EXHIBIT 10.58
LEASE AGREEMENT
BETWEEN
BAYONNE INDUSTRIES, INC.
AND
IMTT-BAYONNE
("LESSOR")
AND
COGEN TECHNOLOGIES NJ VENTURE
("LESSEE")
October 18, 1986
Record and return to: Prepared by
Martin L. Wiener, Esq. Ross D. Ain, Esq.
Kimmelman, Wolff & Van Ness, Feldman, Sutcliffe
Samson & Curtis
280 Corporate Center 1050 Thomas Jefferson St., N.W.
5 Becker Farm Road Seventh Floor
Roseland, New Jersey 07068 Washington, D.C. 20007
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS .................................................. 2
ARTICLE 2
DEMISED PREMISES.............................................. 6
ARTICLE 3
TERM ......................................................... 7
3.1 Base Term ........................................... 7
3.2 Termination ......................................... 7
3.3 Renewal of Lease Agreement........................... 7
3.4 Extension Upon Termination........................... 8
ARTICLE 4
RENT.......................................................... 8
4.1 Base Term Rent....................................... 8
4.2 Renewal Term Rent ................................... 9
4.3 Additional Rent ..................................... 10
ARTICLE 5
USE OF PREMISES
AND OWNERSHIP OF IMPROVEMENTS................................. 10
5.1 Use Limited.......................................... 10
5.2 Safe and Lawful Use.................................. 11
5.3 Maintenance of Governmental Authorizations........... 11
5.4 Lessee's Right to Contest............................ 12
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5.5 Effect on Lessor's Insurance ........................ 12
5.6 Ownership of Improvements ........................... 13
5.7 Security Arrangement ................................ 13
ARTICLE 6
QUIET ENJOYMENT .............................................. 14
6.1 Lessee's Possession ................................. 14
6.2 Access by Lessor .................................... 14
6.3 Access by Lessee for Steam Interconnection .......... 14
ARTICLE 7
TAXES ........................................................ 15
7.1 Payment of Taxes .................................... 15
7.2 Compliance and Evidence of Payment .................. 16
7.3 Tax Appeals ......................................... 16
7.4 Proration ........................................... 16
7.5 Refunds and Rebates ................................. 17
ARTICLE 8
UTILITY EXPENSES ............................................. 17
ARTICLE 9
REIMBURSEMENT ................................................ 18
9.1 Reimbursement of Lessor.............................. 18
9.2 Reimbursement of Lessee.............................. 18
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ARTICLE 10
PRIOR USE; ENVIRONMENTAL RESPONSIBILITY ...................... 19
10.1 Prior Use of Demised Premises ...................... 19
10.2 Environmental Damage Responsibility ................ 19
ARTICLE 11
LIENS ........................................................ 20
ARTICLE 12
INSURANCE..................................................... 21
12.1 Responsibility of Lessee ........................... 21
12.2 Conditions Concerning Insurance Carriers ........... 21
ARTICLE 13
PERMITTED ENCUMBRANCES ON LEASEHOLD
INTERESTS AND IMPROVEMENTS ................................... 22
ARTICLE 14
EMINENT DOMAIN ............................................... 23
14.1 Distribution of Award............................... 23
14.2 Partial Taking ..................................... 24
ARTICLE 15
TERMINATION................................................... 24
15.1 Lessor's Right to Terminate......................... 24
15.2 Lessee's Right to Terminate......................... 25
15.3 Prepaid Rent Nonrefundable ......................... 26
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15.4 Notice to Financiers and Opportunity to Cure ....... 27
15.5 Written Notice of Termination ...................... 29
15.6 Condition of Demised Premises at Termination ....... 29
ARTICLE 16
REMEDIES UPON LESSEE'S BREACH ................................ 29
ARTICLE 17
ATTENDANT LAND RIGHTS ........................................ 31
ARTICLE 18
MORTGAGE PRIORITY ............................................ 32
ARTICLE 19
NONWAIVER .................................................... 33
ARTICLE 20
FORCE MAJEURE ................................................ 33
20.1 Definition ......................................... 33
20.2 Burden of Proof .................................... 34
20.3 Effect of Force Majeure ............................ 34
20.4 Prepaid Rent Nonrefundable ......................... 34
ARTICLE 21
SUCCESSORS AND ASSIGNS ....................................... 35
ARTICLE 22
MISCELLANEOUS ................................................ 39
22.1 Duplicates; Recordation ............................ 39
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22.2 Consent Not to be Unreasonably Withheld............ 40
22.3 Termination of Preexisting Lease................... 40
22.4 Covenants Running with Land........................ 40
22.5 Notice............................................. 40
22.6 Amendments......................................... 41
22.7 Choice of Law...................................... 41
22.8 Severability....................................... 42
22.9 Other Agreements................................... 42
22.10 Captions........................................... 42
22.11 Counterparts....................................... 43
Exhibits
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A. Property Description
B. Map of Demised Premises
C. Example of GNP Deflator Adjustment
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THIS LEASE AGREEMENT made and entered into as of October 18, 1986, by and
between Bayonne Industries, Inc., a New Jersey corporation, and IMTT-Bayonne, a
Delaware partnership (collectively referred to as the "Lessor"), and Cogen
Technologies NJ Venture, a New Jersey general partnership, and its successors
and assigns (the "Lessee").
