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INFRASTRUCTURE USE AGREEMENT
(LATERAL PIPELINE)
AUGUST 12, 1999
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND CONSTRUCTION............................................-2-
SECTION 1.1. Definitions.............................................-2-
SECTION 1.2. Rules of Construction...................................-4-
ARTICLE II
LEASE AND USE OF PUBLIC LATERAL PIPELINE................................-4-
SECTION 2.1. Lease of Public Lateral Pipeline........................-4-
SECTION 2.2. Future Additional Users.................................-5-
SECTION 2.3. Maintenance of Easements, Permits and
Regulatory Approvals...........................................-7-
SECTION 2.4. Term....................................................-8-
SECTION 2.5. Usage Charges...........................................-8-
SECTION 2.6. Right to Pursue Legal Action............................-8-
SECTION 2.7. Covenant of Quiet Enjoyment and Restriction
Against Impairment.............................................-9-
SECTION 2.8. [Intentionally left blank]..............................-9-
SECTION 2.9. Liens...................................................-9-
SECTION 2.10. Real Property Interests................................-10-
ARTICLE III
OPERATIONS, MAINTENANCE, TAXES AND INSURANCE...........................-12-
SECTION 3.1. Lessee's Obligations to Operate, Maintain and
Repair, Insure and Comply with Laws...........................-12-
SECTION 3.2. Taxes..................................................-14-
SECTION 3.3. [Intentionally Omitted].
.............................................................-14-
SECTION 3.4. Remodeling and Improvements............................-14-
SECTION 3.5. Substituted Equipment..................................-15-
SECTION 3.6. Installation of Lessee's Own Machinery and
Equipment.....................................................-15-
ARTICLE IV
DAMAGE, DESTRUCTION AND CONDEMNATION...................................-16-
SECTION 4.1. Damage and Destruction.................................-16-
SECTION 4.2 Condemnation...........................................-16-
SECTION 4.3. Insufficient Net Proceeds..............................-18-
SECTION 4.4 Condemnation of Lessee-Owned Property..................-18-
ARTICLE V
SPECIAL COVENANTS......................................................-18-
SECTION 5.1. [Intentionally Omitted]................................-18-
SECTION 5.2. Indemnification..........................................-18-
SECTION 5.3. Maintenance of Existence...............................-19-
SECTION 5.4. Scope of Execution.....................................-20-
SECTION 5.5. Further Assurances and Corrective Instruments
Recordings and Filings........................................-20-
SECTION 5.6. Depreciation...........................................-21-
SECTION 5.7. Permitted Contests.....................................-21-
ARTICLE VI
ASSIGNMENT.............................................................-22-
SECTION 6.1. Assignability..........................................-22-
SECTION 6.2. Assignment by Public Owner.............................-22-
ARTICLE VII
DEFAULT AND REMEDIES...................................................-23-
SECTION 7.1. Default by the Lessee..................................-23-
SECTION 7.2. Remedies...............................................-24-
ARTICLE VIII
MISCELLANEOUS..........................................................-25-
SECTION 8.1. Notices................................................-25-
SECTION 8.2. Recordation............................................-27-
SECTION 8.3. Amendments.............................................-27-
SECTION 8.4. Applicable Law.........................................-27-
SECTION 8.5. Arbitration............................................-27-
SECTION 8.6. Forum Selection........................................-28-
SECTION 8.7. Counterparts...........................................-28-
SECTION 8.8. Headings...............................................-28-
SECTION 8.9. Entire Agreement.......................................-28-
SECTION 8.10. Statutory References...................................-28-
SECTION 8.11. Severability...........................................-28-
SECTION 8.12. Authority..............................................-29-
SECTION 8.13. No Personal Liability..................................-29-
SECTION 8.14. Force Majeure..........................................-29-
Exhibit A - Form of Coordination Agreement
INFRASTRUCTURE USE AGREEMENT
(LATERAL PIPELINE)
PREAMBLE
This Infrastructure Use Agreement (Lateral Pipeline) ("USE AGREEMENT"),
dated as of August 12, 1999, is made and entered into effective as of the
Effective Date, by and among the following (collectively the "PARTIES"): the
Mississippi Major Economic Impact Authority ("AUTHORITY"), a division of the
Mississippi Department of Economic and Community Development ("MDECD"), acting
for and on behalf of the State of Mississippi ("STATE"); Panola County,
Mississippi ("COUNTY"), acting by and through its Board of Supervisors; the
Industrial Development Authority of the Second Judicial District of Panola
County, Mississippi, acting for and on behalf of the County ("XXX"); the City of
Batesville, Mississippi ("CITY"), acting by and through its Mayor and Board of
Aldermen; and LSP Energy Limited Partnership, a Delaware limited partnership
(individually and specifically the "COMPANY" and collectively with its
successors and assigns hereunder the "LESSEE").
This Use Agreement is contemplated by that certain Inducement Agreement
of even date herewith ("INDUCEMENT AGREEMENT") made and entered into by and
among, the Authority, MDECD, State, County, XXX, City and the Company.
NOW, THEREFORE, in consideration of: the foregoing; the mutual
covenants, promises, agreements, and undertakings herein expressed; the
Company's substantial capital investment in the City, County, and State through
the location of the Facility therein and the increased ad valorem tax revenues
to the City and County and sales tax revenues to the City and State resulting
therefrom; the new temporary construction jobs and permanent jobs, as well as
new indirect jobs, and the increased personal income tax and sales tax revenues
generated thereby, resulting from the Facility; the Company's undertakings
herein to operate and maintain (or cause to be operated and maintained) the
Public Lateral Pipeline in accordance with Section 3.1; various other direct and
indirect economic benefits to be realized by the City, County and State as a
result of the Project; of other mutual benefits to be realized by the Parties
pursuant hereto; and other good and valuable consideration (collectively
"CONSIDERATION"), each to the other given -- the receipt and sufficiency of all
of which the Parties hereby expressly acknowledge, the Parties hereto, intending
legally to be bound, do hereby mutually agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
SECTION 1.1. DEFINITIONS. All capitalized words and phrases used herein
which are not specifically otherwise defined herein but which are defined in the
Inducement Agreement shall have the same meaning in this Use Agreement as in the
Inducement Agreement. In addition to the words and terms elsewhere defined in
this Use Agreement, the following words and terms, as used in this Use
Agreement, shall have the following meanings unless the context or use indicates
another or different meaning or intent:
"EFFECTIVE DATE" means the last date of the execution of this Use
Agreement by the respective Parties hereto, determined by reference to the dates
set forth opposite their respective names on the signature pages attached
hereto.
"EXCESS CAPACITY" means the capacity of the Public Lateral Pipeline in
excess of the Facility Capacity and intended for the use by Additional Users, in
an amount equal to 16 mcf/day.
"FACILITY CAPACITY" means the maximum capacity of the Public Lateral
Pipeline which is necessary for the Company to operate the Facility at its
maximum capacity, in an amount equal to 216 mcf/day.
"GOVERNMENTAL AUTHORITY" means any federal, State or local government,
political subdivision thereof, or any governmental department, commission,
board, bureau, authority, agency or instrumentality thereof, domestic or
foreign.
"NET PROCEEDS," when used with respect to any insurance or condemnation
award, means the proceeds from the insurance or condemnation award with respect
to which that term is used remaining from the gross proceeds thereof after the
payment of all expenses (including attorney's fees) incurred in the collection
thereof.
"PERSON" means any individual, corporation, partnership, joint venture,
business trust, joint stock company, trust, limited liability company,
unincorporated association or other organization, firm, or Governmental
Authority or any other legal entity of whatever nature as in the context may be
appropriate.
"PUBLIC OWNER" means the Governmental Authority owning the Public
Lateral Pipeline and the related Public Easements from time
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to time. The Parties presently anticipate that the Public Lateral Pipeline will
initially be constructed, and the Public Lateral Pipeline and the related Public
Easements will be owned during the construction period, by the County but that,
upon completion of their construction, the ownership of the Public Lateral
Pipeline and the related Public Easements will be conveyed by the County to the
XXX in accordance with the terms of the Inducement Agreement and subject to this
Use Agreement (which will also be assigned by the County to the XXX in
connection with such transfer) and the Usage Easements.
"PUBLIC LATERAL PIPELINE" means the Lateral Pipeline owned by the
Public Owner; provided that the Lateral Pipeline is not a Former Facility
Component.
"REGULATED CLASSIFICATION" means the classification or regulation of
any of the Public Lateral Pipeline, the Facility or the Company as a "public
utility," "public service corporation," "public carrier," "utility holding
company" or any similar designation or the failure of the Company to be
classified as an "EWG" or the failure of the Facility to be classified as an
"Eligible Facility" for ad valorem tax purposes, for regulatory purposes (State
or Federal), or for any other purpose which would have a material detrimental
impact on the business, operations or costs of the Company.
