EXHIBIT 10.7
GROUND LEASE AGREEMENT
BETWEEN
COGEN TECHNOLOGIES LINDEN VENTURE, L.P.
(d/b/a COGEN TECHNOLOGIES LINDEN VENTURE, LIMITED PARTNERSHIP)
AND
EXXON CORPORATION
AUGUST 1, 1990
TABLE OF CONTENTS
ARTICLE HEADING PAGE
------- ------- ----
1 Definitions........................................ 3
2 Demised Premises and Additional Rights............. 11
3 Mortgage Priority.................................. 17
4 Term............................................... 17
5 Rent............................................... 24
6 Use of Premises and Ownership of Improvements...... 27
7 Exxon's Cogeneration Unit.......................... 31
8 Quiet Enjoyment.................................... 33
9 Taxes.............................................. 35
10 Environmental Responsibility....................... 36
11 Liens.............................................. 46
12 Permitted Encumbrances on Leasehold Interests
and Improvements................................. 47
13 Eminent Domain..................................... 48
14 Limitation on Liability and Distribution of Risks.. 49
15 Insurance.......................................... 54
16 Termination........................................ 56
17 Removal of Improvements............................ 66
18 Nonwaiver.......................................... 68
19 Force Majeure...................................... 68
20 Assignment and Subletting.......................... 70
21 Exxon's Complex, Property, and Operations.......... 84
22 Notice and Service................................. 85
23 Consent Not to be Unreasonably Withheld............ 87
24 Amendments......................................... 87
25 Choice of Law...................................... 87
26 Renegotiation...................................... 87
27 Other Agreements................................... 88
28 No Commission ..................................... 88
29 Captions........................................... 89
30 Counterparts....................................... 89
31 Authority.......................................... 89
EXHIBIT HEADING PAGE
------- ------- ----
A Exxon's Property................................... 96
B Demised Premises................................... 97
C Projection Easement Area........................... 102
D Interconnection and Utility Areas.................. 000
X Xxxxxx Rights of Way............................... 104
F Selected Governmental Authorizations for the
Cogeneration Facility............................ 106
G-1 Assumption Agreement............................... 107
G-2 Assumption Agreement............................... 109
G-3 Assumption Agreement............................... 111
H Consent to Assignment.............................. 114
I Consent to Leasehold Mortgage...................... 118
J Recognition Agreement.............................. 122
GROUND LEASE AGREEMENT
This Ground Lease Agreement is made and entered into effective August 1, 1990,
by and between Exxon Corporation, a New Jersey Corporation ("Exxon") and Cogen
Technologies Linden Venture, L.P., doing business in New Jersey as Cogen
Technologies Linden Venture, Limited Partnership ("Cogen"), a Delaware limited
partnership (collectively "Parties").
Exxon, operating through its division Exxon Company, U.S.A., owns, operates and
maintains its Bayway Refinery and, operating through Exxon Chemical Americas, a
division of Exxon Chemical Company (a division of Exxon), owns, operates and
maintains its Bayway Chemical Plant. The Bayway Refinery and Bayway Chemical
Plant (collectively "Exxon's Complex") are located on "Exxon's Property" (as
defined in Article 1 below) in Linden, New Jersey. Additionally, Exxon owns,
operates, and maintains its Linden Marketing Terminal ("Exxon's Marketing
Terminal") and Linden Technology Center ("Exxon's Technology Center") in Linden,
New Jersey.
Cogen Technologies, Inc., has entered into a Power Purchase Agreement dated
April 14, 1989 ("Power Purchase Agreement") with Consolidated Edison Company of
New York, Inc. ("Consolidated Edison"). Under the Power Purchase Agreement Cogen
Technologies, Inc. proposes to sell to Consolidated Edison electricity from a
cogeneration facility
Ground Lease Agreement - 2 -
("Cogeneration Facility") to be located in Linden, New Jersey. The Power
Purchase Agreement was approved by the Public Service Commission of the State of
New York and became effective in September, 1989 and has been assigned to Cogen.
The Cogeneration Facility is contemplated, but not required, to be a qualifying
cogeneration facility as defined in Section 3(18) of the Federal Power Act and
the regulations thereunder. Cogen and Consolidated Edison contemplate that the
Power Purchase Agreement will remain in force for twenty-five years from the
Date of Initial Commercial Operation (as defined in Article 1 below) and
possibly for two additional five-year renewal terms.
Cogen desires to construct, own, operate, and maintain the Cogeneration Facility
on part of the land on which Exxon's Bayway Refinery is located and to lease
from Exxon the "Demised Premises" (as defined in Article 1 below) upon which the
Cogeneration Facility will be located. Exxon is willing to lease the Demised
Premises to Cogen and to xxxxx Xxxxx such easements and rights-of-way as are
reasonably necessary for the construction, operation, maintenance, repair,
replacement and removal of the Cogeneration Facility and related improvements in
partial consideration of Cogen's contemporaneously entering into the Steam Sale
Agreement (as defined in Article 1 below) for the sale of steam to Exxon from
the Cogeneration Facility for use at Exxon's Complex, Exxon's Marketing Terminal
and Exxon's Technology Center. The parties to this Ground Lease Agreement and
the Steam Sale Agreement acknowledge and agree
Ground Lease Agreement - 3 -
that both such agreements are interdependent, as provided in both such
agreements.
Exxon and Cogen contemplate that Exxon may elect to install its own cogeneration
unit (the "Exxon System," as defined in Article 1 below) on the Demised
Premises. Cogen is willing to accommodate the Exxon System on the Demised
Premises and, on terms to be negotiated, to construct and operate the Exxon
System for Exxon.
Now, therefore, in consideration of the mutual covenants contained herein and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms will have the following meanings:
"Access Rights of Way" means the nonexclusive access easement granted to Cogen
for ingress and egress on, over and across, those portions of Exxon's Property
(exclusive of the Demised Premises and the tank fields referred to in Section
2.11 below), more particularly described in Exhibit E, to give Cogen vehicular
and pedestrian access to the Demised Premises and to enable Cogen to construct,
operate, maintain, repair, replace, and remove the Improvements and the Exxon
System, if applicable.
Ground Lease Agreement - 4 -
"Affiliate" means a corporation or other entity that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation or other entity.
"Annual Period" means any one of a succession of consecutive twelve month
periods, the first of which will begin on the Date of Initial Commercial
Operation.
"Base Term" of the Ground Lease means that part of the term of the Ground Lease
beginning with the Date of Initial Commercial Operation, and continuing for a
period of twenty-five Annual Periods, unless sooner terminated.
"Cogeneration Facility" means the cogeneration facility to be constructed by
Cogen on the Demised Premises. The Cogeneration Facility excludes the Exxon
System.
"Commercial Operation" means the production of electricity by Cogen at the
Cogeneration Facility upon the completion of such testing of the Cogeneration
Facility as Cogen determines is required by prudent electrical practices, and
the supply of steam at the points where Cogen's steam supply system connects to
Exxon's steam pipeline at Exxon's existing steam headers.
Ground Lease Agreement - 5 -
"Construction Period" means that part of the term of the Ground Lease from the
commencement of the Ground Lease in accordance with Section 4.3A to the Date of
Initial Commercial Operation.
"CPI" means the Consumer Price Index for all Urban Consumers for the New York-
Northern New Jersey Metropolitan Area, published by the Bureau of Labor
Statistics of the U.S. Department of Labor (all items figure - 1982-1984 = 100).
"Date of Initial Commercial operation" means the first day of the month which
immediately follows the date Cogen designates in writing to Consolidated Edison
as the initial date of Commercial Operation of its Cogeneration Facility.
"Demised Premises" means those two parcels of land, totalling approximately
12.77 acres, on the site of Exxon's Bayway Refinery at Linden, New Jersey. The
Demised Premises are described more particularly in Exhibit B, and upon the
commencement of the Construction Period are to be leased to Cogen pursuant to
this Ground Lease Agreement. The Demised Premises do not include the
Interconnection Areas, Utility Areas, Staging Areas, and Access Rights of Way.
"ECRA" means the New Jersey Environmental Cleanup Responsibility Act, NJSA
13:1K-6 et seq., together with related regulations, as such Act and regulations
may be amended from time to time.
Ground Lease Agreement - 6 -
"Evergreen Period" means that part of the term of the Ground Lease immediately
following the Renewal Terms and preceding the Improvements Removal Period, if
any.
"Exxon's Complex" means Exxon Company, U.S.A.'s Bayway Refinery and Exxon
Chemical America's Bayway Chemical Plant, both located at Linden, New Jersey.
Exxon's Complex excludes Exxon's Marketing Terminal and Exxon's Technology
Center.
"Exxon's Marketing Terminal" means Exxon's Linden Marketing Terminal located in
Linden, New Jersey.
"Exxon's Property" means all the land upon which Exxon's Complex is situated, as
more particularly described in Exhibit A. Exxon's Property includes the Demised
Premises, Interconnection Areas, Utility Areas, Staging Areas, and Access Rights
of Way.
"Exxon System" means Exxon's own cogeneration unit consisting of one gas
turbine, one waste heat recovery system, one back-pressure steam turbine and
appurtenant facilities which might be installed on the Demised Premises, as more
fully described in Section 7.1.
"Exxon's Technology Center" means Exxon's Linden Technology Center, located at
Linden, New Jersey.
"Financier" initially means General Electric Power Funding Corporation (as
construction lender or as agent for itself and other
Ground Lease Agreement - 7 -
construction lenders), and may also mean any other entity subsequently extending
credit to Cogen for the construction, operation, maintenance, repair,
replacement, or removal of the Cogeneration Facility and other Improvements, or
any entity subsequently providing funds for the refinancing or taking-out of
such loans, and the nominees or designees of any such entities; provided that,
at no time will Exxon be obligated to recognize more than one such entity as the
Financier to whom duties are owed, or rights are granted, under this Ground
Lease Agreement and the Steam Sale Agreement. The parties anticipate that after
General Electric Power Funding Corporation is the Financier, a specific
designated Affiliate of General Electric Power Funding Corporation will become
the Financier and that such designated Affiliate will also become a limited
partner in Cogen. Exxon will recognize as the Financier for purposes of this
Ground Lease Agreement and the Steam Sale Agreement (i) General Electric Power
Funding Corporation, until such time as General Electric Power Funding
Corporation notifies Exxon in writing that such designated Affiliate should be
considered to be the Financier, and (ii) thereafter, the designated Affiliate,
until such time as such designated Affiliate notifies Exxon in writing that
Cogen has the right to designate another entity as the Financier, and (iii)
thereafter, such other entity as Cogen may designate in writing from time to
time. Exxon will not be required to recognize as the Financier any partner of
Cogen other than such designated Affiliate of General Electric Power Funding
Corporation.
Ground Lease Agreement - 8 -
"Force Majeure" means a cause beyond the reasonable control of the affected
Party, as more fully defined in Article 19.
"Governmental Authorizations" means any and all licenses, permits, certificates
and other authorizations required by applicable federal, state, or local law.
"Ground Lease" means the creation of a leasehold estate in the Demised Premises
as provided for in this Ground Lease Agreement. The Ground Lease will commence
with the beginning of the Construction Period pursuant to Section 4.3A.
"Ground Lease Agreement" means this agreement, including all exhibits and
amendments thereto that may be made from time to time.
"Improvements" means the Cogeneration Facility and all related improvements
constructed or placed by Cogen on the Demised Premises, the Interconnection
Areas, or the Utility Areas, but not including the Exxon System which may be
installed upon the Demised Premises but owned by Exxon, as more fully described
in Section 7.1.
"Improvements Removal Period" means that part of the term of the Ground Lease
for the removal of the Improvements at the end of the Ground Lease pursuant to
Section 4.7.
"Interconnection Areas" means those portions of Exxon's Property (exclusive of
the Demised Premises and the tank fields referred to in
Ground Lease Agreement - 9 -
Section 2.11), more particularly described in Exhibit D, on, over, and under
which Cogen will have a nonexclusive easement and right of way to construct,
operate, maintain, repair, replace and remove Cogen's electrical and steam
interconnections from its Cogeneration Facility to the facilities of Exxon,
Consolidated Edison and those other purchasers of steam or electricity that may
be served through such Interconnection Areas described in Exhibit D and, with
Exxon's prior written consent with respect to the routing and location of
additional interconnections for additional purchasers of steam or electricity
from the Cogeneration Facility, to the facilities of such additional purchasers
of steam or electricity.
"Memorandum of Lease" means a written summary of this Ground Lease Agreement,
and any amendments, suitable for recordation, as more fully described in
Section 2.8.
"Party" means Cogen or Exxon, as the case may be, and its permitted successors
and assigns.
"Power Purchase Agreement" means that certain Power Purchase Agreement dated
April 14, 1989, executed by and between Cogen Technologies, Inc. and
Consolidated Edison (which Power Purchase Agreement has been assigned to Cogen)
under which electric energy generated at the Cogeneration Facility will be sold
by Cogen for purchase by Consolidated Edison, including all exhibits and
amendments thereto that may be made from time to time.
Ground Lease Agreement - 10 -
"Renewal Term" means either of two periods of the term of the Ground Lease
immediately following the Base Term, as more fully described in Section 4.5.
"Staging Areas" means those specific portions of Exxon's Property (exclusive of
the Demised Premises and the tank fields referred to in Section 2.11) to which
Exxon from time to time grants Cogen temporary access for the storage of
material and equipment used by Cogen for the construction, operation,
maintenance, repair, replacement, or removal of the Improvements or the Exxon
System, if applicable.
"Steam Sale Agreement" means the agreement of even date herewith between Cogen
and Exxon for the sale of steam from the Cogeneration Facility, including all
exhibits and amendments thereto that may be made from time to time.
"Three Turbine Rating" means the power output rating which Cogen's Cogeneration
Facility would obtain utilizing three GE MS-7000 gas turbines.
