Exhibit 10.9
LEASE AGREEMENT
BETWEEN
SYRACUSE UNIVERSITY
(LANDLORD)
and
PROJECT ORANGE ASSOCIATES, L.P.
(TENANT)
Dated: February 27, 1990
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS.................................................................. 2
Section 1.01. - Definition of Terms................................................. 2
ARTICLE 2 - PREMISES..................................................................... 2
Section 2.01. - Premises............................................................ 2
ARTICLE 3 - TERM......................................................................... 3
Section 3.01. - Definition of Terms................................................. 3
ARTICLE 4 - USE OF PREMISES.............................................................. 3
Section 4.01. - Use of Premises..................................................... 3
ARTICLE 5 - DEVELOPMENT OF FACILITY...................................................... 4
Section 5.01. - Tenant's Obligation to Construct. Install and Operate the Facility.. 4
Section 5.02. - Completion of Construction.......................................... 5
Section 5.03. - Covenants and Requirements of Construction.......................... 5
Section 5.04. - Completion of Facility.............................................. 7
Section 5.05. - Assignments to Landlord............................................. 8
Section 5.06. - Fuel Transmission Line Easement..................................... 9
ARTICLE 6 - RENT......................................................................... 9
Section 6.01........................................................................ 9
Section 6.02........................................................................ 10
ARTICLE 7 - OPERATION OF FACILITY........................................................ 10
Section 7.01. - Operation by Tenant................................................. 10
Section 7.02. - Operating Agreements................................................ 10
ARTICLE 8 - OWNERSHIP OF FACILITY........................................................ 11
Section 8.01. - Ownership of Improvements........................................... 11
ARTICLE 9 - REPAIRS, MAINTENANCE AND ALTERATIONS......................................... 12
Section 9.01. - Repairs and Maintenance............................................. 12
Section 9.02. - Alterations. Improvements and Additions............................. 13
ARTICLE 10 - TAXES AND UTILITY EXPENSES.................................................. 14
Section 10.01. - Taxes.............................................................. 14
Section 10.02. - Conversion of Assessments.......................................... 14
Section 10.03. - Time for Payments.................................................. 15
Section 10.04. - Tenant's Right to Contest Taxes.................................... 15
Section 10.05. - Tenant's Right to Refund of Taxes.................................. 15
Section 10.06. - Utilities.......................................................... 16
ARTICLE 11 - NET LEASE................................................................... 16
Section 11.01. - Net Lease.......................................................... 16
Section 11.02. - Rent Not to ▇▇▇▇▇.................................................. 16
Section 11.03. - Compliance With Environmental Laws................................. 17
ARTICLE 12 - REQUIREMENTS OF PUBLIC AUTHORITY............................................ 19
Section 12.01. - Compliance by Tenant............................................... 19
Section 12.02. - Challenge to Validity.............................................. 20
ARTICLE 13 - COVENANT AGAINST LIENS...................................................... 20
Section 13.01. - Tenant's Obligations to Discharge.................................. 20
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Section 13.02. - Right to Discharge................................................. 21
Section 13.03. - No Implied Consent of Landlord..................................... 22
ARTICLE 14 - ENTRY ON PREMISES BY LANDLORD............................................... 22
Section 14.01....................................................................... 22
Section 14.02....................................................................... 23
Section 14.03....................................................................... 23
Section 14.04....................................................................... 23
ARTICLE 15 - ASSIGNMENT AND SUBLETTING................................................... 24
Section 15.01....................................................................... 24
ARTICLE 16 - HOLDING OVER................................................................ 26
Section 16.01....................................................................... 26
ARTICLE 17 - SURRENDER................................................................... 26
Section 17.01. - Surrender of Possession............................................ 26
Section 17.02....................................................................... 29
Section 17.03....................................................................... 29
ARTICLE 18 - SIGNS....................................................................... 29
Section 18.01....................................................................... 29
ARTICLE 19 - INDEMNITY................................................................... 30
Section 19.01. - Tenant's Indemnification of Landlord............................... 30
Section 19.02. - Landlord's Indemnification of Tenant............................... 31
Section 19.03. - Limitation of Landlord's Indemnity................................. 32
Section 19.04....................................................................... 32
ARTICLE 20 - INSURANCE................................................................... 33
Section 20.01. - Casualty Insurance................................................. 33
Section 20.02. - Other Insurance.................................................... 33
Section 20.03. - Evidence Of Insurance and Possession of Policy..................... 34
Section 20.04. - Limitations Upon Concurrent Insurance.............................. 36
Section 20.05. - Disbursement of Proceeds........................................... 36
Section 20.06. - Notice of Cancellation............................................. 37
Section 20.07. - Apportionment of Premiums Upon Expiration of Term.................. 37
Section 20.08. - Responsibility of Tenant During Construction....................... 37
ARTICLE 21 - EMINENT DOMAIN.............................................................. 39
Section 21.01. - Termination of Lease............................................... 39
Section 21.02. - Distribution of Condemnation Proceeds.............................. 39
Section 21.03. - Partial Taking..................................................... 40
ARTICLE 22 - RIGHT OF EACH PART TO PERFORM COVENANTS OF THE OTHER........................ 41
ARTICLE 23 - MORTGAGES................................................................... 42
Section 23.01. - Tenant's Right to Mortgage Leasehold Estate........................ 42
Section 23.02. "Permitted Mortgage"................................................. 42
Section 23.03. "Lending Institution"................................................ 44
Section 23.04. Required Provisions.................................................. 44
Section 23.05. - Interim Financing.................................................. 44
Section 23.06. - Indemnity.......................................................... 45
ARTICLE 24 - DAMAGE OR DESTRUCTION....................................................... 46
Section 24.01....................................................................... 46
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ARTICLE 25 - LATE CHARGES................................................................ 50
Section 25.01. - Past Due Rent...................................................... 50
ARTICLE 26 - TITLE PROVISIONS............................................................ 51
Section 26.01. - Quiet Enjoyment.................................................... 51
Section 26.02 - Landlord's Title.................................................... 51
Section 26.03. - Landlord's Title Documents......................................... 51
Section 26.04. - Title Objections................................................... 51
ARTICLE 27 - DEFAULT..................................................................... 52
Section 27.01. - Events of Default.................................................. 52
Section 27.02. - Remedies on Default................................................ 54
Section 27.03....................................................................... 57
Section 27.04....................................................................... 58
Section 27.05....................................................................... 58
Section 27.06....................................................................... 58
Section 27.07....................................................................... 59
Section 27.08....................................................................... 59
ARTICLE 28 - WAIVERS..................................................................... 59
Section 28.01. - Waivers............................................................ 59
ARTICLE 29 - APPROVALS AND REPRESENTATIONS............................................... 60
Section 29.01. Approvals............................................................ 60
Section 29.02....................................................................... 61
ARTICLE 30 - FORCE MAJEURE............................................................... 61
Section 30.01....................................................................... 61
ARTICLE 31 - NOTICE...................................................................... 62
Section 31.01....................................................................... 62
ARTICLE 32 - CERTIFICATES................................................................ 63
Section 32.01....................................................................... 63
ARTICLE 33 - GOVERNING LAW............................................................... 64
Section 33.01....................................................................... 64
ARTICLE 34 - PARTIAL INVALIDITY.......................................................... 64
Section 34.01....................................................................... 64
ARTICLE 35 - MEMORANDUM OF LEASE......................................................... 65
Section 35.01....................................................................... 65
ARTICLE 36 - INTERPRETATION.............................................................. 65
Section 36.01....................................................................... 65
ARTICLE 37 - BINDING EFFECT.............................................................. 66
Section 37.01....................................................................... 66
ARTICLE 38 - NO ORAL MODIFICATION - ENTIRE AGREEMENT..................................... 66
Section 38.01....................................................................... 66
ARTICLE 39 - HEADINGS AND TABLE OF CONTENTS.............................................. 67
Section 39.01....................................................................... 67
Section 39.01....................................................................... 67
ARTICLE 40 - WAIVER OF JURY TRIAL AND COUNTERCLAIMS...................................... 67
Section 40.01....................................................................... 67
ARTICLE 41 - NO BROKER................................................................... 68
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Section 41.01....................................................................... 68
ARTICLE 42 - TERMINATION................................................................. 68
Section 42.01....................................................................... 68
Section 42.01....................................................................... 68
EXHIBITS
Exhibit A Description of Leased Land
Exhibit B Supplemental Lease Agreement
Exhibit C Plans and Specifications for the Facility
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GROUND LEASE
THIS LEASE (the "Lease") made on February 27, 1990 between SYRACUSE
UNIVERSITY, a New York educational corporation having its principal office at
Syracuse, New York 13244 (the "Landlord") and PROJECT ORANGE ASSOCIATES, L.P., a
Delaware limited partnership (the "Tenant").
RECITALS
1. Landlord has entered into an agreement with Tenant dated the date of
this Agreement (the "Steam Contract") for the purchase of steam to be produced
by Tenant from a cogeneration facility (the "Cogeneration Plant") to be
constructed and operated by Tenant upon the land leased by this Lease.
2. Tenant has also undertaken to install and operate certain steam, water,
condensate, fuel, gas and electric lines and related apparatus and equipment
necessary or appropriate for the operation of the Cogeneration Plant and
delivery of steam to Landlord which, together with the Cogeneration Plant,
constitute the "Facility."
3. Landlord has also entered into an agreement with the Tenant dated the
date of this Lease ("the Operating Agreement") providing for the operation by
Tenant of Landlord's existing steam generation facility (the "Existing Plant").
4. Landlord and a predecessor of Tenant have previously entered into a
certain Lease Agreement, dated as of December 28, 1987, pertaining to the
subject matter of this Lease (the "Prior Agreement"). This Lease is intended to
supersede the Prior Agreement which has been terminated by contemporaneous
agreement between the Customer and such predecessor.
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In consideration of the mutual covenants of this Lease, Landlord and Tenant
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definition of Terms. For purposes of this Lease all defined
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terms, as indicated by the capitalization of the first letter of such term,
shall have the meanings specified in the Steam Contract, unless the context or
use clearly indicates another meaning.
ARTICLE 2
PREMISES
Section 2.01. Premises. Landlord leases to Tenant, and Tenant leases from
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Landlord, upon and subject to the terms, conditions, covenants and provisions of
this Lease, the parcel of land situated in the City of Syracuse, County of
Onondaga, New York, and described in the attached Exhibit "A" made a part of
this Lease ("the Premises"), provided, however, that the underground oil storage
tanks are excluded from the Premises.
ARTICLE 3
TERM
Section 3.01. Definition of Terms. The term of this Lease shall commence
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on the date of this Lease (the "Term Commencement Date") and shall expire on the
date the Steam Contract expires, unless terminated earlier pursuant to this
Lease. The parties shall enter into a supplemental agreement, substantially in
the form attached as Exhibit B, setting forth the commencement and expiration
dates of the term.