"SUBSTANTIAL COMPLETION DATE" means the date when the Facility is
substantially complete, as evidenced by a certificate of substantial completion
issued by the independent engineer retained by the Lenders.
"TERM" means the duration of the obligations created in this Use
Agreement as specified in Section 2.4.
"USE AGREEMENT" means this Infrastructure Use Agreement (Lateral
Pipeline) and any amendments and supplements hereto.
SECTION 1.2. RULES OF CONSTRUCTION.
(a) "Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words and phrases refer to this Use Agreement
and not solely to the particular portion thereof in which any such word is used.
(b) The definitions set forth in Section 1.1 include both the singular
and plural.
(c) Whenever the content of this Use Agreement requires, the number of
all words and pronouns used herein shall include both the
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singular and plural, and the gender of all words and pronouns used herein shall
include the masculine, feminine and neuter.
(d) The captions and headings in this Use Agreement are for convenience
only and in no way define, limit or describe the scope or intent of any
provisions, articles or sections of this Use Agreement.
(e) All references in this Use Agreement to particular articles or
sections shall be references to articles or sections of this Use Agreement
unless some other reference is indicated or otherwise established.
ARTICLE II
LEASE AND USE OF PUBLIC LATERAL PIPELINE
SECTION 2.1. LEASE OF PUBLIC LATERAL PIPELINE. The Public Owner does
hereby lease to the Lessee, and the Lessee does hereby take and lease from
the Public Owner, upon the terms and conditions set forth in this Use
Agreement,(a) the Public Lateral Pipeline and (b) all Public Easements
belonging or in anywise appertaining thereto. The foregoing lease shall
include the right, on the part of the Lessee, to use and enjoy the Public
Lateral Pipeline up to the Facility Capacity (as specified in Section 7(2) of
the Inducement Agreement, 116 mcf/day). The Public Owner does hereby retain
(subject to the other terms and provisions of this Use Agreement) for its own
benefit the right to use and enjoy the Public Lateral Pipeline to the Excess
Capacity (as specified in Section 7(2) of the Inducement Agreement, 16
mcf/day).
SECTION 2.2. FUTURE ADDITIONAL USERS.
(a) The Parties agree that the City may, at its own cost, tap into and
utilize, and be an additional user ("ADDITIONAL USER") for the Public Lateral
Pipeline to transport up to 16 mcf/day per hour of natural gas; provided,
however, that:
(i) the City obtain and deliver to the Company and any
successor Lessee both copies of any and all necessary permits, licenses, and
regulatory approvals as may be required from time to time therefor and that the
City maintain, in full force and effect, all of such necessary permits, licenses
and regulatory approves required therefor;
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(ii) the Company reasonably determines that such proposed
connection to and use of such Public Lateral Pipeline (A) will not result in a
Regulated Classification or (B) could result in a Regulated Classification, but
the Company is able to successfully avoid such Regulated Classification by (1)
transferring and assigning this Use Agreement and its rights and obligations
hereunder to a third-party to be designated by the Company and such third-party
assuming all of the Company's rights (including, without limitation, the right
to transport natural gas on the Public Lateral Pipeline up to the Facility
Capacity) and obligations under this Use Agreement together with a full release
by the Public Owner of the Company from any and all obligations and liabilities
associated with this Use Agreement, (2) the Company entering into a
transportation agreement with such third-party for the transportation of natural
gas on the Public Lateral Pipeline up to the Facility Capacity, which gas
transportation agreement shall obligate the Company to pay a transportation
charge in any amount that equals or exceeds the costs of the third party to
operate and maintain the Public Lateral Pipeline and to make any other payments
required of the Lessee under the Use Agreement; and (3) the Public Owner and/or
the third party entering into a separate lease agreement and/or a gas
transportation agreement with the City with respect to the Excess Capacity,
which agreement shall be consistent with the terms of this Use Agreement; and
(iii) the City execute and deliver to the Company a
coordination agreement in the form attached hereto as Exhibit A.
No prior written approval by the Public Owner shall be required with
respect to any assignment described in clause (ii) above if the third-party so
designated by the Company is (A) an affiliate of the Company (which affiliate
may be passively owned by one or more owners of the Company), (B) a
non-affiliated third party (which concurrently enters into an agreement for the
operation and maintenance of the Public Lateral Pipeline with a third party
experienced in the operation and maintenance of gas pipeline systems) or (C) a
third party experienced in the operation and maintenance of gas pipeline
systems. The Parties acknowledge that the Company may, pursuant to the terms of
the Inducement Agreement, concurrently with any transfer or assignment of its
interests hereunder, transfer or assign its interests in the Usage Easements
related to such Public Lateral Pipeline to such third-party.
(b) To the extent that the City is permitted to tap into the Public
Lateral Pipeline as permitted by this Section 2.2, the Parties agree that the
City may do so without the payment of any tap fee or capital charge by the City
to any other Party. The Parties agree that the entire cost of the City's natural
gas pipeline and other equipment necessary to tap into the Public
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Lateral Pipeline (which shall include a meter and a flow control valve which
will be set to regulate the maximum flow of natural gas from the Public Lateral
Pipeline into the City's pipeline to the maximum amount of natural gas usage to
which the City is entitled from time to time in accordance with this Section
2.2) shall be the sole and absolute responsibility of the City and that the City
shall also be solely responsible for the operation and maintenance of its
natural gas pipeline and for the costs of the operation and maintenance thereof.
(c) The Parties further agree that the City shall not pay any
transportation charges or fees to any other Party for the transportation of the
City's natural gas through the Public Lateral Pipeline, but, in consideration
for the City's use of the Public Lateral Pipeline, the Parties agree that the
County is being permitted by the City to purchase natural gas from the City's
natural gas utility for use in all of the buildings owned and managed by the
County as of the date hereof and located in the City's natural gas utility's
service area for the City's costs.
(d) The City shall be solely responsible for arranging and providing
for its own supply of natural gas (which shall be delivered to the Public
Lateral Pipeline with a quality which meets the specification for gas delivered
from the relevant interstate pipeline) and for negotiating all applicable
natural gas supply and transportation agreements with respect thereto and shall
only be entitled to withdraw natural gas from the Public Lateral Pipeline to the
extent of its own independently arranged natural gas supply.
(e) The Public Owner expressly acknowledges and agrees that the entire
Excess Capacity of the Public Lateral Pipeline is hereby being allocated to the
City and that no part of the Total Capacity of the Public Lateral Pipeline
remains to be, or shall be in the future, allocated to any Additional User. The
City here expressly covenants and agrees that it will not use the Public Lateral
Pipeline to transport in excess of 16 mcf/day.
SECTION 2.3. MAINTENANCE OF EASEMENTS, PERMITS AND REGULATORY
APPROVALS.
(a) The County agrees that it will, at the request and at the expense
of the Lessee and at no cost to the County and at all times until the transfer
thereof to the XXX, obtain and maintain, in full force and effect, any and all
Public Easements and Regulatory Approvals necessary for the ownership and
construction by the County of the Public Lateral Pipeline and the Public
Easements related thereto. Subsequent to the transfer of the Public Easements
and Public Lateral Pipeline by the County to the XXX, the
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XXX agrees that it will, at the request and at the expense of the Lessee and at
no cost to the County and XXX, at all times during the Term, obtain and
maintain, in full force and effect, any and all Public Easements and Regulatory
Approvals necessary for the ownership and operation by the XXX of the Public
Lateral Pipeline and the Public Easements related thereto.
(b) Nothing contained in this Section 2.3 shall be construed to imply
that the City, County or XXX has any obligation to expend any funds for the
purpose of obtaining or transferring any Permits or Easements with respect to
the Public Lateral Pipeline or the Facility Component Sites except for such
funds as are available from Impact Proceeds. The Authority, County, and XXX
agree, however, that the costs of obtaining and maintaining any and all such
Permits and Easements paid by the Lessee shall, subsequent to completion of
construction, be considered an operating expense with respect to the Public
Lateral Pipeline under Section 3.1.
SECTION 2.4. TERM. The initial term of this Use Agreement shall
commence on the Effective Date and shall continue thereafter for and until a
period of thirty (30) years after the Substantial Completion Date of the
Facility. The Lessee may renew this Use Agreement for successive ten (10) year
terms thereafter, with the total, aggregate maximum term hereof being limited
only by the maximum actual operational life of the Facility.
SECTION 2.5. USAGE CHARGES. The Lessee shall pay all fees
and expenses for the operation and maintenance of the Public
Lateral Pipeline, including the cost of property and casualty and
public liability insurance for the Public Lateral Pipeline.