"Utility Areas" means those portions of Exxon's Property (exclusive of the
Demised Premises and the tank fields referred to in section 2.11), more
particularly described in Exhibit D, on, over, under, or across which Cogen will
have a nonexclusive easement and right of way to construct, operate, maintain,
repair, replace, and remove structures, wires, pipes, lines, equipment and other
materials relating to water transfer between the two parcels of the Demised
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Premises, stormwater discharge, wastewater discharge and other utilities serving
the Cogeneration Facility (other than water, gas and standby power supplied to
Cogen by public utilities).
ARTICLE 2
DEMISED PREMISES AND ADDITIONAL RIGHTS
2.1 Demised Premises. Upon the occurrence of the conditions described in
Section 4.3, and on the other terms of this Ground Lease Agreement, Exxon
will lease, let and demise to Cogen and Cogen will lease from Exxon the
Demised Premises. Cogen and Exxon are considering redefining by mutual
agreement the precise boundaries of the north parcel of the Demised Premises
in order to facilitate the placement of certain water tanks that will be
part of the Cogeneration Facility. In that event, Exhibit B will be amended
to reflect the new boundaries of the Demised Premises.
2.2 Additional Rights. To facilitate Cogen's use of the Demised Premises, Exxon
grants to Cogen certain additional rights to use the Interconnection Areas
and Utility Areas, certain Access Rights of Way over Exxon's Property, and
certain temporary rights to use Staging Areas, all as more specifically set
forth in Sections 2.3, 2.4, 2.5, 2.6, and 2.7 below. Additionally, Exxon
grants to Cogen a nonexclusive easement which will run with the land to
allow for the construction, operation, maintenance, repair, replacement and
removal of certain air cooling towers which will be part of the Cogeneration
Facility and which will
Ground Lease Agreement - 12 -
extend beyond the perimeter of the Demised Premises, as shown in Exhibit C.
All additional rights referred to in this Section 2.2 will be ancillary to
the lease of the Demised Premises, and unless otherwise provided for herein,
the term of these additional rights will extend until the termination of the
Ground Lease.
2.3 Rights to Use Interconnection Areas. Exxon grants Cogen a nonexclusive
easement and right of way on, over, across and under the Interconnection
Areas of Exxon's Property, as specifically described in accordance with
Section 2.6, for Cogen to construct, operate, maintain, repair, replace and
remove Cogen's electrical and steam interconnections from its Cogeneration
Facility to the facilities of Exxon, Consolidated Edison and those other
purchasers of steam or electricity that may be served through such
Interconnection Areas described in Exhibit D and, with Exxon's prior written
consent with respect to the routing and location of additional
interconnections for additional purchasers of steam or electricity from the
Cogeneration Facility, to the facilities of such additional purchasers of
steam or electricity.
2.4 Rights to Use Utility Areas. Exxon grants Cogen a nonexclusive easement and
right of way on, over, under and across the Utility Areas of Exxon's
Property, as specifically described in accordance with Section 2.6, for
Cogen to construct, operate, maintain, repair, replace and remove
structures, wires, pipes, lines, equipment and other materials relating to
water transfer
Ground Lease Agreement - 13 -
between the two parcels of the Demised Premises, stormwater discharge, waste
water discharge and other utilities serving the Cogeneration Facility (other
than water, gas and standby power supplied to Cogen by public utilities).
2.5 Access Rights of Way. Exxon grants Cogen the nonexclusive easement referred
to as the Access Rights of Way for ingress and egress on, over and across
Exxon's Property, as specifically described in accordance with Section 2.6,
to give Cogen vehicular and pedestrian access to the Demised Premises and to
enable Cogen to construct, operate, maintain, repair, replace and remove
Cogen's Improvements and the Exxon System, if applicable. Under normal
conditions, Cogen and its invitees will park on the Demised Premises. During
turnarounds and other unusual circumstances Exxon at Cogen's request will
designate additional areas for parking by Cogen and its invitees to meet
their reasonable needs.
2.6 Locations of the Interconnection Areas. Utility Areas, and Access Rights of
Way.
A. The initial locations of the Interconnection and Utility Areas are
described in Exhibit D. The initial Access Rights of Way are described in
Exhibit E. The easements described in Exhibits D and E will run with the
land.
Ground Lease Agreement - 14 -
X. Xxxxx, with the prior written consent of Exxon and subject to Section
2.11, may change the specific boundary lines and dimensions for the
Interconnection Areas and Utility Areas, during construction and from
time to time thereafter during the term of this Ground Lease Agreement,
to enable Cogen to service new customers or to accommodate changed
operating circumstances. Additionally, at any time during the term of the
Ground Lease Agreement, Cogen, at the request of Exxon, will relocate the
Interconnection Areas, Utility Areas, and Access Rights of Way, or any
portion thereof, to other mutually agreeable locations on Exxon's
Property to enable Exxon to accommodate changed operating circumstances
or to sell part of Exxon's Property to a third party free of encumbrances
related to the easements over the Interconnection Areas, Utility Areas,
or to the Access Rights of Way. Any such relocation at the request of
Exxon will be solely at Exxon's expense and will be accomplished without
any unreasonable interruption of Cogen's operation. Any redetermination
or relocation of the Interconnection Areas, Utility Areas, or Access
Rights of Way under the provisions of this Section 2.6B will be
negotiated in good faith by the Parties and will be specifically
described in an instrument executed by the Parties in recordable form as
an amendment to this Ground Lease Agreement.
2.7 Rights to Use Staging Areas. Subject to Section 2.11, Exxon agrees, from
time to time as reasonably requested by Cogen, to
Ground Lease Agreement - 15 -
grant to Cogen temporary access rights to those specific portions of Exxon's
Property that Exxon may designate as Staging Areas for the storage of
material and equipment used by Cogen for the construction, operation,
maintenance, repair, replacement or removal of the Improvements or the Exxon
System, if applicable. Cogen may install temporary security fencing around
the Staging Areas, subject to the right of Exxon and authorized third
persons, if any, to gain access. Exxon's granting to Cogen temporary access
from time to time to such Staging Areas will not be considered amending this
Ground Lease Agreement.
2.8 Memorandum of Lease. The Parties will execute and acknowledge, from time to
time, upon the request of either Party, (i) a Memorandum of Lease,
describing the material provisions of this Ground Lease Agreement, including
the priorities established by Article 3, and setting forth a description of
the Demised Premises, the Interconnection Areas, the Utility Areas and the
Access Rights of Way and referring to the Staging Areas and (ii) any
amendments to the Memorandum of Lease, reflecting amendments to this Ground
Lease Agreement, including those instruments prepared pursuant to Section
2.6 above. The Memorandum of Lease, and any such amendments, will be
recorded in the appropriate records of real property of Union County, New
Jersey. When the Ground Lease terminates or, if it fails to commence
(pursuant to Section 4.3) at that time, the Parties will execute and
acknowledge for recordation one or more instruments to clear
Ground Lease Agreement - 16 -
Exxon's Property of all encumbrances or clouds created by this Ground Lease
Agreement.
2.9 Safety and Security. Each Party, and authorized third persons such as
Contractors and government officials, gaining access to the facilities of
the other Party under this Ground Lease Agreement will abide by the other
Party's safety and security rules and regulations then current and
generally applicable to all employees and contractors, including those
relating to obtaining required work permits.
2.10 Cooperation. Each Party will cooperate with the other so that exercise of
its rights under this Article 2 will not unreasonably interfere with the
operations and rights of the other and of authorized third parties, such as
contractors and government officials. Exxon will extend reasonable
cooperation to public utilities providing water, gas, and standby power to
the Cogeneration Facility and the Exxon System, if applicable, to
facilitate the provision of such services to the Cogeneration Facility and
the Exxon System, if applicable.
2.11 Tank Fields. This Ground Lease Agreement will not give Cogen any easement,
right of way, access or other rights respecting the two tank fields
identified in Exhibit A as the Rahway River Tank Field and the Forty-Acre
Tank Field and this Ground Lease Agreement will not create any encumbrances
or clouds on such tank fields.
Ground Lease Agreement - 17 -
ARTICLE 3
MORTGAGE PRIORITY
3.1 Predetermined Areas. The Ground Lease will be a prior encumbrance against
Exxon's Property (except for the tank fields referred to in Section 2.11)
with respect to any mortgages or other liens that may subsequently be placed
upon Exxon's Property. The recording of the Memorandum of Lease will
establish the priority of this Ground Lease and this Ground Lease will have
preference and precedence and be superior and prior to any such subsequent
mortgage or lien on Exxon's Property.
3.2 Redetermined Areas. The amendments to this Ground Lease Agreement and the
amendments to the Memorandum of the Ground Lease by the execution of the
instruments referred to in Section 2.6 to reflect any redetermined or
relocated Interconnection Areas, Utility Areas or Access Rights of Way will
have preference and precedence and be superior to and prior to any mortgage
or other lien on such redetermined or relocated Areas or Access Rights of
Way that are recorded subsequent to the date of recordation of the
Memorandum of Lease.
ARTICLE 4
TERM
4.1 Term of Ground Lease. This Ground Lease Agreement will be
effective upon its execution, but the leasehold estate created
Ground Lease Agreement - 18 -
under this Ground Lease Agreement will not become effective, if at all,
until the conditions defined in Section 4.3A are met. When these conditions
are met and the Ground Lease commences, the Parties will execute an
amendment to the Memorandum of Lease identifying the date of Commencement of
the Ground Lease. In no event will the term of the Ground Lease continue
beyond December 31, 2050. Cogen's access under this Ground Lease Agreement
to Exxon's Property before the commencement of the Ground Lease is by
license from Exxon, as provided in Section 4.2B, but not pursuant to the
Ground Lease or any other lease.
4.2 Site Preparation.
A. Exxon will remove the existing propane tanks, the trailers and the
corrugated fabrication building from the Demised Premises and will
relocate the existing railroad spurs and fire water line from the Demised
Premises to locations off the Demised Premises and will install new
propane tanks off the Demised Premises. Cogen will reimburse Exxon
promptly for Exxon's reasonable expenses associated with the relocation
of the railroad spurs and fire water line and with removal and
replacement of the propane tanks, to be verified by appropriate
supporting data and not to exceed an aggregate sum of $5.5 million.
Before Exxon begins such site preparation work, Exxon will provide to
Cogen for Cogen's information and comment a written schedule showing by
month the character, timing, and magnitude of the out-of-pocket expenses
and firm financial
Ground Lease Agreement - 19 -
commitments (such as firm orders) Exxon anticipates incurring in
connection with this site preparation work. Exxon will update this
schedule to reflect any significant changes as the work progresses. On a
monthly basis Cogen will reimburse Exxon for such out-of-pocket expenses
actually incurred by Exxon and will provide Exxon with deposits,
irrevocable letters of credit, or other financial assurances reasonably
satisfactory to Exxon to cover such firm financial commitments as Exxon
makes them. Exxon will complete its site preparation work by November 1,
1990, except for the propane tank work which Exxon will complete by June
1, 1991, or by such later dates as suggested in writing by Cogen after
Cogen reviews Exxon's schedule of the work.
X. Xxxxx will remove the existing foundations and the concrete bunkers from
the Demised Premises and all other objects which Cogen elects to remove
from the Demised Premises. Cogen may commence such site preparation work
as soon as the fluidized catalytic cracking unit turnaround and
associated cleanup are completed, presently estimated to be August 1,
1990, and Cogen is hereby granted a license to enter upon the Demised
Premises for such purposes commencing upon the completion of such
turnaround and cleanup. Subject to Section 5.4, Cogen will bear the
expense of the site preparation work which it performs, except that
pursuant to Article 10 Exxon will be primarily responsible for any
environmental remediation incident to such site preparation work.
Ground Lease Agreement - 20 -
C. The Parties anticipate that they will be doing some site preparation
work on the Demised Premises concurrently, and they will cooperate with
each other to facilitate their site preparation work.
D. At any time prior to the commencement of the Construction Period under
Section 4.3 below, if Cogen is unable to obtain financing or the
necessary Governmental Authorizations, Cogen may elect not to commence
the Construction Period by giving Exxon at least thirty days prior
written notice. In such event, the Parties will be discharged from all
unaccrued obligations under this Ground Lease Agreement as of the
expiration of such thirty-day period and Cogen will remove its equipment
and materials.
4.3 Construction Period.
A. When Cogen receives the necessary commitments from the Financier and
those Governmental Authorizations identified in Exhibit F for the
construction and operation of its Cogeneration Facility, Cogen will give
Exxon written notice to that effect, together with supporting
documentation reasonably requested by Exxon. After Cogen has demonstrated
that it has obtained such Governmental Authorizations and commitments
from the Financier, Exxon will promptly give Cogen written notice
allowing Cogen to commence construction of the Cogeneration Facility.
Cogen may make the required demonstration by giving
Ground Lease Agreement - 21 -
Exxon copies of such Governmental Authorizations and a letter from the
Financier to the effect that the Financier has entered into a loan
agreement with Cogen to finance construction of the Cogeneration
Facility. The Ground Lease will commence on the day that Exxon gives
written notice to Cogen allowing Cogen to commence construction of the
Cogeneration Facility. The period of time from the commencement of the
Ground Lease to the Date of Initial Commercial Operation as described in
Section 4.3B below may be referred to as the "Construction Period." The
Parties anticipate that during the Construction Period Exxon may perform
some of its site preparation work referred to in Section 4.2 above, but
Exxon will not unreasonably interfere with Cogen's construction of the
Cogeneration Facility.
B. When construction and testing satisfactory to Cogen of the Cogeneration
Facility are substantially completed, Cogen will promptly commence
Commercial operation, as defined in Article 1, of the Cogeneration
Facility and will give Exxon written notice of the Date of Initial
Commercial Operation, as defined in Article 1.
