and hostile fire exception to the pollution
liability exclusion with a $1,000,000 minimum limit per
occurrence and $2,000,000 annual aggregate for combined bodily
injury and property damage.
(4) Automobile Liability Insurance. Automobile liability insurance
against claims for bodily injury (including death) and property
damage covering all owned, leased non-owned and hired motor
vehicles, including loading and unloading, with a $1,000,000
minimum limit per occurrence for combined bodily injury and
property damage and containing appropriate no-fault insurance
provisions wherever applicable.
(5) Excess Insurance. Excess liability insurance on an occurrence
or claims-made basis covering claims in excess of the
underlying insurance described in the foregoing subsections
(2), (3) and (4), with a $100,000,000 minimum limit per
occurrence; PROVIDED, HOWEVER, that in the event the available
limit of liability is less than $50,000,000 due to claims
against such excess liability insurance, the Lessee shall
purchase additional coverage so that the available limit of
liability under such excess liability insurance is not less
than $100,000,000. Notwithstanding the foregoing, the Lessee
shall be entitled to maintain the insurance with respect to
this subsection (5) with EIM, provided that EIM maintains a
Best Insurance Reports rating of "A-" or better and a financial
size category of "IX" or higher.
The amounts of insurance required in the foregoing subsections (2), (3),
(4) and this subsection (5) may be satisfied by the Lessee purchasing coverage
in the amounts specified or by
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any combination of primary and excess insurance, so long as the total amount of
insurance meets the requirements specified above.
(ii) The Lessee shall procure (or cause to be procured) at its own
cost and expense and maintain (or cause to be maintained) in full force and
effect at all times on and after the Effective Date and continuing
throughout the term of this Lease insurance policies with responsible
insurance companies with a Best Insurance Reports rating of "A-" or better
and a financial size category of "X" or higher, or if not rated by Best, an
S&P's claims paying ability rating of BBB+ or higher, or, if not rated by
either of the foregoing, the Lessee's insurance companies shall be of
substantially equivalent financial strength and creditworthiness of
insurance companies that maintain such ratings (or such other company
acceptable to the Lessor and Assignee), with such limits and coverage
provisions sufficient to satisfy the requirements set forth in each of the
Project Contracts, but in no event less than the limits and coverage
provisions set forth below:
Physical Damage Insurance. Property damage insurance on an "all
risk" basis, boiler and machinery insurance on a comprehensive
basis (covering all production machinery, including but not
limited to pressure vessels, electrical turbines, generators,
transformers and other related equipment, motors, air tanks,
boilers, machinery, pressure piping or any other similar
objects) including coverage against damage or loss caused by
earth movement (including, but not limited to, earthquake,
landslide, subsidence and volcanic eruption) fire, lightning
and flood and providing coverage for (1) the Project in an
amount equal to one hundred percent (100%) of the "full
insurable value" of the Project, (2) transit including ocean
marine transit, if applicable, with sub-limits of $5,000,000,
(3) gas, steam and electrical transmission lines along with
related equipment for which the Lessee has an insurable
interest and (4) engineering and other consulting costs up to a
sublimit of $250,000, and permit fees directly incurred in
order to repair or replace damaged insured property in a
minimum amount of $1,000,000. For purposes of this Section
10(b)(ii), "full insurable value" shall mean the full
replacement value of the Project, including any improvements,
equipment, spare parts, fuel and supplies, without deduction
for physical depreciation and/or obsolescence. All such
insurance may be subject to such reasonable and customary
deductibles as is consistent with prudent industry practices
after accounting for the size and value of the Project. Such
insurance shall (1) not include any coinsurance provision, (2)
provide for increased cost of construction and loss to
undamaged property as the result of enforcement of building
laws or ordinances with sub-limits not less than 10% of the
"full insurable value" of the Project, and (3) include debris
removal with sub-limits not less than $1,000,000 or 15% of the
loss, whichever is greater. The earth movement and flood
coverage may be insured with a sub-limit not less than
$100,000,000. The property damage coverage shall not contain an
exclusion for freezing, mechanical breakdown, loss or damage
covered under any guaranty or warranty, or resultant damage
caused by faulty workmanship, design or materials.
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If the insurance company providing the physical damage
insurance is different from the insurance company providing the
boiler & machinery insurance required in this Section 10, then
a joint loss agreement between such companies will be required
and included as part of the respective policies.
(iii) Notwithstanding the foregoing provisions of paragraph (a) and
(b) above, in the event (i) the Lessee is unable to procure, or cause to be
procured, the renewal of any insurance policies in effect on the date of
this Lease and (ii) the Lessee is unable to procure, or cause to be
procured, in the Lessee's judgment, replacement insurance policies with
insurance companies that satisfy the Best Insurance Reports rating and
financial size category standards described in paragraphs (a) and (b)
above, the Lessee shall be permitted to procure, or cause to be procured,
replacement insurance policies for up to twenty-five percent (25%) of the
aggregate required limits of such insurance being replaced, with insurance
companies with a Best Insurance Reports rating below "A-" and a financial
size category below "X".
(iv) Endorsements. All policies of insurance required by this
Section 10 shall provide for waivers of subrogation by the insurers in
favor of the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, the general
partner of the Lessor and its shareholders, officers and directors, the
limited partners of the Lessor and Assignee and their respective officers,
directors, members, trustees and employees (and such other Persons as may
be required by the Project Contracts).
All policies of liability insurance required to be maintained by the
Lessee under paragraphs (b)(i)(3), (4) and (5) of this Section 10 shall be
endorsed as follows:
(1) To provide a severability of interest or cross liability
clause;
(2) Such that the insurance shall be primary and not excess to or
contributing with any insurance or self-insurance maintained by
the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, the
general partner of the Lessor and its shareholders, officers
and directors, the limited partners of the Lessor or Assignee;
(3) To name ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, the general
partner of the Lessor and its shareholders, officers and
directors, the limited partners of the Lessor and Assignee and
their respective officers, directors, members, trustees and
employees (and such other Persons as may be required by the
Project Contracts) as additional insureds; and
(4) To name the Lessor as a named insured.
All policies of insurance required to be maintained by the Lessee under
paragraph (b)(ii) of this Section 10 shall name the Lessor as a named insured
and name ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, the general partner of the
Lessor and its shareholders, officers and directors, the limited partners of the
Lessor and Assignee and its respective officers and employees (and such other
Persons as may be required by the Project Contracts) as additional insureds.
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(v) Waiver of Subrogation. The Lessee hereby waives any and all
claims for recovery from the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Leasing, the general partner of the Lessor and its shareholders, officers
and directors, the limited partners of the Lessor and Assignee and their
respective officers, directors, members, trustees and employees for any and
all loss or damage covered by any of the insurance policies to be
maintained under this Lease to the extent that such loss or damage is
recovered under any such policy. Inasmuch as the foregoing waiver will
preclude the assignment of any such claim to the extent of such recovery,
by subrogation (or otherwise), to an insurance company (or other Person),
the Lessee shall give written notice of the terms of such waiver to each
insurance company which has issued, or which may issue in the future, any
such policy of insurance (if such notice is required by the insurance
policy) and shall cause each such insurance policy to be properly endorsed
by the issuer thereof, or to otherwise contain one or more provisions that
prevent the invalidation of the insurance coverage provided thereunder by
reason of such waiver.
(c) Amendment of Requirements. The Lessor, with the consent of
Assignee, may at any time amend the requirements and approved insurance
companies of this Section 10, due to (i) new information not known by the Lessor
or Assignee on the date of this Lease or (ii) changed circumstances after the
date of this Lease which in the reasonable judgment of the Lessor or Assignee
either renders such coverage materially inadequate or materially reduces the
financial ability of the approved insurance companies to pay claims.
(d) Additional Requirements.
(i) The Lessee shall promptly notify the Lessor and Assignee of any
loss in excess of $100,000 covered by any insurance maintained pursuant to
paragraph (b)(ii) of this Section 10.
(ii) All policies of insurance required to be maintained pursuant to
paragraph (b)(ii) of this Section 10 shall provide that the Collateral
Trustee shall be the lenders' loss payee thereunder and that the proceeds
of such policies shall be payable to the Operating Account pursuant to a
standard first mortgage endorsement substantially equivalent to the Lenders
Loss Payable Endorsement 438BFU or ISO endorsement CP12181091, without
contribution. The Lessor and Assignee shall have the right to join the
Lessee in adjusting any loss in excess of $100,000. All policies (other
than in respect to liability or workers compensation insurance) shall
insure the interests of the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Leasing, the general partner of the Lessor, the limited partners of the
Lessor and Assignee regardless of any breach or violation by the Lessee or
Lessor of any warranties, declarations or conditions contained in such
policies, any action or inaction of the Lessee or the Lessor or others, or
any foreclosure relating to the Project or any change in ownership of all
or any portion of the Project.
(iii) A loss under any insurance required to be carried under
paragraph (b)(ii) of this Section 10 shall be adjusted with the insurance
companies, including the filing in a timely manner of appropriate
proceedings by the Lessee, subject to the approval of the Lessor and
Assignee if such loss is in excess of $100,000. In addition the Lessee may
in its reasonable judgment consent to the settlement of any loss; PROVIDED
that, in the event
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that the amount of the loss exceeds $100,000, the terms of such settlement
shall be consented to by the Lessor and Assignee.
(iv) All policies of insurance required to be maintained pursuant to
paragraph (b) of this Section 10 shall be endorsed so that if at any time
they should be canceled, or coverage shall be reduced in a manner which
affects the interests of the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Leasing, the general partner of the Lessor, the limited partners of the
Lessor or Assignee, such cancellation or reductions shall not be effective
as to the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, the general
partner of the Lessor, officers and directors, the limited partners of the
Lessor and Assignee for 60 days (except for non-payment of any premium,
which shall be for 10 days), after receipt by the Lessor and the Assignee
of written notice from such insurer of such cancellation or reduction.
(v) The Lessee may, at its own cost and expense, prosecute any
claim against any insurer or contest any settlement proposed by any
insurer, and the Lessee may bring any such prosecution or contest in the
name of the Lessor, the Lessee, or both, and the Lessor will join therein
at the Lessee's request, provided that the Lessee shall indemnify the
Lessor against any losses, costs or expenses (including reasonable
attorney's fees) which the Lessor may incur in connection with such
prosecution or contest.
(e) Evidence of Insurance. On the date of this Lease and on an
annual basis at least two days prior to each policy anniversary, the Lessee
shall furnish the Lessor and Assignee with (1) approved certification of all
insurance required under this Section 10 and (2) a schedule of the insurance
policies held by or for the benefit of the Lessee and required to be in force by
the provisions of paragraph (b) of this Section 10. Such certification shall be
executed by each insurer or by an authorized representative of each insurer
where it is not practical for such insurer to execute the certificate itself.
Such certification shall identify underwriters, the type of insurance, the
insurance limits and the policy term and shall specifically list the special
provisions enumerated for such insurance required by paragraph (b) of this
Section 10. Upon request, the Lessee will promptly furnish the Lessor and
Assignee with copies of all insurance policies, binders and cover notes or other
evidence of such insurance relating to the insurance required to be maintained
by the Lessee. The schedule of insurance shall include, to the extent such
information is not included on the insurance certificates, the name of the
insurance company, policy number, type of insurance, major limits of liability
and expiration date of the insurance policies.
(f) Reports. Upon the request of the Lessor, concurrently with the
furnishing of the certification referred to in paragraph (e) above, the Lessee
shall furnish the Lessor and Assignee with a report of an independent broker,
signed by an officer of the broker, stating that in the opinion of such broker,
the insurance then carried or to be renewed is in accordance with the terms of
paragraph (b) of this Section 10 and attaching an updated copy of the schedule
of insurance required by paragraph (e) above. In addition, the Lessee will
advise the Lessor and Assignee in writing promptly of any default in the payment
of any premium and of any other act or omission on the part of the Lessee which
may invalidate or render unenforceable, in whole or in part, any insurance being
maintained by the Lessee pursuant to paragraph (b) of this Section 10.
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(g) Failure to Maintain Insurance. In the event the Lessee fails to
maintain the full insurance coverage required by paragraph (b) of this Section
10, the Lessor or Assignee, upon 30 days' prior notice (unless the
aforementioned insurance would lapse within such period, in which event notice
should be given as soon as reasonably possible) to the Lessee of any such
failure, may (but shall not be obligated to) take out the required policies of
insurance and pay the premiums on the same.
(h) No Duty of the Lessor or Assignee to Verify or Review. No
provision of this Section 10, or any provision of this Lease or any Project
Contract, shall impose on the Lessor or Assignee any duty or obligation to
verify the existence or adequacy of the insurance coverage maintained by the
Lessee, nor shall the Lessor or Assignee be responsible for any representations
or warranties made by or on behalf of the Lessee to any insurance company or
underwriter. Any failure on the part of the Lessor or Assignee to pursue or
obtain the evidence of insurance required by this Lease from the Lessee and/or
failure of the Lessor or the Assignee to point out any non-compliance of such
evidence of insurance shall not constitute a waiver of any of the insurance
requirements in this Lease.