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ARTICLE 4
USE OF PREMISES
Section 4.01. The Premises shall be used by Tenant solely for the
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construction, installation and operation of the Cogeneration Plant and Facility
as provided in the Steam Contract.
ARTICLE 5
DEVELOPMENT OF FACILITY
Section 5.01. Tenant's Obligation to Construct, Install and Operate the
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Facility. Tenant shall obtain all of the approvals for the Facility described in
--------
Article 29, at its sole cost and expense. If the approvals are denied, Tenant
shall have the right to terminate this Lease upon serving written notice on
Landlord within 30 days of any such denial. The Cogeneration Plant shall be
constructed on the Premises in accordance with the plans, specifications,
sitings and schedules of completion for the Facility prepared for Tenant (which
shall have been received by Landlord at least sixty (60) days prior to the
commencement of construction) and reasonably approved in writing by Landlord
("the Plans"). This Lease may be terminated by Landlord, at its option, upon 30
days' written notice (i) if Tenant shall not have closed the financing for the
Facility (the "financial closing") on or before June 30, 1990, or thereafter if
the Tenant fails to diligently pursue, subject to work stoppages not initiated
by Tenant, the completion of construction at the Facility as soon as reasonably
possible with a view towards completion of construction of the Facility and the
delivery of steam to Landlord by October 1, 1991 or (ii) if the Tenant abandons
the construction of the Facility. Any written notice of termination by Landlord
shall also be given to the holders of a Permitted Mortgage, as defined in
Article 23 of this Lease, who shall have been identified in a written notice by
Tenant to Landlord, at the address of the
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holder provided in the Tenant's notice to Landlord. The holders of any Permitted
Mortgage shall have a period of thirty (30) days from the giving of the notice
of termination within which to cure the default of the Tenant in the pursuit of
completion of the construction of the Facility. If the default of the pursuit of
completion of construction cannot be cured by the holders of the Permitted
Mortgage within such thirty (30) day period, the holders shall have an
additional period of ninety (90) days within which to cure the default, provided
the holders promptly commence and diligently pursue the curing of the default.
The documents constituting the Plans will be attached as Exhibit C and made a
part of this Lease.
Section 5.02. Completion of Construction. Tenant shall, at its sole cost
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and expense, fully complete, or cause the completion of, the construction and
installation of the Facility in accordance with the Plans and all provisions of
this Lease as soon as reasonably possible, subject to work stoppages not
initiated by Tenant, with a view toward completion of construction of the
Facility and the delivery of steam to Landlord by October 1, 1991.
Section 5.03. Covenants and Requirements of Construction. In the
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construction and installation of the Facility (sometimes referred to as "the
Work"), Tenant:
(a) shall obtain all permits and approvals described in Article 29;
(b) shall comply with all requirements of public authorities described
in Article 12 applicable to the Work;
(c) shall have received Landlord's prior written approval of all
architects, engineers and the general contractor to be engaged in the
construction of the Facility, which approval shall not be unreasonably withheld;
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(d) shall perform the Work expeditiously, in strict compliance with
the Plans, in a good and workmanlike manner and of first-class quality, and in
accordance with all the provisions of this Lease;
(e) shall pay all proper accounts for work done or materials furnished
under all contracts which it has entered into relating to the Work, provided,
however, that Tenant may retain any amounts which Tenant's architect has not
certified to be due, or which are properly and reasonably retained to secure the
performance of any work or the correction of any defect or which, in the opinion
of the Tenant's architect, are reasonably retained in anticipation of damages
arising from any contractor's default, or which are required to be retained
under the provisions of the New York Lien Law;
(f) Tenant shall require performance and payment bonds to be furnished
by the general contractor and each major subcontractor of the Work naming
Landlord as co-obligee of the bonds in an amount equal to the total cost of the
construction, acquisition and installation of the Facility, which is presently
estimated to be $73,100,000, unless the requirement of a bond shall have been
waived in writing by Landlord. If the holders of a Permitted Mortgage shall not
require performance and payment bonds for the total cost of the Facility, the
contractors may provide performance and payment bonds for less than the total
cost of the Facility, but not less than eighty (80%) percent of the total cost
of the Facility, provided guarantees of completion and performance for the
balance of the cost of the Facility shall be provided by entities, and in form,
reasonably acceptable to Landlord;
(g) shall bear all costs incurred in the relocation, in a manner
reasonably satisfactory to Landlord, of all utilities and access servicing the
Existing Plant and the Landlord's
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chilled water plant which may be required to enable Tenant to construct the
Facility on the Premises.
Section 5.04. Completion of Facility. The Facility shall be deemed fully
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completed upon Landlord's receipt of evidence, in the form of certificates of
opinion of licensed architects or engineers employed by Tenant or by Landlord,
or in such other form as Landlord reasonably may require, that:
(a) the Facility shall have been completed in all respects in a good
and workmanlike manner and of first-class quality in accordance with the Plans;
(b) The Facility and each of its components, including, all machinery,
equipment, apparatus and lines, are operating in accordance with the Plans, are
available for use by Tenant and are capable of delivery of steam to the Landlord
to the interconnection points, in the Volumes and meeting the specifications
required by the Steam Contract;
(c) all building codes and other regulations and all requirements of
public authorities described in Article 12 have been complied with;
(d) all permits and permanent unconditional certificates of occupancy
which are required have been obtained;
(e) all approvals which are required for the operation of the Facility
and Tenant's performance of the Steam Contract have been obtained;
(f) the contract with the Contractor for the operation of the
Facility, as provided in Section 1.02 of the Steam Contact, shall be in full
force and effect and the Contractor shall have commenced the performance of its
duties as operator of the Facility;
(g) all parking areas are ready for use; and
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(h) all exterior areas, including easements and rights of way, are
adequately graded, landscaped, tidied up, and ready for use, and all other areas
are clean and all surplus building material and rubbish removed from the
Premises.
Section 5.05. Assignments to Landlord. All contracts entered into by
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Tenant for the construction, installation and operation of the Facility shall be
assignable, at Landlord's option, to Landlord or its designee, upon Tenant's
failure to perform any of its obligations under this Article, subject, however,
to the requirements of all Consents and Agreements and any assignments which may
be required by the holder of a Permitted Mortgage as defined in Article 23.
Section 5.06. Fuel Transmission Line Easement. Landlord shall, without
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expense to Tenant, provide an easement for a transmission line for natural gas
and/or propane over the land owned by Landlord between Jamesville Avenue and
East ▇▇▇▇▇▇ Street and proceeding northerly from East ▇▇▇▇▇▇ Street along the
easterly boundary of ▇▇▇▇▇▇▇▇ Avenue to the northerly boundary of ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ and along the easterly boundary of the 200 block of Fineview Place
within the City of Syracuse, New York, provided, however, that such easement
shall be restricted to the transmission only of fuel for the operation of the
Facility and the Existing Plant. The location of the easement shall be mutually
determined by Landlord and Tenant. The easement shall terminate upon the
expiration or sooner termination of this Lease and shall be in such form and
upon such other terms and conditions as shall be acceptable to Landlord acting
reasonably.
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ARTICLE 6
RENT
Section 6.01. Rent. Tenant shall pay Landlord an annual rent of One Dollar
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($1.00) for the Premises, at the office of the Landlord, in advance on the Term
Commencement Date and on each anniversary of the Term Commencement Date.
Section 6.02. The term "rent" shall include the annual rent, the additional
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rent and any other sums, costs, expenses or amounts from time to time payable by
Tenant to Landlord under this Lease, whether by way of indemnity or otherwise,
and all of the foregoing, whether or not expressed to be rent, shall be deemed
to be rent, and Landlord shall have all remedies for the collection of them,
when in arrears, as are available to Landlord for the collection of any other
rent in arrears.
ARTICLE 7
OPERATION OF FACILITY
Section 7.01. Operation by Tenant. Tenant, at all times, shall operate, or
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cause the operation of, the Facility in compliance with, and in a manner which
will enable it to fully perform its obligations to Landlord under the Steam
Contract.
Section 7.02. Operating Agreements.
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(a) Tenant shall not enter into or terminate or assign (except for
assignments as security to the holders of a Permitted Mortgage as defined in
Article 23) any operating agreement or other agreement for the operation or use
of the whole or any substantial part of the Facility ("the agreements") without
the prior written approval of Landlord, which shall not be unreasonably
withheld, provided, however, that Tenant may, without such consent, assign such
agreement to any corporation, partnership or other entity controlling,
controlled by, or under
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common control with the Tenant. Any agreement entered into or assignment made by
Tenant in violation of this paragraph shall be null and void.
(b) Tenant shall cause the agreements to be assignable, at Landlord's
option, to Landlord or its designee, upon the termination of this Lease.
ARTICLE 8
OWNERSHIP OF FACILITY
Section 8.01. Ownership of Improvements. During the term of the Lease, the
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Facility shall be owned by Tenant. Upon the expiration or earlier termination of
this Lease in accordance with its terms, the Facility, together with all
personal property used in the operation of the Facility (except the property
excluded from surrender by Tenant to Owner pursuant to Section 17.01), and any
improvements to the Premises shall become the property of Landlord without any
further consideration by Landlord or any further act or deed required of either
the Landlord or the Tenant, provided, however, that the Tenant shall execute and
deliver to the Landlord such documents as the Landlord reasonably shall request
to evidence Landlord's ownership.
ARTICLE 9
REPAIRS, MAINTENANCE AND ALTERATIONS
Section 9.01. Repairs and Maintenance.
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(a) Tenant, at its sole cost and expense, shall manage, maintain and
promptly repair the Premises and the Facility including, without limitation, all
machinery, equipment, fixtures, apparatus, lines, pipes, sidewalks, passageways,
roadways, curbs, parking areas and landscaping, and all personal property used
in the operation of the Facility, and shall keep them in good order and
condition, and neat and clean. "Repair" shall include replacement, restoration
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and renewal when necessary. Tenant's obligations under this Article apply to all
repairs, interior and exterior, structural and non-structural, ordinary and
extraordinary, and foreseen and unforeseen. All repairs made by Tenant shall be
at least equal in quality and class to the original Work. Tenant shall do all
necessary shoring of foundations and walls of any structures on the Premises and
every other act or thing for the safety and preservation of them and any other
part of the Facility which may be necessary by reason of any excavation or other
building operation upon any adjoining property or street, alleyway or
passageway. Tenant shall manage and maintain the Premises and the Facility as
would a prudent owner and shall not commit, or permit to be committed, any waste
or any nuisance on them, or permit any part of the Premises or the Facility to
be used for any dangerous, noxious or offensive purpose, and shall not permit
any damaged improvement to remain on the Premises for an unreasonable period of
time.
(b) Tenant shall keep and maintain the Premises and the Facility and
all adjoining sidewalks, curbs, alleyways and passageways in a clean and orderly
condition, free of dirt, rubbish, snow, ice and unlawful obstructions.
