DEED OF GROUND LEASE AND SUBLEASE AGREEMENT
Dated as of July 1, 1996
between
OLD DOMINION ELECTRIC COOPERATIVE,
as Ground Lessor
To be indexed as both GRANTOR and GRANTEE
and
CLOVER UNIT 2 GENERATING TRUST,
as Ground Lessee
To be indexed as both GRANTEE and GRANTOR
-------------------------------------------------
Land Located
in Halifax County, Virginia
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS............................................ 2
SECTION 2. LEASE OF GROUND INTEREST............................... 3
2.1. LEASE OF GROUND INTEREST............................... 3
2.2. BASIC GROUND LEASE TERM................................ 3
2.3. RENEWAL GROUND LEASE TERM.............................. 3
2.4. SURRENDER OR TRANSFER OF GROUND INTEREST............... 3
2.5. TRANSFER OF GROUND INTEREST BY GROUND LESSEE........... 4
2.6. NONTERMINABILITY....................................... 4
SECTION 3. RENT FOR THE LEASE OF THE GROUND INTEREST.............. 4
3.1. ANNUAL RENT............................................ 4
3.2. TAXES AND ASSESSMENTS.................................. 4
SECTION 4. SUBLEASE OF GROUND INTEREST............................ 5
SECTION 5. RENT FOR THE SUBLEASE OF THE GROUND INTEREST........... 5
SECTION 6. QUIET ENJOYMENT IN FAVOR OF THE GROUND LESSEE.......... 5
SECTION 7. QUIET ENJOYMENT IN FAVOR OF THE GROUND LESSOR.......... 6
SECTION 8. USE OF THE GROUND INTEREST BY GROUND LESSEE............ 6
SECTION 9. USE OF THE GROUND INTEREST BY GROUND LESSOR............ 7
SECTION 10. SURRENDER OR TRANSFER OF GROUND LEASE INTEREST......... 7
SECTION 11. EARLY TERMINATION OF GROUND SUBLEASE TERM.............. 7
SECTION 12. LIENS.................................................. 8
SECTION 13. WAIVER OF PARTITION.................................... 8
SECTION 14. SECURITY FOR GROUND LESSEE'S OBLIGATION TO THE
LENDERS................................................ 8
i
SECTION 15. NONMERGER.............................................. 9
SECTION 16. INSPECTION............................................. 9
SECTION 17. INDEMNIFICATION........................................ 9
SECTION 18. MISCELLANEOUS.......................................... 10
18.1. AMENDMENTS AND WAIVERS................................. 10
18.2. NOTICES................................................ 10
18.3. SURVIVAL............................................... 11
18.4. SUCCESSORS AND ASSIGNS................................. 11
18.5. BUSINESS DAY........................................... 12
18.6. GOVERNING LAW.......................................... 12
18.7. SEVERABILITY........................................... 12
18.8. COUNTERPARTS........................................... 12
18.9. HEADINGS AND TABLE OF CONTENTS......................... 12
18.10. FURTHER ASSURANCES..................................... 12
18.11. EFFECTIVENESS OF GROUND LEASE AND SUBLEASE............. 12
18.12. LIMITATION OF LIABILITY................................ 13
Appendix A - Definitions
Exhibit A - Clover Power Station Plat
Schedule 1 - Description of the Clover Real Estate
Schedule 2 - Description of the Unit 1 Site
Schedule 3 - Description of the Unit 2 Site
Schedule 4 - Description of the Common Facilities Site
ii
DEED OF GROUND LEASE AND SUBLEASE AGREEMENT
This DEED OF GROUND LEASE AND SUBLEASE AGREEMENT, dated as of July 1,
1996 (this "Ground Lease and Sublease"), between OLD DOMINION ELECTRIC
COOPERATIVE, a wholesale power supply cooperative organized under the laws of
the Commonwealth of Virginia (the "Ground Lessor", to be indexed as both GRANTOR
and GRANTEE), and CLOVER UNIT 2 GENERATING TRUST, a Delaware business trust
created pursuant to the Trust Agreement, dated as of July 1, 1996, between EPC
Corporation and Wilmington Trust Company (the "Ground Lessee", to be indexed as
both GRANTEE and GRANTOR).