(i) Application of Insurance Proceeds for Loss or Taking. It is
agreed that any insurance payments received as the result of the occurrence of
(i) any Event of Loss, or (ii) any event of Taking described in paragraph (a) of
Section 16 hereof, shall be paid to the Operating Account and disposed of as set
forth in paragraph (c) of Section 15 hereof.
(j) Application of Insurance Proceeds for Other than Loss or
Taking. The insurance proceeds of any property loss to the Project or any event
of Taking described in paragraph (b) of Section 16 hereof will be held in the
Operating Account and applied in payment (or to reimburse the Lessee) for
repairs or replacement in accordance with the terms of paragraph (b) of Section
15 hereof. The Lessee shall be entitled, subject to its compliance with the
immediately succeeding sentence, (i) to receive the amounts so deposited against
certificates, invoices or bills reasonably satisfactory to the Lessor, delivered
to the Lessor from time to time as such work or repair progresses, and (ii) to
direct the investment of the amounts so deposited as provided in paragraph (k)
of this Section 10. To the extent that the Lessor reasonably estimates that the
cost of such work or repair shall exceed the amount of proceeds, the Lessee
shall make adequate provisions for the payment thereof, which provisions shall
be reasonably acceptable to the Lessor and Assignee (as to the terms of the
commitment and the creditworthiness of the funding party). Any moneys remaining
in the aforesaid account after final payment for repairs has been made shall be
paid to the Lessee.
(k) Investment. The Lessor, at the Lessee's instruction, shall
invest the amounts deposited with the Lessor pursuant to paragraph (j) of this
Section 10 in any investments permitted under a Financing Arrangement. Such
investments shall mature in such amounts and on such dates so as to provide that
amounts shall be available on the draw dates sufficient to pay the amounts
requested by and due to the Lessee. Any interest earned on investments of such
funds shall be paid to the Lessee. The Lessor shall not be liable for any loss
resulting from the liquidation of each and every such investment and the Lessee
shall bear the risk of such loss, if any.
(l) Application. Any amount referred to in paragraphs (i), (j) or
(k) of this
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Section 10 which is payable to the Lessee shall not be paid to the Lessee or, if
it has been previously paid to the Lessee, shall not be retained by the Lessee,
if at any time of such payment a Potential Default or an Event of Default, Event
of Loss, Taking or Termination Event shall have occurred and be continuing. In
such event, all such amounts shall be paid to and held by the Lessor as security
for the obligations of the Lessee hereunder or, at the Lessor's option, applied
by the Lessor toward payment of any of such obligations of the Lessee at the
time due hereunder as the Lessor may elect. At such time as there shall not be
continuing any Potential Default, Event of Default, Event of Loss, Taking or
Termination Event, all such amounts at the time held by the Lessor in excess of
the amount, if any, which the Lessor shall have elected to apply as above
provided shall be paid to the Lessee.
(m) "Claims Made" Policies for Certain Types of Insurance. If any
liability insurance required under the provisions of this Section 10 is allowed
to be written on a "claims made" basis, then such insurance shall include the
following:
(i) The retroactive date (as such term is specified in each of such
policies) shall be no later than the date of this Lease; and
(ii) each time any policy written on a "claims made" basis is not
renewed or the retroactive date of such policy is to be
changed, the Lessee shall obtain or cause to be obtained for
each such policy or policies the broadest extended reporting
period coverage, or "tail" reasonably available in the
commercial insurance market for each such policy or policies,
as determined in the reasonable judgment of the Lessor and
Assignee, but in no event less than two years after the
expiration of such policy or policies.
(n) Use or Operation of the Project. The Lessee covenants that it
will not use, occupy or operate the Project or permit the use, occupancy or
operation of the Project at a time when the insurance required by this Section
10 is not in force.
(o) Environmental Impairment Liability Insurance. Within ten (10)
days following the date of this Lease, the Lessee shall provide the Lessor with
(i) a binder of coverage demonstrating that the Lessee has obtained an
environmental impairment liability insurance policy which contains the following
terms and conditions: (A) coverage for third-party claims for on-site bodily
injury and property damage, (B) coverage for third-party claims for off-site
investigation and remediation costs, if deemed property damage or environmental
damage under the policy, (C) coverage for third-party claims for off-site bodily
injury and property damage, (D) coverage for onsite investigation and
remediation, (E) coverage for legal defense costs, (F) policy limit in an amount
not less than $10,000,000, and (G) a self-insured retention not to exceed
$100,000 per claim; and (ii) an Officer's Certificate of the Lessee or the
Guarantor setting forth such insurance and stating that it is in full force and
effect and that all premiums then due thereon have been paid.
SECTION 11. INDEMNITIES.
(a) The Lessee shall indemnify, protect, defend and hold harmless
the Lessor, each general and limited partner of the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, each
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Assignee, and their respective assigns and successors, and each Affiliate of
each of them, and their respective officers, directors, trustees, incorporators,
shareholders, partners (general and limited, including, without limitation, the
general and limited partners of the Lessor), employees, agents and servants
(each of the foregoing an "INDEMNIFIED PERSON") from and against any and all
liabilities (including, without limitation, Environmental Damages and strict
liability in tort), losses, obligations, claims (including, without limitation,
Environmental Damages and strict liability in tort), damages, penalties, causes
of action, suits, costs and expenses (including, without limitation, attorneys',
experts', consultants' and accountants' fees and expenses) or judgments of any
nature relating to or in any way arising out of:
(i) the purchasing, ordering, delivery, acquisition, construction,
title on acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by the Lessee of title and registration
documents, ownership, fee interest in the Premises, use, non-use, misuse,
financing, operation, transportation, repair or control of the Project or any
part thereof, accident, injury, death or property damage on or about the Project
and the Project Contracts, (A) except to the extent that such costs are included
in the Acquisition Cost or Adjusted Acquisition Cost of the Project, (B) except
for any general administrative expenses of the Lessor and (C) except that this
indemnity shall not increase any payment required to be made by the Lessee
pursuant to paragraph (b)(iii)(A) or (c)(iii)(A) of Section 12 of this Lease;
PROVIDED, THAT, this paragraph (a) of Section 11 shall not require
indemnification for any tax, regardless of whether indemnification for any tax
is required under paragraph (b) of this Section 11;
(ii) the assertion of any claim or demand based upon any infringement
or alleged infringement of any patent or other right, by or in respect of the
Project or any part thereof; PROVIDED, HOWEVER, that, upon request of the
Lessee, the Lessor will make available to the Lessee the Lessor's rights under
any similar indemnification arising from any manufacturer's or vendor's
warranties or undertakings with respect to any equipment constituting a part of
the Project;
(iii) any violation, or alleged violation, by the Lessee of this Lease
or the Project Contracts or of any contracts or agreements to which the Lessee
is a party or by which it is bound or of any laws, rules, regulations, orders,
writs, injunctions, decrees, consents, approvals, exemptions, authorizations,
licenses and withholdings of objection, of any governmental or public body or
authority and all other Legal Requirements applicable to the Project;
(iv) any and all Environmental Damages relating to or in any way
arising out of the Project, including, without limitation:
(A) the violation or alleged violation of or compliance or
non-compliance with any Environmental Requirements (i) in connection
with the ownership or operation of the Project, and (ii) by any prior
owner or operator of the Premises in connection with the ownership or
operation of the Premises;
(B) the Release or threatened Release at, to or from any
location of any Contaminants, or Remedial Action or corrective action
(as the latter term is used
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in Section 3004(u), 3004(v), and 3008(h) of the Resource Conservation
and Recovery Act or any equivalent state, local or foreign law) to
address any Contaminants, (i) generated, treated, recycled, stored,
processed, used or disposed by or on behalf of the Lessee at or in
connection with the Project, (ii) generated, treated, recycled,
stored, processed, used or disposed by or on behalf of any prior owner
or operator of the Premises in connection with the ownership or
operation of the Premises, (iii) transported by or on behalf of the
Lessee or any other Person to or from the Project for treatment,
recycling, processing, use or disposal at any location, or (iv)
removed by any Person from any portion of the Project; and
(C) the presence of any Contaminant at, in, on or under the
Project;
(D) the failure to report, disclose or remediate any of the
foregoing or to comply with any applicable consent order or voluntary
agreement with any Governmental Authority relating to any of the
foregoing; and
(E) any allegations of any of the foregoing;
(v) any breach of a representation, warranty or covenant made herein
or which is contained in any certificate, document or financial or other
statement furnished by or on behalf of the Lessee under or in connection
with this Lease;
(vi) any default by the Lessee in the performance or observance of
any term, covenant, condition or obligation contained in this Lease; and
(vii) the Project Contracts.
(b) The Lessee agrees to indemnify, protect, defend and hold harmless each
Indemnified Person from and against all U.S. Federal, state, county, municipal,
foreign or other fees and taxes of whatsoever nature, including, but not limited
to, license, qualification, franchise, rental, withholding, sales, use, net
income, gross income, gross receipts, ad valorem, business, personal property,
real estate, value added, excise, motor vehicle, occupation fees and stamp or
other taxes or tolls of any nature whatsoever, and penalties and interest
thereon (all of which shall be deemed to be taxes), assessed, levied against or
payable by the Lessor or any Indemnified Person, with respect to the Project or
the acquisition, purchase, sale, rental, use, operation, control or ownership of
the Project (including, without limitation, any claim by any Governmental
Authority for transfer tax, transfer gains tax, mortgage recording tax, filing
or other similar taxes or fees in connection with the acquisition of the Project
by the Lessor or otherwise in connection with this Lease) or measured in any way
by the value thereof or by the business of, investment in, or ownership by the
Lessor with respect thereto; PROVIDED, HOWEVER, that this indemnity shall not
apply to (i) any U.S. withholding tax imposed because the recipient or legal or
beneficial owner of the amount being taxed is not a U.S. Person within the
meaning of Section 7701 of U.S. Internal Revenue Code of 1986 by reason of the
failure by an Indemnified Person to comply with any withholding certification or
other procedure required by applicable law as a precondition to any exemption
from, or reduction of, such tax to which such Indemnified Person would be
legally entitled and eligible to make such certification or comply with such
procedure, (ii) as long as no Event of Default shall have occurred and be
continuing,
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taxes that result solely from events (other than the payments of amounts
described in this Lease) that occur and relate to periods after the expiration
or earlier termination of this Lease as provided under Sections 12, 13 and 14
hereof, (iii) any taxes or increase in taxes imposed on an Indemnified Person as
a result of such Indemnified Person not being a citizen or resident of, or not
being organized under the laws of, the United States or any political
subdivision thereof, or having had a permanent establishment or otherwise been
engaged in a trade or business outside the United States, PROVIDED, that such
tax or increase in tax would not have been imposed had such Indemnified Person
been a U.S. Person without a foreign permanent establishment or trade or
business outside the United States, (iv) taxes that result from (a) any
voluntary transfer by an Indemnified Person (including such Indemnified Person's
voluntary imposition of a Lessor Lien) of any interest in or obligation of the
Project or any part thereof or the Lessor or any interest arising under this
Lease other than to which the Lessee consents or which is otherwise expressly
permitted or contemplated by this Lease, the Agreement for Lease or any document
contemplated thereby, or (b) from any voluntary transfer of any interest in an
Indemnified Person or from any involuntary transfer of any of the foregoing
interests in connection with any bankruptcy or other proceeding for the relief
of debtors in which such Indemnified Person is the debtor or any foreclosure by
a creditor of any Indemnified Person; PROVIDED, HOWEVER, that this exclusion
(iv) shall not apply if any such transfer occurs at any time after an Event of
Loss, Event of Default or Termination Event hereunder, or an Event of Default
(as defined in the Agreement for Lease), Event of Project Termination (as
defined in the Agreement for Lease), or Event of Loss (as defined in the
Agreement for Lease) shall have occurred and is continuing, (v) taxes that have
not been paid or credited and that are being contested in accordance with the
provisions of Section 27 or 11(f) hereof, during the pendency of such contest,
(vi) taxes (including, without limitation, taxes in the nature of interest,
penalties, fines and additions to tax), payable as the result of an Indemnified
Person's failure to file, in accordance with the appropriate filing procedures
and on a timely basis, any tax reports, returns or statements (other than any
such tax reports, returns or statements which the Lessee is required to file
pursuant to the terms of this Lease), and (vii) Federal, state, local or other
net income taxes imposed directly upon the Lessor or any Indemnified Person, and
PROVIDED, FURTHER that, subject to clauses (i) through (vi) above, this
indemnity shall apply to (1) such net income taxes imposed by a state or local
government or other taxing authority thereof (A) as a result of the location or
use of the Project within the jurisdiction of such government or taxing
authority or (B) to the extent imposed in whole or in part by reason of a
relationship or asserted relationship between such government or other taxing
authority and the Project or the transactions contemplated herein, (2) such net
income taxes to the extent imposed as a result of the inability to claim, or
disallowance or other loss of deductions customarily allowed in computing net
income (e.g., interest expense, financing, administrative, ordinary operating
expenses and other fees and expenses), by reason of such Indemnified Person's
relationship to the Project, to the extent, if any, that such circumstances
described in clause (1) and (2) above shall have resulted in a net increase in
the overall net income taxes of such Indemnified Person over the net income
taxes that would have occurred without regard to such circumstances and, in each
case to the extent such net income taxes (or benefit of a deduction as the case
may be) would not have been imposed (a) had the Lessee been the titled owner of
the Project under applicable state law and (b) had the Lessor made a secured
loan to the Lessee corresponding to the characterization contemplated by Section
21 hereof, or (3) the Lessor for the New York Unincorporated Business Tax.