Section 9.02. Alterations, Improvements and Additions. Upon completion of
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the construction and installation of the Facility, Tenant shall not make any
alterations, improvements, or additions to the Premises or the Facility
(collectively "alterations") of a cost in excess of $250,000 with respect to any
single alteration without the prior written consent of Landlord, which shall not
unreasonably be withheld. Tenant's request to Landlord for permission to make
alterations shall be accompanied by detailed plans and specifications, estimated
costs and the identity of the contractors which shall perform the work. Any
alterations permitted by Landlord shall be at least equal in quality and class
to the original Work and shall be made in accordance with all of the provisions
applicable to the original Work and all of the provisions of
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this Lease. No part of the Facility shall be removed without the prior written
consent of the Landlord, except as required for the restoration, repair or
maintenance of the Facility or required to comply with requirements of public
authorities. Tenant shall not increase the electric generating capacity of the
Cogeneration Plant above 80 megawatts, net of electric consumption within the
Leased Premises, without the prior written consent of Landlord.
ARTICLE 10
TAXES AND UTILITY EXPENSES
Section 10.01. Taxes. Tenant shall, as additional rent, pay and discharge
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punctually and before any fine, penalty, interest or cost may be added to them,
all taxes, assessments, water and sewer rents, rates and charges, vault license
fees or rentals, levies, license and permit fees and all other governmental
impositions and charges of every kind and nature whatsoever, extraordinary as
well as ordinary, foreseen and unforeseen, which shall be charged, levied, laid,
assessed, imposed upon, become due and payable out of or in respect of, or
become liens upon the whole or any part of, the Premises or the Facility,
together with all interest and penalties, under all present or future laws,
ordinances, requirements, orders, directives, rules or regulations of the
federal, state, county, and city governments and of all other governmental
authorities whatsoever (the "Taxes").
Section 10.02. Conversion of Assessments. To the extent permitted by law,
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Tenant or its designees shall have the right to apply for the conversion of any
assessment for local improvements assessed during the term of this Lease to
permit them to be payable in annual installments, and upon such conversion,
Tenant shall pay and discharge punctually the installments as they become due
and payable, provided the assessment shall be fully paid by Tenant before the
termination of this Lease. Landlord shall permit the application for the
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conversion to be filed in its name, if necessary, and shall execute all
documents reasonably required by Tenant for the conversion, provided Tenant
shall pay all of Landlord's costs, including a reasonable attorney's fee.
Section 10.03. Time for Payments. Tenant shall be deemed to have complied
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with the covenants of this Article if the Taxes are paid within the period
allowed by law or by the governmental authority imposing them. Tenant shall
produce and exhibit to Landlord satisfactory evidence of payment within 5 days
of Landlord's request.
Section 10.04. Tenant's Right to Contest Taxes. Tenant shall have the
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right to contest or review, in good faith, all Taxes by appropriate legal
proceedings, or in such other manner as may be appropriate, provided it shall
promptly pay all Taxes when due. Tenant shall conduct the proceedings
diligently, at its own cost and expense and free of any expense to Landlord.
Landlord shall execute all documents reasonably necessary for the proceedings.
Section 10.05. Tenant's Right to Refund of Taxes. Any refunds or rebates
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of the Taxes paid by Tenant shall belong to Tenant. Any refunds received by
Landlord shall be deemed trust funds and shall be received by Landlord in trust
for Tenant and paid to Tenant. Landlord shall, upon the request of Tenant, sign
any receipts reasonably required to obtain payment of any refund or rebate of
Taxes.
Section 10.06. Utilities. Tenant shall pay and discharge punctually all
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sewer rents and charges for water, gas, electricity, light and power, and any
and all other services and utilities furnished to the Premises or the Facility.
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ARTICLE 11
NET LEASE
Section 11.01. Net Lease. Except as otherwise provided in Section 11.03,
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the rent payable by Tenant under this Lease shall be absolutely net to Landlord,
with the intent and effect that all costs, expenses and obligations of every
kind and nature whatsoever relating to the Premises and the Facility, which may
arise or become due during the term of this Lease ("the expenses") shall be paid
by the Tenant and Tenant shall indemnify and save Landlord harmless from and
against the expenses.
Section 11.02. Rent Not to ▇▇▇▇▇. Tenant's obligation to pay rent under
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this Lease shall not be affected by, nor shall the rent ▇▇▇▇▇ or be diminished
or reduced on account of any want of repair, destruction or damage to the
Premises or the Facility, regardless of the cause or extent of them, or for any
inconvenience, discomfort, interruption of business or otherwise arising from
the making of alterations, changes, additions, improvements or repairs to the
Premises or the Facility, or because of any present or future governmental laws,
ordinances, requirements, orders, directives, rules or regulations, or for any
other cause or reason. Tenant waives the provisions of any statute or rule of
law now or hereafter in effect contrary to this Section.
Section 11.03. Compliance With Environmental Laws.
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(a) Prior to the execution of this Agreement, Tenant shall cause to be
conducted at its expense, by an engineering firm acceptable to an institutional
lender providing financing for the Facility, an environmental audit of the
Premises, the scope and description of which shall have been approved by
Landlord, for purposes of determining the existence thereon of any circumstance
or condition which does not comply with all federal, state and local laws, codes
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and rules and regulations promulgated pursuant to statutory authority
(collectively, "Environmental Laws") governing the production, generation,
release, discharge, emission, disposal, transportation, containment, storage or
remediation involving any substance which is hazardous or acutely hazardous to
the public health or safety or which could be the basis for or support a claim
under any Environmental Laws (any such substance, a "Hazardous Substance").
(b) If any liability shall be imposed upon the Tenant, at any time
before or after the Term Commencement Date or the expiration or earlier
termination of this Lease, under or by reason of any Environmental Laws, (i) due
to the existence at or prior to the commencement of construction of the
Cogeneration Plant of Hazardous Substances on or about the Premises, the
existence of which is determined prior to or as a result of the environmental
audit described in paragraph (a) (except any liability imposed upon Tenant
because of any conditions caused by Tenant, its employees, agents, contractors
and assigns [collectively "the Tenants"] prior to the commencement of
construction of the Cogeneration Plant or because of any aggravation by Tenants
after the Term Commencement Date of any conditions disclosed by the
environmental audit described in paragraph (a)), or (ii) as a result solely of
the acts or activities of the Landlord subsequent to such audit, the Landlord
shall, at its expense, comply with all requirements of Environmental Laws
relating to such Hazardous Substances (including requirements relating to the
removal or containment thereof) and shall save, defend, indemnify and hold the
Tenants harmless from and against any such liability, including without
limitation, damages, fines, penalties, reasonable legal fees and all other
reasonable costs to the Tenants in connection therewith.
(c) The indemnification provided by Landlord to Tenants under this
Section 11.03 shall be the sole and exclusive remedy of Tenants against Landlord
with respect to the
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presence of Hazardous Substances at the Premises and shall be in lieu of any
indemnification that might otherwise have been available to Tenants pursuant to
Article 19 of this Agreement.
ARTICLE 12
REQUIREMENTS OF PUBLIC AUTHORITY
Section 12.01. Compliance by Tenant.
------------- --------------------
(a) Except as otherwise expressly provided in Section 11.03, Tenant,
at its sole cost and expense, shall promptly comply with all present and future
laws, ordinances, requirements, orders, directives, rules and regulations of all
federal, state, county, town and city governments and of all other governmental
authorities, departments, boards and officers, and all orders, rules and
regulations of the National and New York Boards of Fire Underwriters or any
other body or bodies which may exercise similar functions, foreseen and
unforeseen, ordinary and extraordinary, applicable to the Premises or the
Facility or any part of them or to their use, whether in force at the
commencement of the term of this Lease or passed, enacted or directed in the
future, and whether or not compliance shall require structural changes
(collectively in this Article "the requirements"). Tenant shall pay all costs,
expenses, liabilities, losses, damages, fines, penalties, claims and demands,
including reasonable counsel fees (collectively "the costs"), that may in any
manner arise from or be imposed because of the failure of Tenant to comply with
this Article and shall indemnify, hold harmless and defend Landlord of and from
the costs.
(b) Tenant shall comply with the requirements of all policies of
public liability, fire and all other policies of insurance in force with respect
to the Premises and the Facility. Tenant shall take immediate steps to remedy or
prevent any violation or attempted violation of the provisions of this Section
by any subtenant or other user of the Premises or the Facility.
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Section 12.02. Challenge to Validity. Tenant shall have the right, after
------------- ---------------------
prior written notice to the Landlord, to contest by appropriate legal
proceedings ("the proceedings") diligently conducted in good faith, in the name
of the Tenant, Landlord, or both, if necessary, without cost or expense to
Landlord, the validity or application of the requirements. If compliance with
the requirements may be delayed during the proceedings without the incurrence of
any lien, charge or liability of any kind against the Premises or the Facility
which cannot be bonded and without subjecting Tenant or Landlord to any
liability, civil or criminal, for failure to comply with them, Tenant may delay
compliance with them until the final determination of the proceedings. Landlord
shall execute all documents reasonably necessary for the proceedings.
ARTICLE 13
COVENANT AGAINST LIENS
Section 13.01. Tenant's Obligations to Discharge. Tenant shall not create
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or permit to be created and shall promptly discharge, any mechanic's, laborer's,
or materialman's lien, or any other charge which might be or become a lien,
encumbrance or charge upon the Premises, the Facility, or any part of either
("the lien") except for any lien that is being contested in good faith by
appropriate proceedings and is appropriately bonded or results from any act or
omission for which Landlord is responsible pursuant to Section 11.03.
Section 13.02. Right to Discharge. If any lien included in Section 13.01
------------- ------------------
shall be filed against the Premises, the Facility, or any part of either,
Tenant, at its own cost and expense, within 30 days after the filing of the
lien, shall discharge it of record or post a bond reasonably satisfactory to
Landlord to assure its discharge. If Tenant fails to discharge or bond the lien
within 30 days after its filing, Landlord, in addition to any other right or
remedy it may have, and without waiving its right to declare a default, may
discharge the lien of record or post a bond to
-16-
assure its discharge. Any amounts paid by Landlord in the discharge or bonding
of the lien, including, but not limited to, penalties, interest, costs,
allowances and reasonable attorney's fees, together with interest at the rate of
18% per annum, shall constitute additional rent under this Lease and shall be
paid by Tenant to Landlord on demand. Any amounts paid by Tenant in the
discharge or bonding of a lien which results from any act or omission for which
Landlord is responsible pursuant to Section 11.03, including, but not limited
to, penalties, interest, costs, allowances and reasonable attorney's fees,
together with interest at the rate of 18% per annum shall be paid by Landlord to
Tenant on demand.