WHEREAS, the Clover Real Estate is more particularly described in
Schedule 1 and is comprised of the Unit 1 Site described in Schedule 2, the Unit
2 Site described in Schedule 3, the Common Facilities Site described in Schedule
4, and certain other property, each such Schedule 1, Schedule 2, Schedule 3 and
Schedule 4 being attached to, and being recorded in the Halifax Clerk's office
with, this Ground Lease and Sublease as part hereof;
WHEREAS, a copy of the Clover Power Station Plat was recorded in the
Halifax Clerk's Office in Plat Book 18, Page 50 and corrected by a re-recording
in such Clerk's Office in Plat Book 18, Pages 120-124, and is marked Exhibit A,
is attached hereto and is being recorded in the Halifax Clerk's Office as a part
hereof;
WHEREAS, Old Dominion and Virginia Power own the Clover Real Estate as
tenants-in-common;
WHEREAS, by the Clover Agreements, Old Dominion and Virginia Power
established their respective rights and obligations as tenants-in-common of the
Clover Real Estate and of all improvements thereafter to be constructed, and all
personal property thereafter to be situated, on the Clover Real Estate. Such
improvements and personal property held by Old Dominion and Virginia Power as
tenants-in-common include (a) the Unit 1 Foundation constructed on the Xxxx 0
Xxxx, (x) the Xxxx 0 Foundation constructed on the Unit 2 Site, (c) the Common
Facilities Foundation constructed on the Common Facilities Site, (d) the Unit 1
Equipment situated on the Unit 1 Site, (e) the Xxxx 0 Equipment situated on the
Unit 2 Site, and (f) the Common Facilities Equipment situated on the Common
Facilities Site;
WHEREAS, as tenants-in-common of such real and personal property, each
of Old Dominion and Virginia Power holds a 50% undivided interest in such real
and personal property, including the right to nonexclusive possession of all
such real and personal property, subject to (a) in the case of all such real and
personal property, the rights of the other to nonexclusive possession and the
terms and conditions of the Clover Agreements, (b) in the case of the Pollution
Control Assets, the rights, terms and conditions described above in clause (a)
and the rights of the Pollution Control Assets Lessor, and (c) in the case of
the Common Facilities, the Unit 1 Site, the Unit 1 Foundation and the Unit 1
Equipment, the rights, terms and conditions described above in clause (a) and
the rights of the Unit 1 Parties;
WHEREAS, simultaneously with the recordation of this Ground Lease and
Sublease, Old Dominion will convey to the Facility Owner for a term of years (a)
the Foundation Interest by the Head Foundation Agreement and (b) the Equipment
Interest by the Head Equipment Agreement;
WHEREAS, by the Operating Foundation Agreement, the Facility Owner will
convey the use and possession of the Foundation Interest back to Old Dominion
for a term of years which shall end prior to the expiration of the term of the
Head Foundation Agreement;
WHEREAS, by the Operating Equipment Agreement, the Facility Owner will
convey the use and possession of the Equipment Interest back to Old Dominion for
a term of years which shall end prior to the expiration of the term of the Head
Equipment Agreement;
WHEREAS, although Old Dominion and the Facility Owner intend that the
Foundation Interest at all times and in all respects be and remain personal
property under Virginia law, they are recording the Head Foundation Agreement
and will record the Operating Foundation Agreement in the Halifax Clerk's Office
in order to satisfy the conditions of Section 55-96 of the Code of Virginia
1950, as amended, in the event that the Foundation Interest is deemed to be real
estate or an interest in real estate for purposes of such Section 55-96; and
WHEREAS, the Unit 1 Parties and the Unit 2 Parties shall share equally
all of those rights, and shall be subject equally to having all of those
responsibilities undertaken, which are granted to or imposed upon Old Dominion,
with respect to the Common Facilities Site, the Common Facilities Foundation and
the Common Facilities Equipment, as (a) tenant-in-common with Virginia Power of
such property, and (b) a party to the Clover Agreements.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Ground Lease and Sublease and not
otherwise defined herein shall have the respective meanings set forth in
Appendix A hereto unless the context hereof shall otherwise require.
Where any provision in this Ground Lease and Sublease refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
2
SECTION 2. LEASE OF GROUND INTEREST.
2.1. LEASE OF GROUND INTEREST. The Ground Lessor hereby leases the
Ground Interest to the Ground Lessee, and the Ground Lessee hereby leases the
Ground Interest from the Ground Lessor. The Ground Lessor and the Ground Lessee
understand and agree that (a) this lease of the Ground Interest is subject to
the limitations identified in the definition of Ground Interest, (b) legal title
to the Clover Real Estate, including the Unit 2 Site and the Common Facilities
Site, remains vested in Old Dominion and Virginia Power as tenants-in-common,
and (c) this lease of the Ground Interest is subject and subordinate to the lien
of the Old Dominion Indenture (including any future amendments, supplements or
issuance of additional advances or indebtedness thereunder), Permitted
Encumbrances and the rights of Virginia Power under the Clover Agreements.
2.2. BASIC GROUND LEASE TERM. The term of the foregoing lease to the
Ground Lessee will commence on the Closing Date and shall terminate at 11:59
p.m. (New York City time) on January 5, 2060 (the "Basic Ground Lease Term");
PROVIDED, HOWEVER, that in no event shall the Basic Ground Lease Term terminate
so long as the Ground Lessee's leasehold interest in the Ground Interest shall
be subject to the Lien of the Leasehold Mortgage.