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(c) The Lessee shall forthwith upon demand, reimburse any Indemnified
Person for any sum or sums expended with respect to any of the foregoing or,
upon request from any Indemnified Person, shall pay such amounts directly. Any
payment made to, or on behalf of, any Indemnified Person pursuant to this
Section 11 shall be increased to such amount as will, after taking into account
all taxes imposed with respect to the accrual or receipt of such payment (as the
same may be increased pursuant to this sentence), equal the amount of the
payment, reduced by the amount of any savings in such taxes actually realized by
the Indemnified Person as a result of the payment or accrual of the amounts in
respect of which the payment to or on behalf of the Indemnified Person hereunder
is made. To the extent that the Lessee in fact indemnifies any Indemnified
Person under the indemnity provisions of this Lease, the Lessee shall be
subrogated to such Indemnified Person's rights in the affected transaction and
shall have the exclusive right to determine the settlement of such indemnified
claims therein. If any Indemnified Person shall actually realize a tax benefit
as a result of the failure of the Lessee to be treated as the owner of the
Project for Federal, state or local income tax purposes, which tax benefit has
not previously been taken into account in computing the amount of the indemnity
payable with respect to claims under Section 11(b) hereof, then an amount equal
to such tax benefit shall reduce any amount that the Lessee is subsequently
obligated to pay pursuant to Section 11(b) hereof. The determination of whether
a tax benefit has actually been realized or whether such tax benefit has
previously been taken into account by such Indemnified Person, shall be
determined in good faith by such Indemnified Person.
(d) The indemnities and all exclusions to the tax indemnity and tax
savings provisions contained in this Section 11 shall not be affected by any
termination or expiration of this Lease.
(e) Notwithstanding any provisions of this Section 11 to the contrary, the
Lessee shall not indemnify and hold harmless any Indemnified Person against any
claims, liabilities or taxes to the extent arising from the gross negligence or
willful misconduct of such Indemnified Person.
(f) Promptly after receipt by an Indemnified Person of notice of
any claim, action, proceeding or suit against such Indemnified Person, the
Lessor or such Indemnified Person will, if a claim for indemnification is to be
made against the Lessee under this Section 11 with respect thereto, notify the
Lessee in writing of such claim or the commencement of such action, proceeding
or suit, but an omission so to notify will not relieve the Lessee from any
liability which it may have to an Indemnified Person under this Section 11,
except to the extent that any amount for which indemnity is required hereunder
is a direct result of such failure to give notice. In case any such claim,
action, proceeding or suit is brought against an Indemnified Person, and the
Lessor or such Indemnified Person notifies the Lessee of the existence thereof,
the Lessee will be entitled to participate in and, to the extent that it may
wish, assume the defense thereof, with counsel selected by the Lessee and
reasonably satisfactory to such Indemnified Person, it being understood that
▇▇▇▇▇▇▇ ▇▇▇▇ LLP is reasonably acceptable for this purpose. The Indemnified
Person will cooperate with the Lessee in such defense. After notice from the
Lessee to an Indemnified Person of its election to assume the defense of any
claim or action, the Lessee will not be liable to such Indemnified Person under
this Section 11 for any legal or other expenses subsequently incurred by such
Indemnified Person in connection with the defense thereof, unless incurred at
the request or with the consent of the Lessee or unless the Lessee fails, in a
timely manner, to engage such counsel reasonably satisfactory to such
Indemnified Person; PROVIDED, that the Lessee shall not have the right to assume
the defense thereof, to the extent that
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such Indemnified Person shall deliver to the Lessee a written notice waiving the
benefits of the indemnification of such Indemnified Person provided by this
Section 11 in connection with such claim, action, proceeding or suit and any
other claim, action, proceeding or suit whose outcome will be controlled
thereby. Notwithstanding the foregoing, if (i) any criminal proceeding is
brought against an Indemnified Person who is an individual, (ii) the action
threatens to restrain or adversely affect the conduct of the business of an
Indemnified Person, excluding the business of the Lessor's ownership of the
Project, or (iii) independent counsel to an Indemnified Person shall conclude
that there may be defenses available to such Indemnified Person which are
different from, or additional to, and may conflict with those available to the
Lessee, the Lessee shall not have the right to assume the defense of any such
action on behalf of the Indemnified Person if such Indemnified Person chooses to
defend such action, and all reasonable costs, expenses and attorneys' fees
incurred by the Indemnified Person in defending such action shall be borne by
the Lessee; provided, that with respect to claims arising under clause (ii) or
(iii) of this sentence, the Lessee shall have the right, at the Lessee's cost
and expense, to participate in the defense of any such action. Notwithstanding
the assumption of its defense by the Lessee pursuant to this paragraph, any
Indemnified Person shall have the right to employ separate counsel and to
participate in its defense, but, except as set forth in the immediately
preceding sentence, the fees and expenses of such counsel shall be borne by the
Indemnified Person. In addition, the Lessee will not be liable in all events for
any settlement of any claim, action, proceeding or suit unless the Lessee has
consented thereto in writing (such consent not to be unreasonably withheld). Any
decision by an Indemnified Person to employ its own counsel rather than counsel
selected by the Lessee (whether or not at the Lessee's expense) shall in no way
affect any rights of such Indemnified Person otherwise arising under this Lease.
SECTION 12. LESSEE'S RIGHT TO TERMINATE.
(a) So long as the Lessee can satisfy the Termination Covenants, the
Lessee shall have the right, upon eighteen (18) months' irrevocable notice (the
"TERMINATION NOTICE") to the Lessor (which notice shall indicate if the Lessee
will cause the Guarantor to assume the outstanding indebtedness of the Lessor
under its Financing Arrangements pursuant to the terms of paragraph (d) of this
Section 12 at the end of the Initial Term), to terminate the lease of the
Project as a whole (i) on the last day of the last month of the Initial Term or
the Extended Term or (ii) on any Basic Rent Payment Date during the Renewal
Term, by arranging, at its own cost and expense, for the sale of the Project in
an arm's-length transaction on the date of termination and the indefeasible
receipt by the Lessor of cash in an amount equal to the sale price of the
Project (the "CASH PROCEEDS"). In the event the Lessee is unable to satisfy the
Termination Covenants, the Lessee shall not terminate this Lease pursuant to
this paragraph (a) unless the Lessee has obtained the prior written consent of
the Lessor and Assignee to such termination of this Lease and the sale of the
Project. In addition, if an Event of Default or Termination Event has occurred
and is continuing, and, prior to the termination of this Lease pursuant to this
paragraph (a), the Lessor arranges for the sale of the Project to a third party
purchaser, the Termination Notice shall be invalidated and the Lessee shall no
longer have the right to cause the termination of the lease of the Project and
sale of the Project to its designee in accordance with the terms of this
paragraph (a). At the time the Project is sold pursuant to this Section 12, the
Lessor shall deliver the documents described in paragraph (i) of Section 29
hereof. In addition, (i) the Lessee shall assign to the purchaser, at no cost,
all right, title and interest of the Lessee in, to and under all Governmental
Actions and Intellectual Property Rights needed for the
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equipping, maintenance, operation or use of the Project and obtained and held by
the Lessee at that time, (ii) the Lessee shall assign to the purchaser, at no
cost, and the purchaser shall assume, all right, title and interest of the
Lessee in, to and under the Project Contracts, and in the event any additional
consent of any party to a Project Contract is required as a precondition
thereunder to an assignment to any such non-foreclosure purchaser designated by
the Lessee, to use its best efforts to obtain any such required consent to such
proposed non-foreclosure assignment and assumption of the Project Contracts, and
(iii) the Lessee shall assign to the purchaser, at no cost, all right, title and
interest of the Lessee in, to and under all service agreements in existence at
that time in connection with the equipping, maintenance, operation or use of the
Project. In the event the Lessee fails to obtain any consents required in clause
(ii) of the immediately preceding sentence, at the request of such purchaser,
the Lessee shall agree to (1) at the expense of such purchaser, continue to
perform under and maintain in full force and effect the Project Contracts and
pay all sums received under the Project Contracts to such purchaser, (2) at the
expense of such purchaser, and subject to the receipt of indemnification
acceptable to the Lessee, take all actions requested by such purchaser with
respect to such Project Contracts (including all actions with respect to the
enforcement of the Lessee's rights and remedies under such Project Contracts),
and (3) not amend, modify, supplement, waive a provision of, grant any consent
under or terminate any such Project Contract without the prior written consent
of such purchaser.
(b) In the event the Lessee exercises its right to terminate the lease of
the Project pursuant to this Section 12 on the last day of the last month of the
Initial Term or in the event a termination of the lease of the Project occurs
pursuant to paragraph (a) of Section 14 hereof and the date on which such
termination occurs is on or before the last day of the last month of the Initial
Term and the Lessee chooses to effect a sale pursuant to this Section 12:
(i) if the Cash Proceeds are greater than the Adjusted Acquisition
Cost plus the Modified Call Premium, the Lessor shall pay to
the Lessee the amount by which such Cash Proceeds exceed the
Adjusted Acquisition Cost plus the Modified Call Premium;
(ii) if the Cash Proceeds are equal to or less than the Adjusted
Acquisition Cost plus the Modified Call Premium, but greater
than or equal to 27.06% of the Adjusted Acquisition Cost plus
the Modified Call Premium, the Lessee shall pay to the Lessor
an amount equal to (A) the Adjusted Acquisition Cost plus the
Modified Call Premium less (B) the Cash Proceeds; and
(iii) if the Cash Proceeds are less than 27.06% of the Adjusted
Acquisition Cost plus the Modified Call Premium (or if there
are no Cash Proceeds), the Lessee shall pay to the Lessor an
amount equal to the sum of (A) 72.94% of the Adjusted
Acquisition Cost and (B) the amount, if any, by which the
residual value of the Project has been reduced by wear and tear
in excess of that attributable to normal and proper use (the
amount of such excess wear and tear to be such amount as the
Lessor and the Lessee agree, or if no agreement is reached, the
amount determined pursuant to the Appraisal Procedure).
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(c) In the event the Lessee exercises its right to terminate the lease of
the Project pursuant to this Section 12 on the last day of the last month of the
Extended Term or on any Basic Rent Payment Date during any Renewal Term or in
the event a termination of the lease of the Project occurs pursuant to paragraph
(a) of Section 14 hereof or the Lessee exercises its option under paragraph (e)
of Section 13 to arrange for the Project to be sold and the date on which such
termination occurs or such option is exercised is on or before the last day of
the last month of the Extended Term or during any Renewal Term and the Lessee
chooses to effect a sale pursuant to this Section 12:
(i) if the Cash Proceeds are greater than the Adjusted Acquisition
Cost, the Lessor shall pay to the Lessee the amount by which
such Cash Proceeds exceed the Adjusted Acquisition Cost;
(ii) if the Cash Proceeds are equal to or less than the Adjusted
Acquisition Cost, but greater than or equal to the percentage
of the Adjusted Acquisition Cost described in Exhibit H hereto
and for the periods described therein, the Lessee shall pay to
the Lessor an amount equal to (A) the Adjusted Acquisition Cost
less (B) the Cash Proceeds; and
(iii) if the Cash Proceeds are less than 33.13% of the Adjusted
Acquisition Cost (or if there are no Cash Proceeds), the Lessee
shall pay to the Lessor an amount equal to the sum of (A)
66.87% of the Adjusted Acquisition Cost and (B) the amount, if
any, by which the residual value of the Project has been
reduced by wear and tear in excess of that attributable to
normal and proper use (the amount of such excess wear and tear
to be such amount as the Lessor and the Lessee agree, or if no
agreement is reached, the amount determined pursuant to the
Appraisal Procedure).