WHEREAS, Lessor, IMTT-Bayonne, operates a tank terminal facility located at
Bayonne, New Jersey ("Lessor's Plant" or "Bayonne Facility"), which Plant
utilizes steam for industrial purposes;
WHEREAS, Lessor, Bayonne Industries, Inc., is the owner of the property
whereon the Bayonne Facility is located and IMTT-Bayonne leases such property
from Bayonne Industries, Inc.;
WHEREAS, IMTT-Bayonne and Lessee have entered into an Agreement for the
Sale of Steam and Electricity from a Cogeneration Facility (the "Steam Sale
Agreement");
WHEREAS, Lessor and Cogen Technologies NJ, Inc. entered into a lease
agreement dated May 22, 1986 covering certain property owned by Bayonne
Industries, Inc., which lease was assigned to Lessee;
WHEREAS, Lessee now desires to lease certain other property owned by
Bayonne Industries, Inc. at the same tank terminal facility in lieu of the
premises originally leased and Lessor and Lessee have agreed to modify their
arrangements under the former lease by execution of this superseding Lease
Agreement so as to allow for such change in location as well as to reflect
certain
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technical changes arising by reason of such change in location; and
WHEREAS, therefore, the Lessor desires to lease to Lessee the land upon
which the Cogeneration Facility will be located;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Lessor and Lessee agree as follows:
ARTICLE 1
---------
DEFINITIONS
-----------
The following terms when used herein shall have the following meanings,
unless a different meaning shall be expressly stated or shall be apparent
from the context:
1.1 "Affiliate" means a corporation or other entity that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, another corporation or entity.
1.2 "Annual Period" means any one of a succession of consecutive 12-month
periods, the first of which shall begin on May 22, 1986 if such date is the
first day of a calendar month, or otherwise on the first day of the month
immediately following the month in which such execution occurs.
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1.3 "Bayonne Facility" means the tank terminal facility located at Bayonne,
New Jersey, and all appurtenant property owned or leased at that location by
IMTT, BI, or any Affiliates thereof.
1.4 "BI" means Bayonne Industries, Inc., a New Jersey corporation having
its principal place of business at the Foot of East 22nd Street, Bayonne, New
Jersey 07002.
1.5 "Boiler House" means the building located at the Bayonne Facility that
houses the Steam Producing Facilities except that interior portion of the
building unrelated to the Steam Producing Facilities.
1.6 "Cogen" means Cogen Technologies NJ, Inc., a Delaware corporation,
having its principal place of business at 14614 Falling Creek Drive, Suite 212,
Houston, Texas 77068.
1.7 "Cogeneration Facility" means the waste heat boilers, gas and steam
turbines, generators and all appurtenant structures, equipment including
interconnection facilities, owned or leased and operated by Lessee for the
purpose of producing electricity, steam or other forms of useful thermal output,
but such term does not include real property interests.
1.8 "Date of Initial Commercial Operation" means 12:01 A.M. on the day
Lessee designates in writing as the initial date of commercial operation of the
Cogeneration Facility.
1.9 "Easement" means that certain easement to be executed from BI and IMTT
to Lessee pursuant to which BI and IMTT grant to
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Lessee ingress and egress over the Bayonne Facility to the Boiler House,
including all exhibits and amendments thereto that may be made from time to
time, and any other easements, rights of way or licenses that may be granted to
Lessee under this Lease Agreement.
1.10 "Financier" means any person lending money for the construction and
operation of the Cogeneration Facility, any person providing funds for
refinancing, or take-out of any such loans, and the nominee or designee of any
such person.
1.11 "IMTT" means IMTT-Bayonne, a Delaware partnership.
1.12 "Lease Agreement" or "Ground Lease" means this contract, including
all exhibits and amendments thereto that may be made from time to time.