2.3. RENEWAL GROUND LEASE TERM. At the expiration of the Basic Ground
Lease Term or any Renewal Ground Lease Term (as hereinafter defined), the Ground
Lessee may extend the Basic Ground Lease Term or such existing Renewal Ground
Lease Term for an additional term of not less than one year (each a "Renewal
Ground Lease Term") by giving the Ground Lessor 180 days' prior written notice;
PROVIDED that, the Ground Lessee shall be permitted to renew the term of this
Ground Lease and Sublease for a Renewal Ground Lease Term only if (a)
concurrently with such renewal, the Head Equipment Agreement and the Head
Foundation Agreement are renewed for a Head Equipment Agreement Renewal Term and
Head Foundation Agreement Renewal Term, respectively, equal to the Renewal
Ground Lease Term, and (b) on the date that notice of such renewal is given and
at the commencement of such Renewal Ground Lease Term (i) the Clover Unit 2
Generating Facility continues to be used for the production of electric capacity
and energy and (ii) no determination has been made in accordance with Section
11.01(a) of the Clover Operating Agreement to retire the Clover Unit 2
Generating Facility prior to the expiration of such Ground Lease Renewal Term.
Notwithstanding the foregoing, if the Ground Lease Term is not earlier
terminated, it shall end on December 31, 2089.
2.4. SURRENDER OR TRANSFER OF GROUND INTEREST. Without limitation upon
Section 10, on the last day of the Ground Lease Term the Ground Lessee shall
surrender the Ground Interest to the Ground Lessor by returning the same unto
the possession of the Ground Lessor without representation or warranty other
than that the Ground Interest is free and clear of all Facility Owner's Liens
and Owner Participant's Liens. Upon surrendering the Ground Interest, the Ground
Lessee shall execute, acknowledge and deliver a release, surrender or conveyance
of the Ground Lease Interest to be prepared by the Ground Lessor at its expense
and in a form reasonably satisfactory to the Ground Lessee to be duly recorded
at the Ground Lessor's expense in the Halifax Clerk's Office. The
3
obligations of the Ground Lessee under this Section 2.4 shall survive the
termination of this Ground Lease and Sublease.
2.5. TRANSFER OF GROUND INTEREST BY GROUND LESSEE. The Ground Lessee
expressly agrees that the Ground Lessee may convey and transfer the Ground Lease
Interest only (i) as part of the Ground Lessee's transfer of the Facility
Owner's Unit 2 Interest pursuant to the Operative Documents or (ii) to Virginia
Power in connection with Virginia Power's exercise of its rights under Sections
6.2 and 6.3 of the Head Agreements.
2.6. NONTERMINABILITY. The Ground Lease Term shall not terminate, nor
shall any of the rights granted and conveyed hereunder to the Ground Lessee be
extinguished, lost or otherwise impaired, in whole or in part, by any cause or
for any reason whatsoever, including the following: (a) any damage to or loss or
destruction of all or any part of Clover Unit 2 for any reason whatsoever and of
whatever duration, (b) the condemnation, requisition (by eminent domain or
otherwise), seizure or other taking of title or use of Clover Unit 2 by any
Governmental Entity or otherwise, (c) any prohibition, limitation or restriction
on the use by any party of all or any part of its property or the interference
with such use by any Person, or any eviction by paramount title or otherwise,
(d) any inadequacy, incorrectness or failure of the description of the Clover
Real Estate or the Ground Interest or any part thereof or any rights or property
in which an interest is intended to be granted or conveyed by this Ground Lease
and Sublease, (e) the insolvency, bankruptcy, reorganization or similar
proceedings by or against the Ground Lessor, the Ground Lessee or any other
Person, (f) the failure by the Ground Lessee to comply with Section 2.4, 3 or 8
hereof, or (g) any other reason whatsoever, whether similar or dissimilar to any
of the foregoing.
SECTION 3. RENT FOR THE LEASE OF THE GROUND INTEREST.
3.1. ANNUAL RENT. As rent for the Ground Interest, the Ground Lessee
agrees to pay to the Ground Lessor annual rent of $30,000 per year, in advance
on January 5 of each year during that portion of the Ground Lease Term equal to
the Ground Sublease Term; PROVIDED that the first payment of rent shall be
payable on the Closing Date and shall be prorated from the beginning of the
Ground Lease Term to January 4, 1997. From and after the expiration or
termination of the Ground Sublease Term, as rent for the Ground Interest, the
Ground Lessee agrees to pay to the Ground Lessor rent equal to the fair market
rental value of the Ground Interest, such fair market rental value to be
determined at the expiration or termination of the Ground Sublease Term by an
appraiser mutually acceptable to the Ground Lessor and the Ground Lessee.
3.2. TAXES AND ASSESSMENTS. From and after the expiration or
termination of the Ground Sublease Term and until the expiration of the Ground
Lease Term or surrender of the Ground Interest to Old Dominion pursuant to
Section 10, the Ground Lessee agrees to pay to the Ground Lessor an amount equal
to 50% of all Taxes and assessments, general or special, taxed, charged, levied,
assessed or imposed upon the Unit 2 Site and 25% of all Taxes and assessments,
general or special, taxed, charged, levied, assessed or imposed upon the Common
Facilities Site. Such payment
4
shall be due upon demand by the Ground Lessor, but in no event shall such
amounts be due prior to the date such Taxes and assessments are due and
payable to a taxing or assessing Governmental Entity.