Section 13.03. No Implied Consent of Landlord. Nothing in this Lease shall
------------- ------------------------------
be construed as the consent or request of Landlord, express or implied, by
inference or otherwise, to any contractor, subcontractor, laborer or materialman
for the performance of any labor or the furnishing of any materials for any
improvement, alteration or repair of the Premises, the Facility, or any part of
either.
ARTICLE 14
ENTRY ON PREMISES BY LANDLORD
Section 14.01 Tenant shall permit Landlord and its authorized
-------------
representatives to enter the Premises and the Facility upon reasonable notice at
all reasonable business times for the purposes of (a) inspecting them, or (b)
making any necessary repairs or performing any other work that may be necessary
because of Tenant's failure to make repairs or perform other work after written
notice from Landlord, or at any time without notice in case of emergency.
Landlord's right of entry shall not imply any duty on its part to perform any
repairs or other work and Landlord's performance of any repairs or work shall
not constitute a waiver of any default of Tenant. Any such inspection shall be
conducted at Landlord's sole risk and expense. In
-17-
conducting any such inspection, Landlord shall comply with Tenant's reasonable
rules and Policies for security and safety.
Section 14.02. During the progress of any work on the Premises or in the
-------------
Facility by Landlord pursuant to Section 14.01, Landlord may store all necessary
materials, tools, supplies and equipment on the Premises and at the Facility.
Landlord shall not be liable for inconvenience, annoyance, disturbance, loss of
business or other damage incurred by Tenant or any subtenant because of the
performance of those repairs or work, or the storing of materials, tools,
supplies and equipment on the Premises or at the Facility during the progress of
such work.
Section 14.03. Landlord shall have the right to enter and take immediate
-------------
possession of the Premises and the Facility for the purpose of assuming
operating control of the Facility pursuant and subject to Section 3.03 of the
Steam Contract and all Consents and Agreements. The Landlord's right of
possession and control of the Premises and the Facility for this purpose shall
be for the period, and its liability while in possession and control shall be
limited, as provided in Section 3.0.3 of the Steam Contract and all Consents and
Agreements.
Section 14.04. Landlord shall have the right to enter the Premises and the
-------------
Facility upon reasonable notice at all reasonable times during usual business
hours within two years prior to the expiration of the term of this Lease for the
purpose of showing them to prospective purchasers, tenants or operators. Any
such entry shall be at Landlord's sole risk and expense and shall be conducted
in compliance with Tenant's reasonable rules and policies for security and
safety.
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ARTICLE 15
ASSIGNMENT AND SUBLETTING
Section 15.01.
-------------
(a) Tenant, without the prior written consent of Landlord, which shall
not unreasonably be withheld, shall not assign this Lease or sublet the whole or
any part of the Premises or the Facility, provided, however, that Tenant may
assign this Lease without the prior written consent of Landlord (i) to any
corporation, partnership or other entity controlling, controlled by, or under
common control with the Tenant or (ii) to the holders of a Permitted Mortgage,
defined in Article 23, for collateral security purposes only. For purposes of
this paragraph (a), an assignment shall include any transfer of this Lease,
whether voluntary or involuntary by operation of law, including any merger or
consolidation of the Tenant and any transfer, sale, assignment, pledge, or other
encumbrance, whether voluntary or involuntary or by operation of law, of more
than forty-nine percent (49%) of the stock of Tenant, except transfers upon
death or inter vivos among the shareholders of Tenant or to their immediate
families. Any attempted assignment or subletting in violation of this Section
shall be null and void.
(b) Any assignment or subletting permitted by Landlord shall be upon
the following conditions (unless waived by Landlord) and upon such other
conditions as Landlord at the time of permission reasonably may require:
(i) Tenant shall not be in default under this Lease;
(ii) The assignee, in a document satisfactory to Landlord and in
recordable form, shall agree to faithfully perform and be bound by all of
the terms, conditions, covenants, provisions and agreements of this Lease;
-19-
(iii) Any sublease shall provide that it is subject to the terms
and conditions of this Lease and may, at Landlord's option, require the
sublessee to attorn to Landlord;
(iv) Neither the assignment nor any sublease, nor Landlord's
consent to either, shall release or discharge Tenant from any liability,
past or future, under the Lease.
(v) Tenant shall remain fully liable under this Lease without
notice from Landlord of any default under this Lease; and
(vi) Landlord's consent to any assignment or sublease shall not
constitute or be deemed its consent, nor constitute a waiver of the
requirement of its consent, to any subsequent assignment or sublease.
(c) Except as otherwise expressly permitted by this Lease,
Tenant shall not delegate any of its obligations nor assign any of its rights
under this Lease separate from any permitted assignment.
ARTICLE 16
HOLDING OVER
Section 16.01. If Tenant shall remain in occupation of the Premises or the
-------------
Facility after the expiration or earlier termination of this Lease, Tenant shall
be deemed to be a tenant from month to month under the terms and conditions of
this Lease, except that in lieu of the annual rent, Tenant shall pay a monthly
rent equal to $150,000. The monthly rent shall be paid in advance on the first
day of each month.
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ARTICLE 17
SURRENDER
Section 17.01. Surrender of Possession. Upon the expiration or earlier
------------- -----------------------
termination of the term of this Lease, Tenant shall quit and peacefully
surrender and deliver to Landlord the possession and use of the Premises and the
Facility, without delay, in good order, condition and repair, except for
reasonable wear and tear after the last necessary repair, replacement,
restoration or renewal made by Tenant, and free and clear of all liens,
encumbrances and charges, without any payment or allowance by Landlord on
account of any improvements on the Premises, and all rights of Tenant under this
Lease and in the Facility, shall terminate. Notwithstanding the expiration or
termination of this Lease, Tenant shall remain liable to Landlord for any loss
or damage suffered by Landlord because of any default of Tenant. Upon
surrender, Tenant shall assign to Landlord all operating agreements and other
agreements and rights, including any easements or rights-of-way, relating to the
operation or use of the Premises or the Facility, or Tenant's interest in them,
as Landlord may request, including the full and unencumbered use of any land
owned, leased or licensed by Tenant for the purpose of providing additional
parking, traffic, or other service facilities for use in connection with the
Premises or the Facility but excluding any properties, agreements, easements or
rights of way for the use or operation of, and rights of ownership or use with
respect to, pipelines, conduits, loading and storage facilities or other
properties, goods or equipment not regularly situated on the Premises or on the
easement referred to in Section 5.06 or on other easements located north of the
southerly commencement point of such easement. Notwithstanding the foregoing,
the rights to be so assigned shall include, but shall not be limited to, the
right to obtain transportation of natural gas to the Premises through any
natural gas pipeline constructed by or for Tenant for purposes of
-21-
providing transportation of natural gas from either an interstate or intrastate
transporter of natural gas or a local distribution company to the Facility (a
"Project Pipeline") to the extent of the maximum daily quantities of natural gas
which (i) are then required for operation of the Facility and (ii) were, at any
time within 24 months preceding the last operation of the Facility prior to the
expiration or earlier termination of this Lease, transported through a Project
Pipeline. The right described in the preceding sentence shall continue (x) for
any remainder of the term of this Lease as originally fixed by Section 3.01 (the
"Term"), on the terms and at the rates that would have been applicable to tenant
if this Lease had not been terminated, and (y) thereafter on such terms and at
such rates as may be approved by the New York State Public Service Commission or
such other regulatory body as may then have jurisdiction, or if rates for such
transportation are not then subject to regulatory approval, at rates determined
in accordance with the methodology then most recently utilized by a regulatory
body having jurisdiction over the local transportation of natural gas in New
York State. Tenant shall not dispose of the rights to any Project Pipeline
except upon the conditions that (A) the acquiror of such rights shall be bound
to afford transportation of natural gas to the Facility to the extent described
in the preceding sentence, (1) for the remainder of the Term, on the terms and
at the rates described in clause (x) of such sentence, and (2) for five years
after the expiration of the Term, on the terms and at the rates described in
clause (y) of such sentence, and (B) if the acquiror elects to abandon or
decommission the Project Pipeline at any time within five years after the
expiration of the Term, it shall make such pipeline available for purchase by
Landlord at the then depreciated book value of such pipeline.
Section 17.02. Any personal property of Tenant remaining upon the Premises
-------------
or the Facility more than 60 days after the expiration or earlier termination of
this Lease, may, at the
-22-
option of Landlord, be deemed to have been abandoned by Tenant and may be
retained by Landlord as its property, or disposed of, without accountability, by
Landlord in such manner as it deems appropriate. In addition, Landlord, at its
option, within thirty days after the expiration or earlier termination of this
Agreement, and upon ten days written notice to Tenant, may require Tenant, at
Tenant's sole cost and expense, to remove from the Premises any personal
property of Tenant within thirty days of the giving of notice by Landlord.
Section 17.03. The provisions of this Article shall survive the expiration
-------------
or earlier termination of this Lease.
ARTICLE 18
SIGNS
Section 18.01. Tenant shall not install or replace, nor permit the
-------------
installation or replacement by others, of any signs or advertising matter in,
upon or over the Premises or the Facility without the prior written consent of
Landlord. Tenant shall comply with all applicable requirements of governmental
authorities having jurisdiction and shall obtain all necessary approvals prior
to the installation or replacement of any sign or other advertising matter
permitted by Landlord.
ARTICLE 19
INDEMNITY
Section 19.01. Tenant's Indemnification of Landlord. Tenant shall
-------------
indemnify and hold the Landlord harmless from and against any and all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including, without limitation, reasonable fees of architects,
engineers, attorneys and other professionals and experts (collectively
"claims"), which may be imposed upon, incurred by or asserted against Landlord
because of any of the following,
-23-
unless the claims arise as a consequence of the
action or failure to act by the Landlord (pursuant to Section 11.03 or
otherwise):
(i) Any work or thing done in, on or about the Premises or the
Facility;
(ii) Any use, non--use, possession, occupation, condition,
operation, maintenance or management of the Premises, the Facility or any
part of either, or any adjacent alley, sidewalk, curb, passageway or space;
(iii) Any act or omission of Tenant or any of its agents,
contractors, servants, employees, subtenants, licensees, or invitees; or
(iv) Any accident, injury or death to any person or damage to any
property occurring in, on or about the Premises or the Facility, or any
adjacent alley, sidewalk, curb, passageway or space.
If any action or proceeding is brought against Landlord because of any
one or more of the claims, Tenant, at its sole cost and expense, upon written
notice from Landlord, shall defend that action or proceeding by counsel approved
by Landlord in writing.