(d) All payments and credits referred to in paragraphs (b) and (c) above
shall be made on the termination date of the lease of the Project pursuant to
this Section 12, and the parties shall account to each other for such payments
and credits, and the Lessee shall pay to the Lessor (i) all Basic Rent payable
through the date of termination of this Lease, (ii) the Variable Component of
Basic Rent accrued through the date of termination of this Lease, (iii) any
Additional Rent owing, (iv) all amounts payable pursuant to Sections 11, 24 and
26 hereof, (v) all losses, damages, costs and expenses (including, without
limitation, attorneys' fees and expenses, commissions, filing fees and sales or
transfer taxes) sustained by the Lessor by reason of such sale, and (vi) all
other amounts owing hereunder (after taking into account the application under
the Financing Arrangements of such purchase price and other payments hereunder),
each as of the termination date; PROVIDED, HOWEVER, that with respect to the
amounts described in clause (v) of this sentence, the Lessee shall not be
obligated to pay any such amounts that, when combined with the amounts paid by
the Lessee pursuant to paragraph (b) or (c) of this Section 12, as the case may
be, exceed an amount equal to 72.94% of the Adjusted Acquisition Cost (in the
case of a termination pursuant to such paragraph (b)) or 66.87% of the Adjusted
Acquisition Cost (in the case of a termination pursuant to such paragraph (c)),
plus the amount, if any, by which the residual value of the Project has been
reduced by wear and tear in excess of that attributable to normal and proper use
(the amount of such excess wear and tear to
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be such amount as the Lessor and the Lessee agree, or if no agreement is
reached, the amount determined pursuant to the Appraisal Procedure). Upon
indefeasible receipt by the Lessor of the Cash Proceeds and all other amounts
then due and owing hereunder, including, without limitation, the amount of
excess wear and tear determined pursuant to paragraph (b)(iii) or (c)(iii) of
Section 12, as the case may be, the Lessor shall transfer its interest in the
Project to the purchaser at the sale designated by the Lessee. The "CASH
PROCEEDS" referred to in paragraphs (b) and (c) of this Section 12 shall mean
the cash proceeds of sale without reduction for any amounts paid by the Lessee.
In the event of a sale pursuant to this Section 12, neither the Lessee nor any
Affiliate of the Lessee shall purchase the Project; PROVIDED, HOWEVER, that if
(A) the Lessee exercises its right to terminate the lease of the Project
pursuant to paragraph (b) of Section 12 hereof on the last day of the last month
of the Initial Term, (B) such sale results in the applicability of paragraph
(b)(ii) or paragraph (b)(iii) of Section 12, and (C) the Lessee provided notice
to the Lessor pursuant to paragraph (a) of this Section 12 that it will cause
the Guarantor to assume the outstanding indebtedness of the Lessor under its
Financing Arrangements, the Lessee shall be required, as an alternative to
making the payment required under such paragraph (b)(ii) or paragraph (b)(iii),
as the case may be, to cause the Guarantor to assume the Lessor's outstanding
indebtedness under all Financing Arrangements pursuant to the terms and
conditions of such Financing Arrangements, in a principal amount equal to the
amount the Lessee would have been obligated to pay to the Lessor pursuant to
such paragraph (b)(ii) or paragraph (b)(iii), as the case may be (the "ASSUMED
INDEBTEDNESS AMOUNT"), on the terms and conditions required for such assumption
of indebtedness under such Financing Arrangements. Upon such assumption of
indebtedness, the Lessor and the Assignee shall execute and deliver
documentation permitting the Guarantor to assume the Lessor's obligations under
the Financing Arrangements, and to release the Lessor from all obligations in
respect of the Financing Arrangements, this Lease, the Agreement for Lease, and
all related documents, and the Lessor and Assignee shall take all such other
actions (at the Lessee's cost and expense) as are reasonably necessary to permit
such assumption by the Guarantor. In the event the Guarantor assumes the
outstanding indebtedness of the Lessor under its Financing Arrangements pursuant
to this paragraph (d), if the Cash Proceeds plus the Assumed Indebtedness Amount
are greater than the Adjusted Acquisition Cost plus the Modified Call Premium,
the Lessor shall pay to the Lessee the amount by which the Cash Proceeds plus
the Assumed Indebtedness Amount exceed the Adjusted Acquisition Cost plus the
Modified Call Premium.
(e) In its notice given pursuant to paragraph (a) of this Section 12, the
Lessee shall advise the Lessor if the sale provided for in such notice will
result in the applicability of paragraph (b)(iii) or (c)(iii) of Section 12
hereof. If the Lessee advises the Lessor that any such paragraph will be
applicable, the Lessor shall have the right to arrange for a sale of the Project
to be made to a purchaser designated by the Lessor, if such purchaser will pay
an amount greater than the amount offered by the Lessee's purchaser. Unless the
Lessor shall arrange for such sale and shall give the Lessee notice thereof
within thirty (30) days of the Lessor's receipt of the Lessee's notice, the
Lessee may proceed with the sale to a purchaser designated by it. Within thirty
(30) days of the Lessee's receipt of the Lessor's notice provided for in the
preceding sentence, the Lessee may arrange for such sale to be made to another
purchaser designated by it, if such purchaser shall pay an amount sufficient to
render paragraph (b)(iii) of Section 12 or paragraph (c)(iii) of Section 12
hereof inapplicable.
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SECTION 13. LESSEE'S RIGHTS OF PURCHASE AND RENEWAL.
(a) The Lessee (or the Guarantor as its designee) shall have the right,
upon ninety (90) days' written notice to the Lessor, to purchase the Project as
a whole on any Basic Rent Payment Date for an amount equal to its Adjusted
Acquisition Cost; PROVIDED, HOWEVER, that, if an Event of Default or Termination
Event has occurred and is continuing, and, prior to the purchase by the Lessee
pursuant to this paragraph (a), the Lessor arranges for the sale of the Project
to a third party purchaser, the Lessee shall no longer have the right to
purchase the Project in accordance with the terms of this paragraph (a). If the
Guarantor elects to purchase the Project pursuant to this Section 13, the
Guarantor has the option to assume in whole (but not in part) the outstanding
indebtedness of the Lessor under all Financing Arrangements pursuant to the
terms and conditions of such Financing Arrangements, in which case the cash
portion of the purchase price to be paid by the Guarantor shall be reduced by an
amount equal to the principal outstanding under such Financing Arrangements so
assumed by the Guarantor. Upon such assumption of indebtedness, the Lessor and
Assignee shall execute and deliver documentation permitting the Guarantor to
assume the Lessor's obligations under the Financing Arrangements, and to release
the Lessor from all obligations in respect of the Financing Arrangement, this
Lease, the Agreement for Lease, and all related documents, and the Lessor and
Assignee shall take all such other actions (at the Lessee's cost and expense) as
are reasonably necessary to permit such assumption by the Guarantor. In
connection with, and as a condition to, any purchase under this Section 13, on
the date upon which such purchase occurs, the Lessee shall pay to the Lessor (i)
the purchase price, (ii) all Basic Rent payable through the date of purchase,
(iii) the Variable Component of Basic Rent accrued through the date of purchase,
(iv) any Additional Rent and Debt Yield-Maintenance Premium owing, (v) all
amounts payable pursuant to Sections 11, 24 and 26 hereof, (vi) all Unrecovered
Liabilities and Judgments, (vii) all losses, damages, costs and expenses
(including, without limitation, attorneys' fees and expenses, commissions,
filing fees and sales or transfer taxes) sustained by the Lessor by reason of
such purchase, and (viii) all other amounts owing hereunder (after taking into
account the application under the Financing Arrangements of such purchase price
and other payments hereunder). At the time the Project is sold pursuant to this
paragraph (a), the Lessor shall deliver the documents described in paragraph (i)
of Section 29 hereof.
(b) Upon the occurrence of an Event of Default and upon the written
request of the Lessee, which shall be received no later than fifteen (15)
Business Days subsequent to receipt of notice from the Lessor or Assignee
pursuant to this Lease that an Event of Default has occurred, the Lessee shall
have the right, not later than thirty (30) Business Days after the Lessor's
receipt of such request, to purchase the Project as a whole at a price equal to
its then Adjusted Acquisition Cost; PROVIDED that the purchase option contained
in this paragraph shall only be available to the Lessee if (i) in the reasonable
judgment of counsel to the Lessor and Assignee, the purchase price and all other
amounts paid by the Lessee will not in the circumstances in which such payment
is made constitute a preferential payment or a voidable transfer or otherwise be
subject to recapture pursuant to the provisions of the Federal Bankruptcy Code
in a bankruptcy proceeding by or against the Lessee and will not otherwise
result in the payment being subject to recapture from the Lessor or (ii) the
Guarantor has provided a guaranty of the payment of such purchase price and all
other amounts required to be paid by the Lessee under this paragraph (b) in the
event payment of such amounts is recovered as such a preferential payment or
voidable transfer, which guaranty shall be in form and substance reasonably
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satisfactory to the Lessor and Assignee. In connection with, and as a condition
to, the purchase of the Project pursuant hereto, (1) the Lessee shall pay at the
time of purchase, in addition to the purchase price, (A) all Basic Rent owing
through the date of termination, (B) any Additional Rent and Debt
Yield-Maintenance Premium owing, (C) all amounts payable pursuant to Sections
11, 24 and 26 hereof, (D) all Unrecovered Liabilities and Judgments, (E) all
losses, damages, costs and expenses (including, without limitation, attorneys'
fees and expenses, commissions, filing fees and sales or transfer taxes),
sustained by the Lessor by reason of such purchase, and (F) all other amounts
owing by the Lessee hereunder as of the date of termination, and (2) when the
Lessor transfers title, such transfer shall be on an as-is, non-installment sale
basis, without warranty by, or recourse to, the Lessor, but free of any Lessor
Lien. At the time the Project is sold pursuant to this paragraph (b), the Lessor
shall deliver the documents described in paragraph (i) of Section 29 hereof.
(c) Subject to the provisions of paragraph (a) of Section 14 of this
Lease, so long as (i) no Event of Default, Event of Loss, Taking or Termination
Event has occurred and is continuing and (ii) all amounts owing under any
Financing Arrangements and all Equity Capital have been paid in full (after
taking into account the application under the Financing Arrangements of all
payments hereunder), the Lessee shall have the right, upon twelve (12) months'
written notice to the Lessor (the "RENEWAL NOTICE"), to renew the lease of the
Project for an additional term (the "RENEWAL TERM") to be determined by the
Lessee, commencing on the first day of the calendar month following the last day
of the Extended Term, on the same terms and conditions (including, without
limitation, being subject to all rights and remedies of the Lessor and Assignee
relating to Events of Default and Events of Loss) as existed during the Lease
Term, at the fair market value rental.
(d) The fair market value rental of the Project for purposes of paragraph
(c) of this Section 13 shall be an amount agreed to by the Lessor and the Lessee
or, if they are unable to agree, an amount determined pursuant to the Appraisal
Procedure.
(e) In the event the Lessee does not deliver the Renewal Notice in
accordance with the provisions of paragraph (c) of this Section 13, the Lessee
shall take either of the following two actions: (i) purchase, on the last day of
the Extended Term the Lessor's interest in the Project for cash at its Adjusted
Acquisition Cost, in accordance with the provisions of paragraph (a) of this
Section 13 (including the payment of all amounts described in such paragraph
(a)) or (ii) arrange for the Project to be sold in accordance with the
provisions of Section 12 hereof and with the consequences therein provided
(including, without limitation, indefeasible receipt by the Lessor of the Cash
Proceeds and all other amounts described in such Section 12), except that such
sale must occur on the last day of such Extended Term; PROVIDED, HOWEVER, that
if the Project is not sold pursuant to Section 12 hereof on the last day of the
Extended Term and the Lessee does not purchase the Project pursuant to clause
(i) above on the last day of the Extended Term, then a sale of the Lessee's
interest in the Project to the Lessor pursuant to Section 12 shall be deemed to
occur, the Cash Proceeds shall be deemed to be $1, and the provisions of Section
12 and the eighth paragraph of Section 19 hereof shall be applicable.
SECTION 14. LESSOR'S RIGHT TO TERMINATE.
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(a) The Lessor shall have the right, upon written notice to the Lessee, to
terminate the lease of the Project as a whole, if any of the following events
(each a "TERMINATION EVENT") shall occur during the term of this Lease: (A)
solely as a result of this Lease, the Agreement for Lease, a Financing
Arrangement, the Project Contracts and the transactions contemplated hereby or
thereby, the Lessor becomes (or with the passage of time would become), or is
declared by any Governmental Authority to be a "public-utility company" as
defined in the 1935 Act, or the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, Assignee, any
Affiliate of the foregoing or their respective officers, directors, members,
trustees, shareholders, partners (general and limited, including, without
limitation, the general and limited partners of the Lessor) or employees shall
become subject to regulation under the 1935 Act; (B) solely as a result of this
Lease, the Agreement for Lease, a Financing Arrangement, the Project Contracts
and the transactions contemplated hereby or thereby, the Lessor becomes (or with
the passage of time would become), or is declared by the Secretary of Energy (or
any successor thereto) or the FERC to be, a public utility, an electric utility
or a utility holding company subject to regulation under the Federal Power Act,
as amended, or the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, Assignee, any Affiliate of
the foregoing or their respective officers, directors, shareholders, partners
(general and limited, including, without limitation, the general and limited
partners of the Lessor) or employees shall become subject to regulation by the
FERC; (C) solely as a result of this Lease, the Agreement for Lease, a Financing
Arrangement, the Project Contracts and the transactions contemplated hereby or
thereby, the Lessor becomes (or with the passage of time would become), or is
declared by any relevant Governmental Authority under the laws of any state or
locality to be, subject to regulation as a public utility, an electric utility
or a utility holding company or the Lessor, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Leasing, Assignee,
any Affiliate of the foregoing or their respective officers, directors,
shareholders, partners (general and limited, including, without limitation, the
general and limited partners of the Lessor) or employees shall become subject to
regulation as a public utility, an electric utility or a utility holding company
under any such laws; or (D) any law or regulation or interpretation of any law
or regulation shall be adopted or enforced by any Governmental Authority
(including, without limitation, the Secretary of Energy, the FERC, the public
service commission of any state or any similar commission of any locality and
the Securities and Exchange Commission), and as a result of such adoption or
enforcement, approval of this Lease, the Agreement for Lease, a Financing
Arrangement, the Project Contracts or the transactions contemplated thereby
shall be required and shall not have been obtained within any grace period after
such adoption or enforcement, or as a result of which adoption or enforcement
this Lease, the Agreement for Lease, a Financing Arrangement, the Project
Contract or the transactions contemplated thereby, including any payments to be
made by or to the Lessee or the ownership of the Project by the Lessor, shall be
or become unlawful or unenforceable or the performance of this Lease, the
Agreement for Lease, a Financing Arrangement, the Project Contracts or the
transactions contemplated thereby shall be rendered impracticable in any
material way. Promptly upon learning of any action or event, the effect of which
results in any Termination Event, the Lessee shall notify the Lessor of such
action or event.