SECTION 4. SUBLEASE OF GROUND INTEREST.
The Ground Lessee hereby subleases the Ground Interest to the Ground
Lessor, and the Ground Lessor hereby subleases the Ground Interest from the
Ground Lessee, for a term commencing on the Closing Date and terminating at
11:59 p.m. (New York City time) on the Expiration Date subject to early
termination pursuant to Section 11 hereof (the "Ground Sublease Term"). The
Ground Lessor and the Ground Lessee understand and agree that (a) this sublease
of the Ground Interest is subject to the limitations identified in the
definition of Ground Interest, (b) legal title to the Clover Real Estate,
including the Unit 2 Site and the Common Facilities Site, remains vested in Old
Dominion and Virginia Power as tenants-in-common, (c) this sublease of the
Ground Interest is subject and subordinate to the Lien of the Old Dominion
Indenture (including any future amendments, supplements or issuance of
additional advances or indebtedness thereunder), Permitted Encumbrances and the
rights of Virginia Power under the Clover Agreements and (d) this sublease of
the Ground Interest is subject and subordinate to the interest of the Ground
Lessee in the Ground Interest created pursuant to Section 2.1 of this Ground
Lease and Sublease.
SECTION 5. RENT FOR THE SUBLEASE OF THE GROUND INTEREST.
As rent for the sublease of the Ground Interest provided in Section 4,
the Ground Lessor agrees to pay to the Ground Lessee annual rent of $30,000 per
year, payable in advance on January 5 of each year during the Ground Sublease
Term; PROVIDED that the first payment of rent shall be payable on the Closing
Date and shall be prorated from the beginning of the Ground Sublease Term to
January 4, 1997.
SECTION 6. QUIET ENJOYMENT IN FAVOR OF THE GROUND LESSEE.
The Ground Lessor warrants that it has full right and authority to
lease the Ground Interest to the Ground Lessee pursuant to the terms of this
Ground Lease and Sublease and agrees that, notwithstanding any provision of any
other Operative Documents, so long as the Ground Lease Term has not been
terminated pursuant to the express provisions of Section 10 hereof, the Ground
Lessor shall not through its own actions or inactions interfere with or
interrupt the quiet enjoyment of the use, operation and possession by the Ground
Lessee of the leasehold interest in the Ground Interest subject to the terms
hereof; PROVIDED, HOWEVER, that the Ground Lessor makes no covenant with respect
to the interruptions of such enjoyment, use, operation or possession of the
Ground Interest arising from actions of any Lender or the Agent.
5
Notwithstanding anything in this Ground Lease and Sublease to the
contrary, the Ground Lessor shall have the right, without being deemed to breach
the foregoing covenant of quiet enjoyment, to (a) grant one or more rights of
way and easements over or in respect of any portion of the Clover Real Estate
and (b) lease or convey one or more portions of the Clover Real Estate;
PROVIDED, HOWEVER, that (i) each such grant, lease and conveyance shall be in
accordance with the Clover Agreements and (ii) no such grant, lease or
conveyance shall either impair the use or operation of, or the ability to
maintain, improve or rebuild the Clover Unit 2 as contemplated by the Clover
Agreements and the Operative Documents or reduce the value of Clover Unit 2 by
more than a DE MINIMIS amount.
SECTION 7. QUIET ENJOYMENT IN FAVOR OF THE GROUND LESSOR.
The Ground Lessee warrants that it has full right and authority to
sublease the Ground Interest to the Ground Lessor pursuant to the terms of this
Ground Lease and Sublease and agrees that, notwithstanding any provision of any
other Operative Documents, so long as the Ground Sublease Term has not been
terminated pursuant to the express provisions of Section 11 hereof, the Ground
Lessee shall not through its own actions or inactions interfere with or
interrupt the quiet enjoyment of the use, operation and possession by the Ground
Lessor of the subleasehold interest in the Ground Interest subject to the terms
hereof; PROVIDED, HOWEVER, that the Ground Lessee makes no covenant with respect
to the interruption of such enjoyment, use, operation and possession of the
Ground Interest arising from actions of any Lender or the Agent.
SECTION 8. USE OF THE GROUND INTEREST BY GROUND LESSEE.
The Ground Lessee's rights hereunder to use the Ground Interest shall
be limited to the right to use the Ground Interest in connection with the use,
operation and maintenance of Clover Unit 2 and in accordance with the terms and
provisions of the Clover Agreements, which shall include the right to construct,
install, operate, use, repair and relocate and remove facilities and structures
on or under the Unit 2 Site and the Common Facilities Site, including buildings,
roads, paths, walkways, sanitary sewers, storm drains, water and gas mains,
waste disposal systems, electric power lines, telephone, television and
telecommunication lines, fire protection systems, coal, water, limestone and
other commodity transport systems, safety sensor and monitoring systems, fuel
lines and other utility lines and systems, all as reasonably necessary or
advisable for the commercial operation of Clover Unit 2, but in each case, only
to the extent permitted by the Clover Agreements.