Section 19.02. Landlord's Indemnification of Tenant. The Landlord shall
------------- ------------------------------------
indemnify and hold the Tenant (including for this purpose any corporation,
partnership or other entity controlling, controlled by or under common control
with, the Tenant) harmless from and against any and all claims which may be
imposed upon, incurred by or asserted against the Tenant because of any of the
following, unless the claims are covered by Section 11.03 or arise as a
consequence of the action or failure to act by the Tenant:
(i) any work or thing done in, on or about the premises of the
Landlord (excluding the Premises and the Facility, except to the extent
covered by clause (v) below);
-24-
(ii) any use, non--use, possession, occupation, condition,
operation, maintenance or management of the premises of the Landlord
(excluding the Premises and the Facility, except to the extent covered by
clause (v) below);
(iii) any act or omission of the Landlord or any of its agents,
contractors, servants, employees, licensees, or invitees;
(iv) any accident, injury or death to any person or damage to
property occurring in, on or about the premises of the Landlord (excluding
the Premises and the Facility, except to the extent covered by clause (v)
below); or
(v) Any use of the Premises or the Facility by the Landlord after
the Term Commencement Date.
If any action or proceeding is brought against Tenant because of any
one or more of the claims, Landlord, at its sole cost and expense, upon written
notice from Tenant, shall defend that action or proceeding by counsel approved
by Tenant in writing.
Section 19.03. Limitation of Landlord's Indemnity. The indemnification of
------------- ----------------------------------
Tenant by Landlord and of Landlord by Tenant pursuant to this Article shall in
all events be limited by the applicable provisions of Section 11.03.
Section 19.04. The provisions of this Article shall survive the expiration
-------------
or earlier termination of this Lease.
ARTICLE 20
INSURANCE
Section 20.01. Casualty Insurance. Tenant, at its sole cost and expense,
------------- ------------------
shall keep the Facility insured against loss or damage by fire or other
casualty, with such extended coverage as shall from time to time be customary
for premises similarly situated in the Syracuse, New York,
-25-
area, with a replacement cost endorsement, in amounts sufficient to prevent
Landlord or Tenant from becoming a co-insurer within the terms of the policy and
in no event less than one hundred percent (100%) of the replacement value of the
Facility, exclusive of the cost of foundations, excavations, and footings below
the lowest basement floor, without any deduction for depreciation. At the
request of Landlord, and at the sole cost and expense of Tenant, the replacement
value shall be determined from time to time, but not more frequently than once
every two years, by an appraiser acceptable to Landlord.
Section 20.02. Other Insurance. Tenant, at its sole cost and expense,
------------- ---------------
shall maintain:
(a) general public liability insurance against all claims for bodily
injury, death or property damage, occurring upon, in or about the Premises or
the Facility, and on or about any adjoining sidewalks and passageways, in the
amount of at least $5,000,000 for injury or death to any one person and
$25,000,000 for injury or death to more than one person in any one accident or
occurrence and $10,000,000 for damage to property or in such greater limits as
may be reasonably required by Landlord;
(b) boiler and pressure vessel insurance, including pressure pipes,
upon all steam boiler and other pressure vessels and pipes in the Facility in an
amount not less than the greater of $10,000,000 or the full replacement value of
the boilers, pressure vessels and pipes;
(c) business interruption insurance in an amount that can be obtained
by the payment of an annual premium of $10,000 during the Base Year and by the
payment of an annual premium of $10,000 plus an additional $1,000 in each
succeeding year. The maximum annual premium shall not exceed $50,000.
(d) Worker's compensation insurance, disability benefits insurance and
all other insurance Tenant is required by law to provide covering loss resulting
from injury, sickness,
-26-
disability or death of all persons employed by Tenant or by Tenant's
contractors, subcontractors, or agents;
(e) Contractual Coverage Insurance providing protection for Tenant and
Tenant's contractors, subcontractors and agents against damage claims that may
arise from operations under this Lease, with limits in the amounts required in
paragraph (a) of this Section; and
(f) such other insurance and in such amounts as may from time to time
be reasonably required by Landlord against other insurable hazards.
Section 20.03. Evidence Of Insurance and Possession of policy.
------------- ----------------------------------------------
(a) All insurance required by this Article shall be obtained by valid
and enforceable policies, issued by insurers of recognized responsibility and
licensed to do business in the State of New York. Upon the financial closing (as
defined in Section 1.06 of the Steam Contract) or at least five days prior to
the commencement of construction of the Facility, whichever occurs first, Tenant
shall deliver to Landlord certified copies of the policies of insurance to be
furnished by Tenant. Thereafter, Tenant shall furnish to Landlord, not less than
thirty (30) days prior to the expiration dates of such policies, certified
copies of the renewal policies. Tenant shall also deliver to Landlord evidence
satisfactory to Landlord of the payment in full of the premiums on such policies
(i) on the date required for delivery of the initial policies, for the period
covered by the initial policies and (ii) prior to the expiration dates of such
policies and any renewal policies, for the period covered by the renewal
policies.
(b) Blanket Insurance. Tenant may obtain the insurance required by
this Article under a blanket insurance policy or policies ("the blanket
policies") covering the Premises, the Facility and other properties, provided:
-27-
(i) the blanket policies shall specify, or Tenant shall furnish
Landlord with a written statement from the insurers under the blanket
policies specifying, the amounts of the total insurance specifically
allocated to the Premises and the Facility, which shall not be less than
the amounts required by this Article;
(ii) the amounts specified shall be sufficient to prevent any one
of the assureds from becoming a co-insurer within the terms of the
applicable policy; and
(iii) the blanket policies shall in all respects comply with the
endorsements and coverage required by this Article.
Section 20.04. Limitations Upon Concurrent Insurance. Except the insurance
------------- -------------------------------------
required by Section 20.02(a), neither Landlord nor Tenant shall obtain separate
insurance concurrent in form, or contributing in the event of loss, with the
insurance required by this Article, unless Landlord and Tenant are named
insureds, with loss payable as required by this Lease, provided, however, that
Landlord may obtain business interruption/extra expense insurance without
including Tenant as a named insured. Each party shall immediately notify the
other of any such separate insurance and Tenant shall deliver the policies to
Landlord as required by Section 20.03.
Section 20.05. Disbursement of Proceeds.
------------- ------------------------
(a) All policies of insurance required by this Article ("the
policies") shall name Landlord and Tenant as insureds as their interests may
appear (except for the insurance required in Section 20.02(d) under which
landlord need not be named as an insured) and, except for the insurance required
by Section 20.02(a), shall also name the holder of any Permitted Mortgage, upon
request of the holder, as insureds as their interests may appear, by a standard
mortgagee clause. During the construction and after the completion of the
Facility pursuant to Article 5, the loss, if any, under the policies shall be
adjusted by Tenant. If the proceeds do not exceed
-28-
$500,000, they shall be paid to Tenant for repair of the damage. If the proceeds
exceed $500,000, they shall be paid and disbursed in accordance with Article 24.
(b) The policies shall provide that any loss shall be adjusted and the
proceeds paid as provided in this Lease.
Section 20.06. Notice of Cancellation. The policies and certificates
------------- ----------------------
evidencing the policies shall provide for thirty (30) days prior written notice
to Landlord of any cancellation, reduction in amount or change in coverage.
Section 20.07. Apportionment of Premiums Upon Expiration of Term. Upon the
------------- -------------------------------------------------
expiration of the term of this Lease, all transferable policies shall be
transferred by Tenant to Landlord and the premiums on them shall be apportioned
between landlord and Tenant if Tenant is not in default under this Lease.
Section 20.08. Responsibility of Tenant During Construction. Prior to
------------- --------------------------------------------
commencement of the construction required under Article 5, Tenant at its own
expense shall obtain, furnish to Landlord, and maintain through completion of
construction the following policies of insurance in form reasonably acceptable
to Landlord:
(i) Worker's compensation insurance, disability benefits insurance
and all other insurance Tenant is required by law to provide covering loss
resulting from injury, sickness, disability or death of all persons
employed by Tenant or by Tenant's contractors, subcontractors, or agents;
(ii) Contractor's Public Liability and Property Damage Insurance
and Vehicle Liability Insurance with limits of at least $5,000,000 for
personal injury or death to any one person; $25,000,000 for personal injury
or death in any one accident and
-29-
$10,000,000 for property damage, which shall insure the activities of
Tenant and Tenant's contractors, subcontractors and agents, including full
underground coverage;
(iii) Contractual Coverage Insurance providing protection for
Tenant and Tenant's contractors, subcontractors and agents against damage
claims that may arise from operations under this Lease, with limits in the
amounts required in paragraph (ii) of this Section;
(iv) An all-risk Builders' Risk Insurance, fire and extended
coverage, on a 100% completed value basis on the insurable portion of the
Facility; and
(v) Any other insurance Landlord reasonably may require.
ARTICLE 21
EMINENT DOMAIN
Section 21.01. Termination of Lease. If all or substantially all of the
------------- --------------------
Premises and the Facility shall be taken for any public or quasi-public use
under any statute, by right of eminent domain or by private purchase in lieu of
a taking (the "Condemnation Proceedings"), this Lease shall automatically
terminate on the date title passes or possession is taken, whichever occurs
first. If less than all or substantially all of the Premises and the Facility is
taken, this Lease shall continue in full force and effect as to the portions not
taken. For purposes of this Article substantially all of the Premises and the
Facility shall be deemed taken if the portions not taken shall not be sufficient
to enable Tenant to render substantial performance of its obligations to
Landlord under the Steam Contract. The provisions of this Article shall survive
the termination of this Lease.
Section 21.02. Distribution of Condemnation Proceeds. In the event of a
------------- -------------------------------------
taking, Landlord and Tenant shall cooperate in the prosecution of the
Condemnation Proceedings and
-30-
shall request the court or board having jurisdiction of the Condemnation
Proceedings to determine the value of the Premises and the Facility separately.
The aggregate net award (the "net award") for the taking of the Premises and the
Facility, after deducting all expenses and costs, including attorneys' fees,
shall be payable to Landlord, Tenant, and the holder of any Permitted Mortgage
and distributed as follows:
(a) First, the amount determined in the Condemnation Proceedings to be
the value of the Premises taken, exclusive of all improvements, shall be paid to
Landlord. If this amount is not separately determined in the Condemnation
Proceedings, it shall be determined by agreement between Landlord and Tenant or,
if they do not agree, by a court having jurisdiction in the matter.
(b) Second, the balance of the net award shall be paid to the holder
of any Permitted Mortgage to the extent of the then unpaid amounts secured by
such mortgage.
(c) Third, from the remaining balance of the net award, the amount of
the accrued Subordinated User Charges and Deferred User Charges, with accrued
interest, under the Operating Agreement shall be paid to Landlord.
(d) The then remaining balance of the net award, if any, shall be
divided between Landlord and Tenant, in proportion to the relative present
values, at the time of the taking, of the Landlord's and the Tenant's interest
in the Facility, as determined by agreement between them or, if they do not
agree, by a court having jurisdiction in the matter.