(b) Upon the occurrence of a Termination Event pursuant to paragraph (a)
of this Section 14, the Lessee shall, at its option, either (A) arrange for the
Project to be sold in accordance with the terms of Section 12 above and with the
consequences therein provided (other than the payment of Debt Yield-Maintenance
Premium or Modified Call Premium referred to in Section 12), except that if such
sale does not occur within nine (9) months after the date stipulated in the
written notice contemplated in paragraph (a) of this Section 14 and the Lessee
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does not purchase the Project pursuant to clause (B) below on or before such
date, then a sale of the Lessee's interest in the Project to the Lessor pursuant
to Section 12 shall be deemed to occur, the Cash Proceeds shall be deemed to be
$1, and the provisions of Section 12 and the eighth paragraph of Section 19
hereof shall be applicable, or (B) purchase, within nine (9) months after the
date stipulated in the written notice contemplated by paragraph (a) of this
Section 14, the Project for cash at its Adjusted Acquisition Cost. In connection
with, and as a condition to, any sale or purchase under this paragraph, on the
date upon which such sale or purchase occurs, the Lessee shall pay to the
Lessor, in addition to any amount payable in connection with a sale or purchase,
all other amounts owing hereunder as of the date of such sale or purchase
including, without limitation, (i) all Basic Rent payable and the Variable
Component of Basic Rent accrued through the date of sale or purchase, (ii) any
Additional Rent owing, (iii) all amounts payable pursuant to Sections 11, 24 and
26 hereof, (iv) all losses, damages, costs and expenses (including, without
limitation, attorneys' fees and expenses, commissions, filing fees and sales or
transfer taxes) sustained by the Lessor by reason of such sale or purchase, (v)
all Unrecovered Liabilities and Judgments and (vi) all other amounts owing
hereunder. At the time the Project is sold pursuant to this paragraph (b), the
Lessor shall deliver the documents described in paragraph (i) of Section 29
hereof.
SECTION 15. LOSS OF OR DAMAGE TO THE PROJECT.
(a) The Lessee hereby assumes all risk of loss of or damage to the
Project, however caused. No loss of, or damage to, the Project shall impair any
obligation of the Lessee under this Lease, which shall continue in full force
and effect regardless of such loss or damage. The foregoing shall not be
construed as requiring the Lessee to repair the Project when it is not otherwise
required to do so under paragraphs (b) or (c) of this Section 15.
(b) In the event of damage of any kind whatsoever to the Project (unless
the same is reasonably determined by the Lessor and Assignee to be damaged
beyond repair) the Lessee, at its own cost and expense, shall place the same in
good operating order, repair, condition and appearance. The Lessee's right to
any proceeds paid under any insurance policy or policies required under Section
10 of this Lease with respect to any such damage to the Project which has been
so placed by the Lessee in good operating order, repair, condition and
appearance is governed by paragraph (j) of Section 10 hereof.
(c) If (A) an Event of Loss shall occur, or (B) a Taking as described in
paragraph (a) of Section 16 shall occur, then in any such event, (i) the Lessee
shall promptly notify the Lessor in writing of such event, (ii) within one
hundred eighty (180) days of such event the Lessee shall pay to the Lessor an
amount equal to the Adjusted Acquisition Cost and (iii) the Initial Term,
Extended Term or Renewal Term shall continue until the Lessor receives payment
from the Lessee of the amount payable pursuant to this paragraph (c) including,
without limitation, (1) all Basic Rent payable and the Variable Component of
Basic Rent accrued through the date of purchase, (2) any Additional Rent owing,
(3) all amounts payable pursuant to Sections 11, 24 and 26 hereof, (4) all
losses, damages, costs and expenses (including, without limitation, attorneys'
fees and expenses, commissions, filing fees and sales or transfer taxes)
sustained by the Lessor by reason of such event and (5) all other amounts owing
hereunder after taking into account the application under the Financing
Arrangements of such payments hereunder, and shall thereupon terminate. Upon the
indefeasible payment by the Lessee of all amounts referred
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to in the immediately preceding sentence, (x) insurance and condemnation
proceeds up to an amount equal to the Adjusted Acquisition Cost of the Project
(net of all collection costs), shall be paid by the Lessor to the Lessee, (y)
the Lessee shall be subrogated to the Lessor's rights resulting from the events
described in clauses (A) and (B) above, and (z) the Lessor shall convey title to
the Project to the Lessee pursuant to the documents described in paragraph (i)
of Section 29 hereof.
SECTION 16. CONDEMNATION AND DEDICATION OF THE PROJECT; EASEMENTS.
(a) If the use, occupancy or title to all or a substantial portion of the
Project or all or a substantial portion of the Premises, is taken, requisitioned
or sold in, by or on account of actual or threatened eminent domain proceedings
or other action by any Person or Governmental Authority having the power of
eminent domain (such events collectively referred to as a "TAKING"), then the
Lessee shall make the payment provided in, and the Initial Term, Extended Term
or Renewal Term shall terminate as provided in, paragraph (c) of Section 15
hereof. The portion of the proceeds from any award or sale made in connection
with such Taking attributable to the Lessor's interest in the Project shall be
retained by the Lessor and, upon the indefeasible payment by the Lessee of all
amounts referred to in respect of clause (B) of paragraph (c) of Section 15
hereof, such amount shall be paid to the Lessee. A Taking shall be deemed to
affect a "substantial portion" of the Project or the Premises if after such
Taking the remainder is not sufficient to permit operation of the Project on a
commercially feasible basis after taking into account the rental and other
monetary obligations of the Lessee hereunder and under the Project Contracts.
(b) If less than a substantial portion of the Project is subject to a
Taking, then this Lease shall continue in effect as to the portion of the
Project not taken and any net proceeds, so long as (i) no Potential Default,
Event of Default, Event of Loss or Termination Event has occurred and is
continuing, and (ii) the Lessor and Assignee shall determine that restoration of
the Project is consistent with prudent business practices and that sufficient
funds are available to complete such restoration, shall be paid to the Lessee
for the restoration of the Project in accordance with paragraph (j) of Section
10 hereof; PROVIDED that, if either of the conditions set forth in clauses (i)
or (ii) above are not satisfied, then the net proceeds shall be paid to the
Lessor and if and to the extent that such proceeds are not applied to (or paid
to the Lessee in reimbursement for) the restoration of the Project, the Adjusted
Acquisition Cost shall be reduced by the Lessor by the amount of such proceeds.
Thereupon, Exhibit D shall be revised to reflect such reduction in Adjusted
Acquisition Cost.
SECTION 17. SURRENDER OF THE PROJECT.
(a) Subject to the provisions of Sections 12, 13, 14, 15 and 19 hereof,
upon termination of the lease of the Project under this Lease, the Lessee shall
surrender the Project to the Lessor. The Project shall be surrendered in the
condition required by paragraph (b) of Section 9.
(b) Upon the surrender of the Project, the Lessee shall deliver to the
Lessor or its designee all logs, manuals, inspection data, books and records or
copies thereof and other
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information, which are necessary to operate the Project and which are in
accordance with sound industry practice customarily retained (or that the Lessee
actually did retain) or are required by law to be retained with respect to
similar property and equipment, including, without limitation, all software and
manuals applicable to the Project and all design plans, know-how, records and
information used by the Lessee and the Operator during the prior 12 months of
operation of the Project.
SECTION 18. EVENTS OF DEFAULT
Any of the following events of default shall constitute an "EVENT OF
DEFAULT" and shall give rise to the rights on the part of the Lessor described
in Section 19 hereof:
(a) Failure of the Lessee to pay amounts due to the Lessor at the time of
any scheduled sale or deemed sale of the Project hereunder or under paragraph
(c) of Section 15 hereof, failure of the Lessee to pay Basic Rent, Debt
Yield-Maintenance Premium or Modified Call Premium for more than five (5) days
after such payment is due pursuant to Section 7 hereof or failure of the Lessee
to pay any other amount payable by the Lessee hereunder for more than ten (10)
days after such payment is due; or
(b) Failure to maintain the insurance required by Section 10 hereof, or
default in the performance of the covenants contained in paragraphs (ii)(a),
(ii)(b), (ii)(c), (ii)(e), (ii)(f), (ii)(g), or (ii)(j) of ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇
(▇) ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ (▇) of ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ (▇) of
Section 29; or
(c) Default in the performance of any other obligation or covenant of the
Lessee pursuant to this Lease or the Lessee's Consent and (other than a default
arising from a failure to deliver notice of an Event of Default, Potential
Default, Event of Loss, Taking or Termination Event under clause (iii) of
paragraph (ii)(g) of Section 2 hereof, which shall not be subject to any grace
period), the continuance of such default for thirty (30) days after the earlier
of the date (i) the Lessee becomes aware of such default or (ii) written notice
of such default shall have been given to the Lessee by the Lessor or Assignee
specifying such default and requiring such default to be remedied; PROVIDED,
that if such default is of a nature that it is not capable of being cured by the
payment of money or cannot with due diligence be cured within such thirty (30)
day period, and if the Lessee shall have diligently commenced curing such
default and proceeds diligently and in good faith thereafter to complete curing
such default, then the time within which such default may be cured shall be
extended for such period (not to exceed ninety (90) days or the expiration date
of the Lease Term) as is necessary to cure such default; or
(d) The occurrence of any event or circumstance relating to Environmental
Matters (not otherwise covered under any other provision of this Section 18)
that results, directly or indirectly, in a Material Adverse Effect; or
(e) (1) Any representation or warranty made by the Lessee in this Lease
(other than the representations or warranties made in paragraphs (i)(d), (i)(j)
and (i)(p) of Section 2 hereof) or in the Lessee's Consent or which is contained
in any certificate, document or financial or other statement furnished under or
in connection with this Lease proves to be false or misleading on or as of the
date made or deemed made and results, directly or indirectly, in a Material
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Adverse Effect, or (2) any representation or warranty made by the Lessee in
paragraphs (i)(d), (i)(j) and (i)(p) of Section 2 hereof proves to be false,
misleading or inaccurate in any material respect on or as of the date made or
deemed made; or
(f) (i) The Pledge Agreement ceases to be in full force and effect
prior to the termination thereof in accordance with its terms, (ii) the Lessee
defaults in the performance of any obligation or covenant contained in the
Pledge Agreement, any required notice of such default shall have been given, and
any applicable grace period shall have expired, or (iii) the representation
contained in the second sentence of paragraph (i)(r) of Section 2 shall at any
time become untrue; or
(g) The entry of a decree or order for relief in respect of the Lessee or
the Guarantor by a court having jurisdiction in the premises or the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Lessee or the Guarantor or of any substantial part of
the Lessee's or the Guarantor's property, or ordering the winding up or
liquidation of the Lessee's or the Guarantor's affairs, in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law and such
decree or order remains unstayed and in effect for sixty (60) consecutive days;
or the commencement against the Lessee or the Guarantor of an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, and the
continuance of any such case unstayed and in effect for a period of sixty (60)
consecutive days; or
(h) The Lessee's or the Guarantor's insolvency (however evidenced) or the
Lessee's or the Guarantor's admission of insolvency or bankruptcy, or the
commencement by the Lessee or the Guarantor of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or the
consent by the Lessee or the Guarantor to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Lessee or the Guarantor or of any substantial
part of the Lessee's or the Guarantor's property, or the making by the Lessee or
the Guarantor of an assignment for the benefit of creditors, or the failure of
the Lessee or the Guarantor generally to pay their debts as such debts become
due, or the taking of corporate action by the Lessee or the Guarantor in
furtherance of any such action; or
(i) (i) The Guaranty ceases to be in full force and effect prior to the
termination thereof in accordance with its terms or the Guarantor asserts that
the Guaranty is not in full force and effect, or (ii) an Event of Default (as
defined in the Guaranty) shall occur under the Guaranty; or
(j) Any representation or warranty made by the Guarantor in the Guaranty
or in the Guarantor's Consent or any document contemplated hereby or thereby
proves to be false or misleading on or as of the date made or deemed made and
results, directly or indirectly, in a Material Adverse Effect; or
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(k) The Guarantor shall fail to own (directly or indirectly) beneficially
and of record a majority of the membership interests of the Lessee; or
(l) (i) The CEI Note ceases to be in full force and effect prior to the
termination thereof in accordance with its terms, or (ii) the Guarantor shall
fail to perform or observe any agreement, obligation or covenant contained in
the CEI Note, any required notice of such default shall have been given, and any
grace period shall have expired; or
(m) A default or event of default by the Guarantor or any of its Material
Subsidiaries shall occur, the effect of which is that the holder or holders of
any Indebtedness of the Guarantor or any such Material Subsidiary having a then
outstanding principal balance in excess of $100,000,000, causes or declares such
Indebtedness of the Guarantor or any such Material Subsidiary to become due
prior to its stated maturity under the provisions of any agreement or agreements
pursuant to which such Indebtedness was created; or
(n) The Guarantor or any of its Material Subsidiaries shall default in any
payment of principal of or interest on any Indebtedness of the Guarantor or any
such Material Subsidiary having a then outstanding principal balance in excess
of $100,000,000, beyond the period of grace, if any, under the provisions of any
instrument or instruments or agreement or agreements pursuant to which such
Indebtedness was created; or
(o) Final judgment or judgments for the payment of money in excess of
$100,000,000 in the aggregate shall be rendered against the Guarantor or any of
its Material Subsidiaries by any court of competent jurisdiction and the same
shall remain undischarged for a period of thirty (30) days from the date such
payment is due, during which execution of such judgment or judgments shall not
be effectively stayed.