Notwithstanding anything herein to the contrary, during the Ground
Sublease Term, the Ground Lessee shall not be deemed to have exceeded its rights
granted hereunder as the result of any action by the Ground Lessor.
6
SECTION 9. USE OF THE GROUND INTEREST BY GROUND LESSOR.
The Ground Lessor's rights hereunder to use the Ground Interest during
the Ground Sublease Term shall include the right to construct, install, operate,
use, repair and relocate facilities and structures on or under the Unit 2 Site
and the Common Facilities Site, including buildings, roads, paths, walkways,
sanitary sewers, storm drains, water and gas mains, waste disposal systems,
electric power lines, telephone, television and telecommunication lines, fire
protection systems, coal, water, limestone and other commodity transport
systems, safety sensor and monitoring systems, fuel lines and other utility
lines and systems, and any other uses as shall be permitted by the Clover
Agreements.
SECTION 10. SURRENDER OR TRANSFER OF GROUND LEASE INTEREST.
If (a) the Operating Equipment Agreement and the Operating Foundation
Agreement are terminated pursuant to Section 10, 13 or 18 of each thereof, (b)
the Purchase Option pursuant to Section 15.1 of the Operating Equipment
Agreement and the Foundation Purchase Option pursuant to Section 15.1 of the
Operating Foundation Agreement are exercised, (c) the Ground Lessee exercises
its right to terminate the Head Equipment Agreement and the Head Foundation
Agreement pursuant to Section 10.2 of each thereof or (d) the Ground Lessee
exercises its right to transfer the Facility Owner's Unit 2 Interest pursuant to
Section 17.1(e) of the Operating Agreements, either (I) in circumstances where
the transferee is the Ground Lessor, the Ground Lessee shall, upon satisfaction
of the requirements of the relevant sections of the Operating Equipment
Agreement, the Operating Foundation Agreement, the Head Equipment Agreement and
the Head Foundation Agreement, surrender all of the Ground Lessee's right, title
and interest in and to the Ground Interest to the Ground Lessor in accordance
with Section 2.4 or (II) in all other cases, the Ground Lessor expressly agrees
that the Ground Lessee may convey and transfer the Ground Lessee's right, title
and interest in the Ground Interest as part of the Ground Lessee's transfer of
the Facility Owner's Unit 2 Interest under the relevant sections of the
Operating Agreements and the Head Agreements. The Ground Lessor and the Ground
Lessee agrees to comply with the provisions of the applicable sections of the
Operating Equipment Agreement, the Operating Foundation Agreement, the Head
Equipment Agreement and the Head Foundation Agreement and Section 2.4 hereof in
connection with such surrender.
7
SECTION 11. EARLY TERMINATION OF GROUND SUBLEASE TERM.
The Ground Sublease Term shall terminate prior to the scheduled
expiration of the Ground Sublease Term (a) upon satisfaction of the relevant
sections of the Operating Equipment Agreement and the Operating Foundation
Agreement, if the Operating Equipment Agreement and the Operating Foundation
Agreement shall be terminated pursuant to Section 10, 13, 14, 15.1, 15.2 or 18
of each thereof or (b) the Operating Equipment Agreement and the Operating
Foundation Agreement shall be terminated pursuant to Section 17 of each thereof.
Upon satisfaction of the requirements of Section 10, 13, 14, 15.1, 15.2 or 18 of
the Operating Equipment Agreement and the Operating Foundation Agreement or upon
termination of the Operating Equipment Agreement and the Operating Foundation
Agreement pursuant to Section 17 of each thereof, the Ground Sublease Term shall
terminate without any action of any Person whatsoever; PROVIDED, HOWEVER,
that, notwithstanding the foregoing, in every instance, the Ground Sublease
Term shall end prior to the expiration or earlier termination of the Ground
Lease Term. The Ground Lessor agrees to execute, acknowledge and deliver an
instrument, prepared at Ground Lessor's expense in a form reasonably
satisfactory to the Ground Lessee (or Virginia Power in the event it
exercises its rights under Section 6.3 of the Head Agreements), evidencing
the conveyance to the Ground Lessee (or Virginia Power in the event it
exercises its rights under Section 6.3 of the Head Agreements) of the
Ground Lessor's subleasehold interest in and to the Ground Interest for
recordation in the Halifax Clerk's Office at the Ground Lessor's expense (and
Ground Lessee shall execute, acknowledge and deliver an assignment of the
Ground Lessee's interest in the Ground Interest to Virginia Power if
Virginia Power exercises its rights under Section 6.3 of the Head Agreements).
SECTION 12. LIENS.
The Ground Lessee covenants and agrees that it will not create, incur,
assume or suffer to exist any Facility Owner's Liens on the Clover Real Estate
and the Ground Interest other than the Lien of Leasehold Mortgage.
8
SECTION 13. WAIVER OF PARTITION.