Section 21.03. Partial Taking. If less than substantially all of the
------------- --------------
Premises and the Facility is taken (the "partial taking"), the balance of the
net award, after payment to Landlord for the amount determined to be the value
of the portion of the Premises taken, shall be paid to Tenant who promptly
shall, at its own cost and expense, restore the Facility to a complete
-31-
architectural unit and, to the extent reasonably practicable, as nearly like its
condition prior to the taking. To the extent that the balance of the net award
exceeds the cost of restoration, it shall be paid as provided in paragraphs (b),
(c) and (d) of Section 21.02.
ARTICLE 22
RIGHT OF EACH PARTY TO PERFORM COVENANTS OF THE OTHER
Section 22.01. If either party shall fail to perform any of its
-------------
obligations under this Lease, the other party (the "curing party") may, at its
option, after ten (10) days' notice to the defaulting party, or without notice
in case of an emergency, perform any of such obligations.
Section 22.02. Any moneys paid and all costs and expenses incurred by the
-------------
curing party, including reasonable attorneys' fees, in the performance of the
defaulting party's obligations under this Lease, together with interest at the
rate of eighteen per cent (18%) per annum, shall be paid by the defaulting party
to the curing party on demand.
Section 22.03. The curing party's exercise of its rights under this
-------------
Article shall not constitute a waiver of any other rights or remedies the curing
party may have because of the default of the other party.
ARTICLE 23
MORTGAGES
Section 23.01. Tenant's Right to Mortgage Leasehold Estate. Tenant shall
------------- -------------------------------------------
have the right to mortgage its leasehold estate in the Premises and its interest
in the Facility, in accordance with the provisions of this Lease, and not
otherwise, by one or more "Permitted Mortgages" (as defined in Section 23.02)
and to renew, modify, consolidate, replace, extend and refinance (individually
and collectively "refinance or refinancing") any one or more Permitted Mortgages
to the extent permitted by Section 23.02. Tenant shall not assign, sell,
transfer, mortgage, pledge,
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or encumber its leasehold estate in the Premises or in the Facility, except as
expressly permitted under this Lease. Landlord agrees to execute and deliver a
Consent and Agreement with respect to each Permitted Mortgage at Tenant's sole
cost and expense.
Section 23.02. "Permitted Mortgage":
-------------
(a) A "Permitted Mortgage" shall mean a mortgage loan, obtained from a
lending institution, at least 100% of the proceeds of which are designated for
use in connection with the construction, development, improvement, expansion,
alteration, maintenance, repair, replacement, or operation, or for costs of the
development, of the Facility or the Existing Plant or any facilities which are
appurtenant to or are a necessary and integral part of the operation of the
Facility or the Existing Plant ("the related facilities"), including the
establishment of appropriate reserves required by the lending institution,
capitalized interest and other reasonable and necessary financing costs, or for
the purchase or redemption of any economic interest (whether characterized as
debt or equity) in Tenant (to the extent only of its ownership in the Facility
and the related facilities), and any refinancing of such mortgage loan by a
lending institution, provided at least 95% of the proceeds of any such
refinancing shall be applied for the foregoing purposes. The terms of any such
mortgage loan or refinancing shall require the full amortization of principal
prior to the expiration of the term of this Lease.
(b) Every Permitted Mortgage or encumbrance of all or any part of the
Premises and the Facility and any security interest granted with respect to any
part of the Facility shall expressly recognize (i) the rights of the Landlord
under this Lease, and in particular, the right of the Landlord to acquire
possession of the Premises and the possession of and title to the Facility upon
the expiration or earlier termination of this Lease and (ii) the rights of the
Landlord under Section 3.03 of the Steam Contract, except to the extent that
such rights may be modified,
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restricted or limited in any Consent and Agreement. Nothing in this Lease shall
authorize Tenant, or imply any consent or agreement on the part of Landlord, to
subject Landlord's estate and interest in the Premises to any Permitted
Mortgage, encumbrance or charge.
Section 23.03. "Lending Institution". The term "lending institution" shall
-------------
mean any one or more insurance companies, bank or trust companies, colleges,
universities, charitable institutions or unions, pension, profit or retirement
funds or trusts, governmental agencies or funds, real estate investment trusts,
or other financial or lending institutions.
Section 23.04. Required Provisions. Each Permitted Mortgage shall contain
------------- -------------------
the following provisions, among others:
(a) The obligation of the lending institution to release insurance and
condemnation proceeds to Landlord, Tenant, and the holder of any mortgage as
their interest may appear, for the purposes required by this Lease, as modified
by any Consent and Agreement;
(b) Both Landlord and Tenant shall receive all notices required or
desired to be given by the lending institution and, if any default is not cured
by Tenant within the period of time permitted under the mortgage, the lending
institution shall accept performance of the covenant in default by Landlord, if
it is performed within a reasonable specified time thereafter; and
(c) The lending institution shall give thirty (30) days' written
notice to Landlord prior to the commencement of any foreclosure proceedings
against the Tenant.
Section 23.05. Interim Financing. The terms "mortgage" and "Permitted
------------- -----------------
Mortgage" shall include both permanent mortgage financing and interim
construction mortgage financing and all advances under them.
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Section 23.06. Indemnity. Tenant shall make all payments of principal and
------------- ---------
interest under any Permitted Mortgage and shall pay all of the costs and
expenses incurred in connection with them, all of which shall be paid by Tenant
directly to the lending institution as and when they shall be due and payable
and shall comply with all other terms and conditions of any Permitted Mortgage.
Tenant shall indemnify, defend and hold harmless Landlord from any and all
liabilities, loss, costs, obligations, expenses, claims, demands, suits, causes
of action, or damages of any kind or character and by whomsoever claimed,
arising from or in any manner connected with or related to any Permitted
Mortgage, and Tenant shall pay to Landlord any and all reasonable attorneys'
fees incurred by Landlord in connection with the protection of Landlord's right,
title and interest in and to the Premises and Landlord's rights under the Steam
Contract, to the extent that they may be affected by claims arising out of or
related to any Permitted Mortgage. If Landlord shall perform any of the
obligations of Tenant to the lending institution under any Permitted Mortgage,
any sums expended by Landlord shall be repaid to Landlord as additional rent by
Tenant upon demand, together with interest at the rate of eighteen per cent
(18%) per annum.
ARTICLE 24
DAMAGE OR DESTRUCTION
Section 24.01.
-------------
(a) If the Facility or any part of it shall be damaged or destroyed by
fire or otherwise, Tenant shall promptly notify Landlord, and, at its sole cost
and expense, and whether or not the insurance proceeds are sufficient, restore,
repair, replace, or rebuild the Facility (individually and collectively
"restore" or "the restoration"). The restoration shall be at least equal in
quality and class to the original Work, and shall be performed pursuant to plans
and
-35-
specifications approved by Landlord, which approval shall not be unreasonably
withheld or delayed, and the holder of any Permitted Mortgage and in accordance
with all provisions applicable to the Work and all other provisions of this
Lease. The restoration shall be commenced within ninety (90) days from the date
of the damage or destruction, provided, however, that Landlord shall grant such
extensions of time for the adjustment of insurance and the preparation of the
plans and specifications as reasonably may be required. The architect or
engineer in charge of the restoration shall be selected by Tenant and approved
in writing by Landlord, which approval shall not be unreasonably withheld or
delayed, and the holder of any Permitted Mortgage. Tenant shall diligently
complete the restoration.
(b) The insurance proceeds payable because of damage to or destruction
of the Facility ("the insurance proceeds") shall be paid to the holder of any
Permitted mortgage to be applied as required by the Permitted Mortgage and the
Consent and Agreement. If there is no Permitted Mortgage, the insurance proceeds
shall be payable to Landlord. In the event the insurance proceeds are payable to
Landlord, the insurance proceeds, net of the costs of adjustment and collection
("the net insurance proceeds"), shall be disbursed in accordance with the
following subparagraphs (c), (d) and (e).
(c) The net insurance proceeds shall be disbursed to Tenant for the
restoration, in installments equal to ninety per cent (90%) of the work
completed and materials furnished in the restoration, upon the written request
of Tenant accompanied by the following:
(i) evidence, by an official search of a licensed title insurance
company doing business in Syracuse, New York, approved by Landlord, that no
lien has been filed against the Premises or the Facility; and
-36-
(ii) a certificate signed and verified by Tenant and the architect
or engineer in charge of the restoration, stating that:
A. the amount requested is justly due to contractors,
subcontractors, materialmen, engineers, architects or other persons who
have rendered services or furnished materials for the restoration, a
description of the services and materials and the amounts due each person,
and that no part of the amount requested has been included in any other
request by Tenant;
B. except for the amount requested, after due inquiry, no other
amounts are due on the date of the certificate for labor, wages, materials,
supplies or services in connection with the restoration;
C. the cost of labor and materials required to complete the
restoration will not exceed the net insurance proceeds remaining after
payment of the amount requested; and
D. the restoration is in compliance with the plans and
specifications approved by Landlord and has been performed in accordance
with the provisions applicable to the original Work.
(d) Upon completion of the restoration, there shall be paid to Tenant,
from, and only to the extent of, the net insurance proceeds, an amount equal to
100% of the costs of work completed and materials furnished in the restoration
less the amounts previously disbursed to Tenant, provided Tenant shall have
complied with all the requirements and provisions of this Article and shall have
obtained an unconditional permanent certificate of occupancy, if required, from
the appropriate governmental authority.
-37-
(e) Upon receipt of evidence satisfactory to Landlord that the
restoration has been completed in accordance with the provisions of this Lease
and its cost paid in full and that there are no liens upon the Premises or the
Facility, the net insurance proceeds remaining, if any, shall be paid to Tenant,
provided Tenant is not in default under this Lease.
(f) Subject to the rights of the holders of any Permitted Mortgage, if
this Lease shall be terminated for any reason other than in accordance with this
Article or Article 21, Landlord shall be entitled to all insurance proceeds, and
Tenant shall have no interest in, nor any right, title, or claim to them.
(g) No destruction or damage to the Facility or any part of it shall
permit Tenant to surrender this Lease or shall relieve Tenant from its
obligation to pay rent or from any of its other obligations under this Lease.
Tenant waives any rights now or in the future conferred upon it by statute or
otherwise to quit or surrender this Lease or to any suspension, diminution,
abatement or reduction of rent on account of any destruction or damage to the
Facility or the Premises.
(h) If the Facility is damaged by fire or otherwise during the last
three (3) years of the term of this Lease and the cost of restoration will
exceed 50% of the then replacement value of the Facility, Tenant may elect to
terminate this Lease on at least thirty (30) days' notice to Landlord, given
within ninety (90) days after the damage. If Tenant elects to terminate, this
Lease shall end on the date specified in the notice, provided Tenant shall
restore the Premises to its condition prior to the commencement of the
construction of the Cogeneration Facility ("the restoration"), which restoration
shall be performed in accordance with all of the requirements of this Agreement
applicable to the original Work. Subject to the rights of the holder of any
Permitted Mortgage, all insurance proceeds shall first be made available for the
costs of
-38-
restoration by Tenant and the balance shall be the sole property of Landlord,
and Tenant shall not have any right or claim to the insurance proceeds. The
termination of the Lease under this Section shall not release Tenant from its
obligation to pay rent or from any of its other obligations under this Lease
accrued or payable for the period prior to the effective date of termination.