1.13 "Leasehold Improvements" means the Cogeneration Facility and any
other improvements constructed or placed on the Demised Premises by Lessee.
1.14 "Note" means the promissory note of Cogen dated MAY 22, 1986, payable
to Bayonne Industries, Inc. in the principal amount of $2,600,000.00, the
payment of which has been assumed by Lessee.
1.15 "Option Agreement" means that certain option agreement dated May 22,
1986 between Lessee, as assignee of Cogen, and BI, including all exhibits and
amendments thereto that may be made from time to time.
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1.16 "Party" or "Parties" means the signatories of this Lease Agreement and
their permitted successors and assigns.
1.17 "Prime Rate" means the interest rate (sometimes referred to as the
"Base Rate") for large commercial loans to creditworthy entities published by
First National Bank of Chicago, or its successor bank, as such rate may be in
effect from time to time.
1.18 "Purchase and Sale Agreement" means that certain agreement dated May
22, 1986 pursuant to which Cogen purchases and Lessor sells the Steam Producing
Facilities, including all exhibits and amendments thereto that may be made from
time to time.
1.19 "Rent Note" means the promissory note of Cogen dated May 22, 1986,
payable to BI in the principal amount of $600,000.00, the payment of which has
been assumed by Lessee.
1.20 "Security Agreement" means that certain agreement dated May 22, 1986
between Lessee, as assignee of Cogen, and BI executed and delivered by Cogen as
security for the payment of the Note, including all exhibits and amendments that
may be made from time to time.
1.21 "SPF Lease" means that certain Steam Producing Facilities Lease
Agreement dated May 22, 1986 between Lessee, assignee of Cogen, as lessor, and
IMTT, as lessee, pursuant to which the Steam Producing Facilities will be leased
to IMTT, including all exhibits and amendments thereto that may be made from
time to time.
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1.22 "Steam Producing Facilities" means the existing boilers and
appurtenant structures and equipment located inside the Boiler House, and all
additions, replacements, improvements, substitutions, and increments thereto,
but not including the Boiler House, located at the Bayonne Facility and operated
for the purpose of producing steam for industrial purposes at the Bayonne
Facility.
1.23 "Steam Sale Agreement" means, that certain agreement between Lessee,
as assignee of Cogen, and IMTT dated June 13, 1985, for the sale of steam and
electricity from a cogeneration plant, including all exhibits and amendments
thereto that may be made from time to time.
ARTICLE 2
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DEMISED PREMISES
----------------
Upon the terms and conditions hereinafter set forth, and in consideration
of the payment of the rents and the prompt performance by the Lessee of the
covenants and agreements contained herein, the Lessor does lease, let, and
demise to the Lessee and the Lessee hereby leases from the Lessor, that certain
real property situated in the County of Hudson, State of New Jersey, as
described in Exhibit A hereto and as more fully shown on Exhibit B hereto
attached (hereinafter referred to as the "Demised Premises").
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ARTICLE 3
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TERM
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3.1 Base Term. This Lease Agreement shall be effective upon the date of
execution and shall continue in effect for a Base Term of twenty (20) Annual
Periods after the May 22, 1986.
3.2 Termination. Notwithstanding the preceding paragraph, if the Date of
Initial Commercial Operation of the Cogeneration Facility has not occurred prior
to the last day of the month which is twenty (20) months following May 22, 1986,
Lessor may thereafter terminate this Lease Agreement by providing Lessee and
each Financier thirty (30) days written notice, unless prior to the expiration
of such thirty (30) day period, Lessee has commenced a program of continuous
construction of the Cogeneration Facility and does not, of its own volition,
subsequently discontinue such construction program.
3.3 Renewal of Lease Agreement. Upon the expiration of the Base Term, this
Lease Agreement shall automatically be extended for two (2) succeeding terms
(hereinafter referred to as the "Renewal Terms"), unless Lessee elects to
terminate this Lease Agreement at the expiration of the Base Term or the first
Renewal Term. In the event that this Lease Agreement terminates during the Base
Term pursuant to Article 15, Lessee shall not owe Lessor Renewal Term rent
pursuant to Article 4.2. The first Renewal Term shall be for two (2) Annual
Periods and the second Renewal
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Term shall be for ten (10) Annual Periods. Termination of this Lease Agreement
pursuant to this Article 3.3 shall be valid only if Lessee provides written
notice of its intent to terminate to Lessor at least nine (9) months prior to
the expiration of the Base Term or the first Renewal Term. Upon expiration of
the second Renewal Term, this Lease Agreement may be continued thereafter by
mutual agreement of the Parties.