C. The Construction Period must begin by January 1, 1994, or the Ground
Lease will not commence and in such event the Parties will be discharged
from all unaccrued obligations under this Ground Lease Agreement. The
Construction Period must be concluded by January 1, 1998, or Exxon may
terminate this Ground Lease pursuant to Section 16.1D. These time limits
may
Ground Lease Agreement - 22 -
be extended by written agreement of the Parties, but not for any other reason,
including Force Majeure (except Force Majeure which affects Exxon so as to
prevent the commencement of the Construction Period by January 1, 1994 or its
completion by January 1, 1998).
4.4 Base Term. The Base Term of the Ground Lease will commence on the Date of
Initial Commercial operation and will continue for twenty-five Annual
Periods, unless sooner terminated in accordance with the terms hereof.
4.5 Renewal Terms. Following the completion of the twenty-five year Base Term,
the Ground Lease will be automatically renewed for two successive Renewal
Terms of five Annual Periods each, the first of which will commence with the
expiration of the Base Term, unless Cogen elects to terminate this Ground
Lease at the expiration of the Base Term or at the expiration of the first
five-year Renewal Term. Termination by Cogen in accordance with the
provisions of this Section 4.5 will be valid only if Cogen provides Exxon
written notice of its intent to terminate at least four years prior to the
expiration of the Base Term or first five-year Renewal Term, as the case may
be.
4.6 Evergreen Period. After the expiration of the second five-year Renewal
Term, this Ground Lease will automatically extend into an Evergreen Period
which will continue until December 31, 2048, unless either Party elects to
terminate the Evergreen Period
Ground Lease Agreement - 23 -
earlier. Either Party may terminate the Evergreen Period at any time by
giving at least five years prior written notice to the other Party. In that
event, termination of the Evergreen Period will be effective five years
after the notice is given, or at such other time' as the Parties may agree.
If neither Party terminates the Evergreen Period earlier, the Evergreen
Period will automatically terminate on December 31, 2048, and the
Improvements Removal Period of this Ground Lease will come into force
pursuant to Section 4.7. The automatic termination date of December 31,
2048, may not be extended for any reason, including Force Majeure.
4.7 Improvements Removal Period.
A. Upon the expiration or other termination of the Construction Period, Base
Term, any Renewal Term, or the Evergreen Period, the term of this Ground
Lease will be extended, unless one of the exceptions described below in
Section 4.7B applies, to allow Cogen promptly to remove the Improvements,
for one additional term (the "Improvements Removal Period") to terminate
upon the earlier to occur of (i) twenty-four months after the
commencement of the Improvements Removal Period, or (ii) the date Cogen
provides written notice to Exxon that Cogen has completed the removal of
the Improvements pursuant to Article 17 below.
B. The term of this Ground Lease will not be extended to include the
Improvements Removal Period if Cogen neither desires nor is
Ground Lease Agreement - 24 -
required by Exxon to remove the Improvements pursuant to the terms of
Article 17, or if there is a full taking by competent authority of the
Demised Premises as described in Article 13.
C. In no event will the Ground Lease continue in force beyond December 31,
2050, for any reason, including Force Majeure.
Article 5
RENT
5.1 Base Rent
A. Before the commencement of the Construction Period the Ground Lease will
not be in effect and Cogen will owe no rent. From the commencement of the
Construction Period until the Improvements Removal Period, Cogen will pay
to Exxon as rent hereunder the following amounts (unless the rent is
reduced or abated pursuant to Section 5.1C below):
(i) during the Construction Period, the sum of $15,957.00 per month,
adjusted for inflation pursuant to Section 5.2, payable monthly, in
advance; and
(ii) during the Base Term and any Renewal Terms and Evergreen Period,
the sum of $31,914.00 per month, adjusted for inflation pursuant to
Section 5.2 and thereafter reduced during the first ten years of the
Ground Lease Agreement - 25 -
Base Term as described in Section 5.4, and payable monthly, in
advance.
B. During the Improvements Removal Period, Cogen will pay Exxon the rent
specified in Section 5.1A(i) above, unless the rent is abated pursuant to
Section 5.1C below, or unless the Improvements Removal Period is
triggered by any of the events described in Sections 16.2A, 16.2B, or
16.2C below, in which case Cogen will owe Exxon no rent during the
Improvements Removal Period.
C. The rent may be reduced under the circumstances described in Section 13.3
(Partial Taking) and rent for partial months will be prorated. If Cogen
terminates this Ground Lease pursuant to Sections 16.2D, 16.2E, 16.2F, or
16.2G, Cogen will be released from all obligations to pay rent after
Cogen gives Exxon the two year written notice called for in Section 16.5G
(including any Improvements Removal Period), as long as Cogen continues
to supply Exxon's steam requirements as called for in Article 3 of the
Steam Sale Agreement.
X. Xxxxx will make its monthly rent payments to Exxon by the first day of
each month at the address specified in Article 22 or such other addresses
as Exxon may designate.
Ground Lease Agreement - 26 -
5.2 Inflation Adjustment
A. The rent specified in Section 5.1 will be adjusted each calendar year by
multiplying the specified rent by the factor y/z, where y is the Consumer
Price Index ("CPI") for all Urban Consumers for the New York-Northern New
Jersey Metropolitan Area, published by the Bureau of Labor Statistics of
the U.S. Department of Labor (all items figure - 1982-1984 = 100) for the
month Of September immediately preceding the year in question and z is
the CPI for December 1988 (which CPI for December 1988 is 126.0).
B. If the CPI is discontinued for any reason, the Bureau of Labor Statistics
will be requested to furnish a new index comparable to the CPI, together
with information which will make possible the conversion to the new index
in computing the adjusted rent hereunder. If for any reason the Bureau of
Labor Statistics does not furnish such an index and such information,
Exxon and Cogen instead will agree upon and use such other index or
comparable statistics on the cost of living for the New York-Northern New
Jersey Metropolitan Area as may be computed and published by an agency of
the United States or a responsible financial periodical of recognized
authority.
5.3 Interest. If Cogen fails to pay all or a portion of any rent payment within
the time stated in this Article 5, Cogen will owe Exxon interest on the
unpaid portion, which interest will accrue
Ground Lease Agreement - 27 -
from the date due until paid at two percent (2%) over the bank prime loan
rate as reported in Federal Reserve Statistical Release H.15 (or a successor
publication of similar authority, if Statistical Release H.15 is
discontinued) for the day the payment becomes due; provided, however, in no
event will this rate of interest exceed the maximum rate of interest
permissible under the laws of the State of New Jersey.
5.4 Rent Reduction. During the first ten years of the Base Term, the rent
described in Section 5.1A (ii), that is, $31,914.00 per month adjusted for
inflation, will be reduced each month by the fixed sum $9,807.00 (which will
not be adjusted for inflation); provided, however, that in no event will
Cogen's monthly rental fall below zero. The purpose of this reduction will
be to offset partially Cogen's expenditures in removing the concrete bunkers
from the Demised Premises.
ARTICLE 6
USE OF PREMISES AND OWNERSHIP OF IMPROVEMENTS
6.1 Use Limited. During the term of this Ground Lease, Cogen will use the
Demised Premises, the Interconnection Areas, the Utility Areas, the Staging
Areas, the projection easement area shown in Exhibit C, and the Access
Rights of Way for the construction, operation, maintenance, repair,
replacement, and removal of the Improvements, and (if applicable) the Exxon
System, for uses reasonably related thereto and for no other purpose.
Ground Lease Agreement - 28 -
6.2 Reliability. Safe and Lawful Use In its activities under this Ground Lease
Agreement, Cogen will not commit any act which constitutes a nuisance, and
will comply with all applicable and duly adopted laws, ordinances, rules and
public authority regulations and all applicable material safety codes and
recognized industry safety standards. The uses described in Section 6.1 will
not inherently be considered to constitute a nuisance. Cogen will design,
operate, and maintain the Improvements to meet safety and reliability
standards consistent with steam supply to a major industrial complex. Exxon
will have the right to review and comment on the reliability provisions of
Cogen's design and Cogen will work with Exxon so that the above safety and
reliability requirements are adequately addressed. In addition, Exxon will
have the right to review and approve any Improvements installed within any
easements granted by Exxon to Cogen hereunder from the perspective of
maintenance access, emergency access and impact on existing or future
equipment and improvements of Exxon, which approval shall not be
unreasonably withheld.
6.3 Maintenance of Governmental Authorizations. Cogen will obtain and maintain
all necessary Governmental Authorizations for its activities under this
Ground Lease Agreement and will carry on its operations in material
compliance with all such Governmental Authorizations, except that if any
environmental monitoring or remediation of Exxon's Property becomes
necessary, Exxon will obtain and maintain all Governmental Authorizations
needed for
Ground Lease Agreement - 29 -
such environmental monitoring or remediation. Each Party will cooperate with
the other Party in obtaining, maintaining and complying with any
Governmental Authorizations necessary under this Ground Lease Agreement.
Cogen will use reasonable efforts, but will have no obligation, to keep
Exxon advised of significant developments with respect to its major
Governmental Authorizations relating to the Improvements.
6.4 Cogen's Right to Apply for Variance or Contest.
X. Xxxxx will have the right, without expense to Exxon, to apply for a
variance or exception or to contest, the validity or application of any
law, ordinance, order, rule, regulation, requirement or Governmental
Authorization with which Cogen is responsible for compliance under
Sections 6.2 or 6.3 above, provided that Cogen has no knowledge after
reasonable inquiries that such application or contest would result in
significant detriment to Exxon. If legally required and consented to by
Exxon in writing, Cogen may make such applications or contests in the
name of Exxon. Cogen will notify Exxon reasonably in advance of such
applications or contests, and will keep Exxon advised of their status and
outcome. If by the terms of any such law, ordinance, order, rule,
regulation, requirement, or Governmental Authorization, compliance
therewith may legally be delayed pending the prosecution of any such
proceedings and Cogen has no knowledge after reasonable inquiries that
delay will result in significant detriment to Exxon, Cogen may delay
Ground Lease Agreement - 30 -
such compliance until the final determination of such proceeding.
B. Exxon will cooperate with Cogen with respect to any appropriate papers or
other instruments which may be necessary or proper to permit Cogen to
apply for such variance or exception or to contest the validity or
application of any such law, ordinance, order, rule, regulation,
requirement, or Governmental Authorization and will cooperate with Cogen
in such application or contest, all at Cogen's expense.
6.5 Ownership of Improvements. Cogen will be the owner or lessee of all
Improvements, which will retain their character as personal property and
will remain the property of Cogen, regardless of the manner of installation
or affixation of the Improvements to the Demised Premises, the
Interconnection Areas, the Utility Areas and the projection easement area
shown in Exhibit C. Exxon will have no legal or equitable ownership interest
in the Improvements arising from this Ground Lease Agreement, and Exxon
hereby subordinates any and all statutory, constitutional or common law
landlord's liens affecting all or any portion of the Improvements to any
liens and security interests of the Financier. Upon Cogen's request, Exxon
will execute such documents as may be reasonably required to confirm the
foregoing waiver and subordination. Nothing in this Ground Lease Agreement
will preclude the Financier or any other person holding a security interest
in any of the Improvements from removing the same in the
Ground Lease Agreement - 31 -
event of default by Cogen under any leasehold mortgage or any security
agreement related thereto.
6.6 Status of Cogeneration Facility and Power Purchase Agreement. Cogen will
promptly give Exxon written notice if the Cogeneration Facility loses its
qualifying cogeneration facility status or if there is a notice of default
under or material amendment to the Power Purchase Agreement.
ARTICLE 7
EXXON'S COGENERATION UNIT
7.1 Exxon System.
A. Subject to the terms and conditions of this Section 7.1, Cogen agrees
that Exxon may construct, operate, maintain, repair, replace, and remove
its own cogeneration unit, which may be referred to as the Exxon System,
consisting of one gas turbine, one waste heat recovery system, one back-
pressure steam turbine and appurtenant facilities, upon the Demised
Premises. The Parties anticipate that Cogen will construct, operate,
maintain, repair, replace, and remove the Exxon System for Exxon pursuant
to Paragraph 7.1C. Therefore, Cogen agrees to accommodate the Exxon
System in Cogen's design for Cogen's Cogeneration Facility, so that at a
future date, should Exxon elect to install the Exxon System, it will be
compatible with Cogen's Cogeneration Facility. Further, Exxon will be
allowed
Ground Lease Agreement - 32 -
to review and comment upon Cogen's design of Cogen's Cogeneration
Facility and Cogen's plan for seeking Governmental Authorizations for
Cogen's Cogeneration Facility as such may impact the design and
Governmental Authorizations for the Exxon System. Exxon will reimburse
Cogen for any expenses reasonably incurred by Cogen as a result of the
construction, operation, maintenance, repair, replacement and removal of
the Exxon System.
X. Xxxxx will seek to obtain, at Cogen's sole expense, the necessary
environmental Governmental Authorizations relating to air emissions for
the Exxon System as part of Cogen's permitting efforts for Cogen's
Cogeneration Facility. Cogen is now planning to include five GE MS-7000
EA gas turbines in its Cogeneration Facility. In the event Cogen is
unable to obtain such environmental Governmental Authorizations relating
to air emissions of the Exxon System because Cogen's Cogeneration
Facility is planned as a plant with a gross power output rating in excess
of the power output rating which would have been obtained utilizing three
GE MS-7000 EA gas turbines (the "Three Turbine Rating"), Cogen will
redesign Cogen's Cogeneration Facility so as to enable Cogen to obtain
such environmental Governmental Authorizations for the Exxon System. If
such environmental Governmental Authorizations for the Exxon System
cannot be obtained by Cogen even if Cogen redesigns its cogeneration
Facility as a plant with a gross rating equal to the Three Turbine
Rating, then Cogen will not have any further
Ground Lease Agreement - 33 -
obligation to seek environmental Governmental Authorizations for the
Exxon System, but instead may design and develop its Cogeneration
Facility as a plant with a gross rating not exceeding the Three Turbine
Rating.