ARTICLE 25
LATE CHARGES
Section 25.01. Past Due Rent. If Tenant shall fail to pay the rent when
------------- -------------
due and payable, Tenant shall pay to Landlord, as additional rent, an amount
calculated at a rate per year equal to 18% on the delinquent rent until paid in
full. Nothing in this section shall limit Landlord's right and remedies under
any other provision of this Lease.
ARTICLE 26
TITLE PROVISIONS
Section 26.01. Quiet Enjoyment. Tenant, upon payment of the rent and the
------------- ---------------
performance and observance of all covenants, warranties, agreements and
conditions of this Lease on its part to be kept, shall quietly have and enjoy
the Premises during the term of this Lease, without hindrance or molestation by
anyone claiming by, through or under Landlord.
Section 26.02 Landlord's Title. Landlord represents and warrants to Tenant
------------- ----------------
that it has fee simple title to the Premises and the power and authority to
execute and deliver this Lease and to carry out and perform all covenants to be
performed by it.
Section 26.03. Landlord's Title Documents. Upon execution of this Lease,
------------- --------------------------
Landlord shall deliver to Tenant such abstracts, maps, and title documents, as
it may have. Tenant shall
-39-
return the title documents to Landlord within 90 days. Landlord shall also
provide Tenant a survey of the Premises.
Section 26.04. Title Objections. Within ninety (90) days after the
------------- ----------------
execution of this Lease, Tenant shall notify Landlord of any objections to the
title of Tenant's leasehold estate, which shall not include (a) liens for
current taxes not in default, (b) minor survey exceptions which do not adversely
affect the value of the Premises or prevent the use of the Premises for the
purposes contemplated by this Lease, (c) utility easements which do not
adversely affect the value of the Premises or prevent the use of the Premises
for the purposes contemplated by this lease and (d) liens and encumbrances which
do not materially adversely affect the value of the Premises or prevent the use
of the Premises for the purposes contemplated by this Lease. If Tenant does not
notify Landlord within that 90-day period, any objection to title Tenant may
have shall be deemed waived. Upon Landlord's failure to satisfy and discharge of
record the title objections within forty-five (45) days after its receipt of the
notice from Tenant, Tenant may, at its option, cancel this Lease by giving
Landlord written notice within ten (10) days after the expiration of the forty-
five (45) day period and the Lease shall terminate on the giving of notice. Upon
termination, neither party shall have any further rights or liabilities under
this Lease, except that Tenant shall remain liable to Landlord for any damages
caused by any default by Tenant.
ARTICLE 27
DEFAULT
Section 27.01. Events of Default. Any one or more of the following events
------------- -----------------
shall constitute an event of default (an "event of default"):
-40-
(a) Tenant's failure to pay any rent when due and payable and the
continuation of the failure for sixty (60) days after written notice from
Landlord;
(b) Tenant's failure to observe and perform any of the terms,
covenants, conditions, limitations or agreements under Articles 10, 12, 20 and
23 of this Lease on Tenant's part to be observed or performed and the
continuation of the failure for a period of sixty (60) days after notice from
Landlord specifying the nature of the failure. If the Event of Default is
curable but is impossible to cure within sixty (60) days, so long as Tenant
shall commence and diligently prosecute the curing of the default, the Tenant
shall have a period of one hundred twenty (120) days from the date notice of
default shall have been given by Owner within which to cure the default;
(c) Tenant shall file a voluntary petition in bankruptcy or shall be
adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
code or any other present or future federal, state or other bankruptcy or
insolvency statute or law (collectively in this Article "insolvency laws"), or
shall seek, consent to or acquiesce in the appointment of any bankruptcy or
insolvency trustee, receiver or liquidator of Tenant or of all or any
substantial part of its properties or of the Premises or the Facility;
(d) The commencement of any action, case or proceeding ("proceeding")
against Tenant seeking (i) any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any insolvency
laws, or (ii) the appointment, without the consent or acquiescence of Tenant, of
any trustee, receiver or liquidator of Tenant or
-41-
of all or substantially all of its properties or of the Premises or the
Facility, and the proceeding shall continue undismissed for a period of ninety
(90) days;
(e) Tenant shall abandon or vacate the Premises or the Facility;
(f) A final judgment for the payment of money in excess of $100,000
shall be rendered against Tenant and shall remain undischarged for a period of
sixty (60) days during which execution shall not be effectively stayed; or
(g) The termination of the Steam Contract for any reason other than
the default of Landlord.
Section 27.02. Remedies on Default.
------------- -------------------
(a) Upon any one or more events of default, Landlord may, at its
option, at any time thereafter, give written notice to Tenant specifying the
event or events of default and stating that this Lease and the term demised
shall expire and terminate on the date specified in the notice, which shall be
at least ten days after the giving of the notice. Upon the date specified in
this notice, this Lease and the term demised and all rights of Tenant under this
Lease shall expire and terminate. The expiration or termination of this Lease by
Landlord shall not relieve Tenant of its liability and obligations under this
lease, which shall survive.
(b) Upon termination of this Lease pursuant to this Section, Tenant
shall quit and peacefully surrender the Premises, and Facility to Landlord.
Landlord, upon, or at any time after, the expiration or termination of this
Lease, without additional notice and without prejudice to any other rights and
remedies it shall have at law or in equity,
(i) may re-enter the Premises and the Facility, and remove from
them Tenant, its agents, employees, servants, licensees, and subtenants and
other persons, firms or corporations and all or any of its or their
property, either by summary dispossess
-42-
proceedings or by any suitable action or proceeding at law or in equity, or
by force or otherwise, without being liable to indictment, prosecution or
damages for such action;
(ii) may repossess and have, hold and enjoy the Premises and the
Facility; and
(iii) shall have the right to receive all rental and other income
from the Premises and the Facility.
(c) Upon Landlord's termination of this Lease, reentry of the Premises
or dispossession of the Tenant by summary proceedings or otherwise:
(i) The rent shall become due and payable and be paid up to the
time of termination, re-entry, or dispossession;
(ii) Landlord at any time and from time to time may relet the
Premises and the Facility or any part or parts or either, either in the
name of Landlord or otherwise, for a term or terms which may, at Landlord's
option, be less than or exceed the period which would otherwise have
constituted the balance of the term of this Lease and on such conditions,
including, without limitation, concessions of free rent and alterations of
the Premises and the Facility, as Landlord, in its sole discretion may
determine, and Landlord may collect and receive all rents and income from
them;
(iii) Landlord shall not be responsible or liable for any failure
or refusal to relet the Premises and the Facility or any part of them, or
for any failure to collect any rent due upon any reletting of them;
(iv) Whether or not the premises or the Facility or any part of
them shall have been relet, Tenant, until the end of what would have been
the term of this Lease in the absence of expiration or termination, shall
be liable to Landlord, for damages for
-43-
Tenant's default, which shall include, without limitation, all repossession
costs, brokerage commissions, legal expenses and reasonable attorneys'
fees;
(v) Landlord shall be entitled to recover damages from Tenant, by
separate action, actions or proceedings, monthly or at such other time or
times when the rent would have been payable under this Lease if it were
still in effect.
(d) Nothing in this Article shall limit or Prejudice the right of
Landlord to prove and obtain damages in an amount equal to the maximum allowed
by any statute or rule of law in effect at the time those damages are to be
proved, whether or not that amount, is greater than the amount provided by this
Article.
Section 27.03.
-------------
(a) Upon the occurrence of an event of default by Tenant, Landlord
shall also give written notice of the default, at the time written notice is
given to Tenant, to the holders of not more than two Permitted Mortgages ("the
Mortgagee") designated in writing by Tenant to Landlord.
(b) Upon the occurrence of an event of default by Tenant described in
paragraph (a) or (f) of Section 27.01 which shall not have been cured by Tenant
within the sixty (60) day period, the Mortgagee shall have an additional period
of thirty (30) days within which to cure the default.
(c) Upon the occurrence of an event of default by Tenant described in
paragraph (b) of Section 27.01 which shall not have been cured by Tenant within
the sixty (60) day period, the Mortgagee shall have an additional period of
thirty (30.) days within which to cure the default. If the event of default
described in paragraph (b) of Section 27.01 is curable but is impossible to cure
within sixty (60) days, so long as the Tenant or the Mortgagee shall
-44-
commence and diligently prosecute the curing of the default, the Mortgagee shall
have a period of one hundred twenty (120) days from the date notice of default
shall have been given by Landlord within which to cure the default.
Section 27.04. Tenant expressly waives, to the extent permitted by law:
-------------
(a) the service of any notice of intention to re-enter provided by any
statute;
(b) for and on behalf of itself and all persons claiming through or
under it, including any leasehold mortgagee or other creditor, any and all right
of redemption or re--entry or re-possession in the event of:
(i) dispossession of Tenant by a judgment or by warrant of any
court or judge;
(ii) re-entry or re-possession by Landlord; or
(iii) any expiration or termination of this lease.
The terms "enter", "re-enter", "entry", or "re-entry" as used in this Lease are
not restricted to their technical legal meanings.
Section 27.05. Upon any breach or threatened breach by Tenant of any of
-------------
the agreements, terms, covenants or conditions contained in this Lease, Landlord
may enjoin the breach or threatened breach and may invoke any right and remedy
allowed at law, in equity, by statute, or otherwise as though re-entry, summary
proceedings, and the other remedies were not available under this Lease.
Section 27.06. Each right and remedy under this Lease shall be cumulative
-------------
and shall be in addition to every other right or remedy provided for in this
Lease or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise by Landlord of any one or
-45-
more of those rights or remedies shall not preclude the simultaneous or later
exercise by Landlord of any or all other rights or remedies Landlord may have.
Section 27.07. This Article shall survive any termination, expiration or
-------------
cancellation of this Lease by the parties or as a result of any statute, law,
order or warrant.
Section 27.08. Landlord may, at its option, from time to time, commence
-------------
actions to recover any installment or installments of rents or damages, and
nothing in this Lease shall be deemed to require Landlord to await the date this
Lease would have expired had there been no default by Tenant or no termination
by Landlord.
ARTICLE 28
WAIVERS
Section 28.01. Waivers. No failure by Landlord to insist upon the strict
------------- -------
performance of any agreement, term, covenant or condition of this Lease or to
exercise any right or remedy upon a breach of any of them, and no acceptance of
full or partial rent during the continuance of any breach, shall constitute a
waiver of the breach or of the agreement, term, covenant or condition. No
agreement, term, covenant or condition to be performed or complied with by
Tenant, and no breach of any of them, shall be waived, altered or modified
except by a written instrument executed by Landlord. No waiver of any breach
shall affect or alter this Lease, and each and every agreement, term, covenant
and condition of this Lease shall continue in full force and effect with respect
to any other existing or subsequent breach.