3.4 Extension Upon Termination. Upon any termination of this Lease
Agreement, it shall be automatically extended for one additional twelve (12)
month period solely for the purposes described in Article 15.6.
ARTICLE 4
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RENT
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4.1 Base Term Rent. This Lease Agreement is made for and in consideration
of a rental amount of Six Hundred Thousand Dollars ($600,000.00) which is due
upon the execution of this Lease Agreement, and payable by delivery to BI of a
promissory note (the Rent Note) with Lessee as maker, due and payable, in full,
twenty-four (24) months from May 22, 1986 bearing interest at the rate of one
percent (1%) over the Prime Rate, with interest, due from May 22, 1986 until
paid and said interest being payable monthly commencing thirty (30) days from
May 22, 1986. In the event that Lessee elects to terminate
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this Lease Agreement for any reason on or before November 22, 1986, and Lessee
pays to Lessor a certified check made to the order of BI in the sum of Sixty
Thousand Dollars ($60,000.00), the above-described Rent Note shall be returned
to Lessee marked "paid" or "cancelled".
4.2 Renewal Term Rent.
A. For the Renewal Terms, Lessee shall pay to Lessor beginning upon,
the first day of the first calendar month of the Renewal Term and upon the first
day of each succeeding calendar month for the duration of the Renewal Term a
rental amount of Five Thousand Dollars ($5,000.00) per month, to be adjusted as
provided in Article 4.2B.
B. The Renewal Term Rent shall be adjusted upward at an annual
percentage rate equal to the annual percentage increase in the GNP Deflator, if
any, which has occurred during the immediately preceding calendar year,
commencing with calendar year 1988 and for each year thereafter. The increase,
if any, will be implemented at the beginning of each Renewal Term Annual Period.
In no event will the Renewal Term Rent ever be adjusted downward or decreased,
provided, however, that in the event of a decrease in the GNP Deflator, the
Renewal Term Rent will not be adjusted upward until the GNP Deflator has
exceeded a level equal to that in the year immediately preceding the year(s) in
which the GNP Deflator decreased.
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C. The GNP Deflator is defined as the percentage which when divided
into the then current Gross National Product will yield Gross National Product
in 1982 dollars (or constant dollars for the then applicable base year). GNP
Deflator percentages are published by the U.S. Department of Commerce in its
bulletin "Survey of Current Business" and/or the Federal Reserve Bulletin. An
example of the operation of the GNP Deflator is attached as Exhibit C.
4.3 Additional Rent. In addition to the rent set forth in Articles 4.1 and
4.2, Lessee shall comply with all of the obligations to pay taxes set forth in
Article 7 and to make payments set forth in Article 8 and Article 9 of this
Lease Agreement, which obligations shall be collectively referred to as
"Additional Rent." Any payments made by a Financier pursuant to Article
21.7(2)(i) shall also be Additional Rent.
ARTICLE 5
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USE OF PREMISES
---------------
AND OWNERSHIP OF IMPROVEMENTS
-----------------------------
5.1 Use Limited. The Demised Premises shall be used (i) only for the
erection, construction, operation, maintenance, modification, reconstruction,
and replacement of the Cogeneration Facility or (ii) with the consent of Lessor,
for any other lawful use.
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5.2 Safe and Lawful Use. Lessee shall not use, occupy, suffer or permit the
Demised Premises or any part thereof to be used during the term hereof in any
manner or occupied for any purpose contrary to any applicable and duly adopted
laws, ordinances, rules and any public authority regulations nor in derogation,
violation or in nonconformity with any safety codes and recognized industry
safety standards and guidelines applicable to Lessee's operation on the Demised
Premises. Lessee shall use, maintain and occupy the Demised Premises in a
careful, safe, lawful and proper manner and will not commit nor permit any
public or private nuisance to be committed on the Demised Premises. Lessee shall
not use nor permit the use of the Demised Premises in any way which will injure
the reputation of the same or which shall constitute an unreasonable
interference with Lessor's business or a nuisance, annoyance or inconvenience to
the Lessor or any neighbors of Lessor or which shall damage Lessor or any
neighbors of Lessor. The safe and lawful erection, construction, operation,
maintenance, modification, reconstruction, or replacement of a Cogeneration
Facility shall not be construed to constitute a nuisance, annoyance or
inconvenience on the Demised Premises.