C. If Cogen is successful in obtaining the environmental Governmental
Authorizations for the Exxon System, and if Exxon elects to install the
Exxon System, the Parties will negotiate in good faith an agreement under
which Cogen or its contractors will construct, operate, maintain, repair,
replace, and remove (as applicable) the Exxon System and under which
Cogen will be reimbursed for actual expenses plus a reasonable
administrative fee associated therewith.
D. Nothing in this Article 7 is intended to release Cogen from any of its
obligations under the Steam Sale Agreement.
ARTICLE 8
QUIET ENJOYMENT
8.1 Environmental Condition of Exxon's Property. Exxon has conducted a limited
investigation with respect to the environmental condition of the Demised
Premises and has disclosed to Cogen the character and results of that
investigation in a letter dated May 1, 1990. Cogen has conducted its own
environmental survey, including soil and water sampling, of the Demised
Premises, and has disclosed to Exxon the results of that survey. Cogen has
Ground Lease Agreement - 34 -
caused a title search to be performed and a title insurance commitment to be
issued with respect to the Demised Premises and the Access Rights of Way.
Exxon has disclosed to Cogen certain data collected in 1985 and related to
the environmental condition of the Demised Premises and will disclose to
Cogen additional 1985 data related to the initial locations of the
Interconnection Areas, the Utility Areas, and the Access Rights of Way.
Exxon, without the benefit of an independent investigation, is not aware of
any outstanding judgments, pending litigation, or notices of violation
relating to Exxon's Property which would preclude the construction,
operation, maintenance, repair, replacement and removal of the Cogeneration
Facility, but Exxon does not warrant that there are no such judgments,
litigation, or notices, and subject to Section 10.1A Exxon does not warrant
that the Demised Premises or any other relevant parts of Exxon's Property
can be used for or are suitable for Cogen's purposes.
8.2 Cogen's Possession. Exxon has owned and continuously occupied the Demised
Premises since 1907 and, to the best of Exxon's knowledge, no one is now
questioning or challenging Exxon's rights of possession and ownership of the
Demised Premises. Exxon will be responsible for any valid lien or judgment
against the Demised Premises existing on the effective date of this Ground
Lease Agreement. So long as Cogen is in compliance with this Ground Lease
Agreement, during the term of the Ground Lease Cogen will have quiet,
undisturbed, and continued possession of the Demised Premises, and the
agreed use of the Interconnection Areas, the
Ground Lease Agreement - 35
Utility Areas, the Staging Areas, and the Access Rights of Way free from any
claims against or actions of Exxon and all persons claiming under, by, or
through Exxon.
8.3 Access. Properly accredited representatives of either Party will, with
reasonable notice under the circumstances, have reasonable access to those
facilities of the other Party necessary in order, in the case of Exxon, to
make inspections and, in the case of both Parties, to obtain information
required in connection with this Ground Lease Agreement, the Steam Sale
Agreement, the Power Purchase Agreement, and any other agreements between
the Parties. Each Party will make reasonable efforts to avoid interference
with the operations of the other Party.
ARTICLE 9
TAXES
9.1 Parties' Responsibility. During the term of the Ground Lease, Cogen will
pay all taxes, assessments or charges levied against and solely attributable
to the Improvements. Exxon will pay all property taxes, assessments or like
charges otherwise relating to the Demised Premises, the Exxon System, the
Interconnection Areas, the Utility Areas, the Staging Areas and the Access
Rights of Way. In the event the taxing authorities fail or refuse to issue a
separate tax xxxx to Xxxxx covering only the Improvements, Cogen will be
responsible only for such taxes, assessments and charges solely attributable
to the Improvements.
Ground Lease Agreement - 36 -
9.2 Tax Appeals. Either Party will have the right, with the other Party's
knowledge, to contest or review all such taxes, assessments and charges by
legal proceedings, or in such other manner as it may deem suitable. If
either Party contests any such tax, assessment or charge, such Party may
withhold or defer payment or pay under protest, but such contesting Party
will protect the other Party, Exxon's Property, and the Improvements from
any lien by adequate surety bond or other appropriate security. Each Party
will give reasonable cooperation to the other in any proceedings brought by
the other to contest taxes.
9.3 Failure to Pay. Should either Party fail to pay when due the taxes,
assessments or charges which such Party is responsible for pursuant to
Section 9.1 above, the other Party may, at its option and without waiving
any other rights such Party may have under the terms of this Ground Lease
Agreement or provided by law, pay such taxes, assessments or charges,
together with all penalties and interest which may have been added thereto.
Any such amounts so paid will become immediately due and payable upon
demand by the Party paying the same.
ARTICLE 10
ENVIRONMENTAL RESPONSIBILITY
10.1 Overall Environmental Liability. In order to facilitate segregation of
Cogen's and Exxon's operations, Cogen will construct its Cogeneration
Facility with concrete paving covering substantially all of the Demised
Premises, in accordance with
Ground Lease Agreement - 37 -
normal construction practices, and, subject to Sections 14.1 and 20.3,
overall environmental liability will be allocated between the Parties as
follows:
A. If any environmental remediation of the Demised Premises is necessary
for the construction of the Cogeneration Facility, Exxon will be
primarily responsible for such remediation, as described in Section
10.6, and will bear the direct expense of such remediation, except that
Exxon will not be responsible to any entity for any resulting loss,
damage, or expense associated with any delays in or other impacts on the
construction, operation, maintenance, repair, replacement, or removal of
the Cogeneration Facility or other equipment or facilities of Cogen.
Additionally, Exxon will be liable for any other direct environmental
loss, damage, or expense (including those relating to third-party
claims) of Exxon or Cogen relating to Exxon's Property and resulting
solely from conditions existing before Cogen commences site preparation
activities on Exxon's Property or solely from the actions or inactions
of Exxon or its invitees on Exxon's Property after the effective date of
this Ground Lease Agreement.
X. Xxxxx will be liable for any direct environmental loss, damage, or
expense (including those relating to third-party claims) of Cogen or
Exxon relating to Exxon's Property and which Exxon can demonstrate
result solely from the actions or inactions of cogen or its invitees on
Exxon's Property.
Ground Lease Agreement - 38 -
C. If an environmental loss, damage, or expense relating to Exxon's
Property results jointly from the causes described above in Sections
10.1A and 10.1B, each Party will bear its share of liability according
to the degree to which the causes for which it is responsible
contributed to the loss, damage, or expense.
D. Direct environmental loss, damage and expense will include all such
losses, damages, and expenses, including fines, reasonable out-of-pocket
expenses, costs of litigation, attorneys fees, costs of removing liens
imposed by governmental authorities, and costs of necessary remediation
such as necessary disposal or treatment of contaminated soil or ground
water. Direct environmental expenses will also include reasonable costs
of settling any third-party claims, provided the other Party agrees in
writing with such settlements. Direct environmental loss, damage and
expense will not include punitive, indirect, or consequential losses,
damages, or expenses referred to in Section 14.1.
10.2 Third Party Claims. Cogen and Exxon will cooperate and assist each other in
defending any environmental claims relating to Exxon's Property and made
against both Parties, and in pressing related claims or counterclaims
against third parties, where appropriate. In order to reduce transactional
costs, Cogen and Exxon will negotiate in good faith to determine which
Party will have primary responsibility for handling of any such claim.
Ground Lease Agreement - 39 -
10.3 Triggering ECRA. Any action which would cause any entity to comply with
ECRA with respect to all or any part of Exxon's Property may be referred to
as triggering ECRA with respect to Exxon's Property, or simply triggering
ECRA. Exxon may trigger ECRA at any time with respect to all or any part of
Exxon's Property. Cogen will not take at any time any action which would
trigger ECRA with respect to any of Exxon's Property, except that Cogen may
trigger ECRA with respect to the Demised Premises (and perhaps a butane
supply line extending to the Demised Premises and the electrical
interconnect lines from the Cogeneration Facility and the land underlying
those lines) at any time more than two years after the Date of Initial
Commercial Operation.
10.4 Cogen's ECRA Liability. If Cogen at any time triggers ECRA with respect to
any of Exxon's Property other than the Demised Premises (and perhaps a
butane supply line extending to the Demised Premises and the electrical
interconnect lines from the Cogeneration Facility and the ground underlying
those lines), or if Cogen triggers ECRA with respect to the Demised
Premises before or within two years after the Date of Initial Commercial
operation, unless the action which causes Cogen to trigger ECRA is beyond
Cogen's control (including bankruptcy of Cogen or foreclosure of the liens
of the Financier), Cogen will be deemed to be in default under this Ground
Lease Agreement and will be liable for and will promptly reimburse Exxon
for all expenses which Exxon reasonably incurs because of such triggering
of ECRA, up to a maximum of $10 million. Exxon will not be entitled to be
Ground Lease Agreement - 40 -
paid any other sums for damages to Exxon arising from such breach by Cogen.
Payment by Cogen of such expenses of Exxon (up to the maximum of $10
million), however, will not be deemed to cure such default by Cogen
pursuant to the first sentence of this Section 10.4, but instead Exxon, in
addition to the right to be so paid, shall be entitled to terminate this
Ground Lease for such default pursuant to Section 16.1A, but subject to the
Financier's cure right described in Section 16.4B. If Cogen triggers ECRA
with respect to the Demised Premises (and perhaps a butane supply line
extending to the Demised Premises and the electrical interconnect lines
from the Cogeneration Facility and the land underlying those lines) before
or within two years after the Date of Initial Commercial Operation because
of a cause beyond its control (including bankruptcy of Cogen or foreclosure
of the liens of the Financier), or if Cogen triggers ECRA with respect to
the Demised Premises (and perhaps a butane supply line extending to the
Demised Premises and the electrical interconnect lines from the
Cogeneration Facility and the land underlying those lines) more than two
years and less than fifteen years after the Date of Initial Commercial
Operation, Cogen will not be deemed to be in default of this Ground Lease
Agreement, but will be liable for and will promptly reimburse Exxon for all
expenses reasonably incurred by Exxon in order to comply with ECRA, up to a
maximum of $2 million. The $10 million maximum and the $2 million maximum
will not apply to Cogen's liability under Sections 10.1 and 10.2 above.
Cogen's obligation under this Section 10.4 to reimburse Exxon promptly for
expenses reasonably incurred by Exxon will apply to
Ground Lease Agreement - 41 -
all such expenses (up to the $10 million or $2 million cap, as applicable),
whether related to the Demised Premises or to other parts of Exxon's
Property and whether related to environmental conditions caused by Exxon or
by any other entity. If Cogen triggers ECRA with respect to the Demised
Premises more than fifteen years after the Date of Initial Commercial
Operation, or if Exxon triggers ECRA, Cogen will not be obligated to
reimburse Exxon for any of Exxon's expenses in complying with ECRA except
to the extent that Cogen may be liable for such expenses under Sections
10.1 or 10.2 above.
10.5 ECRA Cooperation. If either Party anticipates that ECRA will be triggered
with respect to all or any part of Exxon's Property, that Party will
promptly give the other Party reasonable notice to enable it to prepare for
such triggering of ECRA. Subject to the provisions of sections 10.1, 10.2,
10.3, 10.4 and 20.3, Exxon will be primarily responsible for ECRA
compliance with respect to Exxon's Property, including the Demised
Premises, even if ECRA is triggered by Cogen. This compliance will include
without limitation interacting with the New Jersey Department of
Environmental Protection, making ECRA filings, developing and implementing
sampling and cleanup plans if necessary, posting financial assurances,
entering into administrative consent orders if appropriate, and the other
actions mandated by ECRA. If ECRA is triggered, both Parties will cooperate
with each other by providing appropriate data, affidavits, and other
information and documentation to facilitate ECRA compliance. Exxon will
have
Ground Lease Agreement - 42 -
complete discretion with respect to the course of action which it takes to
comply with ECRA, but Exxon subject to Section 14.1 will exert reasonable
efforts to mitigate the financial impact of ECRA compliance on Cogen. Cogen
will have the right to review and comment on Exxon's plans for complying
with ECRA and Exxon will work with Cogen to mitigate the impact of ECRA
compliance on the operation of the Cogeneration Facility. Additionally,
Cogen will have the right to conduct its own independent testing of soil
and ground water on the Demised Premises and on any land within one hundred
feet of the Demised Premises. Cogen will give Exxon reasonable access to
the Demised Premises to facilitate compliance with ECRA.
10.6 General Cooperation. If any environmental remediation (other than
remediation under ECRA, which is covered by Section 10.5) becomes necessary
before or during the term of the Ground Lease with respect to the Demised
Premises, Interconnection Areas, Utility Areas, or Access Rights of Way,
Exxon will be primarily responsible subject to the provisions of Sections
10.1 and 10.2 for that remediation and for related interactions with
regulatory authorities. If any such remediation becomes necessary, both
Parties will cooperate with each other by providing appropriate data,
affidavits, and other information, documentation and assistance to
facilitate the remediation. Exxon will have complete discretion with
respect to the course of action which it takes to effect the remediation,
but Exxon will exert reasonable efforts to mitigate the financial impact of
any such remediation
Ground Lease Agreement - 43 -
on Cogen, subject to Section 14.1. Cogen will have the right to review and
comment on Exxon's plans for the remediation and Exxon will work with Cogen
to mitigate the impact of any such remediation on the construction,
construction schedule, and operation of the Cogeneration Facility. Cogen
will give Exxon reasonable access to the Demised Premises to facilitate any
such remediation. At Exxon's request, Cogen will dispose of any
contaminated soil or other contaminated materials that Exxon determines
should be removed from the Demised Premises.