As permitted by Section 56-90.1 of the Code of Virginia, each of the
Ground Lessor and the Ground Lessee, on its own behalf and on behalf of its
successors and assigns, hereby waives any right, whether pursuant to statute or
common law, to partition the Clover Real Estate, or any interest or portion
thereof, and such waiver will continue in effect until the earlier of (a)
termination of the Clover Ownership Agreement pursuant to Section 16.01 of the
Clover Ownership Agreement and Clover Operating Agreement pursuant to Section
14.01 of the Clover Operating Agreement in accordance with their terms or (b)
December 31, 2089. Each of the Ground Lessor and the Ground Lessee agrees not to
commence during such period any action of any kind seeking any form of partition
with respect thereto. Each of the Ground Lessor and the Ground Lessee agrees to
incorporate this waiver in all deeds, deeds of trust, and instruments of
conveyance relating to the Clover Real Estate (or any interest or portion
thereof), whether delivered at the Closing or thereafter.
SECTION 14. SECURITY FOR GROUND LESSEE'S OBLIGATION TO THE LENDERS.
In order to secure the Secured Indebtedness, the Ground Lessee will by
the Leasehold Mortgage xxxxx x Xxxx to the Trustees for the benefit of the Agent
and the ratable benefit of the Lenders on all of the Ground Lessee's right,
title and interest in and to the Ground Interest. The Ground Lessor hereby
consents to the grant of such Lien and acknowledges receipt of copies of the
Leasehold Mortgage, it being understood that such consent shall not affect any
requirement or the absence of any requirement for any consent under any other
circumstances. Unless and until the Ground Lessor shall have received written
notice from the Agent that the Liens of the Loan Agreement and the Leasehold
Mortgage has been released, the Agent and the Trustees under the Leasehold
Mortgage shall have the rights of the Ground Lessee under this Ground Lease
and Sublease to the extent set forth in and subject in each case to the
exceptions set forth in the Loan Agreement and the Leasehold Mortgage.
SECTION 15. NONMERGER.
The remainder in the Ground Interest conveyed by this Ground Lease and
Sublease shall not merge into any interest in the Ground Interest conveyed by
the Ground Lease and Sublease even if such remainder and such interest are at
any time vested in or held directly or indirectly by the same Person, but this
Ground Lease and Sublease shall nonetheless remain in full force and effect in
accordance with its terms notwithstanding such vesting or holding.
9
SECTION 16. INSPECTION
During the Ground Sublease Term, at such times as reasonably requested,
each of the Facility Owner, the Owner Participant, the Ground Lessee, the Owner
Trustee, the Agent, each Lender and their representatives may, at reasonable
times, on reasonable notice to the Co-Owners and at their own risk and
expense (except, at the expense, but not risk, of the Ground Lessor when an
Event of Default has occurred and is continuing), inspect the Clover Unit 2
Site and the Common Facilities Site; PROVIDED, HOWEVER, that any such
inspection will not interfere with the Co-Owners' normal commercial operation
of the Unit 2 Site or the Common Facilities Site and will be in accordance
with the Clover Unit 2 Operator's safety and insurance programs.
SECTION 17. INDEMNIFICATION
The Ground Lessor hereby shall indemnify, protect, save and hold
harmless the Ground Lessee, the Owner Trustee, the Owner Participant, each
Lender and the Agent and their respective Affiliates, successors, assigns,
agents, directors, officers or employees (each a "Ground Lease Indemnitee") from
and against, any and all Claims imposed on, incurred by or asserted against any
such Ground Lease Indemnitee, in any way relating to or arising out of:
(i) environmental conditions on Clover Real Estate on the
Closing Date;
(ii) the existence or presence at, on, in or under Clover
Unit 1, the Unit 1 Site or any part of the Clover Real Estate (other
than Clover Unit 2 or the Unit 2 Site) of any Environmental Material;
(iii) the disturbance, pollution, contamination or
interference with any wetland, body of water (whether surface or
subsurface), aquifer or watercourse due to the existence or presence
of a hazardous condition or any Environmental Material at, on, in
or under Clover Unit 1, the Unit 1 Site or any other property
described on the Clover Power Station Plat (other than Clover Unit 2 or
the Unit 2 Site);
(iv) the transportation, use, treatment, storage,
disposition, Release or disposal of any Environmental Material existing
at, on, in or under Clover Unit 1, the Unit 1 Site or any part of the
Clover Real Estate (other than Clover Unit 2 or the Unit 2 Site); and
(v) the Release of any Environmental Material from, at, on,
in or under Clover Unit 1, the Unit 1 Site or any part of the Clover
Real Estate (other than Clover Unit 2 or the Unit 2 Site) (including
any release into air, water vapor, surface water, groundwater, drinking
water or land (including surface or subsurface land) or any plant,
aquatic or other animal life).
10
The foregoing provisions are in supplementation of, and are not in
derogation of, the provisions of Section 8.1 of the Participation Agreement but
the Ground Lessor's payment and performance of its obligations under this
Section 17 shall be governed by the provisions of paragraphs (c), (d), (e), (f)
and (g) of such Section 8.1.