SECTION 2.6. RIGHT TO PURSUE LEGAL ACTION. To the extent permissible
under applicable law, the Lessee may, at its own cost and expense, in its own
name, prosecute or defend any act or proceedings or take any other action, or
participate in any prosecution, defense, proceeding or any other action made or
taken by the Public Owner, involving third Persons which the Lessee deems
reasonably necessary in order to secure or protect its right of possession, use
and occupancy of the Public Lateral Pipeline, Public Easements, Facility
Components Sites, Usage Easements, and other rights or obligations hereunder;
provided, that in the event the Public Owner prosecutes or defends any such
action or proceeding or takes any such other action, and whether or not the
Lessee so participates therein, the Public Owner shall not voluntarily settle or
consent to any settlement with respect to the Lessee's right of possession, use
and occupancy of the Public Lateral Pipeline, Public Easements, Facility
Component Sites, Usage Easements or other rights or obligations hereunder
without the prior written consent of the Lessee. Nothing contained herein
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shall be construed to prevent or restrict the Lessee from asserting any rights
which the Lessee may have against the Public Owners for any material breach of
this Use Agreement, the Inducement Agreement, the Usage Easements, or under any
provision of law.
SECTION 2.7. COVENANT OF QUIET ENJOYMENT AND RESTRICTION AGAINST
IMPAIRMENT. the State, County, XXX and any other Public Owner (and their
successors, representatives, and assigns) each hereby grant and warrant to the
Lessee the right quietly and peaceably to enjoy the Public Lateral Pipeline,
Public Easements, Facility Component Sites, and Usage Easements, without any
interruption, interference, or disturbance, and hereby expressly covenant not to
create, suffer, agree to, or take any right, interest, or action that could
revoke, impede, impair, disturb, or diminish the Lessee's possession, use,
control, operation, and quiet and peaceable enjoyment of its rights in the
Public Lateral Pipeline, Public Easements, Facility Component Sites, and Usage
Easements pursuant to and in accordance with the terms and provisions of, and
during the Term and any renewals of, this Use Agreement, and the Public Owner
(and its successors, representatives, and assigns) does hereby restrict the real
property interests comprising the Public Lateral Pipeline and the related
Facility Component Sites and Public Easements which are necessary for the use,
operation, maintenance, repair, or other support of the Public Lateral Pipeline,
and does hereby bind such real property interests to the foregoing covenant
during the entire Term of this Use Agreement and any renewals thereof. This
Section 2.7 is not intended to limit in any manner or to any extent the rights
reserved by the Lessee in the Usage Easements upon its partial assignment of the
Public Easements to the County.
SECTION 2.8. [Intentionally left blank].
SECTION 2.9. LIENS.
(a) Each of the State, MDECD, Authority, County and XXX (and their
successors, representatives and assigns) acknowledge that the Lessee has granted
or may grant one or more deeds of trust on its real property interests in the
Facility Site, Facility Component Sites, Usage Easements and this Use Agreement
and its leasehold interests in the Public Lateral Pipeline and Public Easements
in connection with any financing arrangements it has or will enter into in
connection with the Project; provided, however, that the Lessee agrees that (i)
any such deeds of trust so granted by the Lessee shall expressly exclude the
Public Owner's interest in any and all easements on the Facility Site so granted
or to be granted by the Lessee to the County and the XXX and (ii) the Public
Easements related to the Public Lateral Pipeline will be released (except with
respect to any leasehold interests granted to the
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Lessee under this Use Agreement) from such deed of trust thereon by the Lenders
upon the transfer by the Lessee of the Public Easements to the County. The
County and XXX acknowledge that any such deed of trust shall provide the
beneficiary thereunder with the right to foreclose on the Lessee's interest in
the Facility Site and on the Lessee's interest in the Public Lateral Pipeline,
the Public Easements, the Facility Component Sites, the Usage Easements, and
this Use Agreement, in each case on the occurrence of an event of default on the
part of the Lessee under the related financing arrangements.
(b) Each of the State, MDECD, Authority, County, and XXX (and their
successors, representatives, and assigns) covenant and agree not to
intentionally create or to assume or suffer to exist a lien on, or with respect
to, its respective interest in the Public Lateral Pipeline or the related
Facility Component Sites and Public Easements.
SECTION 2.10. REAL PROPERTY INTERESTS. With respect to the Company's
use of the Public Lateral Pipeline and the related Facility Component Sites and
Public Easements in connection with the Company's Facility which is located on
the Facility Site and with respect to the exercise of the Company's other
rights, duties and obligations hereunder and under the Usage Easements, the
Company, the County, and the XXX (and their successors, representatives, and
assigns) each hereby expressly acknowledge and agree that the Usage Easements
retained by the Company (and its successors and assigns) constitute an interest
in, and result in and constitute the retention by the Company (and its
successors and assigns) of a joint, undivided, partial easement for such
purposes in, the real property comprising the Facility Component Sites and the
Public Lateral Pipeline constructed thereon and therein and that the primary
beneficiary of the Usage Easements is the Facility Site itself. The County and
the XXX (and their successors, representatives, and assigns) each also hereby
expressly acknowledge and agree that the Usage Easements, as well as all of the
other covenants, terms, conditions, restrictions and other provisions of this
Use Agreement (specifically including, but not limited to, the right to use the
Public Lateral Pipeline and Facility Component Sites of Section 2.1 and the
covenants and restrictions granted and imposed in Section 2.7) (collectively the
"COVENANTS"), are real and benefit and burden, and inure to the benefit of, the
land comprising the Facility Site, run with and follow the land comprising the
Facility Site, constitute easements appurtenant and covenants appurtenant,
respectively, to and for the benefit of the land comprising the Facility Site in
favor of the Company (and its successors and assigns) and the Facility Site;
that the Covenants are real and also benefit and burden, and shall run with, the
real property interests comprising the Usage
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Easements for the Facility Component Sites on which the Public Facility
Components are located; that the transfer of any ownership rights in the Public
Lateral Pipeline, Facility Component Sites, and/or the Public Easements shall
not impair the rights of the Company (and its successors and assigns) under this
Use Agreement and the Usage Easements; and that the Usage Easements and
Covenants will pass with the Facility Site to all subsequent successors and
assigns of the Company and subsequent grantees of the Facility Site, and shall
inure to the benefit of, and be enforceable by, the Company (and its successors
and assigns). The Parties acknowledge and agree that both the Usage Easements
and the Public Easements are commercial (as opposed to personal) in nature and
are both for their joint economic benefit and for the public benefit. The
intention of the Parties is that neither the partial assignment, appointment,
and division of the Easements into the Usage Easements and the Public Easements
pursuant to the Inducement Agreement shall, or shall be deemed or interpreted
to, result in any additional or increased burden on or use of the servient
estate in the Facility Component Sites.
ARTICLE III
OPERATIONS, MAINTENANCE, TAXES AND INSURANCE
SECTION 3.1. LESSEE'S OBLIGATIONS TO OPERATE, MAINTAIN AND REPAIR,
INSURE AND COMPLY WITH LAWS.
(a) The Lessee shall operate and maintain the Public Lateral Pipeline
(without regard to the operating status of the Facility) as follows:
(i) Except due to events beyond the reasonable control of the
Lessee, including, but not limited to, those Force Majeure events described in
Section 8.14, the Lessee agrees that, subject to the provisions of Sections
3.1(b), 3.4, 3.5, and 3.6, during the Term of this Use Agreement it will at its
own expense operate and maintain, or cause to be operated and maintained, the
Public Lateral Pipeline in good condition, repair, and working order, ordinary
wear and tear excepted, in accordance with good utility practices, and will make
or cause to be made from time to time all necessary repairs thereto (including
external and structural repairs) and renewals and replacements thereto and
perform or cause to be performed all necessary maintenance thereon. Each of the
Company and the Lessee acknowledges and agrees that none of the State, County or
XXX shall have any responsibility for the payment of expenses of the Facility.
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(ii) The Lessee shall obtain or cause to be obtained on and
after the effective date hereof and maintain or cause to be maintained
throughout the Term property and casualty insurance in the amount of the
replacement costs of, and with respect to all portions of, the Public Lateral
Pipeline in order to insure the interests therein of both the Public Owner and
the Lessee against loss or damage to the Public Lateral Pipeline, all of which
property and casualty insurance policies insuring the interests of the Lessee
therein shall contain a standard mortgagee clause in favor of the Lenders. The
Lessee shall provide such property and casualty insurance on behalf of the
Public Owner for the Public Lateral Pipeline through a member of the Chubb or
CIGNA insurance groups or through another commercial insurance company of the
Lessee's choice and approved by the Public Owner (which approval shall not be
unreasonably withheld) which shall be licensed under the laws of the State to
sell and to issue property and casualty insurance policies in the State. So long
as no event of default by the Lessee has occurred or is continuing under this
Use Agreement or the Inducement Agreement and the Public Owner has not exercised
its remedies thereunder, all claims on such insurance, regardless of amount, may
be adjusted by the Lessee with the insurers, and the proceeds of all insurance
policies for loss or damage to the Public Lateral Pipeline shall be payable to
the Lessee and the Public Owner as their interests may appear for application as
provided in Section 4.1. The Lessee and the Public Owner shall carry their own
public liability insurance policies. The Parties recognize, however, that the
cost of providing public liability insurance for the Public Lateral Pipeline and
Facility Component Sites shall nevertheless be paid by the Lessee as an
additional component of the operation and maintenance costs of the Public
Lateral Pipeline and that, consequently, the Lessee shall have the option to
provide such public liability insurance on behalf of the Public Owner through
Wausau Insurance or through another commercial insurance company of the Lessee's
choice and approved by the Public Owner (which approval shall not be
unreasonably withheld) which shall be licensed under the laws of the State to
issue public liability insurance policies in the State. Each Party shall,
however, to the extent permitted by applicable law, be named as an additional
insured under the public liability insurance policies of the other Parties with
respect to the Public Lateral Pipeline and Facility Component Sites. The Net
Proceeds of such liability insurance shall be applied toward extinguishment or
satisfaction of the liability with respect to which such insurance proceeds may
be paid.