5.3 Maintenance of Governmental Authorizations. Lessee shall be responsible
for obtaining and maintaining all necessary government authorizations, licenses,
permits and certificates for its utilization of the Demised Premises and shall
carry on its
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operations in compliance with all such authorizations, licenses, permits and
certificates.
5.4 Lessee's Right to Contest.
A. Lessee shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, in the name of the Lessee, or
Lessor (if legally required and consented to by Lessor), or both (if legally
required and consented to by Lessor) without cost or expense to Lessor, the
validity or application of any law, ordinance, order, rule, regulation or
requirement of the nature referred to in Articles 5.2 and 5.3. If by the terms
of any such law, ordinance, order, rule, regulation or requirement, compliance
therewith may legally be delayed pending the prosecution of any such proceeding,
Lessee may delay such compliance therewith until the final determination of such
proceeding.
B. Lessor agrees to execute and deliver any appropriate papers or other
instruments which may be necessary or proper to permit Lessee to so contest the
validity or application of any such law, ordinance, order, rule, regulation or
requirement and to fully cooperate with Lessee in such contest, all at Lessee's
expense.
5.5 Effect on Lessor's Insurance. Except with regard to the permitted uses
under Article 5.1, Lessee shall put nothing on the Demised Premises nor
undertake any activity which would forfeit Lessor's insurance on its Bayonne
Facility or the
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insurance required hereunder. Should any installation made or action taken by
Lessee, whether authorized or unauthorized under this Lease Agreement, increase
the premium of any of Lessor's insurance policies on its Bayonne Facility or the
insurance required hereunder, then Lessee is obligated to pay such increased
premiums on Lessor's insurance policies. Should the Lessee's operation and
maintenance of the Cogeneration Facility be conducted in an unsafe manner so as
to render the Lessor unable to secure insurance on its Bayonne Facility, then
Lessee hereby grants to Lessor the right to require Lessee, upon written notice
from Lessor, to immediately take such action as is necessary to operate and
maintain the Cogeneration Facility in a safe manner.
5.6 Ownership of Improvements. Lessee warrants that it or its assignees will
be the owner of any Leasehold Improvements erected, installed, or located on the
Demised Premises by it. Lessor agrees that same shall be the sole property of
the Lessee, and Lessor shall have no legal or equitable ownership interest
therein.
5.7 Security Arrangement. Lessor reserves the right from time to time during
the Base Term of this Lease or any renewal thereof, to require Lessee, at
Lessee's expense, to take such actions, implement such procedures and/or erect
such improvements as Lessor, in its sole discretion, may deem necessary and/or
desirable to assure the security of the Bayonne Facility by
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reason of ingress and egress to, from and over the Bayonne Facility by Lessee,
its agents, servants, employees, invitees and/or any other persons utilizing
such rights of ingress and egress to gain access to and from the Demised
Premises.
ARTICLE 6
---------
QUIET ENJOYMENT
---------------
6.1 Lessee's Possession. Lessor warrants that it has good title to the
Demised Premises free and clear of all liens and encumbrances other than those
set forth in Title Report No. 8624-60149 of Chicago Title Insurance Company.
Lessor covenants and agrees with Lessee that so long as the Lessee keeps and
performs all of the covenants and conditions required to be kept and performed
by the Lessee, the Lessee shall have quiet and undisturbed and continued
possession of the Demised Premises, free from any claims against the Lessor and
all persons claiming under, by or through the Lessor.
6.2 Access by Lessor. Lessor, its agents and representatives, at all
reasonable times, may enter the Demised Premises to inspect the same for the
purposes of ascertaining compliance with terms of this Lease Agreement.
6.3 Access by Lessee for Steam Interconnection. Lessee shall have the right
to enter, at reasonable times, the premises of the Lessor in order to construct,
operate, and maintain steam or electric interconnection facilities necessary to
carry out the
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Steam Sale Agreement and any other steam agreement with Exxon Company, U.S.A. or
any other person, or any other electric power sales arrangements, but only in
accordance with the provisions of Article 17 of this Lease Agreement.
ARTICLE 7
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TAXES
-----
7.1 Payment of Taxes. Lessee shall be responsible for all taxes relating to
the Demised Premises and any buildings or improvements erected thereon by
Lessee, as well as all equipment and/or fixtures located thereon by Lessee.