SECTION 18. MISCELLANEOUS.
18.1. AMENDMENTS AND WAIVERS. No term, covenant, agreement or condition
of this Ground Lease and Sublease may be terminated, amended or compliance
therewith waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto and, also, in connection with any termination of, or amendment
to, those provisions for which Virginia Power is an intended beneficiary,
approval in writing by Virginia Power.
18.2. NOTICES. Unless otherwise expressly specified or permitted by the
terms hereof, all communications and notices provided for herein to a party
hereto shall be in writing or by a telecommunications device capable of creating
a written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, without limitation, by overnight mail or courier
service, (b) in the case of notice by United States mail, certified or
registered, postage prepaid, return receipt requested, upon receipt thereof, or
(c) in the case of notice by such a telecommunications device, upon transmission
thereof, provided such transmission is promptly confirmed by either of the
methods set forth in clauses (a) or (b) above, in each case addressed to such
party at its address set forth below or at such other address as such party may
from time to time designate by written notice to the other party hereto:
If to the Ground Lessor:
Old Dominion Electric Cooperative
Innsbrook Corporate Center
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Vice President of Accounting and Financing
11
If to the Ground Lessee:
Clover Unit 2 Generating Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Corporate Trust Administration
A copy of all communications and notices provided for herein shall be sent by
the party giving such communication or notice to Virginia Power at:
Virginia Electric and Power Company
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
18.3. SURVIVAL. All warranties, representations, indemnities and
covenants made by either party hereto, herein or in any certificate or other
instrument delivered by either such party or on the behalf of such party under
this Ground Lease and Sublease, shall be considered to have been relied upon by
the other party hereto and shall survive the consummation of the transactions
contemplated hereby on the Closing Date regardless of any investigation made by
either party or on behalf of either party.
18.4. SUCCESSORS AND ASSIGNS.
(a) This Ground Lease and Sublease shall be binding upon and shall
inure to the benefit of, and shall be enforceable by, the parties hereto and
their respective successors and assigns as permitted by and in accordance with
the terms hereof.
(b) Except as expressly provided herein or in the Operative Documents,
the Ground Lessor may not assign its interests herein without the consent of the
other party hereto. Except as expressly provided herein or in the Operative
Documents, the Ground Lessee may not assign its interests in this Ground Lease
and Sublease prior to the expiration or early termination of the Ground Sublease
Term without the consent of the Ground Lessor.
18.5. BUSINESS DAY. Notwithstanding anything herein to the contrary, if
the date on which any payment is to be made pursuant to this Ground Lease and
Sublease is not a Business Day, the payment otherwise payable on such date shall
be payable on the next succeeding Business Day with the same force and effect as
if made on such scheduled date and (PROVIDED such payment is made on
12
such succeeding Business Day) no interest shall accrue on the amount of such
payment from and after such scheduled date to the time of such payment on
such next succeeding Business Day.
18.6. GOVERNING LAW. THIS GROUND LEASE AND SUBLEASE SHALL BE IN ALL
RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
COMMONWEALTH OF VIRGINIA INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
18.7. SEVERABILITY. Whenever possible, each provision of this Ground
Lease and Sublease shall be interpreted in such manner as to be effective and
valid under Applicable Law, but if any provision of this Ground Lease and
Sublease shall be prohibited by or invalid under Applicable Law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Ground Lease and Sublease.
18.8. COUNTERPARTS. This Ground Lease and Sublease may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one instrument.
18.9. HEADINGS AND TABLE OF CONTENTS. The headings of the sections of
this Ground Lease and Sublease and the Table of Contents are inserted for
purposes of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
18.10. FURTHER ASSURANCES. Each party hereto will promptly and duly
execute and deliver such further documents to make such further assurances for
and take such further action reasonably requested by any party to whom such
first party is obligated, all as may be reasonably necessary to carry out more
effectively the intent and purpose of this Ground Lease and Sublease.
18.11. EFFECTIVENESS OF GROUND LEASE AND SUBLEASE. This Ground Lease
and Sublease has been dated as of the date first above written for convenience
only. This Ground Lease and Sublease shall be effective on the date of
execution and delivery by each of the Ground Lessee and the Ground Lessor.
18.12. LIMITATION OF LIABILITY. It is expressly understood and agreed
by the parties hereto that (a) this Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as trustee
of Clover Unit 2 Generating Trust (the "Trust") under the Trust Agreement, in
the exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto or by any Person
claiming by, through or under the parties hereto and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any
13
obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or any other Operative Documents.
14
IN WITNESS WHEREOF, the undersigned have caused this Ground Lease and
Sublease to be duly executed and delivered by their respective officers
thereunto duly authorized.