(iii) The Lessee shall, during the Term of this Use Agreement
and any renewals thereof and, at no expense to the Public Owner, promptly comply
or cause compliance with all laws, ordinances, orders, rules, regulations and
requirements of duly
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constituted public authorities which may be applicable to the Public Lateral
Pipeline or to the repair and alteration thereof, or to the use or manner of use
of the Public Lateral Pipeline; provided, however, that such laws, ordinances,
orders, rules, regulations and requirements made by the State, County, City and
XXX shall not discriminate against the Lessee.
(b) In connection with its obligation to operate and maintain the
Public Lateral Pipeline in accordance with Section 3.1(a), the Lessee may
satisfy such obligation, at its election by operating and maintaining all or
some of the Public Lateral Pipeline directly itself or indirectly through a
subcontractor therefor. The Lessee shall reimburse to the Public Owner all of
the cost and/or compensation, if any, payable by the Public Owner to such
third-party operator. Notwithstanding the foregoing, the Lessee shall have the
option, exercisable in its sole discretion, to enter into an operating and
maintenance agreement with a third-party operator for such proportional interest
in the Public Lateral Pipeline(s) as shall be subject to its lease and use.
SECTION 3.2. TAXES. The Lessee shall be responsible for the payment of
any Taxes on the Lessee's assessable interest, if any, in the Public Lateral
Pipeline and the related Public Easements to the extent that the Lessee or its
interest therein is not otherwise exempt therefrom or subject to a
fee-in-lieu-of-taxes with respect thereto; provided, however, the Lessee shall
not be responsible for any Taxes assessable against the Public Owner or the
City.
SECTION 3.3. [Intentionally Omitted].
SECTION 3.4. REMODELING AND IMPROVEMENTS. The Lessee may remodel the
Public Lateral Pipeline or make substitutions, additions, modifications or
improvements thereto from time to time as it, in its discretion, deems
desirable, so long as such remodeling, substitutions, additions, modifications,
or improvements do not cause the Public Lateral Pipeline to fail to meet or
exceed the original design capacity, quality and criteria. The cost of such
remodeling, substitutions, additions, modifications or improvements shall be
paid by the Lessee, but the same shall be the property of the Public Owner and
be included under the terms of this Use Agreement as part of the Public Lateral
Pipeline. Any property for which a substitution or replacement is made pursuant
to this Section or Sections 3.1 and/or 3.5 may be disposed of by the Lessee in
any manner and in the Lessee's sole discretion, with any funds received from
such disposition being credited against the cost of such substitute or
replacement property. In no event shall the Lessee in connection with or as a
result of any actions taken under this Section 3.4 create, assume or suffer to
exist a lien on, or with respect to, the Public
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Owner's interest in the Public Lateral Pipeline or the related Facility
Component Sites and Public Easements.
SECTION 3.5. SUBSTITUTED EQUIPMENT. The Lessee may from time to time
(on behalf of the Public Owner) substitute machinery and equipment for any
existing equipment that comprises part of the Public Lateral Pipeline, so long
as such substitutions do not cause the Public Lateral Pipeline to fail to meet
or exceed the original design quality and criteria. Any such substitute
machinery and equipment shall be promptly conveyed by the Lessee to the Public
Owner, shall be installed at the Facility Components Sites and shall become a
part of the Public Lateral Pipeline and be included under the terms of this Use
Agreement. The Lessee shall deliver to the Public Owner an executed counterpart
of one or more bills of sale conveying such machinery and equipment to the
Public Owner. In no event shall the Lessee in connection with or as a result of
any actions taken under this Section 3.5 create, assume or suffer to exist a
lien on, or with respect to, the Public Owner's interest in the Public Lateral
Pipeline or the related Facility Component Sites and Public Easements.
The Public Owner and Lessee agree to execute and deliver such documents
as the Public Owner or Lessee may reasonably request in connection with any
action taken by the Public Owner or Lessee under this Section. The Lessee will
not remove or permit the removal of any of the equipment comprising part of the
Public Lateral Pipeline from the related Facility Component Sites except in
accordance with this Section.
SECTION 3.6. INSTALLATION OF LESSEE'S OWN MACHINERY AND EQUIPMENT. The
Lessee may, from time to time in its sole discretion and at its own expense,
install additional machinery, equipment and other tangible personal property on
the Public Lateral Pipeline or elsewhere on the Facility Component Sites. Any
such machinery and equipment so installed by the Lessee, if integral to the
Public Lateral Pipeline, shall be the property of the Public Owner and shall be
included under the terms of this Use Agreement as part of the Public Lateral
Pipeline. In no event shall the Lessee in connection with or as a result of any
actions taken under this Section 3.6 create, assume or suffer to exist a lien
on, or with respect to, the Public Owner's interest in the Public Lateral
Pipeline or the related Facility Component Sites and Public Easements.
ARTICLE IV
DAMAGE, DESTRUCTION AND CONDEMNATION
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SECTION 4.1. DAMAGE AND DESTRUCTION. If the Public Lateral Pipeline is
destroyed or damaged (in whole or in part) by fire or other casualty, the
Parties agree that the Lessee may elect, so long as no event of default by the
Lessee has occurred or is continuing under this Use Agreement and the Public
Owner has not exercised its remedies hereunder, to promptly repair, rebuild or
restore the property so damaged or destroyed. If the Lessee elects to so repair,
rebuild or restore the Public Lateral Pipeline, the Net Proceeds of any
insurance resulting from claims for such losses shall be paid to and held by the
Lessee or the County (it being understood that the County shall hold such
proceeds in the event that public bidding or procurement laws are applicable),
as applicable, for the purposes of repairing, rebuilding or restoring, subject
to any applicable public bidding or procurement laws, the property so damaged or
destroyed to substantially the same condition as existed prior to the event
causing such damage or destruction, with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Lessee and as will not result in the Public Lateral Pipeline
failing to meet or exceed original capacity, quality and design criteria. If the
Lessee elects not to so repair, rebuild, or restore the Public Lateral Pipeline,
then the Net Proceeds of any such insurance resulting from claims for such
losses shall be paid (a) for so long and to the extent obligations remain
outstanding under the Impact Bonds, to the State and (b) otherwise, to the
Public Owner. In no event shall the Lessee in connection with or as a result of
any actions taken under this Section 4.1 create, assume or suffer to exist a
lien on, or with respect to, the Public Owner's interest in the Public Lateral
Pipeline or the related Facility Component Sites and Public Easements.
SECTION 4.2 CONDEMNATION. In the event that title to, or the temporary
use of, the Public Lateral Pipeline or the related Public Easements or Facility
Components Sites or any part of either thereof shall be taken under the exercise
of eminent domain by a Governmental Authority or by any Person acting under a
Governmental Authority, the Public Owner will cause the Net Proceeds received by
it from any awards made in such eminent domain proceedings to be paid to and
held by the Lessee or to any other Person as required by law, and the Lessee
shall, subject to any applicable public bidding or procurement laws, apply such
Net Proceeds received by the Lessee to the acquisition, by construction or
otherwise, on behalf of the Public Owner of other improvements deemed necessary
by the Lessee on or adjacent to the Facility Component Sites (which improvements
shall be deemed a part of the Public Lateral Pipeline and available for use and
operation hereunder by the Lessee without the payment of any additional fees
other than herein provided to the same extent as if such other improvements were
specifically
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described herein); provided, however, that, in the event it becomes necessary
for the State, County, City, and/or XXX to take any action to condemn the Public
Lateral Pipeline, the related Public Easements or Facility Component Sites, or
any part thereof or interest, if any, or right of the Lessee therein or in the
Usage Easements, then the State, County, City, and XXX agree that they shall
negotiate in good faith with the Lessee and use their best efforts in order
otherwise to give effect to, to enable the Lessee to realize and utilize, and to
provide to the Lessee, to the maximum extent possible, the benefits and rights
intended to be granted to the Lessee under this Use Agreement and the Inducement
Agreement or such additional benefits which are of substantially equivalent
benefits as such lost benefits. In no event shall the Lessee in connection with
or as a result of any actions taken under this Section 4.2 create, assume or
suffer to exist a lien on, or with respect to, the Public Owner's interest in
the Public Lateral Pipeline or the related Facility Component Sites and Public
Easements.