10.7 Cogen's Net Worth. From the Date of Initial Commercial Operation to the
termination of the Ground Lease and until Cogen has discharged its
obligations under ECRA, if any, Cogen will maintain a net worth which, when
combined with the net worth of its general partner or general partners,
will total at least $50 million. Net worth includes all items which would
be included, in accordance with generally accepted accounting principles,
under the capital portion of the balance sheet of Cogen and also includes
the amount of any letter of credit in favor of Exxon, supporting a
guarantee of Cogen's obligations under this Ground Lease Agreement, and
issued by an entity with a long term debt rating of A or better. Net worth
shall not include any letter of credit in favor of Exxon issued for the
purpose provided in Section 10.8. In no circumstance shall this Section
10.7 be construed to require the provision of a letter of credit in an
amount in excess of $50 million in respect of Cogen's obligation to
maintain a net worth of at least $50 million, calculated as provided above.
If Cogen
Ground Lease Agreement - 44 -
needs to include a letter of credit to maintain a net worth of $50 million,
Cogen will so advise Exxon and Cogen will not be obligated to maintain such
letter of credit unless Exxon so requests.
10.8 Letter of Credit. With regard to liability under the provisions of Section
10.4 which results from action taken or directed by any Financier, Exxon
may require the Financier to either (i) provide a letter of credit
substantially in the form of the letter of credit being issued by General
Electric Capital Corporation described below or (ii) make such other
arrangements as are reasonably satisfactory to Exxon. With respect to the
initial Financier recognized by Exxon for purposes of this Ground Lease
Agreement, General Electric Power Funding Corporation, Exxon will accept
the letter of credit issued on the date hereof by General Electric Capital
Corporation, an Affiliate of General Electric Power Funding Corporation,
for the account of Cogen in favor of Exxon (or any replacement letter of
credit as provided below), which letter of credit provides that Exxon may
draw thereunder in various circumstances, including the impending expiry
date thereof without Exxon having been furnished with a substantially
similar replacement letter of credit issued by General Electric Corporation
or one of its wholly-owned Affiliates or, if General Electric Power Funding
Corporation or one of its Affiliates is no longer the Financier recognized
by Exxon for purposes of this Ground Lease Agreement, by the Financier so
recognized, provided such Financier has a long term debt rating of
Ground Lease Agreement - 45 -
A or better and is otherwise reasonably acceptable to Exxon. Such letter of
credit also provides that in the event ECRA is triggered prior to January
1, 2013, by an action taken or directed by any Financier and that prior to
the 30th day before such date no determination has been made as to one or
both of (a) the obligation of Exxon to remediate or (b) the expense
thereof, Exxon may draw the full amount available thereunder. It is agreed
that, if Exxon draws under such letter of credit or any such replacement
letter of credit because of any of the reasons specifically described
above, Exxon will enter into an escrow agreement among Cogen, Exxon, the
issuer of such letter of credit and an escrow agent (which must be
reasonably satisfactory to Exxon) nominated by Cogen pursuant to which such
escrow agent will hold the proceeds of such draw for disbursement in
various circumstances (which must be reasonably satisfactory to Exxon),
including the delivery to such escrow agent of a certificate substantially
similar to Exhibit X-0, Xxxxxxx X-0, Exhibit B-3 or Exhibit B-4, as the
case may be, to the aforementioned letter of credit issued by General
Electric Capital Corporation on the date hereof. All fees and disbursements
of the escrow agent will be paid by Cogen. Funds held by the escrow agent
will (subject to protection criteria reasonably acceptable to Exxon) be
invested for the benefit and risk of Cogen.
Ground Lease Agreement - 46 -
ARTICLE 11
LIENS
11.1 If any mechanics', materialmen's or other liens are filed against Exxon's
Property or any part thereof, by reason of labor performed or materials
furnished to Cogen in the construction, operation, maintenance, repair,
replacement or removal of the Improvements, Cogen will, at Cogen's own
cost, cause such lien or liens to be satisfied, removed, cancelled,
erased, discharged of record, bonded or otherwise secured against,
together with any notices of lien that may have been filed, either by
payment thereof, by bonding the lien in accordance with the laws of the
State of New Jersey or by such other means as may be acceptable to Exxon.
Should Cogen fail to discharge any such lien or otherwise fail to satisfy
Exxon with respect thereto, Exxon may, at its option, have the lien
removed by bonding same or satisfying same, all at Cogen's expense, which
will be in addition to any other remedies provided in this Ground Lease
Agreement. Cogen will at no time cause or permit a mortgage or any other
security instrument of any nature to become a lien against any part of
Exxon's Property, except as otherwise provided in Article 12.
Ground Lease Agreement - 47 -
ARTICLE 12
PERMITTED ENCUMBRANCES ON
LEASEHOLD INTERESTS AND IMPROVEMENTS
12.1 General. Subject to Cogen's obligation in Article 10 not to trigger ECRA
before or within two years after the Date of Initial Commercial operation
due to causes within its control, Cogen may, subject to Article 20, at any
time and from time to time during the term of this Ground Lease Agreement
and without the consent of Exxon, encumber Cogen's interest in the
leasehold estate created by this Ground Lease Agreement, in the additional
rights granted to Cogen pursuant to Sections 2.2, 2.3, 2.4, 2.5, 2.6, and
2.7 above, and in the Improvements by way of a lien, security agreement,
UCC filing, chattel mortgage, leasehold mortgage, or permitted assignment
containing such provisions as Cogen may deem fit and proper. Cogen
recognizes that ECRA regulations currently provide that execution of a
mortgage, filing of a lien, granting a security interest, assigning a
lease to secure a loan, and refinancing a debt not including a sale and
lease back generally would not trigger ECRA, but that certain sales or
transfers of the Improvements, the Ground Lease, or certain partnership
interests with respect to Cogen could trigger ECRA.
Ground Lease Agreement - 48 -
ARTICLE 13
EMINENT DOMAIN
13.1 Distribution of Award. If the Demised Premises, the Interconnection
Areas, the Utility Areas, the Staging Areas or the Access Rights of Way
are taken or condemned, in whole or in part, by any competent authority,
the Parties will cooperate in applying for and in prosecuting any claim
for such taking. Any award, after deduction of all expenses, including
attorney's fees, incurred in connection therewith, payable to both Exxon
and Cogen (or if required, to the Financier) will be distributed as
follows:
A. The portion of the award relating to the taking of Cogen's rights
under this Ground Lease Agreement, lost profits of Cogen, the
Improvements and, if applicable, the expense of dismantling and moving
the Improvements will be paid to Cogen; and
B. The portion of the award relating to the lost benefits of steam from the
Cogeneration Facility and to the value of the land constituting the
Demised Premises, the Interconnection Areas, the Utility Areas, the
Staging Areas and the Access Rights of Way will be paid to Exxon.
13.2 Full Taking. In the event of a full taking of the Demised
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Premises, the Ground Lease will automatically terminate on the date such
authority requires the Cogeneration Facility to be shut down.
13.3 Partial Taking. In the event of a partial taking of the Demised Premises,
or a full or partial taking of the Interconnection Areas, the Utility
Areas, the Staging Areas or the Access Rights of Way by any competent
authority which renders the continuation of normal operations at the
Cogeneration Facility impossible, impracticable, or unduly onerous, Cogen
may elect to terminate the Ground Lease under the provisions of Sections
16.2G and 16.5G. If this Ground Lease is not so terminated, it will
continue in full force and effect as to those portions of the Demised
Premises, the Interconnection Areas, the Utility areas, the Staging Areas
and the Access Rights of Way not taken, and the rent payable hereunder
will be proportionately and equitably reduced.
ARTICLE 14
LIMITATION ON LIABILITY AND DISTRIBUTION OF RISKS
14.1 Limitation on Liability for Damages. Neither Exxon nor Cogen, nor their
respective officers, directors, partners, agents, employees, Affiliates,
nor their successors or assigns will be liable under this Ground Lease
Agreement to the other Party or its officers, directors, partners, agents,
employees, Affiliates, or their successors or assigns, for any punitive,
Ground Lease Agreement - 50 -
indirect, or consequential losses, damages, or expenses, including loss of
profits.
14.2 Distribution of Risks Between Exxon and Cogen.
X. Xxxxx will compensate Exxon for any loss of or damage to Exxon's Bayway
Refinery, Bayway Chemical Plant, Marketing Terminal, Technology Center,
or any other property of Exxon sustained by Exxon arising out of or in
connection with the ownership, construction, operation, maintenance,
repair, replacement, or removal of the Improvements, limited, however,
to the amount provided for in Section 14.2D plus any amounts Cogen may
recover for such loss or damage from its vendors, contractors,
subcontractors, or others. Subject to the limitations of Section 14.5,
Cogen will make reasonable efforts to recover such damages or losses
from vendors, contractors, subcontractors, and others.
X. Xxxxx will be responsible for and will hold Exxon harmless from
liability resulting from loss of or damage to the Improvements or any
other property of Cogen located on the Demised Premises or Exxon's
Property sustained by Cogen, whether or not such loss or damage is
caused by the negligence of Exxon, its officers, directors, partners,
agents, employees, Affiliates, or their representatives.
Ground Lease Agreement - 51 -
C. Except as provided otherwise herein, Cogen agrees to indemnify, hold
harmless and defend Exxon, its officers, directors, partners, agents,
employees, Affiliates, and their representatives from and against any
and all claims, losses, damages, causes of action, suits, and liability
of every kind, including all expenses of litigation, court costs, and
attorney's fees, for injury to or death of any person (including Cogen's
employees), or for damage to any property, arising out of or in
connection with the ownership, construction, operation, maintenance,
repair, replacement, or removal of the Improvements, where the injury or
death or damage is caused by the negligence of Cogen, its officers,
directors, partners, agents, employees, Affiliates, or their
representatives as well as the contributory negligence of Exxon, its
officers, directors, partners, agents, employees, Affiliates, or their
representatives with Cogen or any third party, except that Cogen assumes
no liability for the sole negligent acts of Exxon. It is the express
intention of the Parties that the indemnity provided for in this Section
14.2C is intended by Cogen to indemnify and protect Exxon from the
consequences of Exxon's own negligence, where that negligence is a
concurring cause of the injury, death, or damage. Furthermore, the
indemnity provided for in this Section 14.2C will have no application to
any claim, loss, damage, cause of action, suit, and liability where the
injury, death, or damage results from the sole negligence of Exxon
Ground Lease Agreement - 52 -
unmixed with the fault of Cogen, its officers, directors, partners,
agents, employees, Affiliates, or their representatives.
X. Xxxxx'x indemnity obligations, pursuant to Sections 14.2A and 14.2C,
will be initially limited to $10 million and then adjusted every five
years from the effective date of this Ground Lease Agreement by
application of the CPI-based formula set forth in Section 5.2 above and
by rounding the results to the nearest $100,000. The limitation applies
solely to the provisions of Sections 14.2A and 14.2C and does not affect
any other responsibility of Cogen, including its environmental
obligations under Article 10 above.
14.3 Cooperation. Exxon will furnish Cogen with written notification as soon as
practicable after Exxon becomes aware of any event or circumstances which
might give rise to such indemnification; provided, however, the failure of
Exxon to give such written notification will not waive any rights under
this Article 14, except to the extent the rights of Cogen are actually
prejudiced. At Exxon's request, Cogen will defend any suit asserting a
claim covered by this indemnity and will pay all associated costs and
expenses (including reasonable attorneys fees and expenses) that may be
incurred in enforcing this indemnity. Exxon may, at its own expense,
retain separate counsel and participate in the defense of any such suit or
action. Cogen will not compromise or settle a claim hereunder
Ground Lease Agreement - 53 -
without the prior written consent of Exxon; provided, however, that in the
event such a consent is withheld, then the liability of Cogen will be
limited to the aggregate of the amount of the proposed compromise or
settlement, the amount of counsel fees and expenses outstanding at the time
such consent is withheld, and the amount of any outstanding claim against
which indemnification applies and which is not covered by the proposed
compromise or settlement (together with all costs and expenses associated
with such outstanding claim). Thereafter, Exxon will reimburse Cogen upon
demand, for the amount of any additional liability, counsel fees and
expenses incurred by Cogen over and above the amounts described above after
the time such consent shall have been withheld.
14.4 Dispute of Obligation. To the extent Cogen disputes its obligation to
indemnify Exxon, it will not be considered a breach of this Ground Lease
Agreement for Cogen to fail to perform under this Article 14 until such
time as Cogen is determined to have the obligation to indemnify under
this Article 14 pursuant to an agreement reached by the Parties or by
judicial determination.
14.5 Vendors. Contractors, and Subcontractors. Exxon retains the right to
pursue any claim that it may have against any of Cogen's vendors,
contractors, or subcontractors, arising out of or in connection with the
ownership, construction, operation, maintenance, repair, replacement, or
removal of the
Ground Lease Agreement - 54 -
Improvements, except that with respect to claims based on such activities
between the effective date of this Ground Lease Agreement and two years
after the Date of Initial Commercial Operation, Exxon agrees to waive all
liability relating to such activities in excess of $10 million that Cogen's
contractor Ebasco Constructors, Inc. and the vendors, contractors and
subcontractors of Ebasco Constructors, Inc. may have to Exxon under any
legal theory for any losses, damages, or expenses, including any punitive,
indirect, or consequential losses, damages, or expenses, including loss of
profits. Cogen retains the right to pursue any claim that it may have
against any of Exxon's vendors, contractors, or subcontractors, arising out
of or in connection with their activities at Exxon's Complex, except that
with respect to claims based on such activities between the effective date
of this Ground Lease Agreement and two years after the Date of Initial
Commercial Operation, Cogen agrees to waive all liability relating to such
activities in excess of $10 million that any such entity may have to Cogen
under any legal theory for any losses, damages, or expenses, including
punitive, indirect, or consequential losses, damages, or expenses,
including loss of profits.