SECTION 19. RIGHTS UPON DEFAULT.
Upon the occurrence and continuation of any Event of Default the Lessor may
do any one or more of the following (subject to the provisions of paragraph (b)
of Section 13 of this Lease):
(i) Terminate the lease of the Project hereunder;
(ii) Whether or not the lease of the Project is terminated, take
immediate possession of the Project and remove any equipment or property of
the Lessor in the possession of the Lessee, wherever situated, and for such
purpose, enter upon the Premises without liability to the Lessee for so
doing;
(iii) Whether or not any action has been taken under clause (i) or
(ii) above, sell the Project (with or without the concurrence or request of
the Lessee);
(iv) Hold, use, occupy, operate, repair, remove, lease or keep idle
the Project as the Lessor in its sole discretion may determine, without any
duty to mitigate damages with respect to any such action or inaction or
with respect to any proceeds thereof; and
(v) Exercise any other right or remedy which may be available under
applicable law and in general proceed by appropriate judicial proceedings,
either at law or in equity, to enforce the terms hereof.
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Suit or suits for the recovery of any default in the payment of any sum due
hereunder or for damages may be brought by the Lessor from time to time at the
Lessor's election, and nothing herein contained shall be deemed to require the
Lessor to await the date whereon this Lease or the term hereof would have
expired by limitation had there been no such default by the Lessee or no such
termination or cancellation.
The receipt of any payments under this Lease by the Lessor with knowledge
of any breach of this Lease by the Lessee or of any default by the Lessee in the
performance of any of the terms, covenants or conditions of this Lease, shall
not be deemed to be a waiver of any provision of this Lease.
No receipt of moneys by the Lessor from the Lessee after the termination or
cancellation hereof in any lawful manner shall reinstate, continue or extend the
Initial Term, the Extended Term or the Renewal Term, or affect any notice
theretofore given to the Lessee, or operate as a waiver of the right of the
Lessor to enforce the payment of Basic Rent, any Debt Yield-Maintenance Premium,
Additional Rent or other charges payable hereunder, or operate as a waiver of
the right of the Lessor to recover possession of by proper suit, action,
proceedings or remedy; it being agreed that, after the service of notice to
terminate or cancel this Lease, and the expiration of the time therein
specified, if the default has not been cured in the meantime, or after the
commencement of any suit, action or summary proceedings or of any other remedy,
or after a final order, warrant or judgment for the possession of the Project,
the Lessor may demand, receive and collect any moneys payable hereunder, without
in any manner affecting such notice, proceedings, suit, action, order, warrant
or judgment. Acceptance of the keys to the Project, or any similar act, by the
Lessor, or any agent or employee of the Lessor, during the term hereof, shall
not be deemed to be an acceptance of a surrender of the Project unless the
Lessor and Assignee shall consent thereto in writing.
After any Event of Default, the Lessee shall be liable for, and the Lessor
may recover from the Lessee, (i) all Basic Rent payable and the Variable
Component of Basic Rent accrued through the date of termination of this Lease,
(ii) any Additional Rent and Debt Yield-Maintenance Premium owing, (iii) all
amounts payable pursuant to Sections 11, 24 and 26 hereof, (iv) all losses,
damages, costs and expenses (including, without limitation, attorneys' fees and
expenses, commissions, filing fees and sales or transfer taxes and all costs and
expenses related to (1) the conduct of investigations, studies, sampling and/or
testing of the Premises and (2) the taking of any action, including, without
limitation, any remedial measures or removal with respect to the Premises, each
as required by Assignee pursuant to the terms of a Financing Arrangement)
sustained by the Lessor by reason of such Event of Default and the exercise of
the Lessor's remedies with respect thereto, including without limitation, in the
event of a sale by the Lessor of its interest in the Project pursuant to this
Section 19, all costs and expenses associated with such sale and (v) all other
amounts owing hereunder. The amounts payable in clauses (i) through (v) above
are hereinafter sometimes referred to as the "ACCRUED DEFAULT OBLIGATIONS".
After an Event of Default, the Lessor may sell its interest in the Project
upon any terms that the Lessor deems satisfactory, free of any rights of the
Lessee or any Person claiming through or under the Lessee (including, without
limitation, any rights hereunder or under the Agreement for Lease or the Project
Contracts). In the event of any such sale, in addition to the Accrued Default
Obligations, the Lessor shall be entitled to recover from the Lessee, as
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liquidated damages and not as a penalty, and subject to the second succeeding
sentence, an amount equal to the Adjusted Acquisition Cost. Proceeds of sale
received by the Lessor in excess of the Adjusted Acquisition Cost shall be
credited against the Accrued Default Obligations the Lessee is required to pay
under this Section 19. If such proceeds plus the Adjusted Acquisition Cost,
exceed the sum of (i) Accrued Default Obligations and (ii) the Adjusted
Acquisition Cost and (iii) any Unrecovered Liabilities and Judgments, and if the
Lessee has indefeasibly paid the Adjusted Acquisition Cost, the Accrued Default
Obligations plus all Unrecovered Liabilities and Judgments and all other amounts
required to be paid under this Section 19, such excess shall be paid by the
Lessor to the Lessee; PROVIDED, HOWEVER, that the Lessee shall remain liable
from such excess proceeds for any Unrecovered Liabilities and Judgments that
arise after the payment of such excess proceeds to the extent such Unrecovered
Liabilities and Judgments arise from or relate to acts or omissions occurring,
or circumstances or conditions created or existing at any time as of or prior to
the expiration or termination of this Lease. As an alternative to any such sale,
or if the Lessee converts the Project after an Event of Default, or if the
Project suffers an Event of Loss or Taking or is otherwise lost or destroyed at
the time of the Event of Default, in addition to the Accrued Default
Obligations, the Lessor may require the Lessee to pay to the Lessor, and the
Lessee shall pay to the Lessor, as liquidated damages and not as a penalty, an
amount equal to the Adjusted Acquisition Cost plus an additional amount equal to
two and one half percent (2 1/2%) of the Adjusted Acquisition Cost. If the
Lessor subsequently sells its interest in the Project, the proceeds of any such
sale (net of any unreimbursed costs or liabilities incurred by the Lessor or
Assignee with respect to the Project or Project Contracts after the termination
of the Lease, which are not included in the Accrued Default Obligations (after
taking into account any revenues received from the operation of the Project))
shall be distributed as provided in the third and fourth sentences of this
paragraph. In the event the Lessor receives indefeasible payment from the Lessee
of the Adjusted Acquisition Cost of the Project plus an additional amount equal
to two and one half percent (2 1/2%) of the Adjusted Acquisition Cost, and the
Accrued Default Obligations, the Lessor shall transfer all of the Lessor's
right, title and interest in and to the Project to the Lessee.
In the event of a sale pursuant to this Section 19, upon indefeasible
receipt by the Lessor of all amounts payable hereunder, the Lessor shall
transfer all of the Lessor's right, title and interest in and to the Project to
a purchaser other than the Lessee or to the Lessee, as the case may be.
In the event the Lessor is not paid an amount equal to the Adjusted
Acquisition Cost and an additional amount equal to two and one half percent
(2 1/2%) of the Adjusted Acquisition Cost, plus the Accrued Default Obligations,
then, in addition to the Lessor's other rights in this Section 19, the Lessee
shall upon the Lessor's request (i) assign to the Lessor (or to an assignee
designated by the Lessor or Assignee), at no cost, all right, title and interest
of the Lessee in, to and under all Governmental Actions and Intellectual
Property Rights needed for the equipping, maintenance, operation or use of the
Project and obtained and held by the Lessee at that time, (ii) assign to the
Lessor (or to a foreclosure purchaser designated by the Lessor or the Assignee),
at no cost, all right, title and interest of the Lessee in, to and under the
Project Contracts, and in the event any additional consent of any party to a
Project Contract is required as a precondition thereunder to an assignment to
any other third party assignee designated by the Lessor or Assignee, use its
best efforts to obtain any such required consent to such proposed
non-foreclosure assignment and assumption of the Project Contracts; and (iii)
assign to the
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Lessor, at no cost, all right, title and interest of the Lessee in, to and under
all service agreements in existence at the time of such sale and transferable by
the Lessee and any easements available to the Lessee and transferable by the
Lessee in connection with the equipping, maintenance, operation or use of the
Project. The Lessee acknowledges that it would be difficult to ascertain the
value to the Lessor of the Lessee's agreement to assign, transfer or have
reissued to the Lessor such Governmental Actions and Intellectual Property
Rights, to assign such Project Contracts (and, if necessary, to obtain such
consents to such assignment) and to assign to the Lessor such service agreements
and easements or to adequately compensate the Lessor by an award of damages for
the Lessee's failure to assign to the Lessor such Governmental Actions and
Intellectual Property Rights, to assign such Project Contracts (and, if
necessary, to obtain such consents to such assignment) and to assign to the
Lessor such service agreements and easements, and that therefore the Lessor
would not have an adequate remedy at law for breach by the Lessee of its
agreement hereunder to the Lessor. Accordingly, the Lessee acknowledges that the
Lessor shall be entitled to obtain specific performance of the Lessee's
obligation to assign to the Lessor such Governmental Actions and Intellectual
Property Rights, to obtain such consents to such assignment and to assign to the
Lessor the service agreements and easements. In the event the Lessee fails to
obtain any consents required in clause (ii) of the third preceding sentence, at
the request of the Lessor or such purchaser, as the case may be, the Lessee
shall agree to (A) at the expense of such purchaser or the Lessor, as the case
may be, continue to perform under and maintain in full force and effect the
Project Contracts and pay all sums received under the Project Contracts to such
third party or the Lessor, as the case may be, (B) at the expense of such third
party or the Lessor, as the case may be, and subject to the receipt of
indemnification reasonably acceptable to the Lessee, take all actions requested
by such third party or the Lessor, as the case may be, with respect to such
Project Contracts (including all actions with respect to the enforcement of the
Lessee's rights and remedies under such Project Contracts), and (C) not amend,
modify, supplement, waive a provision of, grant any consent under or terminate
any such Project Contract without the prior written consent of such third party
or the Lessor, as the case may be.
No remedy referred to in this Section 19 is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to above
or otherwise available to the Lessor at law or in equity, and the exercise in
whole or in part by the Lessor of any one or more of such remedies shall not
preclude the simultaneous or later exercise by the Lessor of any or all such
other remedies.
No waiver by the Lessor of any Event of Default hereunder shall in any way
be, or be construed to be, a waiver of any future or subsequent Event of
Default.
With respect to the termination of this Lease as a result of an Event of
Default, the Lessee hereby waives service of any notice of intention to
re-enter. The Lessee hereby waives any and all rights to recover or regain
possession of the Project or to reinstate this Lease as permitted or provided by
or under any statute, law or decision now or hereafter in force and effect.
SECTION 20. SALE OR ASSIGNMENT BY LESSOR.
(a) The Lessor shall have the right to obtain equity and debt financing
for the acquisition and ownership of the Project by selling or assigning its
right, title and interest in any
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or all amounts due from the Lessee or any third party under this Lease and
granting a security interest in this Lease and the Project to the Collateral
Trustee or any successor to the Collateral Trustee under a Financing
Arrangement, notice of the identity of which shall be given to the Lessee;
PROVIDED that, any sale or assignment by the Lessor shall be made consistent
with the terms of this Lease and shall be subject to the rights and interests of
the Lessee under this Lease and the Agreement for Lease.