The Public Owner shall cooperate fully with the Lessee in the handling
and conduct of any prospective or pending condemnation proceeding with respect
to the Public Lateral Pipeline or the related Public Easements or Facility
Component Sites or any part thereof and will, to the extent it may lawfully do
so, permit the Lessee to participate in any such proceeding. In no event will
the Public Owner voluntarily settle, or consent to the settlement of, any
prospective or pending condemnation proceeding with respect to the Public
Lateral Pipeline or the related Public Easements or Facility Component Sites or
any part thereof without the written consent of the Lessee.
SECTION 4.3. INSUFFICIENT NET PROCEEDS. If the Net Proceeds are not
sufficient to pay in full the costs of repair, rebuilding, or restoration
referred to in Section 4.1 (if the Lessee elects under Section 4.1 to so repair,
rebuild, or restore the Public Lateral Pipeline) or the costs of acquisition
referred to in Section 4.2, the Lessee will nevertheless complete the work
thereof and will pay that portion of the costs thereof in excess of the amount
of said Net Proceeds. The Lessee shall not, by reason of the payment of such
excess costs, be entitled to any reimbursement from Public Owner.
SECTION 4.4 CONDEMNATION OF LESSEE-OWNED PROPERTY. The Lessee shall
also be entitled to the Net Proceeds of any condemnation award or portion
thereof made for damages to or takings of its own property not included in the
Public Lateral Pipeline, provided that any Net Proceeds resulting from damages
to or taking of all or a portion of the interest, if any, or rights of the
Lessee in the Public Lateral Pipeline created by this Use
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Agreement shall be paid and applied in the same manner provided in Section 4.2.
ARTICLE V
SPECIAL COVENANTS
SECTION 5.1. [Intentionally Omitted].
SECTION 5.2. INDEMNIFICATION. The Lessee ("INDEMNITOR") agrees, to the
extent permitted by law, to indemnify, defend and hold harmless the MDECD, the
Authority and the Public Owner, as well as each of their respective employees,
officers, directors, trustees, agents, representatives and elected or appointed
public officials ("INDEMNITEE"), from and against third party causes of action,
legal or administrative proceedings, claims, demands, damages, liabilities,
judgments, interest, attorney's fees, costs and expenses of whatsoever kind or
nature arising out of or in connection with or resulting from or caused by the
negligent acts or omissions of the Indemnitor or its employees or agents or
anyone else acting under its direction and control or on its behalf with respect
to the performance of its rights, duties, obligations, and responsibilities
under this Use Agreement (including the operation and maintenance of the Public
Lateral Pipeline in accordance herewith), provided that the Indemnitor, as the
real party in interest in any such action, is allowed to participate in the
defense in any such action and whether or not the Lessee so participates, the
Public Owner does not voluntarily settle or consent to any settlement of any
such claim without the prior written consent of the Lessee; provided further,
however, that the decision not to allow the Indemnitor to participate in the
defense in any such action shall not be deemed to be, and shall not constitute,
a waiver of any other indemnification rights to which the Indemnitee may
otherwise be entitled outside of the terms and provisions of this Use Agreement.
The indemnity provisions expressed in this Section 5.2 shall apply to the
fullest extent permitted by law and shall in no manner amend, abridge, modify,
or restrict any other obligation of the Parties expressed elsewhere in this Use
Agreement. The provisions of this Section shall survive the termination of this
Use Agreement.
SECTION 5.3. MAINTENANCE OF EXISTENCE. The Lessee agrees that during
the Term of this Use Agreement it shall continue to be duly qualified to do
business in the State (as a foreign entity or otherwise) and in any other state
in which the nature of its business so requires it to be so qualified, will
maintain its entity existence, will not dissolve or otherwise dispose of all or
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substantially all of its assets and will not consolidate with or merge into
another entity or permit one or more entities to consolidate with or merge into
it without the prior written approval of the State, the County and the City;
provided, that the Lessee may, without violating the foregoing, consolidate with
or merge into another entity, or permit one or more entities to consolidate with
or merge into it, or transfer all or substantially all of its assets to another
such entity (and thereafter dissolve or not dissolve, as the Lessee may elect)
if the entity surviving such merger or resulting from such consolidation, or the
entity to which all of substantially all of the assets of the Lessee are
transferred, as the case may be,
(a) is an entity organized under the laws of the United States of America,
or any state, district or territory thereof, and qualified to do
business in the State;
(b) has expressly assumed in writing all the obligation of the Lessee
contained in this Use Agreement; and
(c) has a consolidated tangible net worth (after giving affect to such
consolidation, merger or transfer) of not less than the tangible net
worth of the Lessee immediately prior to such consolidation, merger or
transfer.
The term "CONSOLIDATED TANGIBLE NET WORTH," as used in this Section,
shall mean the difference obtained by subtracting total consolidated liabilities
(not including as a liability any capital or surplus item) from total
consolidated tangible assets, computed in accordance with generally accepted
accounting principles.
SECTION 5.4. SCOPE OF EXECUTION. The Parties acknowledge that, during
the construction of the Public Lateral Pipeline by the County, this Use
Agreement is effective among the Lessee, the Authority, and the County and among
the Authority, the County, and the XXX, with the County and XXX entering into
this Use Agreement to indicate their acknowledgment and approval of the terms
and conditions hereof. Subject, however, to the transfer of title to the Public
Lateral Pipeline and Public Easements by the County to the XXX, the XXX agrees
to accept the transfer of title to the Public Lateral Pipeline and Public
Easements from the County, subject to the terms and provisions of this Use
Agreement, the Usage Easements, the Inducement Agreement and the Liens, and to
accept the assignment hereof from the County. In addition, subject
to the conveyance of the Public Lateral Pipeline and Public Easements by the
County to the XXX, the XXX is also entering into this Use Agreement to
acknowledge and to indicate its agreement that any such Public Lateral Pipeline
and Facility Component Sites so conveyed thereto shall be provided to the Lessee
by the XXX in
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accordance with, and subject to, the terms and provisions of this Use Agreement,
the Usage Easements, and the Inducement Agreement.
SECTION 5.5. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS RECORDINGS
AND FILINGS. The Public Owner and the Lessee will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered, at
the expense of the Lessee, such supplements hereto and such further instruments
as may reasonably be required for correcting any inadequate or incorrect
description of the Public Lateral Pipeline, Facility Component Sites, Public
Easements, or Usage Easements hereby provided or intended so to be or for
carrying out the intention of or facilitating the performance of this Use
Agreement. Each of the Public Owner and the Lessee agrees to execute and
deliver, at the request of the other, such instruments, properly authorized and
in recordable form, as are necessary to confirm, of record, the covenants and
restrictions granted or imposed in Sections 2.7, 2.9, and 2.10 of this Use
Agreement.
The Lessee shall cause this Use Agreement, any security instruments,
financing statements and all supplements thereto and any other instrument as may
be required from time to time to be kept recorded and filed in such manner and
in such places as may be required by law to fully preserve and protect the
security of the Public Owner.
SECTION 5.6. DEPRECIATION. The Public Owner agrees that any
depreciation with respect to the Public Lateral Pipeline paid for in whole or in
part by the Lessee under the Inducement Agreement or this Use Agreement shall be
made available to the Lessee, and the Public Owner will fully cooperate with the
Lessee in any effort by the Lessee to avail itself or any such depreciation.
SECTION 5.7. PERMITTED CONTESTS. The Lessee may, at its expense and in
its name and behalf, in good faith contest (and the Lessee shall notify the
Public Owner of such contest) any law, ordinance, order, rule, regulation or
requirement referred to in Section 3.1(a)(iii).
In the event of such contest, the Lessee may permit such lien,
encumbrance or charge to remain unsatisfied and undischarged during the period
of such contest and any appeal therefrom. The Public Owner shall cooperate fully
with the Lessee in any such contest, except where the Public Owner is an adverse
party to the Lessee.
Each such contest shall be promptly prosecuted to a final conclusion.
No such contest shall subject the Public Owner to the risk of any material civil
liability or any criminal liability, and the Lessee shall give such reasonable
security to the Public Owner
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as may be demanded by the Public Owner to insure compliance with the foregoing
provisions of this Section. The foregoing shall not constitute a waiver by the
Public Owner of any civil or criminal remedies otherwise available to the Public
Owner against the Lessee.