Lessor shall deliver to Lessee promptly after receipt copies of all tax bills
relating to the tax lot of which the Demised Premises are a portion together
with a calculation made in accordance with Article 7.4 of the taxes owed by
Lessor on the nonleased portion of the tax lot. Lessee shall thereafter promptly
pay to Lessor Lessee's pro rata share of such taxes. Such payment shall be made
to a special account of Lessor, disbursements therefrom to be made in accordance
with an agreement among Lessor, Lessee, and the bank in which such account shall
be established, which shall provide that withdrawals therefrom shall be made
solely to the order of the taxing authority for the payment of Lessee's pro rata
share of taxes. Thereafter, Lessor shall be responsible) to remit to the
responsible tax authorities payment of taxes for the entire tax lot of which the
Demised Premises are a portion.
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7.2 Compliance and Evidence of Payment. Lessor shall be deemed to have
complied with the covenants of this Article regarding all taxes if payment of
such taxes shall have been made either within any period allowed by law or by
the governmental authority imposing the same during which payment is permitted
without penalty or interest or before the same shall become a lien upon the
Demised Premises provided Lessee pays any and all penalties, late charges and/or
interest in connection therewith, and Lessor shall produce and exhibit to
Lessee, if requested to do so in writing by Lessee, satisfactory evidence of
such payment. Notwithstanding the foregoing and subject only to Article 7.1,
Lessor shall promptly pay all such taxes where no legal delay has been obtained.
7.3 Tax Appeals. Lessee or its designees shall have the right, with
Lessor's knowledge and consent, to contest or review all such taxes by legal
proceedings, or in such other manner as it may deem suitable which, if
necessary, may be in the name of and with the cooperation of the Lessor and
Lessor shall execute, all documents necessary to accomplish the foregoing.
Notwithstanding the foregoing and subject only to Article 7.1, Lessor shall
promptly pay all such taxes where no legal delay has been obtained.
7.4 Proration. The Parties hereto understand and agree that the real
property taxes relating to the Demised Premises shall be prorated
proportionately between Lessor and Lessee:
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(i) for the first and last year of this Lease Agreement, and (ii) to the extent
that the Demised Premises are not a separately assessed tax lot, based upon the
respective percentages of the acreage of the tax lot compared to the acreage
leased herein. All taxes relating to Leasehold Improvements of Lessee shall be
solely for the account of Lessee. All taxes relating to leasehold improvements
of Lessor shall be solely for the account of Lessor.
7.5 Refunds and Rebates. Any refunds or rebates on account of the taxes
paid with respect to the Demised Premises shall be prorated in accordance with
the provisions of Article 7.4(ii). Any such refunds received by Lessor or Lessee
a part of which are for the benefit of the other shall be received by either
Party in trust and paid forthwith to the Party entitled to such portion of the
refund. Lessee will, upon the request of Lessor, sign any receipts which may be
necessary to secure the payment of any such refund or rebate.
ARTICLE 8
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UTILITY EXPENSES
----------------
Lessee shall contract separately for and pay when due all the rents or
charges for utilities, including but not limited to electricity, gas, water,
sewerage and sewer assessments, used by the Lessee, which are or may be assessed
or imposed upon the Demised Premises and if not paid, such rents or charges
shall
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become payable as Additional Rent with the installment of rent next due or
within thirty (30) days of demand therefor, whichever occurs sooner.
ARTICLE 9
---------
REIMBURSEMENT
-------------
9.1 Reimbursement of Lessor. If the Lessee shall fail or refuse to comply
with and perform any conditions and covenants of this Lease Agreement, the
Lessor may (but shall be under no obligation to) carry out and perform such
conditions and covenants, for the account of the Lessee. Any cost or expense so
incurred by Lessor shall be payable on demand or shall be added, to the
installment of rent due immediately thereafter. This remedy shall be in addition
to such other remedies as the Lessor may have hereunder by reason of the breach
by the Lessee of any of the covenants and conditions of this Lease Agreement.
9.2 Reimbursement of Lessee. If the Lessor shall fail or refuse to comply
with and perform any conditions and covenants of this Lease Agreement, the
Lessee may (but shall be under no obligation to) carry out and perform such
conditions and covenants, for the account of the Lessor. Any cost and expense
paid by Lessee shall be payable by Lessor on demand. This remedy shall be in
addition to such other remedies as the Lessee may have hereunder by reason of
the breach by the Lessor of any of the covenants and conditions of this Lease
Agreement.
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ARTICLE 10
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PRIOR USE; ENVIRONMENTAL RESPONSIBILITY
---------------------------------------
10.1 Prior Use of Demised Premises. Lessor makes no warranty that the
Demised Premises are suitable for Lessee's purposes; however, Lessor has no
knowledge that the Demised Premises are unsuitable for Lessee's purposes. If the
Demised Premises cannot be used for Lessee's purposes as specified in Article 5,
then Lessee may cancel this Lease Agreement without liability or penalty to
either Party.