ARTICLE 15
INSURANCE
15.1 General Requirements. Cogen will carry at the effective date
Ground Lease Agreement - 55
of this Ground Lease Agreement and will use its best efforts to maintain in
force to the end of this Ground Lease, the following insurances with
companies satisfactory to Exxon:
(i) Workers' Compensation and Employer Liability
For all its employees who may at any time be on Exxon's Property,
workers' compensation and employer's liability with limits of at
least $100,000 per accident;
(ii) Comprehensive General Liability
Cogen's normal and customary comprehensive general liability
insurance (including without limitation contractual) with limits of
at least $10 million per occurrence for bodily injury and $10 million
per occurrence for property damage; and
(iii) Automobile Liability
Automobile liability insurance covering owned, non-owned, and rented
vehicles which may at any time operate on Exxon's Property, with
limits of at least $10 million for injury, death, or property damage
resulting from each occurrence.
Ground Lease Agreement - 56 -
Nothing contained in this Section 15.1 shall limit or waive Cogen's legal
or contractual responsibilities to Exxon or others.
15.2 Notices and Examination. If requested by Exxon, Cogen will have its
insurance carriers furnish to Exxon insurance certificates specifying the
types and amounts of coverage in effect, the expiration dates of each
policy, and a statement that no insurance will be canceled or materially
changed during the term of this Ground Lease without thirty days prior
written notice to Exxon. If requested by Exxon, Cogen will permit Exxon to
examine the insurance policies, or at Exxon's option, Cogen will furnish
Exxon with certified copies of the insurance policies.
15.3 Self-Insurance. Upon showing reasonable evidence of financial ability to
assume loss to Exxon, Cogen may self-insure any or all of the coverages
shown above.
ARTICLE 16
TERMINATION
16.1 Exxon's Right to Terminate. Subject to Section 16.4, Exxon will have the
right, at its option, to terminate the Ground Lease upon the occurrence of
any of the following events:
Ground Lease Agreement - 57 -
X. Xxxxx-defaults by failing to make timely payment of rent pursuant to
Article 5 hereof, which failure continues for sixty days after Exxon
gives Cogen and the Financier identified in Section 16.4 written notice
of such failure to pay, or Cogen defaults by triggering ECRA in
violation of Section 10.4; or
X. Xxxxx defaults by failing substantially to perform any material
obligation under this Ground Lease Agreement, other than the payment of
rent or forbearance from triggering ECRA covered in Section 16.1A, which
failure continues for a period of sixty days after Exxon gives Cogen and
the Financier identified in Section 16.4 written notice of such
nonperformance; provided, however, if such default may not reasonably be
cured within such sixty-day period, this Ground Lease will not terminate
pursuant to this Article 16.1B, if Cogen diligently commences to cure
such default within such sixty-day period and for so long as Cogen
diligently continues such efforts, unless the default continues uncured
for six months after Exxon gives Cogen and the Financier identified in
Section 16.4 such written notice; or
C. Exxon terminates the Steam Sale Agreement because of default by Cogen;
or
Ground Lease Agreement - 58 -
X. Xxxxx fails, after the Construction Period has commenced, to conclude
the Construction Period by January 1, 1998, in which event Exxon may
terminate this Ground Lease by giving Cogen prompt written notice; or
E. Exxon terminates the Steam Sale Agreement pursuant to Article 2.3 of
such agreement (dealing with failure by Cogen to commence Commercial
operations by July 1, 1993, or make alternate arrangements), or Cogen
ceases to be obligated to comply with the Steam Sale Agreement for any
reason other than a termination of such Agreement (i) by Cogen due to a
default by Exxon thereunder, (ii) by Exxon (only) at the expiration of
"Base Term" (as defined in such Agreement) or of the first five year
renewal thereof, (iii) by Cogen because Exxon's External Steam
Requirements (as defined in such Agreement) from Cogen under such
Agreement have fallen below the level specified in Section 11.2E of such
Agreement and the other conditions in such Section have been satisfied,
or (iv) by agreement of Cogen and Exxon; or
F. The Ground Lease enters its Evergreen Period and Exxon gives Cogen at
least five years written notice of termination pursuant to Section 4.6.
16.2 Cogen's Right to Terminate. Cogen will have the right, at its
Ground Lease Agreement - 59 -
option, to terminate the Ground Lease upon the occurrence of any of the
following events:
A. Exxon defaults by failing substantially to perform any material
obligation under this Ground Lease Agreement, which failure continues
for a period of sixty days after Cogen gives Exxon and its lenders and
mortgagees identified in Section 16.4 written notice of such
nonperformance; provided, however, if such default may not reasonably be
cured within such sixty-day period, this Ground Lease will not terminate
pursuant to this Section 16.2A, if Exxon diligently commences to cure
such default within such sixty-day period and for so long as Exxon
diligently continues such efforts, unless the default continues uncured
for six months after Cogen gives Exxon and its lenders and mortgagees
identified in Section 16.4 such written notice; or
X. Xxxxx terminates the Steam Sale Agreement because of default by Exxon;
or
X. Xxxxx terminates the Steam Sale Agreement under Article 11.2E of such
agreement (dealing with decreased need for Steam by Exxon); or
Ground Lease Agreement - 60 -
D. The Power Purchase Agreement is terminated for any reason and is not
replaced by a similar agreement to sell power; or
X. Xxxxx is unable to receive or maintain the Governmental Authorizations
necessary lawfully to construct, operate, and maintain the Cogeneration
Facility due to Force Majeure (and not due to repeated violations by
Cogen of such authorizations for reasons other than Force Majeure); or
F. The Demised Premises, the Interconnection Areas, the Utility Areas, or
the Access Rights of Way cannot be used for Cogen's purposes as
specified in Article 6 and the Parties cannot relocate the
Interconnection Areas, Utility Areas or Access Rights of Way pursuant to
Section 2.6 to their mutual satisfaction, or if Cogen is unable to
obtain water, gas, or standby power for the Cogeneration Facility; or
G. There is a partial taking allowing termination in accordance with
Section 13.3; or
H. The Ground Lease continues to the end of the Base Term, or either
Renewal Term, or into the Evergreen Period and Cogen gives any of the
notices of termination specified in Article 4.
Ground Lease Agreement - 61 -
Any notice from Cogen to Exxon of termination of the Ground Lease will be
effective only if such notice either (i) is joined in by the Financier in
writing, if there is a Financier then in existence, or (ii) certifies on
its face that there is no Financier.
16.3 Automatic Termination. The Ground Lease will automatically terminate as of
the effective date set forth in Section 16.5 below if
A. The Ground Lease continues in effect to December 31, 2050; or
B. There is a full taking by competent authority of the Demised Premises,
as described in Article 13; or
C. This Ground Lease Agreement is rejected pursuant to Section 365 of the
Bankruptcy Code of 1978, as amended, or any successor provision thereto,
in a case wherein Cogen is the debtor.
16.4 The Financier, Lenders and Mortgagees.
A. Exxon will have no right to terminate this Ground Lease for default
pursuant to Sections 16.1A, 16.1B, or 16.1C above, until Exxon (i) has
provided the Financier substantially the same notices which Exxon is
obligated to provide to
Ground Lease Agreement - 62 -
Cogen pursuant to Sections 16.1A or 16.1B, or 16.5A; and (ii) has
provided the Financier the same right to cure such default as Cogen; and
(iii) in the case of defaults which are susceptible of being cured only
if the Financier has access to the Demised Premises, the Improvements,
the Interconnection Areas, the Utility Areas and the Access Rights of
Way (and only in the case of such defaults), has provided the Financier
six additional months subsequent to the end of the period for the cure
of any such default in Section 16.1B, without extension for any period
contemplated in Article 19, to cure such default, provided that the
Financier has pursued and continues to pursue with diligence, continuity
and good faith all actions to enable the Financier to obtain access in
order to cure, and to cure, such default. Exxon and Cogen hereby grant
to the Financier a non-exclusive license, irrevocable for the term of
the Ground Lease, to have access to and to use the Demised Premises, the
Improvements, the Interconnection Areas, the Utility Areas and the
Access Rights of Way for the purpose of curing any default by Cogen
under clause (ii) above, or under Article 11.4A (ii) of the Steam Sale
Agreement, in any case in which such default is not subject to cure in a
reasonably practicable manner without access to the Demised Premises,
the Improvements, the Interconnection Areas, the Utility Areas and the
Access Rights of Way. Cogen will have no right to terminate this Ground
Lease pursuant to Section 16.2A above, until Cogen (i) has provided any
lender to whom Exxon has assigned this
Ground Lease Agreement - 63 -
Ground Lease Agreement to secure a loan and has provided any mortgagee
holding a mortgage on all or any part of Exxon's Property substantially
the same notices which Cogen is obligated to provide to Exxon pursuant
to Section 16.2A, and (ii) has provided such lender or mortgagee the
same right to cure as Exxon, provided that Exxon has previously given
Cogen actual notice of the appropriate contact person and address for
any such lender or mortgagee.
B. In the event Cogen defaults pursuant to the terms of the first sentence
of Section 10.4, Exxon agrees not to terminate this Ground Lease if the
Financier, within sixty days after receiving notice of such default,
pays to Exxon the sums provided for in such first sentence of Section
10.4 and thereafter takes appropriate steps to foreclose upon or
otherwise obtain title to or possession of the Cogeneration Facility.
16.5 Effective Date of Termination.
A. If an event described in Sections 16.1A or 16.1B occurs, or if the
termination described in Section 16.1C occurs, Exxon may promptly give
Cogen a written notice of termination (which, in the case of triggering
ECRA, will be the first written notice) which will trigger immediately
the commencement of the Improvements Removal Period described
Ground Lease Agreement - 64 -
in Section 4.7 and the Ground Lease will terminate when the Improvements
Removal Period terminates.
B. If Cogen fails to conclude the Construction Period by the time provided
in Section 16.1D, Exxon may give Cogen the written notice provided for
in Section 16.1D, which notice will trigger immediately the commencement
of the Improvements Removal Period described in Section 4.7 and the
Ground Lease will terminate when the Improvements Removal Period
terminates.
C. If Exxon terminates the Steam Sale Agreement pursuant to Article 2.3 of
such agreement after this Ground Lease has commenced, or if Cogen ceases
to be obligated to comply with the Steam Sale Agreement for any reason
other than as specified in Section 16.1E, in each case, Exxon may give
Cogen prompt written notice that Exxon is electing to terminate the
Ground Lease as well, and this written notice will trigger immediately
the commencement of the Improvements Removal Period and the Ground Lease
will terminate when the Improvements Removal Period terminates.
D. If Exxon gives Cogen notice of termination of the Ground Lease during
the Evergreen Period pursuant to Section 4.6, the Improvements Removal
Period will commence on the date specified in the notice and the Ground
Lease will terminate when the Improvements Removal Period terminates.
Ground Lease Agreement - 65 -
E. If a default described in Section 16.2A occurs, Cogen may promptly
give Exxon a second written notice which will trigger immediately the
commencement of the Improvements Removal Period and the Ground Lease
will terminate when the Improvements Removal Period terminates.
F. If any event described in Section 16.2B or 16.2C occurs, Cogen may give
Exxon prompt written notice which will trigger immediately the
commencement of the Improvements Removal Period and the Ground Lease
will terminate when the Improvements Removal Period terminates.
G. If any event described in Sections 16.2D, 16.2E, 16.2F or 16.2G occurs,
Cogen may give Exxon prompt written notice. This notice will trigger the
commencement of the Improvements Removal Period immediately, if the
Ground Lease is in the Construction Period, otherwise two years after
such notice is given, and the Ground Lease will terminate when the
Improvements Removal Period terminates.
H. If Cogen gives Exxon notice of termination of the Ground Lease during
the Base Term, either Renewal Term, or during the Evergreen Period
pursuant to Sections 4.5 or 4.6, the Improvements Removal Period will
commence on the date specified in the notice and the Ground Lease will
terminate when the Improvements Removal Period terminates.
Ground Lease Agreement - 66 -
I. If the Evergreen Period continues in effect until December 31, 2048, the
Improvements Removal Period will commence on January 1, 2049, and the
Ground Lease will terminate when the Improvements Removal Period
terminates, and in any event not later than December 31, 2050.
J. If there is a full taking as described in section 13.2, there will be no
Improvements Removal Period and the Ground Lease will terminate on the
date the governmental authority requires the Cogeneration Facility to be
shut down.
K. If this Ground Lease Agreement is rejected pursuant to Section 365 of
the Bankruptcy Code of 1978, as amended, or any successor provision
thereto, in a case wherein Cogen is the debtor, the Ground Lease will
terminate on the effective date of such rejection.
16.6 Cooperation. If the Ground Lease is terminated for any reason, the Parties
will work together to achieve a smooth transition.
ARTICLE 17
REMOVAL OF IMPROVEMENTS
17.1 During the Improvements Removal Period or as soon as is practicable
following any rejection described in Section 16.3C (subject to any rights
of Financier, its nominee, or designee
Ground Lease Agreement - 67 -
in the Improvements) Cogen may, and will, at Exxon's written request given
not later than any termination of the Construction Period, Base Term, any
Renewal Term, or the Evergreen Period pursuant to Section 16.1 above, or at
Exxon's written request given within and not later than thirty days after
any other termination of the Construction Period, Base Term, any Renewal
Term or the Evergreen Period, at Cogen's expense, remove all or any portion
of the Improvements from Exxon's Property and will restore Exxon's Property
to as near its original condition as is practicable, except that Cogen may
cut off, blank, and leave in place any below-ground utility and
interconnection services in the Interconnection Areas or Utility Areas (but
not on the Demised Premises). Any such below-ground utility and
interconnection services that contain or have contained any hydrocarbon or
other hazardous substance will be purged and cleaned by Cogen to Exxon's
satisfaction prior to blanking. In the event Exxon does not request such
removal and any of the Improvements are not removed, all such Improvements
will be deemed abandoned to Exxon without any payment being due from Exxon
and Cogen will have no further liability with regard thereto. In the event
that Exxon requests removal and Cogen fails to remove all or any portion of
the Improvements, Exxon may remove such Improvements at Cogen's expense.