ARTICLE 29
APPROVALS AND REPRESENTATIONS
Section 29.01. Approvals. Except as otherwise provided in Section 1.03 of
------------- ---------
the Steam Contract, Tenant, at its sole expense, shall take all actions
necessary to obtain, and shall make
-46-
and diligently prosecute applications ("the applications") for, all permits,
licenses, authorizations and other approvals (collectively "the approvals")
required from all governmental or administrative agencies or regulatory bodies
having jurisdiction, for the construction, installation and operation of the
Facility, including, without limitation, all site plan approvals, zoning
approvals, easement and franchise agreements, building permits, air emission
discharge permits, waste discharge permits, and all other licenses, permits and
permission to construct and maintain all on-site and off-site improvements,
curbcuts, roadway median cuts and utility lines and services. Landlord shall
cooperate with Tenant in the applications, without expense to Landlord, provided
the approvals sought are consistent with the provisions of this Lease.
Section 29.02. No representation, statement, or warranty, express or
-------------
implied, has been made by Landlord as to the condition of the Premises, or their
permitted use under applicable zoning, building, land use and similar laws,
ordinances and regulations ("use regulations"). Except to the extent otherwise
provided in Section 11.03 and in Section 1.03 of the Steam Contract, Tenant
assumes all responsibility for compliance with the use regulations, and Landlord
shall have no liability or responsibility for any defect in the Premises or for
any limitations upon the use of the Premises.
ARTICLE 30
FORCE MAJEURE
Section 30.01. If Landlord or Tenant shall be delayed, hindered in or
-------------
prevented from the performance of any act required under this Lease by reason of
acts of God or a public enemy, strikes, lockouts, riots, injunctions or other
interference through legal proceedings, state, federal or local laws or
regulations or requisitions of any governmental authority ("force majeure"),
performance of that act shall be excused for the period of the delay and the
period for the
-47-
performance of the act shall be extended for a period equivalent to the period
of the delay, provided the party delayed shall give the other party written
notice and full particulars of the force majeure within a reasonable time after
the event occurs. The provisions of this Article shall not excuse Tenant from
the prompt payment of rent under this Lease.
ARTICLE 31
NOTICE
Section 31.01. Every notice, request, demand, consent, approval,
-------------
objections, document or other communication authorized or required by this Lease
shall be in writing and shall be deemed effective when delivered personally or
five days after deposited in the U.S. mails, registered or certified mail,
postage prepaid, return receipt requested, addressed to the other party at the
following address:
To Tenant:
Project Orange Associates, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Kronish, Lieb, Weiner & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and
To the holders of a permitted Mortgage identified, and at the
address stated, in a written notice by Tenant to Landlord
To Landlord:
Syracuse University
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇--▇▇▇▇
Attention: Senior Vice President for Business and Finance or
Successor
-48-
with a copy to:
Bond, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
or to such other address as either party may designate by notice given from time
to time in accordance with this Section. A notice to change an address shall be
effective upon receipt by the other party.
ARTICLE 32
CERTIFICATES
Section 32.01. Either party shall, without charge, within ten (10) days
-------------
after written request of the other, certify, by written instrument duly executed
and acknowledged, to any mortgagee, purchaser, or proposed mortgagee or
purchaser, or to any other person, firm or corporation specified in the request,
the following matters:
(a) that this Lease has not been amended, or if it has, the substance
of the amendment;
(b) whether the Lease is in full force and effect;
(c) the existence of any default, set--off, counterclaim or defense on
the part of the other party;
(d) the commencement and expiration dates of this Lease;
(e) the dates to which rent has been paid; and
(f) any other matters that may reasonably be requested. The
certificate may be relied upon by the party requesting it and any other person,
firm or corporation to whom it may be exhibited or delivered, and the contents
of the certificate shall be binding on the party which executed it.
-49-
ARTICLE 33
GOVERNING LAW
Section 33.01. This Lease and the performance of it shall be governed,
-------------
interpreted, construed and regulated by the laws of the State of New York.
ARTICLE 34
PARTIAL INVALIDITY
Section 34.01. If any term, covenant, condition or provision of this
-------------
Lease, or the application of it to any person or circumstance, shall be invalid
or unenforceable, the remainder of this Lease, or the application of that term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected and every other term, covenant,
condition and provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
ARTICLE 35
MEMORANDUM OF LEASE
Section 35.01. The parties will, at the request of either one, promptly
-------------
execute duplicate originals of an instrument, in recordable form, which will
constitute a short form of Lease, setting forth a description of the Premises,
the terms of this Lease and any other portions of the Lease, except the rental
provisions as either party may request.
ARTICLE 36
INTERPRETATION
Section 36.01. Wherever the singular number is used in this Lease the same
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shall include the plural and the masculine gender shall include the feminine and
neuter genders, and
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vice versa, as the context shall require. This Lease may be executed in several
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
ARTICLE 37
BINDING EFFECT
Section 37.01. Except as expressly provided otherwise in this Lease, the
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covenants, conditions and agreements contained in this Lease shall bind and
inure to the benefit of Landlord and Tenant and their respective heirs,
successors, administrators and assigns.
ARTICLE 38
NO ORAL MODIFICATION - ENTIRE AGREEMENT
Section 38.01. All prior understandings and agreements between the parties
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with respect to the subject matter of this Lease (including the Prior Agreement)
are merged within this Lease, which alone fully and completely sets forth the
understanding of the parties with respect to such subject matter. Tenant is not
relying on any representation or agreement other than those set forth in the
Agreements. This Lease may not be changed or terminated orally or in any manner
other than by a written agreement signed by the party against whom enforcement
is sought. No mutual termination or mutual cancellation of this Lease or
termination of this Lease by the Tenant shall be of any force or effect unless
approved in writing by the holders of a Permitted Mortgage, as defined in
Article 23.
ARTICLE 39
HEADINGS AND TABLE OF CONTENTS
Section 39.01. The headings of the Articles and Sections of this Lease are
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for convenience and reference only and do not define, limit or describe the
intent of this Lease or in any way affect this Lease or the interpretation of
it.
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Section 39.02. The table of contents preceding this Lease is for the
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purpose of convenience and reference only and is not to be deemed, construed or
interpreted in any way to be part of this Lease.
ARTICLE 40
WAIVER OF JURY TRIAL AND COUNTERCLAIMS
Section 40.01. The parties waive a trial by jury of any and all issues in
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any action or proceeding between them or their successors or assigns connected
with or arising out of this Lease or any of its provisions, or Tenant's use and
occupation of the Premises or the Facility. In the event Landlord commences a
summary proceeding against Tenant to recover possession of the Premises and the
Facility, Tenant shall not interpose any counterclaim.
ARTICLE 41
NO BROKER
Section 41.01. The parties warrant and represent to each other that no
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real estate broker or agent was instrumental or in any way responsible in
bringing about this Lease.
ARTICLE 42
TERMINATION
Section 42.01. If the guaranty by the Approved Operator required by
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Section 7.01 of the Operating Agreement shall not be delivered to Landlord by
March 15, 1990, Landlord may, upon fifteen days written notice to Tenant,
terminate this Lease.
Section 42.02. The obligations of the parties under this Lease are
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contingent upon the approval of this Lease by the Board of Trustees of Landlord.
If such approval is not granted by March 5, 1990, either party may terminate
this Lease upon fifteen days written notice to the other.
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IN WITNESS WHEREOF, the parties have caused this Lease to be executed by
their duly authorized officers.
SYRACUSE UNIVERSITY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_________________________________
PROJECT ORANGE ASSOCIATES, L.P.
By: G.A.S. Orange Partners, L.P., its general
partner
By: G.A.S. Orange Development, Inc., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
_________________________________
Title: President
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF
On this ________ day of February, 1990, before me personally came ▇▇▇▇
▇▇▇▇▇▇ to me known, who being by me duly sworn, did depose and say that he
resides in New York, New York, that he is the President of G.A.S. ORANGE
DEVELOPMENT, INC., the General Partner of G.A.S. Orange Partners, L.P., which is
the General Partner of Project Orange Associates L.P., the partnership described
in this instrument, and that he had authority to sign this instrument and he
acknowledged to me that he executed the instrument as the act and deed of the
partnership.
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Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF ONONDAGA )
On this day of February, 1990, before me personally came ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
to me known, who being by me duly sworn, did depose and say that he resides in
Cazenovia, New York, that he is a Senior Vice President of SYRACUSE UNIVERSITY,
the corporation described in and which executed the above instrument; that he
knows the seal of the corporation; that the seal affixed to the instrument is
the corporate seal; and that he signed his name to the instrument.
----------------------------------
Notary Public
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Exhibit A
(Metes and bounds description of the leased premises. The leased
premises are shown on the map attached to this Exhibit A. A metes and
bounds description of the leased premises shall be inserted in this
Exhibit A as soon as it is available.]
Together with a non-exclusive easement to Tenant, its successors and
assigns, upon, over and across the premises of Landlord lying between the leased
premises and Landlord's existing steam plant ("the steam plant") for ingress and
egress to and from the leased premises and ▇▇▇▇▇▇▇ Street.
Excepting and reserving from the leased premises the existing
transformers and the building in which they are housed (collectively "the
transformer building"), easements to Landlord, its successors and assigns upon,
over, across and under the leased premises (i) for the entry and passage of
pedestrians, vehicles and machines to and from Landlord's transformer building,
chilled water plant ("the chilled water plant") located adjacent to the leased
premises, and the steam plant, including, without limitation, an easement over
an area five feet in width along the west wall of the transformer building, an
area twenty feet in width along the north wall of the transformer building, and,
if Tenant shall not have constructed a common wall along the east and south
walls of the transformer building, an easement three feet in width along the
east and south walls of the transformer building, an easement over an area
fifteen feet in width along the west wall and the north wall of the chilled
water plant and an easement over an area at least ten feet in width, and,
depending on the final design of the Cogeneration Plant, as much as fifteen feet
in width, along the east wall of the ▇▇▇▇▇ Plant, as indicated on the dotted
area on the map attached, and (ii) for the installation, repair, replacement and
maintenance of lines for the transmission of electrical power, communications,
water, steam, condensate, fuel and other utilities, consisting of overhead or
underground poles, lines, conduits, pipes, mains, ducts,
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manholes, and other appurtenant and supporting facilities, apparatus and
structures as Landlord may now or from time to time deem necessary for the
operation of the transformer building, the chilled water plant and the steam
plant.
The precise location of the easements granted and reserved shall be
determined and confirmed by Landlord and Tenant upon the completion of the Plans
for the Cogeneration Plant. Landlord shall have the right to relocate such
easements from time to time provided such relocation does not unreasonably
interfere with Tenant's operation of the Cogeneration Plant.
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