OLD DOMINION ELECTRIC COOPERATIVE,
a wholesale power supply cooperative organized
under the laws of the Commonwealth of Virginia
as Ground Lessor
By:/s/ XXXXXX X. XXXXXX
------------------------------------ [Seal]
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: July 31, 1996
CLOVER UNIT 2 GENERATING TRUST,
as Ground Lessee
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee under the Trust Agreement
By:/s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: July 31, 1996
STATE OF )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this __ day of
_______, 1996, by ________________ as ______________ of Old Dominion Electric
Cooperative, a wholesale power supply cooperative organized under the laws of
the Commonwealth of Virginia, on behalf of said cooperative.
/s/ XXXXXX XXXXXXXX
----------------------------------
Name: Xxxxxx XxXxxxxx
Notary Public
(Notarial Seal)
My Commission expires: _________________________
STATE OF )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this __ day of
_______, 1996, by _______________ as ______________ of Wilmington Trust Company,
a Delaware banking corporation, on behalf of such corporation as trustee of
Clover Xxxx 0 Xxxxxxxxxx Xxxxx, a business trust organized under the laws of the
State of Delaware, on behalf of said business trust.
/s/ XXXXXXXX XXXXX-XXXXXXX
----------------------------------
Name: Xxxxxxxx Xxxxx-Xxxxxxx
Notary Public
(Notarial Seal)
My Commission expires: _______________________
APPENDIX A
TO
GROUND LEASE
AND SUBLEASE
DEFINITIONS
This Appendix A has been filed separately. See Appendix A to Exhibit 10.46 to
Old Dominion's Form 10-K for the year ended December 31, 1996.
EXHIBIT A
TO
GROUND LEASE
AND SUBLEASE
CLOVER POWER STATION PLAT
Recorded in the Halifax Clerk's Office in Plat Book 18, page 50, and corrected
by a rerecording in the Halifax Clerk's Office in Plat Book 18, pages 120-124.
Exh.A-1
SCHEDULE 1
TO
GROUND LEASE
AND SUBLEASE
DESCRIPTION OF THE CLOVER REAL ESTATE
All that certain parcel of land belonging, lying and being in the Roanoke
Magisterial district of Halifax County, Virginia and all appurtenances thereto
belonging, and more particularly described as follows:
AND BEING a portion of the same land and appurtenances acquired by Old Dominion
Electric Cooperative ("Old Dominion") as tenant in common with Virginia Electric
and Power Company ("Virginia Power") by deeds which are recorded in the Halifax
Clerk's Office as follows:
Grantors Date of Deed Deed Book Page Number
--------------------------------------------------------------------------------
Clover Project Corp. May 30, 1990 550 465
Xxxxxxx X. Xxxxxxxx, et al. October 1, 1990 556 367
Xxxxxxx X. Xxxxxxx, et al. July 3, 1991 570 8
Xxxxxxx X. Xxxxxxx, et al. March 14, 1991 561 353
Xxxxxx Xxxxx, et al. July 24, 1991 569 844
Burlington Industries October 23, 1991 570 13
X. X. Xxxxxx, et al. May 22, 1992 579 412
Norfolk Southern Railway June 9, 1992 579 771
Company
LESS AND EXCEPT, however, those certain parcels of land conveyed by Old Dominion
and Virginia Power by deeds which are recorded in the Halifax Clerk's Office as
follows:
Grantees Date of Deed Deed Book Page Number
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx, et al. October 7, 1991 570 10
Commonwealth of Virginia June 23, 1992 580 576
Commonwealth of Virginia December 1, 1994 627 57
Commonwealth of Virginia June 1, 1995 632 255
================================================================================
A-1
SUBJECT, however, to all existing exceptions, reservations, easements,
conditions, restrictions, covenants, agreements, limitations and waivers of
record that may apply to the foregoing parcel of land.
A-2
SCHEDULE 2
TO
GROUND LEASE
AND SUBLEASE
DESCRIPTION OF THE UNIT 1 SITE
ALL those two certain parcels of land lying and being in Roanoke Magisterial
district of Halifax County, Virginia, with all appurtenances thereunto
belonging, being those portions of the Clover Real Estate which are outlined and
marked on the Clover Power Station Plat as Parcel I and Parcel II of the Unit 1
Site.
B-1
SCHEDULE 3
TO
GROUND LEASE
AND SUBLEASE
DESCRIPTION OF THE UNIT 2 SITE
ALL those certain parcels of land lying and being in Roanoke Magisterial
district of Halifax County, Virginia, with all appurtenances thereunto
belonging, being those portions of the Clover Real Estate which are outlined and
marked on the Clover Power Station Plat as Parcel I and Parcel II of the Unit 2
Site.
C-1
SCHEDULE 4
TO
GROUND LEASE
AND SUBLEASE
DESCRIPTION OF THE COMMON FACILITIES SITE
ALL that certain parcel of land lying and being in Roanoke Magisterial district
of Halifax County, Virginia, with all appurtenances thereunto belonging,
outlined and marked as Parcel "B" on the Clover Power Station Plat, LESS AND
EXCEPT those parcels of real estate outlined and marked on the Clover Power
Station Plat as Parcel I and Parcel II of the Unit 1 Site and Parcel I and II of
the Unit 2 Site.
D-1