Ground Lease Agreement - 68 -
ARTICLE 18
NONWAIVER
18.1 The various rights, remedies, options, and elections of Exxon and Cogen
as expressed herein are cumulative, and the failure of Exxon or Cogen to
enforce strict performance by the other Party of the provisions of this
Ground Lease Agreement or to exercise any right, election, or option or
to resort or have recourse to any remedy herein conferred will not be
construed or deemed to be a waiver or a relinquishment of the future
enforcement by Exxon or Cogen of any such provisions, rights, options,
elections, or remedies, but the same will continue in full force and
effect.
ARTICLE 19
FORCE MAJEURE
19.1 Definition. Except for the obligations of a Party to make payments when
due under this Ground Lease Agreement, the Parties will be excused from
delays in performance or failures to perform their respective obligations
hereunder and will not be liable in damages or otherwise, if and only to
the extent that such delays or failures are caused by Force Majeure. The
term "Force Majeure" means any cause beyond the reasonable control of the
affected Party, including, without limitation, storm, flood, lightning,
drought, earthquake, fire, explosion, civil disturbance, labor dispute,
act of God or the public
Ground Lease Agreement - 69 -
enemy, or action of a court or governmental authority. Financial distress
of either Party, late delivery of materials or equipment (unless itself
caused by Force Majeure), or inadequate performance by contractors (unless
itself caused by Force Majeure) will not be considered Force Majeure.
19.2 Burden of Proof. The burden of proof as to whether an event or condition
of Force Majeure has occurred will be upon the Party claiming that it
should be excused from performing its obligations hereunder due to the
occurrence of such an event or condition.
19.3 Condition. If either Party relies on Force Majeure as a basis for being
excused from performance of its obligations under this Ground Lease
Agreement, then the Party relying on Force Majeure will:
A. Give prompt oral notice to the other Party, confirmed promptly in
writing, of the occurrence of the event or condition, with an estimate
of its expected duration and probable impact on the performance of its
obligations hereunder;
B. Exercise all reasonable efforts to continue to perform its obligations
hereunder;
Ground Lease Agreement - 70 -
C. Expeditiously take action to correct or cure the event or condition
excusing performance to the extent reasonably practicable;
D. Exercise all reasonable efforts to mitigate or limit damages to the
other Party; and
E. Give prompt oral notice to the other Party, confirmed promptly in
writing, of the cessation of the event or condition giving rise to its
excusal from performance.
19.4 Labor Disputes. This Article 19 will not require the settlement of any
strike, walkout, lockout, or other labor dispute on terms which, in the
judgment of the Party involved, are contrary to its interests. The
settlement of such labor disputes will be at the sole discretion of the
Party involved.
ARTICLE 20
ASSIGNMENT AND SUBLETTING
20.1 By Exxon. Exxon may freely assign this Ground Lease Agreement, which will
be binding on and inure to the benefit of the successors and assigns of
Exxon. Upon any such assignment, Cogen will attorn to and recognize such
successor and assignee of Exxon as lessor under this Ground Lease
Agreement.
Ground Lease Agreement - 71 -
20.2 By Cogen. Cogen will not grant any subleases under this Ground Lease
Agreement. Cogen will not assign, transfer, mortgage, pledge, or
hypothecate this Ground Lease Agreement at any time, except that
X. Xxxxx may at any time assign, mortgage, pledge, or hypothecate this
Ground Lease Agreement in accordance with Article 12, provided that such
transaction is accomplished in a way that does not trigger ECRA with
respect to any part of Exxon's Property (unless the transaction is
caused by a foreclosure, which is permitted any time under Section 20.4C
below even if the foreclosure triggers ECRA); and
B. Following two years after the Date of Initial Commercial Operation,
Cogen may assign or transfer this Ground Lease Agreement to an
unrelated entity, provided that such unrelated entity will also assume
Cogen's rights and obligations under the Steam Sale Agreement, and (i)
first deliver to Exxon its written assumption agreement substantially in
the form of Exhibit G-1 to be bound by all of the provisions of this
Ground Lease Agreement and the Steam Sale Agreement; (ii) have the
personnel, experience, equipment and other resources reasonably required
to perform its obligations under this Ground Lease Agreement and the
Steam Sale Agreement; (iii) be financially capable based upon reasonable
standards of performing its obligations under this Ground Lease
Agreement and the Steam
Ground Lease Agreement - 72 -
Sale Agreement; and (iv) be in other respects reasonably acceptable to
Exxon. Subject to Section 20.4, this Ground Lease Agreement will be
binding on and inure to the benefit of the successors and assigns of
Cogen.
20.3 Continuing Obligations.
A. No assignment of this Ground Lease Agreement by Exxon or Cogen pursuant
to Section 20.1 or 20.2 or Article 21 will operate to relieve Exxon or
Cogen of its obligations to comply with ECRA, or of any obligations to
the other under this Ground Lease Agreement which have accrued prior to
the effective date of the assignment. An obligation will be deemed to
have accrued before the effective date of an assignment only if all the
substantive elements of the obligation have accrued by that date. An
assignment of this Ground Lease Agreement will relieve the assignor of
any obligations to the other Party under this Ground Lease Agreement
which have not accrued before the effective date of the assignment;
provided, however, that the assignor shall continue to be obligated
under this Ground Lease Agreement if any such assignment shall be
ineffective. Once Cogen or Exxon has complied with ECRA, such party will
not be responsible to the other party for any additional compliance with
ECRA, even if ECRA clean-up standards subsequently change.
Ground Lease Agreement - 73 -
B. If Exxon assigns this Ground Lease Agreement to an entity having a net
worth of at least $250 million and an investment grade bond rating,
Exxon will be relieved at the time of such assignment from any and all
obligations to Cogen (which have not accrued before the effective date
of the assignment as described in Section 20.3A) arising from or
relating to the environmental condition or any contamination of Exxon's
Property, whether such obligations are based on this Ground Lease
Agreement, or on any applicable federal, state, or local statute or
regulation, or on common law, or on any other legal theory or cause of
action.
C. If Exxon assigns this Ground Lease Agreement to an entity which does
not have a net worth of at least $250 million and an investment grade
rating, Cogen may maintain a claim against Exxon arising from or
relating to the environmental condition or any contamination of Exxon's
Property only if such claim can be brought under applicable federal,
state, or local statute or regulation (except ECRA, which Exxon is
obligated to comply with under Section 20.3A), or common law (and not
under this Ground Lease Agreement, which is covered by Section 20.3A)
and only if all of these conditions are met:
(i) Cogen first diligently pursues legal remedies which
Ground Lease Agreement - 74 -
Cogen may have with respect to such environmental condition or
contamination against the entity to whom Exxon assigned the Ground
Lease Agreement and subsequent assignees, if applicable;
(ii) Such assignee or subsequent assignees do not meet their
obligations to Cogen arising from or relating to the environmental
condition or contamination of Exxon's Property; and
(iii) Cogen provides written notice to Exxon of its claim against Exxon
within two years after the effective date of the termination of
this Ground Lease Agreement (which will be no later than December
31, 2050).
D. As used in Sections 20.3B and 20.3C, net worth includes all items which
would be included, in accordance with generally accepted accounting
principles, under the equity portion of the balance sheet of the entity
in question. Investment grade bond rating means that the entity has an
investment grade bond rating by either Xxxxx'x or Standard & Poor's or
equivalent measure of financial stability.
20.4 Rights of the Financier and Other Mortgagees and Lenders.
A. With regard to the initial Financier (General Electric
Power Funding Corporation), Exxon upon request of such
Ground Lease Agreement - 75 -
Financier (i) will first execute and deliver a consent to assignment
substantially in the form shown in Exhibit H, and (ii) will execute and
deliver, upon the commencement of the Construction Period (as defined in
Section 4.3A) and termination of the consent to assignment, a consent to
leasehold mortgage substantially in the form shown in Exhibit I. With
respect to the designated Affiliate of General Electric Power Funding
Corporation, upon (a) any refinancing of the initial loan for the
construction of the Cogeneration Facility, (b) acknowledgment by General
Electric Power Funding Corporation in writing that it is no longer the
Financier to be recognized by Exxon for purposes of this Ground Lease
Agreement and (c) the request of such designated Affiliate, Exxon and
Cogen will execute and deliver a recognition agreement substantially in
the form shown in Exhibit J. Thereafter, if Cogen assigns, mortgages,
pledges, or hypothecates this Ground Lease Agreement and the leasehold
estate to secure a loan from another Financier to be recognized as the
Financier by Exxon for purposes of this Ground Lease Agreement, pursuant
to Section 20.2 above, in connection therewith Exxon will execute a
similar consent to any such assignment as may be reasonably requested by
the other Financier and Exxon will give the information specified in
Section 20.5 below.
B. On instructions from the Financier, unless otherwise directed by a
court of competent jurisdiction, Exxon will make all payments due Cogen
under this Ground Lease
Ground Lease Agreement - 76 -
Agreement in accordance with the written instructions of the Financier
in conformity with its documentation with Cogen, and in such event Exxon
will not be liable to Cogen for such payments.
C. If Cogen becomes in default under any loan documentation with the
Financier or any successor or assign of Financier holding a mortgage,
pledge or hypothecation of Cogen's interest in this Ground Lease
Agreement, the Financier or such successor or assign may assume or cause
a third party to assume Cogen's rights and obligations under this Ground
Lease Agreement at any time, provided that the Financier or such
successor, assign, or third party must first give Exxon reasonable
written notice of such assumption, which notice shall contain a request
(which specifically references this Section 20.4C) for a list of all
defaults of Cogen under this Ground Lease Agreement and the Steam Sale
Agreement, at least thirty days in advance and must first (i) enter into
an agreement with Exxon agreeing to assume Cogen's rights and
obligations thereafter accruing under this Ground Lease Agreement and
the Steam Sale Agreement and to cure all existing defaults of Cogen
under this Ground Lease Agreement and the Steam Sale Agreement that can
be cured (including without limitation paying all amounts owed by Cogen
to Exxon, subject to the caps set forth in Article 10 and in Exhibit
G-3, if applicable) pursuant to and as provided in an assumption
agreement
Ground Lease Agreement - 77 -
substantially in the form of Exhibit G-2; provided that the Financier or
any nominee or designee of the Financier holding the interest in this
Ground Lease Agreement for the benefit of the Financier may enter into
such an assumption agreement substantially in the form of Exhibit G-3;
(ii) have the personnel, experience, equipment, and other resources
reasonably required to perform its obligations under this Ground Lease
Agreement and the Steam Sale Agreement; (iii) be financially capable
based upon reasonable standards of performing its obligations under this
Ground Lease Agreement and the Steam Sale Agreement, and (iv) be in the
other respects reasonably acceptable to Exxon. In such event, Exxon will
accept performance by such Financier, successor, assign, or third party
and the time limitation in Section 20.2 respecting assignment by Cogen
will not apply to such Financier, successor, assign, or third party.
Similarly, if the general partner of Cogen becomes in default under its
partnership agreement with the designated Affiliate of General Electric
Power Funding Corporation (as described in Article 1), the designated
Affiliate may designate a new general partner of Cogen, provided that
such new general partner has the personnel, experience, equipment and
other resources reasonably required to perform its obligations under
this Ground Lease Agreement and the Steam Sale Agreement and is in other
respects reasonably acceptable to Exxon. Exxon agrees that General
Electric Company and General Electric Power Funding
Ground Lease Agreement - 78 -
Corporation meet the requirements of this Section 20.4C (ii), (iii), and
(iv) (and the comparable requirements of Section 20.4F (ii) (b), (c),
and (d)).
D. Following the assumption of Cogen's rights and obligations under this
Ground Lease Agreement by the Financier or its successor, assign, or a
third party pursuant to Section 20.4C, such Financier, successor,
assign, or third party may assign its rights and obligations under this
Ground Lease Agreement to any entity, provided that such Financier,
successor, assign, or third party must first give Exxon reasonable
written notice of such assignment at least thirty days in advance and
must first meet the requirements of Section 20.4C (i), (ii), (iii), and
(iv). Any such entity may with reasonable written notice to Exxon at
least thirty days in advance assign its rights and obligations under
this Ground Lease Agreement to other entities meeting the requirements
of Section 20.4C (i), (ii), (iii), and (iv). In such event, Exxon will
accept performance by such entity.
E. Notwithstanding any other provision of this Ground Lease Agreement,
after the Financier or any successor, assign, third party or other
entity referred to in Section 20.4C or 20.4D above assumes Cogen's
rights and obligations under the Ground Lease Agreement, Exxon will
retain all of its rights under this Ground Lease Agreement, including
without
Ground Lease Agreement - 79 -
limitation the right to terminate the Ground Lease for any of the
reasons specified in Article 16. Further, Cogen and the Financier (and
its successors and assigns) will give Exxon concurrent notice of any
default by Cogen and the exercise by Financier (and its successors and
assigns) of any remedy under any of the documentation between Cogen and
Financier (and its successors and assigns) pertaining to the
Cogeneration Facility. If the Financier or any assignee of the Financier
becomes entitled to remove the Improvements from Exxon's Property, Exxon
will not interfere with the exercise of such right of removal.