ARTICLE VI
ASSIGNMENT
SECTION 6.1. ASSIGNABILITY. The Lessee may not assign or transfer any
of its rights or obligations under this Use Agreement without the prior written
approval for such assignment from the Authority, on behalf of the State and
MDECD, and from the County on behalf of the XXX or any other Public Owner, which
approval shall not be unreasonably withheld; provided, however, that the Lessee
may assign this Use Agreement without such prior written approval(a) as provided
in Section 5.3, (b) as provided in Section 2.2(a)(ii), or (c) as a collateral
assignment to the Lenders. Each of the Parties agrees to execute such documents
(including a consent to assignment agreement), in a form to their reasonable
satisfaction, as may reasonably be requested by any such Lender or subsequent
assignee to evidence and acknowledge its consent and the effectiveness of any
such assignment or lien. Any such assignment shall not only assign the rights of
the assignor under this Use Agreement but shall also contain an acknowledgment
and express assumption by the assignee of the obligations of the assignor under
this Use Agreement and upon any such assignment the Public Owner is hereby
deemed to release the Company in full from any and all obligations and
liabilities of the Company under this Use Agreement thereafter arising.
SECTION 6.2. ASSIGNMENT BY PUBLIC OWNER. The Public Owner shall not
assign, encumber, convey or otherwise dispose of all or any part of its rights,
title and interest in and to the Public Lateral Pipeline, the Facility Component
Sites, the Public Easements, and/or this Use Agreement, except to the Lessee in
accordance with the provisions of this Use Agreement, without the prior written
consent of the Lessee; provided, however, that, in any event, any assignment
(whether by operation of law or otherwise as provided herein) shall be, and is
hereby, made subject to the rights of the Lessee (and its successors and
assigns) under this Use Agreement and the applicable terms and provisions of the
Inducement Agreement. Provided, however, that the County may assign its interest
in the Public Lateral Pipeline, Facility Components Sites, Public Easements, and
this Use Agreement to the XXX, but such an assignment by the County to the XXX
shall not
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release the County from any or all of its rights, duties, and responsibilities
under this Use Agreement with respect to the Public Lateral Pipeline and the
Facility Components Sites. The various Public Facility Components may be owned
directly by the Public Owner or owned by another public entity formed thereby
for such purposes but shall, in any event, be subject to the terms and
provisions of this Use Agreement.
SECTION 6.3. BINDING EFFECT. Notwithstanding anything to the contrary
in this Use Agreement (including without limitation Sections 5.3 or 6.1), upon
any assignment of this Use Agreement (whether by operation of law or otherwise
as provided herein), this Use Agreement shall be binding upon, and inure to the
benefit of, both the Parties hereto and their respective successors and assigns.
In addition, the Parties hereto expressly recognize, acknowledge, and agree that
all of the terms, conditions, provisions and agreements contained in Article II
are so integrally related one to each of the other terms, conditions, provisions
and agreements contained in Article II that, upon either any assignment of this
Use Agreement by operation of law or any acceptance or rejection of this Use
Agreement in any bankruptcy or insolvency proceeding involving the Lessee, none
of the terms, conditions, provisions and agreements contained in Article II are
capable of being severed from any of the other terms, conditions, provisions and
agreements contained in Article II; that any such assignment, acceptance, or
rejection must be of this entire Use Agreement, such Use Agreement being
indivisible and interdependent for purposes of this sentence, and may not be
solely of any part or parts thereof; and that, therefore, any such assignment
may not be selective but must convey, or any such acceptance or rejection may
not be selective but must be an acceptance or rejection of, all of the terms,
conditions, provisions and agreements contained in Article II, and not of any
part or parts thereof.
ARTICLE VII
DEFAULT AND REMEDIES
SECTION 7.1. DEFAULT BY THE LESSEE. The occurrence of any of the
following shall constitute an event of default with respect to the Lessee:
(a) the Lessee shall fail to keep the Public Lateral Pipeline in good
repair and good operating condition as required by Section 3.1; or
(b) the Lessee shall fail to maintain the insurance required
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by Section 3.1; or
(c) the Lessee shall otherwise fail to comply with any material
provision of this Use Agreement;
(d) the Company shall fail to make the payment required to remedy any
action or inaction by the Company under Section 17(4)(b)(iii) of the Inducement
Agreement in the manner and within the cure period set forth therein; or
(e) the Company shall fail to make any payment when due under that
certain Agreement, dated as of the date hereof, between the Company and Panola
Partnership, Inc.;
provided, in each case, the Authority or the Public Owner shall first give the
Lessee a written notice specifying the nature of the Lessee's failure to be in
compliance with its obligations under this Use Agreement and following receipt
by the Lessee of such written notice from the Authority, the Lessee shall have
(other than with respect to the default described in clause (d)) a period of one
hundred eighty (180) days (or fifteen (15) days in the case of a failure of the
Lessee to make a payment required to be made by it hereunder) after receipt of
such written notice within which to cure any such default or failure; provided,
however, that, if any such default or failure cannot be cured within one hundred
eighty (180) days with the exercise of due diligence by the Lessee, and if the
Lessee, within such period submits to the Authority and the County a plan
reasonably designed to correct the default within a reasonable additional period
of time necessary to cure such failure or default (not to exceed six (6) months)
then the Lessee shall not be in default hereunder unless Lessee fails to
diligently pursue such cure or fails to cure such default or failure within the
additional period of time specified by the plan.
SECTION 7.2. REMEDIES. In the event that the Lessee fails to cure such
failure to the reasonable satisfaction of the Authority within such applicable
cure period, then the Authority or the Public Owner may mediate or file suit to
enforce this Use Agreement pursuant to Section 8.5 and for money damages by
giving the Lessee a written notice specifying the nature of the Lessee's failure
to cure. In addition, however, in the event of a default by the Lessee (a) under
Sections 7.1(a) or (b) or (c), the Authority or the Public Owner may (but shall
be under no obligation to) take such action as may be necessary to cure such
failure after first giving five (5) days notice in writing to the Lessee,
including the operation and maintenance of the Public Lateral Pipeline or the
advancement of amounts of money, and all amounts so advanced therefor by the
Authority or the Public Owner shall become an additional obligation of the
Lessee to the Public Owner, which
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amounts, together with interest thereon at the rate of six percent (6%) per
annum, the Lessee agrees to pay on demand and (b) under Sections 7.1(d) or (e),
the Authority or the Public Owner may (i) for so long as the Company is the
Lessee hereunder, terminate this Use Agreement or (ii) if the Company is not the
Lessee hereunder, direct the Lessee to terminate the gas transportation
agreement with the Company and/or terminate this Use Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. All notices, demands and requests which may or
are required to be given to another Party hereunder shall be in writing, and
each shall be deemed to have been properly given when served personally on an
executive officer of the Party to whom such notice is to be given, or when sent
postage prepaid by first class mail, registered or certified, return receipt
requested, by deposit thereof in a duly constituted United States Post Office or
branch thereof located in one of the states of the United States of America in a
sealed envelope addressed as follows:
If to the Lessee or Company: If to the County:
LSP Energy Limited Partnership President
000 Xxxxxxxxxx Xxxxx Board of Supervisors
Xxxxxxxxxx, XX 00000 Panola County
Post Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
With a copy to: With a copy to:
General Counsel Board Attorney
LS Power, LLC Board of Supervisors
Two Tower Center, 20th Floor Panola County
Xxxx Xxxxxxxxx, XX 00000 Post Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
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If to the Authority: If to the XXX
Director Commissioner and President
Mississippi Major Economic Industrial Development
Impact Authority Authority of the
c/o Executive Director Second Judicial
Department of Economic and District of Panola
Community Development County, Mississippi
State of Mississippi Post Xxxxxx Xxx 0000
Xxxx Xxxxxx Xxx 000 Xxxxxxxxxx, XX 00000
Xxxxxxx, XX 00000-0000
With a copy to: With a copy to:
Legal Counsel Board Attorney
Department of Economic and Board of Supervisors
Community Development Panola County
State of Mississippi Post Xxxxxx Xxx 000
Xxxx Xxxxxx Xxx 000 Xxxxxxxxxx, XX 00000
Xxxxxxx, XX 00000-0000
If to the City:
Mayor
City of Xxxxxxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
With a copy to:
Board Attorney
Board of Aldermen
City of Batesville
Post Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
A duplicate copy of each notice, certificate or other communication
given under any of the foregoing documents to any Party hereunder shall also be
given to the other Parties indicated in this Section. The Parties may, by notice
given hereunder, designate any further or different addresses and to which
subsequent notices, certificates or other communications shall be sent.
SECTION 8.2. RECORDATION. A memorandum of this Use Agreement and every
assignment and amendment hereof, shall, for notice and information purposes, be
recorded in the office of the
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Clerk of the Chancery Court of the County, or in any other such office which may
at the time provided by law be the proper place for the recordation of a deed
conveying the Public Lateral Pipeline. This memorandum shall include, without
limitation, the names of the Parties, the Term, the legal descriptions of the
Facility Component Sites and the Facility Site, a general description of the
Public Lateral Pipeline, a disclosure that the Public Lateral Pipeline and
Facility Component Sites are subject to this Use Agreement and to certain
applicable terms and provisions of the Inducement Agreement, and Sections 2.7,
2.9, and 2.10 of this Use Agreement verbatim.