(b) Any Assignee shall, after the occurrence and during the continuance of
any Event of Loss, Event of Default or Termination Event hereunder, except as
otherwise agreed by the Lessor and such Assignee, have all the rights, powers,
privileges and remedies of the Lessor hereunder, and the Lessee's obligations as
between itself and such Assignee hereunder shall not be subject to any claims or
defense that the Lessee may have against the Lessor. Upon written notice to the
Lessee of any such assignment, the Lessee shall thereafter make payments of
Basic Rent and the Variable Component of Basic Rent, any Debt Yield-Maintenance
Premium, Additional Rent and other sums due hereunder to Assignee, to the extent
specified in such notice, and such payments shall discharge the obligation of
the Lessee to the Lessor hereunder to the extent of such payments. Anything
contained herein to the contrary notwithstanding, no Assignee shall be obligated
to perform any duty, covenant or condition required to be performed by the
Lessor hereunder, and any such duty, covenant or condition shall be and remain
the sole obligation of the Lessor, unless and until Assignee has taken
possession of the Premises or the Project or otherwise foreclosed upon the
Lessor's interest therein or accepted a conveyance in lieu of foreclosure of the
Premises or the Project pursuant to a Financing Arrangement.
SECTION 21. INCOME TAXES.
The Lessor agrees that it will not file any Federal, state or local income
tax returns or state or local sales tax returns during the Lease Term or any
Renewal Term with respect to the Project that are inconsistent with the
treatment of the Lessee as owner of the Project for Federal, state and local
income tax purposes and state and local sales tax purposes.
SECTION 22. NOTICES AND REQUESTS.
All notices, offers, acceptances, approvals, waivers, requests, demands and
other communications hereunder or under any other instrument, certificate or
other document delivered in connection with the transactions described herein
shall be in writing, shall be addressed as provided below and shall be
considered as properly given (a) if delivered in person, (b) if sent by express
courier service (including, without limitation, Federal Express, ▇▇▇▇▇, DHL,
Airborne Express, and other similar express delivery services), (c) in the event
overnight delivery services are not readily available, if mailed through the
United States Postal Service, postage prepaid, registered or certified with
return receipt requested, or (d) if sent by telecopy and confirmed; PROVIDED
that, in the case of a notice by telecopy, the sender shall in addition confirm
such notice by writing sent in the manner specified in clause (a), (b) or (c) of
this Section 22. All notices shall be effective upon receipt by the addressee;
PROVIDED, HOWEVER, that, if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. For the purposes of notice, the addresses of the parties shall
be as set forth below; PROVIDED, HOWEVER, that any party shall have the right to
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change its address for notice hereunder to any other location by giving written
notice to the other party in the manner set forth herein. The initial addresses
of the parties hereto are as follows:
If to the Lessor:
Hawkeye Funding, Limited Partnership
c/o ML Leasing Equipment Corp.
Strategic Asset Lease and Finance Group
Four World Financial Center
New York, New York 10080
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy of all notices under this Section 22 to be simultaneously given,
delivered or served to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at the following address:
ML Leasing Equipment Corp.
Controller's Office
Two World Financial ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to the Lessee:
Newington Energy, L.L.C.
c/o Consolidated Edison Development, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy of all notices under this Section 22 to Assignee at such address as
Assignee may specify by written notice to the Lessor and the Lessee.
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SECTION 23. COVENANT OF QUIET ENJOYMENT.
During the Lease Term or any Renewal Term hereunder and so long as no
Event of Default, Event of Loss, Taking or Termination Event shall have occurred
and be continuing, the Lessor recognizes the Lessee's right to quiet enjoyment
of the Project on the terms and conditions provided in this Lease without any
interference from the Lessor or anyone claiming through or under the Lessor.
SECTION 24. RIGHT TO PERFORM FOR LESSEE.
(a) If the Lessee fails to perform or comply with any of its
covenants or agreements contained in this Lease, and any period to cure such
failure has expired without the Lessee curing such failure, the Lessor may, upon
notice to the Lessee but without waiving or releasing any obligations or
default, itself perform or comply with such covenant or agreement, and the
amount of the reasonable expenses of the Lessor incurred in connection with such
performance or compliance shall be payable by the Lessee, not later than ten
(10) days after written notice by the Lessor.
(b) Without in any way limiting the obligations of the Lessee
hereunder, the Lessee hereby irrevocably appoints the Lessor as its agent and
attorney at the time at which the Lessee is obligated to deliver possession of
the Project to the Lessor, to demand and take possession of the Project in the
name and on behalf of the Lessee from whomsoever shall be at the time in
possession thereof.
SECTION 25. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Lessee may consolidate with or merge into any other corporation or
sell all or substantially all of its assets to any Person; PROVIDED that,
following such consolidation, merger or sale of assets, (a) the Guarantor shall
own (directly or indirectly) beneficially and of record a majority of the
membership interests of the Lessee, and (b) no Event of Default, Event of Loss,
Taking or Termination Event shall exist under this Lease. The terms and
provisions of this Lease shall be binding upon and inure to the benefit of the
Lessee and its respective successors and assigns.
SECTION 26. EXPENSES.
The Lessee shall pay all of the out-of-pocket costs and expenses
incurred by the Lessor and any Assignee in connection with this Lease,
including, without limitation, the reasonable fees and disbursements of counsel
to the Lessor and counsel to such Assignee. Notwithstanding anything contained
herein to the contrary, this Section 26 is not intended to increase the Lessee's
obligation to pay any tax under this Lease beyond those taxes for which the
Lessee is obligated to indemnify the Lessor or any other Indemnified Person
under the provisions of paragraph (b) of Section 11 hereof.
SECTION 27. PERMITTED CONTESTS.
(a) The Lessee shall not be required, nor shall the Lessor have the
right, to pay, discharge or remove any tax, assessment, levy, fee, rent, charge
or Lien, or to comply or
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cause the Project to comply with any Legal Requirements applicable thereto or
the occupancy, use or operation thereof, so long as no Potential Default and no
Event of Default, Event of Loss, Taking or Termination Event exists under this
Lease, and, in the reasonable judgment of the Lessee's counsel, the Lessee shall
have reasonable grounds to contest the existence, amount, applicability or
validity thereof by appropriate proceedings, which proceedings in the reasonable
judgment of the Lessor Assignee (i) shall not involve any danger that the
Project or any portion thereof or any Basic Rent or any Additional Rent would be
subject to sale, forfeiture or loss, as a result of failure to comply therewith,
(ii) shall not affect the payment of any Basic Rent or any Additional Rent or
other sums due and payable hereunder or result in any such sums being payable to
any Person other than the Lessor or Assignee, (iii) will not subject either the
Lessor or any Assignee to any danger of civil liability for which the Lessor or
such Assignee is not adequately indemnified or subject the Lessor or any
Assignee to any danger of criminal liability, (iv) if involving taxes, shall
suspend the collection of taxes (unless the Lessee has provided a bond for the
full amount in dispute), and (v) shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which the Lessee or
the Project is subject and shall not constitute a default thereunder (the
"PERMITTED CONTEST"). The Lessee shall conduct all Permitted Contests in good
faith and with due diligence and shall promptly after the final determination
(including appeals) of any Permitted Contest (or, if earlier, upon any of the
above criteria no longer being satisfied) pay and discharge all amounts which
shall be determined to be payable therein. The Lessor shall cooperate in good
faith with the Lessee with respect to all Permitted Contests conducted by the
Lessee pursuant to this Section 27.
(b) In the event the Lessor or Assignee deems, in its reasonable
discretion, that its interests under this Lease or in the Project are not
adequately protected in connection with a Permitted Contest brought by the
Lessee as permitted under this Section 27, the Lessee shall give such reasonable
security as may be demanded by the Lessor or Assignee to ensure payment of such
tax, assessment, levy, fee, rent, charge or Lien and compliance with Legal
Requirements and to prevent any sale or forfeiture of the Project or any portion
thereof, any Basic Rent or any Additional Rent by reason of such nonpayment or
noncompliance. The Lessee hereby agrees that the Lessor may assign such security
provided by the Lessee to Assignee.
(c) At least ten (10) days prior to the commencement of any
Permitted Contest, the Lessee shall notify the Lessor in writing thereof if the
amount in contest exceeds $100,000, and shall describe such proceeding in
reasonable detail. In the event that a taxing authority or subdivision thereof
proposes an additional assessment or levy of any tax for which the Lessee is
obligated to reimburse the Lessor under this Lease, or in the event that the
Lessor is notified of the commencement of an audit or similar proceeding which
could result in such an additional assessment, then the Lessor shall in a timely
manner notify the Lessee in writing of such proposed levy or proceeding.
SECTION 28. INTENTIONALLY OMITTED.
SECTION 29. MISCELLANEOUS.
(a) All agreements, indemnities, representations and warranties,
and the obligation to pay Basic Rent and the Variable Component of Basic Rent,
any Debt Yield-Maintenance Premium, Additional Rent and other amounts contained
in this Lease shall survive until the expiration or other termination of this
Lease, provided that (i) any obligations under this
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Lease accrued at the time of or related to periods prior to such expiration or
other termination (including, without limitation, any obligation to pay
Unrecovered Liabilities and Judgments) shall survive such expiration or other
termination, and (ii) any obligation under this Lease which is expressly
provided to be performed after or to survive the expiration or termination of
this Lease shall survive the expiration or other termination hereof.
(b) This Lease and the instruments, documents or agreements
referred to herein constitute the entire agreement between the parties and no
representations, warranties, promises, guarantees or agreements, oral or
written, express or implied, have been made by any party hereto with respect to
this Lease or the Project, except as provided herein or therein.
(c) This Lease may not be amended, modified or terminated, nor may
any obligation hereunder be waived orally, and no such amendment, modification,
termination or waiver shall be effective for any purpose unless it is in
writing, signed by the party against whom enforcement thereof is sought. A
waiver on one occasion shall not be construed to be a waiver with respect to any
other occasion.
(d) The captions in this Lease are for convenience of reference
only and shall not be deemed to affect the meaning or construction of any of the
provisions hereof. Any provision of this Lease which is prohibited by law or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and the parties hereto shall negotiate in good
faith appropriate modifications to reflect such changes as may be required by
law, and, as nearly as possible, to produce the same economic, financial and tax
effects as the provision which is prohibited or unenforceable; and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Lessee and the Lessor hereby waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect. THIS LEASE HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW
YORK. THE LESSEE AND THE LESSOR AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY
THE LAW OF THE STATE OF NEW YORK, THIS LEASE, AND THE RIGHTS AND DUTIES OF THE
LESSEE AND THE LESSOR HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)
IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, IN RESPECT OF ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THE LESSEE HEREBY IRREVOCABLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE
OF NEW YORK IN THE COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT
AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS LEASE OR THE TRANSACTIONS
CONTEMPLATED HEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE LESSEE
HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN
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INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS LEASE OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO
HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT.
THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE LESSOR
OR ANY ASSIGNEE FROM OBTAINING JURISDICTION OVER THE LESSEE IN ANY COURT
OTHERWISE HAVING JURISDICTION. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
LESSEE AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE
JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. THE LESSEE
AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED
MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS LEASE OR ANY METHOD AUTHORIZED
BY THE LAWS OF NEW YORK. THE LESSOR AND THE LESSEE EXPRESSLY WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATED TO THIS LEASE OR
THE TRANSACTIONS CONTEMPLATED HEREBY. THE LESSOR AND THE LESSEE ACKNOWLEDGE THAT
THE PROVISIONS OF THIS PARAGRAPH (D) OF SECTION 29 HAVE BEEN BARGAINED FOR AND
THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION THEREWITH.
(e) In connection with any sale of the Project pursuant to Section
12, 13, 14, 15 or 19 of this Lease, when the Lessor transfers title, such
transfer shall be on an as-is, non-installment sale basis, without warranty by,
or recourse to, the Lessor, but free of any Lessor Lien.
(f) In connection with the sale or purchase of the Project pursuant
to Section 12, 13, 14, 15 or 19 of this Lease, the Lessee or the Guarantor shall
pay or the Lessee shall cause the purchaser of the Project to pay, in addition
to the purchase price, all transfer taxes, transfer gains taxes, mortgage
recording tax, if any, recording and filing fees and all other similar taxes,
fees, expenses and closing costs (including reasonable attorneys' fees) in
connection with the conveyance of the Project to the Lessee, the Guarantor or
any purchaser. Notwithstanding anything contained herein to the contrary, this
paragraph (f) is not intended to increase the Lessee's obligation to pay any tax
under this Lease beyond those taxes for which the Lessee is obligated to
indemnify the Lessor or any other Indemnified Person under the provisions of
paragraph (b) of Section 11 hereof.
(g) At all times during the term of this Lease, the Lessor's
capitalization shall be such that at least three percent (3%) of its
capitalization in accordance with GAAP (including interest required to be
capitalized in accordance with GAAP on the principal outstanding on any
Financing Arrangement) consists of cash contributions from the Lessor's general
partner and limited partners.