10.2 Environmental Damage Responsibility. Lessor agrees that Lessee shall
be liable only for any environmental loss, damage, cost, or expense arising from
its construction, operation, and maintenance of the Cogeneration Facility and
Lessor shall not be entitled to claim any right of contribution or otherwise
hold Lessee liable for any environmental losses, damages, costs, or expenses
which result from actions which occurred prior to the effective date of this
Lease Agreement or which occurred or occurs by reason of actions of the Lessor
or other parties beyond the reasonable control of the Lessee. Lessee and Lessor
shall cooperate with each other to assist in the defense of any claim made
against one or both of the Parties to this Lease Agreement which relates to
environmental damage not caused by the Parties, Including pursuing any third
parties. Unless prohibited by any applicable insurance policy carried by either
Party, Lessor and Lessee agree to subrogate the other
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Party to any rights that they may have against third parties with respect to
environmental liability in connection with the Demised Premises.
ARTICLE 11
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LIENS
-----
If any mechanics', materialmen's or other liens shall be filed against the
Demised Premises by reason of labor performed or materials furnished to the
Lessee in the erection, construction, completion, alteration, repair or addition
to any building or improvement, the Lessee shall within thirty (30) days
thereafter, at the Lessee's own cost and expense, cause such lien or liens to be
satisfied, removed, cancelled, erased and discharged of record together with any
Notices of Intention that may have been filed either by payment thereof or by
bonding the lien in accordance with the laws of the State of New Jersey. Should
Lessee fail to comply with the foregoing, Lessor may at its option have the lien
removed by bonding same, all at lessees expense. Failure to do so shall entitle
the Lessor to resort to such remedies as are provided herein in the case of any
default of this Lease Agreement, in addition to such as are permitted by law.
Lessee shall at no time cause or permit a mortgage or any other security device
of any nature to be inscribed against the Demised Premises except as otherwise
provided in Article 13 with regard to Lessee's leasehold interest.
-21-
ARTICLE 12
----------
INSURANCE
---------
12.1 Responsibility of Lessee. Lessee shall provide and maintain, for the
joint benefit of the Lessee and Lessor (and mortgagees, if any) during the
entire term of this Lease Agreement, public liability insurance against claims
for: (1) bodily injury and death occurring on or about the Demised Premises; (2)
property damage; and (3) for any claims or acts that Lessee or Lessor can be
held legally liable for, regardless of the jurisdiction. Lessee shall also
provide and maintain Worker's Compensation Insurance in statutory limits. Lessor
shall have the right, from time to time, to make such reasonable requirements
with reference to insurance that will reasonably cover liabilities to which the
Lessor may be exposed by virtue of this Lease Agreement, but in no event will
Lessor require that Lessee carry limits in excess of those carried by Lessor.
Any insurance called for hereunder shall also provide coverage for any claims
resulting from Lessee's use of any of Lessor's land pursuant to Article 17
hereof.
12.2 Conditions Concerning Insurance Carriers. Insurance companies issuing
policies required in this Lease Agreement shall be qualified to do business in
New Jersey and shall have a financial rating of A12 or better according to
"Best's Insurance Reports, Fire and Casualty," edition current at the inception
date of each policy. To the extent permissible by law, all
-22-
insurance policies required to be furnished by the Lessee hereunder shall name
both Lessee and Lessor (and mortgagees, if any) as named insureds and each such
policy shall be non-cancellable with respect to Lessor without thirty (30) days
written notice to the Lessor. The policy or policies of insurance or certified
copies thereof shall be delivered to Lessor, together with evidence of the
payment of the premiums therefor, not less than fifteen (15) days prior to the
commencement of the term of this Lease Agreement or the date when the Lessee
shall enter into possession of the Demised Premises, whichever occurs sooner. At
least fifteen (15) days prior to the expiration or termination date of any
policy, Lessee shall deliver a renewal or replacement policy with proof of the
payment of the premium therefor; provided, however, that in the event that
Lessee cannot deliver a renewal or replacement policy within such period, Lessee
shall deliver to Lessor a binder or certificate of insurance as soon as
possible.