SECTION 8.3. AMENDMENTS. Any amendments to this Use Agreement shall be
in writing and signed by all Parties who are affected by such amendment or their
respective successors and assigns.
SECTION 8.4. APPLICABLE LAW. This Use Agreement shall be governed by
the laws of the State notwithstanding the fact that one or more of the Parties
to this Use Agreement may be or become a resident or a citizen of, or be or
become domiciled in, a different state.
SECTION 8.5. MEDIATION. If a dispute arises out of or relates to this
Use Agreement, or the breach thereof, and if such dispute cannot be settled by
the applicable Parties through negotiation, then the applicable Parties agree
first to attempt, in good faith, to settle the dispute through mediation before
resorting to litigation. A mediator and site for the mediation acceptable to all
applicable Parties shall be chosen by them no later than 20 days following the
date of receipt of the written request for mediation, failing in which the
Parties agree that the American Arbitration Association shall, at the request of
any of the applicable Parties, be utilized to select the mediator and the place
for the mediation. If, by the 45th day following the date of receipt of the
written request for mediation, no mediator has been selected, any applicable
Party may proceed to file an action in the forum referenced below. If a mediator
and the place for mediation has been selected by such 45th day, the mediation
session shall be held and concluded not later than 90 days after selection of
the mediator and site. If, following the earlier of the conclusion of the
mediation, or the end of such 90 day period, any applicable Party is not
satisfied with the results of such mediation, any party may proceed to file an
action in the forum referenced below. Except as modified herein, the mediation
shall be conducted pursuant to the Commercial Mediation Rules of the American
Arbitration Association.
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SECTION 8.6. FORUM SELECTION. To the extent permitted by law, venue for
any legal action involving the City, County, XXX, and/or Lessee arising from
this Use Agreement, shall be in the courts of the United States sitting in the
Northern District of Mississippi.
SECTION 8.7. COUNTERPARTS. This Use Agreement may be executed in two or
more counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
SECTION 8.8. HEADINGS. The use of captions and headings in this Use
Agreement are solely for convenience and shall have no legal effect in
construing the provisions of this Use Agreement.
SECTION 8.9. ENTIRE AGREEMENT. This Use Agreement and the Inducement
Agreement constitute the essential terms of the agreement between the Parties
for the purposes stated herein, and no other offers, agreements, understandings,
warranties, or representations exist between the Parties.
SECTION 8.10. STATUTORY REFERENCES. Unless otherwise specifically
indicated herein to the contrary, all references herein to statutory sections
refer to the Mississippi Code Annotated of 1972, as amended.
SECTION 8.11. SEVERABILITY. Subject to Section 6.3, if any clause,
provision or section of this Use Agreement be held illegal or invalid by any
court, the invalidity of such clause, provision or section shall not affect any
of the remaining clauses, provisions or sections hereof, and this Use Agreement
shall be construed and enforced as if such illegal or invalid clause, provision
or section had not been contained herein.
SECTION 8.12. AUTHORITY. The Parties hereto recognize, acknowledge, and
agree that the agreements contained herein have been the subject of arm's length
negotiations between the Parties, and each of the Parties recognizes,
acknowledges, represents, and warrants that, to the extent permissible under
applicable law (as to which no representation or warranty is made or implied,
except as hereinafter indicated), the obligations set forth herein are the valid
and legally and mutually binding reciprocal obligations of such Party,
enforceable in a court of competent jurisdiction against such respective Party
in accordance with the terms hereof, and, based upon the law of the State (as
currently interpreted) that the doctrine of sovereign immunity does not bar
actions for breach of contract brought against the State or its political
subdivisions (including the County, City, and XXX), the doctrine of sovereign
immunity is thus inapplicable to any contract action,
-25-
contract liability, and contract remedies (specifically including, but not
limited to, specific performance) pertaining to this Use Agreement. The Parties
and each of the officers or officials thereof represents and warrants that the
terms and provisions of this Use Agreement applicable to, and his or her
execution of this Use Agreement in the name of and on behalf of, such Party has
been authorized and approved, as required by law, by any and all necessary
actions of the applicable Board of Aldermen, Board of Supervisors, board of
directors, or other appropriate governing body thereof and that such officer or
official has been duly authorized thereby to execute this Use Agreement on
behalf of and in the name of such Party.
SECTION 8.13. NO PERSONAL LIABILITY. The Parties acknowledge and agree
that in no event shall any individual, partner, member, shareholder, owner,
officer, director, employee, affiliate, beneficiary, or elected or appointed
public official of any Party or its affiliates be personally liable to another
Party for any payments, obligations or performance due under this Use Agreement,
or any breach or failure of performance of either Party hereunder and that the
sole recourse for payment or performance of the obligations hereunder shall be
against the Parties themselves and each of their respective assets and not
against any other Person, except for such liability as may be expressly assumed
by an assignee pursuant to an assignment of, or pursuant to, this Use Agreement
in accordance with the terms hereof.
SECTION 8.14. FORCE MAJEURE. For purposes of this Use Agreement, "Force
Majeure" is defined as something beyond a Party's reasonable control, including,
but not limited to, acts of God, governmental acts (including delay or denial of
necessary permits or approvals and whether or not within the power of the
government or governmental agency, but excluding any delay or denial of a
necessary permit or approval by a government or a governmental agency which is a
Party where the Party claiming Force Majeure is also a government or a
governmental agency), acts of the public enemy, terrorism, sabotage and civil
disturbance, floods, landslides, earthquakes, fires, washouts, droughts,
unusually severe weather (including, without limitation, lightning, hurricanes,
tornadoes, and other storms), epidemics, quarantine, restrictions, strikes,
labor slowdowns, labor troubles, freight embargoes, and breakdowns or damages to
equipment and necessary facilities (including emergency outages of equipment or
facilities used for making repairs to avoid breakdown, damage, or imminent
danger and specifically excepting economic conditions or events or business
decisions or judgment and failure to make any payment (collectively "FORCE
MAJEURE"). A Party claiming Force Majeure shall promptly notify the other
applicable Parties of the occurrence of the event of Force Majeure and shall
exercise
-26-
reasonable business efforts to remove the event of Force Majeure; provided,
however, that nothing in this Section 8.14 shall require a Party to settle or
resolve any labor dispute if it deems the settlement to be contrary to its best
interests; provided further, however, that an event of Force Majeure shall not
include the failure of any Governmental Authority which is a Party hereto to
take any governmental act (including, without limitation, delay or denial of
necessary permits or approvals and whether or not within the power of the
Government Authority) by any of the State, the County, the City, or the XXX
unless such failure is itself otherwise due to an event of Force Majeure.
-27-
EXECUTION
IN WITNESS WHEREOF, the undersigned individuals, acting in their indicated
official capacity, have executed this Use Agreement on behalf of and in the name
of their respective entities on the dates set forth opposite their respective
names, having first been duly authorized by such entities so to do.
Mississippi Major Economic Impact
Authority (a Division of the
Mississippi Department of Economic
and Community Development)
Date: August 12, 1999 By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Its: Director and the
Executive Director of the
Mississippi Department of
Economic and Community
Development
-28-
Panola County, Mississippi
Date: August 12, 1999 By: Board of Supervisors
/s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
President
Date: August 12, 1999 By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx
(SEAL) Clerk
Industrial Development
Authority of the Second
Judicial District of Panola
County, Mississippi
Date: August 12, 1999 By: /s/ Xxxx Xxxxxxxx
-----------------------------
Xxxx Xxxxxxxx
Commissioner and
President
-00-
Xxxx xx Xxxxxxxxxx, Xxxxxxxxxxx
Date: August 12, 1999 By: /s/ Xxxxx Xxxxx
-----------------------------
Xxxxx Xxxxx, Mayor
By: /s/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx, City Clerk
(Seal)
LSP Energy Limited Partnership
Date: August 12, 1999 By: LSP Energy, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxxxxx
Senior Vice President
GAS USE AGREEMENT
-30-
EXHIBIT A
TO USE AGREEMENT
FORM OF
COORDINATION AGREEMENT
This Coordination Agreement (this "AGREEMENT"), dated as of
_____________, 1999, is made and entered into effective as of the last date of
its execution by the last party hereto, determined by reference to the dates set
forth opposite their respective names on the signature pages attached hereto
("EFFECTIVE DATE") by and between the City of Batesville, Mississippi (the
"CITY"), acting by and through its Mayor and Board of Aldermen and LSP Energy
Limited Partnership, a Delaware limited partnership (the "COMPANY").
This Agreement is contemplated by that certain Infrastructure Use
Agreement (Lateral Pipeline), dated as of January __, 1999, entered into by and
among the Authority, UDECD, the County, the XXX, the City and the Company (the
"USE AGREEMENT").