F. In the event of the rejection of this Ground Lease Agreement and the
Steam Sale Agreement prior to their stated expiration dates pursuant to
Section 365 of the Bankruptcy Code of 1978, as amended, or any successor
provision thereto, in a case wherein Cogen is the debtor, Exxon will
enter into both a new ground lease of the Demised Premises and a new
steam sale agreement with the Financier or the same nominee or designee
of the Financier for the remainder of the term of this Ground Lease
Agreement and the Steam Sale Agreement, respectively (assuming no
rejection had occurred), effective, in each case, as at the date of such
rejection and upon substantially the same covenants, agreements, terms,
provisions and limitations herein contained and therein
Ground Lease Agreement - 80 -
contained (in each case, excluding a provision equivalent to this
Section 20.4F), provided:
(i) the Financier delivers a written request to Exxon for such new
ground lease and new steam sale agreement within thirty days from
the date of such rejection, which written request is accompanied
by payment to Exxon of all amounts due to Exxon under this Ground
Lease Agreement and the Steam Sale Agreement and unpaid as at the
date of such request and which request identifies the party to act
as lessee under such new ground lease and supplier under the new
steam sale agreement;
(ii) the Financier or such nominee or designee who is to act as lessee
under such new ground lease and supplier under the new steam sale
agreement must (a) cure all existing defaults of Cogen under this
Ground Lease Agreement and the Steam Sale Agreement that can be
cured and that would exist but for such rejection (including
without limitation paying all amounts owed by Cogen to Exxon,
subject to the limitations of recovery set forth in Article 10),
(b) have the personnel, experience, equipment, and other resources
reasonably required to perform its obligations under the new
ground lease agreement and the new steam sale agreement, (c) be
financially capable based upon
Ground Lease Agreement - 81 -
reasonable standards of performing its obligations under the new
ground lease agreement and the new steam sale agreement, and (d)
be in the other respects reasonably acceptable to Exxon;
(iii) such new ground lease agreement and new steam sale agreement will
expressly provide that Exxon will not be required to deliver
actual possession of the Demised Premises on the date of execution
and delivery thereof free of lessees, tenants or other occupants;
(iv) such new ground lease agreement and new steam sale agreement will
expressly provide that with respect to all representations,
warranties and covenants of Exxon under the new ground lease
agreement and new steam sale agreement that refer to the "date
hereof" or "effective date of this Agreement" or words or phrases
or provisions of similar import, the same refer to the date of
this Ground Lease Agreement and of the Steam Sale Agreement,
respectively, and not the date of execution and delivery of such
new ground lease agreement and new steam sale agreement and it is
agreed that Exxon will not be obligated to remove any liens placed
on the Demised Premises or any other part of Exxon's Property
subsequent to the date hereof;
Ground Lease Agreement - 82 -
(v) the last sentence of Section 8.2 of such new ground lease
agreement will expressly exclude Cogen, this Ground Lease
Agreement and persons claiming by, through or under Cogen or its
successors and assigns under this Ground Lease Agreement (and
actions or omissions of such persons) and claims and actions of
the same from the operation thereof; and
(vi) the Financier or such nominee or designee enters into both a new
ground lease agreement and a new steam sale agreement, unless the
Steam Sale Agreement has been previously terminated in accordance
with its terms other than in the event the Steam Sale Agreement is
rejected pursuant to Section 365 of the Bankruptcy Code of 1978,
as amended, or any successor provision thereto, in a case wherein
Cogen is the debtor.
G. If Cogen acquires the fee title to the Demised Premises, or Exxon
acquires Cogen's leasehold estate in the Demised Premises, or a third
party acquires both the fee title and the leasehold estate in the
Demised Premises, so long as any leasehold mortgage or other mortgage
relating to Exxon's Property is in effect, Cogen and Exxon intend that
to the extent permitted by law the fee title to the Demised Premises and
the leasehold estate of Cogen in the Demised Premises created by this
Ground Lease Agreement will remain
Ground Lease Agreement - 83 -
separate, and will not merge without the prior written consent of the
Financier and any other affected mortgagee.
H. So long as there exists a Financier, Exxon and Cogen will not, without
the prior written consent of the Financier (which consent will not be
unreasonably delayed or withheld) enter into a written amendment of this
Ground Lease Agreement; provided, however, that no such consent of the
Financier will be required for a redefinition of the Demised Premises
pursuant to Section 2.1 above, or for changes in the projection easement
described in Exhibit C, or for changes and relocations of the
Interconnection Areas, Utility Areas, and Access Rights of Way pursuant
to Section 2.6B above.
I. The Financier's name may be added to the loss payable endorsement of any
insurance policies which Cogen carries pursuant to Article 15. In the
event of a casualty loss or condemnation, Cogen's share of the proceeds
from any such insurance policies or from a condemnation proceeding may
be paid to the Financier and the Financier may apply Cogen's share of
such proceeds in accordance with the terms of the leasehold mortgage.
20.5 Status Certificates. Either Party from time to time at the request of the
other Party will sign promptly a written certificate confirming that this
Ground Lease Agreement has
Ground Lease Agreement - 84 -
been duly authorized, is valid, and does not conflict with the articles of
incorporation, by-laws, or partnership agreement of the Party in question,
and stating whether the Ground Lease Agreement is in full force and effect;
whether it has been modified or amended, and if so, the substance of such
modification or amendment; whether there have been any uncured defaults;
whether there are any offsets, counterclaims, or defenses to be asserted by
that Party against the other under this Ground Lease Agreement; and such
other information as may be reasonably requested.
ARTICLE 21
EXXON'S COMPLEX, PROPERTY, AND OPERATIONS
21.1 Sale or Other Transfer. At any time Exxon may sell or transfer all or any
part of Exxon's Complex or Exxon's Property to any Affiliate of Exxon or
any third party. Exxon recognizes that in such event Exxon may be
obligated to comply with ECRA.
21.2 Operations. At any time Exxon may increase, reduce, discontinue, or
change the character of its operations at Exxon's Complex.
Ground Lease Agreement - 85 -
ARTICLE 22
NOTICE AND SERVICE
22.1 Notice. All notices, requests, demands and other communications required
or permitted under the terms of this Ground Lease Agreement will be
sufficient in form if in writing and will be deemed to be duly given if
delivered by personal service, telegram, or mailed certified or
registered first class mail, postage prepaid, properly addressed to the
Party entitled to receive such notice pursuant to Section 22.3.
22.2 Date of Service.
A. Mail. If a notice is sent by registered or certified mail, it will be
deemed given within three days, excluding Saturdays, Sundays, or legal
holidays of the State of New Jersey, after deposit of the same in the
United States mail, postage prepaid, except as otherwise demonstrated by
a signed receipt.
B. Telegram. If a notice is given by telegram, it will be deemed given
eighteen hours after delivery to the telegram company.
Ground Lease Agreement - 86 -
C. Personal Service. If a notice is given by personal service, it will be
deemed given upon the date of actual delivery to the address of the
Party to be notified.
22.3 Addresses. Notices may be sent to the Parties at the following addresses:
A. Lessee: Cogen Technologies Linden
Venture, L.P.
c/o Cogen Technologies, Inc.
0000 Xxxxx Xxxxxxxx
Xxxxx 0000 - 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn.: Xx. Xxxxxx X. XxXxxx
President
X. Xxxxxx: Exxon Corporation
c/o Exxon Company, U.S.A.
0000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxxxx 00000
Attn.: Refinery Manager
or to such other and different persons or addresses as may be designated by
the Parties.
Ground Lease Agreement - 87 -
ARTICLE 23
CONSENT NOT TO BE UNREASONABLY WITHHELD
23.1 Whenever either Party requests any consent, permission, or approval which
may be required or desired by that Party pursuant to the provisions
hereof, the other Party will not unreasonably withhold or postpone the
grant of such consent, permission, or approval.
ARTICLE 24
AMENDMENTS
24.1 No amendment or modification of the terms of this Ground Lease Agreement
will be binding on either Exxon or Cogen unless reduced to writing and
signed by both Parties.
ARTICLE 25
CHOICE OF LAW
25.1 This Ground Lease Agreement will be governed by and construed in accordance
with the laws of the State of New Jersey.
ARTICLE 26
RENEGOTIATION
26.1 Should any term or provision of this Ground Lease Agreement be
Ground Lease Agreement - 88 -
found invalid by any court or regulatory body having jurisdiction
thereover, the Parties will immediately renegotiate in good faith such term
or provision of the Ground Lease Agreement to eliminate such invalidity,
consistent with the intent of this Ground Lease Agreement.
ARTICLE 27
OTHER AGREEMENTS
27.1 This Ground Lease Agreement and the Steam Sale Agreement supersede all
prior oral and written agreements and understandings of the Parties
relating to the subject matters hereof. This Ground Lease Agreement and
the Steam Sale Agreement constitute the entire agreement and
understanding of the Parties relating to the subject matters hereof.
ARTICLE 28
NO COMMISSION
28.1 No real estate agent or broker has negotiated this Ground Lease Agreement
and no real estate commission, finder's fee or similar fee will be due
and payable if the transaction covered hereby is consummated. Exxon and
Cogen hereby agree to indemnify and hold the other Party harmless against
all entities (if any there be) claiming any real estate commission,
finder's fee or similar fee under or through the
Ground Lease Agreement - 89 -
indemnifying Party as a result of the transaction covered hereby.
ARTICLE 29
CAPTIONS
29.1 All indices, titles, subject headings, section titles, and similar items
are provided for the purpose of reference and convenience and are not
intended to be inclusive, definitive, or to control the meaning, content,
or scope of this Ground Lease Agreement.
ARTICLE 30
COUNTERPARTS
30.1 This Ground Lease Agreement may be executed in any number of counterparts,
and each executed counterpart will have the same force and effect as an
original instrument.
ARTICLE 31
AUTHORITY
31.1 Representations and Warranties of Exxon. Exxon hereby represents and
warrants to Cogen as follows:
A. Exxon is a corporation duly organized and existing in good standing
under the laws of the State of New Jersey.
Ground Lease Agreement - 90 -
B. Exxon possesses all requisite power and authority to enter into and
perform this Ground Lease Agreement and to carry out the transaction
contemplated herein.
C. No suit, action or arbitration, or legal, administrative or other
proceeding is pending against Exxon that would affect the validity or
enforceability of this Ground Lease Agreement or the ability of Exxon to
materially fulfill its commitments hereunder.
31.2 Representations and Warranties of Cogen. Cogen hereby represents and
warrants to Exxon as follows:
X. Xxxxx is a limited partnership duly organized and existing under the
laws of the State of Delaware and is duly qualified to do business in
the State of New Jersey.
X. Xxxxx possesses all requisite power and authority to enter into and
perform this Ground Lease Agreement and to carry out the transactions
contemplated herein.
C. No suit, action or arbitration, or legal, administrative or other
proceeding is pending against Cogen that would affect the validity or
enforceabilty of this Ground Lease Agreement or the ability of Cogen to
materially fulfill its commitments hereunder.
Ground Lease Agreement - 91 -
IN WITNESS WHEREOF, the Parties have caused this Ground Lease Agreement to be
signed by their respective officers duly authorized as of the day and year first
set forth above.
ATTESTED BY: EXXON CORPORATION
/s/ X.X. Xxxxxxxx By: /s/ X.X. Xxxxxxxx, Xx.
--------------------------- --------------------------
Assistant Secretary of X. X. Xxxxxxxx, Xx.
Exxon Corporation Vice President of
Exxon Company, U.S.A., A
Division of Exxon Corporation
ACKNOWLEDGMENT
STATE OF TEXAS )
) ss.
COUNTY OF XXXXXX )
BE IT REMEMBERED, That on this 9th day of August, 1990, before me, the
subscriber, a notary public, personally appeared X. X .XXXXXXXX, who being by me
duly sworn on his oath, deposed and made proof to my satisfaction, that he is an
Assistant Secretary of Exxon Corporation, the Corporation named in the within
instrument;
Ground Lease Agreement - 92 -
that X. X. XXXXXXXX, XX., is Vice President of Exxon Company, U.S.A., a
Division of Exxon Corporation; that the execution, as well as the making of this
instrument, has been duly authorized pursuant to a resolution of the Board of
Directors of Exxon Corporation; that the deponent well knows the corporate seal
of Exxon Corporation; and that the seal affixed to said instrument is the proper
corporate seal and was thereto affixed and said instrument signed and delivered
by X. X. XXXXXXXX, XX., as and for the voluntary act and deed of Exxon
Corporation, in presence of deponent, who thereupon subscribed his name thereto
as attesting witness.
Given under my hand and seal of office this 9th day of August, 1990.
/s/ Xxxxxxxxx Xxxxxx
----------------------------
NOTARY PUBLIC in and for
XXXXXX COUNTY, TEXAS
My commission expires: July 30, 1992
-------------------
[SEAL APPEARS HERE]
Ground Lease Agreement - 93 -
COGEN TECHNOLOGIES
LINDEN VENTURE, L.P.
(D/B/A COGEN TECHNOLOGIES
LINDEN VENTURE, LIMITED
PARTNERSHIP)
By: COGEN TECHNOLOGIES LINDEN, LTD.
(D/B/A COGEN TECHNOLOGIES LINDEN,
LIMITED PARTNERSHIP), General
Partner
By: COGEN TECHNOLOGIES, INC.
General Partner
ATTEST:
/s/ Xxxx Xxx XxXxxxxx By: /s/ Xxxxxx X. XxXxxx
----------------------------- ----------------------------------
Title: Assistant Secretary Xxxxxx X. XxXxxx
President
ACKNOWLEDGEMENT
STATE OF TEXAS )
) SS.
COUNTY OF XXXXXX )
BE IT REMEMBERED, That on this 6th day of August, 1990,
Ground Lease Agreement - 94 -
before me, the subscriber, a notary public, personally appeared Xxxxxx X. XxXxxx
who is the President of Cogen Technologies, Inc., General Partner of Cogen
Technologies Linden, Ltd., (D/B/A Cogen Technologies Linden, Limited
Partnership), which is the General Partner of Cogen Technologies Linden Venture,
L. P., a Delaware limited partnership (D/B/A Cogen Technologies Linden Venture,
Limited Partnership), who I am satisfied is the person who signed this
instrument, and he acknowledged that he signed, sealed with the corporate seal,
and delivered the same as such officer aforesaid, and that this instrument is
the voluntary act and deed of such corporation, on behalf of Cogen Technologies
Linden Venture, L. P.
[SEAL APPEARS HERE] /s/ Xxxxxxxxx Xxxxxx
------------------------------
Notary Public