(h) Each time that the Adjusted Acquisition Cost is increased or
decreased pursuant to the terms of this Lease (other than a decrease in
connection with the amortization of the Acquisition Cost of the Project as
contemplated by this Lease), the Lessee and the Lessor shall promptly revise
Exhibit D hereto to reflect such increase or decrease.
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(i) In connection with the purchase of the Project by the Lessee,
the Guarantor or any third party pursuant to the provisions of this Lease, the
Lessor shall deliver to the Lessee, the Guarantor or such third party, as the
case may be, a ▇▇▇▇ of sale and deed conveying to the Lessee, the Guarantor or
such third party, as the case may be, and the Lessee, the Guarantor or such
third party, as the case may be, shall accept a conveyance of, the Lessor's
interest in the Premises and the Project, and, if applicable, any Project
Contract, such conveyance to be without warranty by, or recourse to, the Lessor,
but free of any Lessor Lien (PROVIDED that the purchase price paid by the Lessee
to the Lessor, exclusive of the other amounts payable hereunder in connection
with such purchase, shall equal the Adjusted Acquisition Cost).
(j) In the event of any Event of Default, the Lessee shall, to the
extent required by the Lessor or Assignee, exercise all commercially reasonable
efforts (i) to provide the Lessor (or a designated assignee of the Lessor or
Assignee) with all easements, manuals and other matters and services to be
provided by the Operator under the Project Contracts necessary to enable the
Project to operate on commercially reasonable terms, (ii) to provide the Lessor
(or a designated assignee of the Lessor or Assignee) with any Project Contracts
and Intellectual Property Rights not assigned to the Lessor (or a designated
assignee of the Lessor or Assignee) pursuant to the applicable terms hereof that
are necessary to enable the Project to operate on commercially reasonable terms,
(iii) to provide the Lessor (or a designated assignee of the Lessor or Assignee)
with any permits, licenses or other Governmental Actions (to the extent not
already provided to such party by the Lessee or Guarantor) that are necessary to
enable the Project to operate on commercially reasonable terms in connection
with its operation as an EWG or a "qualifying cogeneration facility" under PURPA
and its delivery of electricity, including, without limitation, all permits,
licenses or other Governmental Actions required to enable such party (PROVIDED
that such party is not a "public-utility company", as such term is defined in
Section 2(a)(5) of the 1935 Act, or otherwise subject to regulation as a public
utility by any relevant governmental body or similar entity under the laws of
any state or locality) to operate the Project on commercially reasonable terms
as an EWG or a "qualifying cogeneration facility" under PURPA in connection with
the sale of electricity to third parties, and (iv) to negotiate in good faith
with the Lessor (or a designated assignee of the Lessor or Assignee), or
exercise all commercially reasonable efforts to locate a third party reasonably
acceptable to the Lessor and Assignee who is capable of operating the Project
for the Lessor (or a designated assignee of the Lessor or Assignee), to operate
the Project for the Lessor (or such designated assignee of the Lessor or
Assignee), for fair market value compensation for such services. The Lessee's
obligations contained in this paragraph (j) shall survive the expiration or
other termination of this Lease until the Lessor receives payment of (1) all
amounts payable pursuant to this Lease and the Agreement for Lease, (2) all
losses, damages, costs and expenses (including, without limitation, attorneys'
fees and expenses, commissions, filing fees and sales or transfer taxes)
sustained by the Lessor, (3) all amounts owing under the Financing Arrangements
and (4) any unreimbursed costs incurred by the Lessor or Assignee with respect
to the Project or the Project Contracts after the term of this Lease, net of any
revenues received from the operation of the Project.
SECTION 30. NO RECOURSE.
The Lessor's obligations hereunder are intended to be the obligations
of the limited partnership and of the corporation which is the general partner
thereof only and no recourse for the payment of any amount due under this Lease,
any Project Contract or any other agreement contemplated hereby, or for any
claim based thereon or otherwise in respect thereof,
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shall be had against any limited partner of the Lessor or any incorporator,
shareholder, officer, director or Affiliate, as such, past, present or future of
such corporate general partner or of any corporate limited partner or of any
successor corporation to such corporate general partner or any corporate limited
partner of the Lessor, or against any direct or indirect parent corporation of
such corporate general partner or of any limited partner of the Lessor or any
other subsidiary or Affiliate of any such direct or indirect parent corporation
or any incorporator, shareholder, officer or director, as such, past, present or
future, of any such parent or other subsidiary or Affiliate. Nothing contained
in this Section 30 shall be construed to limit the exercise or enforcement, in
accordance with the terms of this Lease, the Project Contracts and any other
documents referred to herein, of rights and remedies against the limited
partnership or the corporate general partner of the Lessor or the assets of the
limited partnership or the corporate general partner of the Lessor.
SECTION 31. NO MERGER OF ESTATES.
There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in the Project by reason of the fact that the
same person acquires or holds, directly or indirectly, this Lease or the
leasehold estate hereby created or any interest herein or in such leasehold
estate as well as the fee estate in the Project or any interest in such fee
estate.
▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
(e) The Lessor and the Lessee acknowledge that a portion of the
Premises is expected to be released (the "RELEASE PARCEL") in connection with
constructing a segment of the Industrial Corridor Road and that the Town of
Newington, New Hampshire and the Lessee have not reached a definitive agreement
as to the exact location, length or construction requirements of the Industrial
Corridor Road. Notwithstanding anything to the contrary contained herein, it is
the intention of the Lessor and the Lessee, and the Lessor and the Lessee hereby
agree, that the provisions hereof regarding construction, completion and
operation of the Project shall not apply to the construction, completion and
operation of any portion of the Industrial Corridor Road; PROVIDED, HOWEVER,
that notwithstanding subsection 8.25 of the Agreement for Lease (A) upon
Substantial Completion (as defined in the Agreement for Lease), the Lessee shall
be in compliance with all terms, conditions and requirements of the Town of
Newington, New Hampshire and all other Governmental Authorities with respect to
the construction, completion and operation of the Industrial Corridor Road,
except where the failure to comply will not result, directly or indirectly, in a
Material Adverse Effect; and (B) no act or omission by the Lessee in connection
with the Release Parcel prior to the time of its release from the Premises shall
result in any Lien on the Premises (other than Permitted Liens).
(b) The Lessor and the Lessee further acknowledge and agree that
any remedial actions taken by the Lessor, its successors or assigns, may be
subject to the Lessee's obligations to, and the rights of, the Town of
Newington, New Hampshire and other Governmental Authorities in connection with
the Industrial Corridor Road. The Lessee agrees to construct, maintain and
repair the Industrial Corridor Road in compliance with the Lessee's obligations
to the Town of Newington, New Hampshire and any other applicable Governmental
Authority relating thereto, except where the failure to comply will not result,
directly or indirectly, in a Material Adverse Effect.
-73-
THIS LEASE AGREEMENT IS
CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
to be executed and delivered as of the day and year first above written.
HAWKEYE FUNDING, LIMITED PARTNERSHIP
By Hawkeye Funding, Inc.,
its General Partner
By:
--------------------------------
Name:
Title:
NEWINGTON ENERGY, L.L.C.
By CED/SCS Newington, LLC,
its sole member
By:
--------------------------------
Name:
Title:
-74-
THIS LEASE AGREEMENT IS
CONFIDENTIAL AND PROPRIETARY
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES AND EASEMENTS
A-1
EXHIBIT B
LIST OF PROJECT CONTRACTS
(a) The Operation and Maintenance Agreement, dated as of December 20, 1999,
between Newington Energy, L.L.C. and General Electric International, Inc.
(b) The Guaranty, dated as of November 15, 2000, from General Electric Company
to Newington Energy, L.L.C, guaranteeing the obligations of General
Electric International, Inc. under the O&M Agreement.
(c) The Engineer, Procure and Construct Contract, dated as of May 24, 2000,
between Duke/Fluor ▇▇▇▇▇▇ and Hawkeye Funding, Limited Partnership.
(d) The Guaranty, dated as of May 24, 2000, by Fluor Corporation to Hawkeye
Funding, Limited Partnership, guaranteeing the obligations of Duke/Fluor
▇▇▇▇▇▇ under the EPC Contract.
(e) The Guaranty, dated as of May 24, 2000, by Duke Capital Corporation to
Hawkeye Funding, Limited Partnership, guaranteeing the obligations of
Duke/Fluor ▇▇▇▇▇▇ under the EPC Contract.
B-1
EXHIBIT C
LIST OF PROJECT AUTHORIZATIONS
PERMIT GROUPING PERMIT/APPROVAL PARTICIPATING REGULATORY AGENCY(IES)
FEDERAL/NH STATE Air Operating Permit NHDES-Air Resources Division
US EPA Region I
National Pollutant Discharge Elimination System (NPDES) NHDES-Water Division
US EPA Region I
Wetlands Permit NHDES-Wetlands
Town of Newington
Conservation Commission
US Army Corps of Engineers
Section 401 Water Quality Certification NHDES - Water Division
US EPA Region I
US Army Corps of Engineers
Stack Height Approval Federal Aviation Administration
Fuel Use Act US Department of Energy
NH STATE Certificate of Site and Facility Energy Facility Site Evaluation Cmte
Significant Alteration of Terrain NHDES-Water Division
Rivers Management/Shoreline Protection NHDES-Water Division
Coastal Zone Management (CZM) Program Office of State Planning
Historic Resources Review State Historical Preservation Ofc.
Natural Heritage Inventory Program Dept of Resources & Economic Devel.
Hazardous Waste Generator Registration NHDES-Waste Management Div.
Above-Ground Storage Tank Application NHDES-Waste Management Div.
Public Utility Crossing Another Utility Public Utilities Commission
Public Utility in or Across Railroad Right-of-Way Public Utilities Commission
MUNICIPAL/LOCAL Municipal Water Supply City of Portsmouth
Wastewater Connection/Discharge Permit City of Portsmouth
CONSTRUCTION- Building Permits Local Governmental Authority
RELATED PROJECT Mechanical Permits Local Governmental Authority
AUTHORIZATIONS Electrical Permits Local Governmental Authority
Plumbing Permits Local Governmental Authority
Construction Release / Inspection Local Governmental Authority
Fire Protection Permit Local Governmental Authority
Engineering Licenses State of New Hampshire
C-1
EXHIBIT D
SEMI-ANNUAL RENT COMPONENT
D-1
EXHIBIT E
PLEDGE AGREEMENT
E-1
EXHIBIT F
EASEMENTS
1. EASEMENTS FOR TRANSMISSION LINE ROUTE OPTION 2:
1.1 CE Nuclear Power, LLC. Executed Option Agreement to acquire
Transmission Line Easement Route Option 2 on CE Nuclear Power, LLC property
in place.
1.2 A.A.& M., Inc. Executed Option Agreement to acquire Transmission
Line Easement Route Option 2 on A.A.& M., Inc. property in place. Notice of
exercise given and acknowledged. Closing set for January 15, 2001.
1.3 TyCom Integrated Cable Systems, Inc. Executed Option Agreement to
acquire Transmission Line Easement Route Option 2 and Back-up Underground
Transmission Line Easement on TyCom Integrated Cable Systems, Inc. property
in place.
1.4 Boston & Maine Railroad. Executed License Agreement in place.
1.5 Public Service Company of New Hampshire, Inc. Agreement to acquire
Transmission Line Easement Route Option 2 on Newington Station property of
Public Service Company of New Hampshire, Inc. not yet finalized.
1.6 Town of Newington Sewer Commission. Executed easement and consent
for placement of Transmission Line Easement Route Option 2 on property of
TyCom Integrated Cable Systems, Inc. and property of Town of Newington in
place.
2. WATER INTAKE AND DISCHARGE:
2.1 Sea 3, Inc. Executed Waterline and Pumping Station Easement in
place.
2.2 ▇▇▇▇▇▇▇ Energy Corp. Waterline Easement not yet finalized.
3. ICR ROAD:
3.1 CE Nuclear Power, LLC. Executed Option Agreement to acquire land for
ICR Road on CE Nuclear Power, LLC property, in place.
3.2 A.A.& M., Inc. Executed Option Agreement to acquire land for ICR
Road on A.A.& M., Inc. property in place. Notice of exercise given and
acknowledged. Closing set for January 15, 2001.
3.3 TyCom Integrated Cable Systems, Inc. Executed Option Agreement to
acquire land for ICR Road on TyCom Integrated Cable Systems, Inc. property,
in place.
F-1
3.4 Public Service Company of New Hampshire, Inc. Executed Access
Agreement in place for entry on land of Public Service Company of New
Hampshire, Inc. to construct ICR Road. Agreement to convey title not yet
finalized.
4. MISCELLANEOUS PROPERTY MATTERS:
4.1 Northeast Medical Properties, Inc. Executed Construction Parking
Lease with Northeast Medical Properties, Inc., in place.
4.2 ▇▇▇▇▇▇▇ Energy Corp. Construction Parking and Laydown Agreement not
yet finalized.
F-2
EXHIBIT G
CEI NOTE
G-1
SCHEDULE 2(f)
SEC PUBLIC FILINGS OF THE GUARANTOR