NOW, THEREFORE, in consideration of the premises herein and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. To the extent not otherwise defined herein, all
capitalized words and phrases used herein shall have the meaning and the
construction given such words and phrases in the Use Agreement.
2. COORDINATION.
(a) DESIGN AND SPECIFICATIONS. The City and the Company shall
coordinate with each other the design and specifications for the meter and the
flow control valve and the other equipment to be constructed by the City and
necessary for the City to tap into the Public Lateral Pipeline.
(b) NOMINATIONS AND IMBALANCE CHANGES. The City and the Company shall
coordinate with each other and the operator of the Public Lateral Pipeline
("OPERATOR") the nomination and use of the Public Lateral Pipeline so that the
Operator is able to resolve meter discrepancies ( if any) and assign
responsibility for imbalance charges from the interstate pipeline companies and
gas suppliers. The City shall be responsible for paying any imbalance charges
for which it is responsible.
3. LIMITATION ON USE BY CITY. Except in the case of an event
of Force Majeure, the City shall not transport or use a greater amount of
natural gas than authorized under Section 2.2 of the Use Agreement.
4. DEFAULT AND REMEDIES. The Company shall notify the City of any
unauthorized excess transportation or utilization under Section 3 or other
breach hereunder as soon as reasonably possible after the Company becomes aware
thereof, and such notice shall be deemed to constitute a demand by the Company
that the City immediately cease such unauthorized excess transportation or
utilization or other breach hereunder. In the event that the City does not
immediately cease any continuing unauthorized excess transportation or
utilization or any other breach of this Agreement (whether or not such
unauthorized excess transportation or utilization is causing physical damage to
the Public Lateral Pipeline or to the Facility or monetary damage to the
Company), or in the event of repeated instances of willful unauthorized excess
transportation or utilization or any other breach of this Agreement by the City,
or in the event that the City fails to pay any amounts of damages claimed by the
Company due to any such unauthorized excess transportation or utilization to the
Company within thirty (30) days after receipt from the Company of a notice that
such amounts are due, then the Company may take any and all actions allowed by
law or equity against the City that it deems to be necessary under the
circumstances in order to protect the Public Lateral Pipeline, the Facility, and
the rights under the Use Agreement and the business and operations of the
Company, including, but not limited to, legal actions to enjoin the City's
breach of its obligations with respect to the Public Lateral Pipeline, but
excluding termination of the City's use of the Public Lateral Pipeline.
5. TERM. This Agreement shall be effective as of the Effective Date and
remain in full force and effect so long as the Company and the City utilize the
Public Lateral Pipeline.
6. NOTICES. All notices, demands and requests which may or are required
to be given to another Party hereunder shall be in writing, and each shall be
deemed to have been properly given when served personally on an executive
officer of the Party to whom such notice is to be given, or when sent postage
prepaid by first class mail, registered or certified, return receipt requested,
by deposit thereof in a duly constituted United States Post Office or branch
thereof located in one of the states of the United States of America in a sealed
envelope addressed as follows:
If to the Lessee or Company:
LSP Energy Limited Partnership
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
With a copy to:
General Counsel
LS Power, LLC
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
If to the City:
Mayor
City of Xxxxxxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
With a copy to:
Board Attorney
Board of Aldermen
City of Batesville
Post Xxxxxx Xxx 000
Xxxxxxxxxx, XX 00000
A duplicate copy of each notice, certificate or other communication
given under any of the foregoing documents to any Party hereunder shall also be
given to the other Parties indicated in this Section. The Parties may, by notice
given hereunder, designate any further or different addresses and to which
subsequent notices, certificates or other communications shall be sent.
7. AMENDMENTS. Any amendments to this Agreement shall be in writing and
signed by all Parties who are affected by such amendment or their respective
successors and assigns.
8. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State notwithstanding the fact that one or more of the Parties to this Agreement
may be or become a resident or a citizen of, or be or become domiciled in, a
different state.
9. MEDIATION. If a dispute arises out of or relates to this Use
Agreement, or the breach thereof, and if such dispute cannot e settled by the
applicable Parties through negotiation, then the
applicable Parties agree first to attempt, in good faith, to settle the dispute
through mediation before resorting to litigation. A mediator and site for the
mediation acceptable to all applicable Parties shall be chosen by them no later
than 20 days following the date of receipt of the written request for mediation,
failing in which the Parties agree that the American Arbitration Association
shall, at the request of any of the applicable parties, be utilized to select
the mediator and the place for the mediation. If, by the 45th day following the
date of receipt of the written request for mediation, no mediator has been
selected, any applicable Party may proceed to file an action in the forum
referenced below. If a mediator and the place for mediation has been selected by
such 45th day, the mediation session shall be held and concluded not later than
90 days after selection of the mediator and site. If, following the earlier of
the conclusion of the mediation, or the end of such 90 day period, any
applicable Party is not satisfied with the results of such mediation, any party
may proceed to file an action in the forum referenced below. Except as modified
herein, the mediation shall be conducted pursuant to the Commercial Mediation
Rules of the American Arbitration Association.
10. FORUM SELECTION. To the extent permitted by law, venue for any
legal action involving the City and/or Lessee arising from this Agreement shall
be in the courts of the United States sitting in the Northern District of
Mississippi.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
12. HEADINGS. The use of captions and headings in this Agreement are
solely for convenience and shall have no legal effect in construing the
provisions of this Agreement.
13. ENTIRE AGREEMENT. This Agreement constitute the essential terms of
the agreement between the Parties for the purposes stated herein, and no other
offers, agreements, understandings, warranties, or representations exist between
the Parties.
14. STATUTORY REFERENCES. Unless otherwise specifically indicated
herein to the contrary, all references herein to statutory sections refer to the
Mississippi Code Annotated of 1972, as amended.
15. SEVERABILITY. If any clause, provision or section of this Agreement
be held illegal or invalid by any court, the invalidity of such clause,
provision or section shall not affect any of the remaining clauses, provisions
or sections hereof, and this
Agreement shall be construed and enforced as if such illegal or invalid clause,
provision or section had not been contained herein.
16. NO PERSONAL LIABILITY. The Parties acknowledge and agree that in no
event shall any individual, partner, member, shareholder, owner, officer,
director, employee, affiliate, beneficiary, or elected or appointed public
official of any Party or its affiliates be personally liable to another Party
for any payments, obligations or performance due under this Agreement, or any
breach or failure of performance of either Party hereunder and that the sole
recourse for payment or performance of the obligations hereunder shall be
against the Parties themselves and each of their respective assets and not
against any other Person, except for such liability as may be expressly assumed
by an assignee pursuant to an assignment of, or pursuant to, this Agreement in
accordance with the terms hereof.
17. FORCE MAJEURE. For purposes of this Agreement, "Force Majeure" is
defined as something beyond a Party's reasonable control, including, but not
limited to, acts of God, governmental acts (including delay or denial of
necessary permits or approvals and whether or not within the power of the
government or governmental agency, but excluding any delay or denial of a
necessary permit or approval by a government or a governmental agency which is a
Party where the Party claiming Force Majeure is also a government or a
governmental agency), acts of the public enemy, terrorism, sabotage and civil
disturbance, floods, landslides, earthquakes, fires, washouts, droughts,
unusually severe weather (including, without limitation, lightning, hurricanes,
tornadoes, and other storms), epidemics, quarantine, restrictions, strikes,
labor slowdowns, labor troubles, freight embargoes, and breakdowns or damages to
equipment and necessary facilities (including emergency outages of equipment or
facilities used for making repairs to avoid breakdown, damage, or imminent
danger and specifically excepting economic conditions or events or business
decisions or judgment and failure to make any payment (collectively "FORCE
MAJEURE"). A Party claiming Force Majeure shall promptly notify the other
applicable Parties of the occurrence of the event of Force Majeure and shall
exercise reasonable business efforts to remove the event of Force Majeure;
provided, however, that nothing in this Section 19 shall require a Party to
settle or resolve any labor dispute if it deems the settlement to be contrary to
its best interests; provided further, however, that an event of Force Majeure
shall not include the failure of any Governmental Authority which is a Party
hereto to take any governmental act (including, without limitation, delay or
denial of necessary permits or approvals and whether or not within the power of
the Government Authority) by any of the State, the County, the City, or the XXX
unless such failure is itself
otherwise due to an event of Force Majeure.
EXECUTION
IN WITNESS WHEREOF, the undersigned individuals, acting in their
indicated official capacity, have executed this Agreement on behalf of and in
the name of their respective entities on the dates set forth opposite their
respective names, having first been duly authorized by such entities to do so.
CITY: City of Batesville, Mississippi
Date: August 12, 1999 By: /s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx, Mayor
(Seal) By: /s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx, City Clerk
COMPANY: LSP Energy Limited Partnership
Date: August 12, 1999 By: LSP Energy, Inc.,
Its general partner
By: /s/ Xxxxx Xxxxxxxxxxx
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