ARTICLE 13
----------
PERMITTED ENCUMBRANCES ON
-------------------------
LEASEHOLD INTERESTS AND IMPROVEMENTS
------------------------------------
Lessee may, at any time and from time to time during the term of this Lease
Agreement and without the consent of Lessor, encumber Lessee's interest in the
leasehold estate created by this Lease Agreement to any Financier by way of a
lien, leasehold
-23-
mortgage or deed of trust containing such provisions as Lessee shall deem fit
and proper. The rights of Lessor will remain superior to those of such
Financiers in all instances except those in which Lessee encumbers Leasehold
Improvements placed upon the Demised Premises by Lessee. Lessee is hereby
specifically granted the right to encumber the Leasehold Improvements and Lessor
hereby subordinates any rights that it may have against said Leasehold
Improvements in favor of a Financier, it being understood that nothing in this
Article 13 shall adversely affect any rights of Lessor or any Financier under
Articles 21.6 and 21.7 of this Lease Agreement.
ARTICLE 14
----------
EMINENT DOMAIN
--------------
14.1 Distribution of Award. If the Demised Premises and/or attendant rights
of way or other land rights shall be taken or condemned, in whole or in part, by
any competent authority, the Parties hereto agree to cooperate in applying for
and in prosecuting any claim for such taking and further agree that the
aggregate net award, after a pro rata deduction of all expenses and costs,
including attorneys' fees, incurred in connection therewith, payable to both
Lessor and Lessee (or if required, to any mortgagee) shall be distributed as
follows: (1) the portion of the award (or moneys received) relating to the
taking of the Cogeneration Facility or the expense of dismantling and moving
-24-
the Cogeneration Facility shall be paid to the Lessee; (2) the portion of the
award (or moneys received) relating to the value of the Demised Premises for
the remainder of the Base Term of this Lease Agreement shall be paid to Lessee;
and (3) the portion of the award (or moneys received) relating to the value of
the land constituting the Demised Premises shall be paid to the Lessor.
14.2 Partial Taking. In the event of a partial taking of the Demised
Premises and/or attendant rights of way, and if such partial taking renders the
continuation of normal operations at the Cogeneration Facility impossible,
impracticable, or unduly onerous, Lessee may elect to terminate this Lease
Agreement by giving notice to the Lessor within three (3) months after such
taking or condemnation. If such notice of termination is given, this Lease
Agreement shall terminate as of the date on which such notice is given.
ARTICLE 15
----------
TERMINATION
-----------
15.1 Lessor's Right to Terminate. Lessor shall have the right to terminate
this Lease Agreement upon the occurrence of any of the following events:
A. The Lessee shall fail to make timely payment of any of the rent
pursuant to Articles 4, 7, 8, 9, and 21.7(2)(i) when due and payable, which
failure continues for thirty (30) days after written notice thereof; or
-25-
B. The Lessee shall fall to perform any of the covenants or
obligations of this Lease Agreement required to be kept and performed by
Lessee,' other than the payment of rent covered in Paragraph A above, which
failure continues for a period of thirty (30) days after written notice of such
non-performance; provided, however, that this Lease Agreement shall not
terminate if Lessee shall diligently commence to cure such default within such
thirty (30) day period and for so long as Lessee diligently continues such
efforts.
15.2 Lessee's Right to Terminate. Lessee shall have the right to terminate
this Lease Agreement upon the occurrence of any of the following events:
A. Lessor shall fail to perform any of the covenants or obligations of
this Lease Agreement required to be kept and performed by Lessor, which failure
continues for a period of thirty (30) days after written notice of such non-
performance; provided, however, that this Lease Agreement shall not terminate if
Lessor shall diligently commence to cure such default within such thirty (30)
day period and for so long as Lessor diligently continues such efforts;
B. Lessee terminates the Steam Sale Agreement by reason of Lessor's
breach under Article 15 of the Steam Sale Agreement;
C. The Cogeneration Facility is damaged or destroyed such that the
Cogeneration Facility cannot be made operational at
-26-
normal production capacity within two (2) years after the occurrence;
D. There is a partial taking or condemnation with respect to the
Demised Premises or any building or improvement thereon such that the
continuation of normal operations at the Cogeneration Facility is impossible,
impracticable or unduly onerous;
E. Lessee fails to receive or maintain the authorizations necessary to
lawfully construct, operate and maintain the Cogeneration Facility;
F. For any reason on or before November 22, 1986, provided Lessee pays
Sixty Thousand Dollars ($60,000.00) to Lessor on or before such date; or
G. The Demised Premises cannot be used for Lessee's purposes as
specified in Article 5.
15.3 Prepaid Rent Nonrefundable. In the event that Lessee terminates this
Lease Agreement pursuant to Articles 15.2 A, B, C, D, E OR G, Lessee shall not
be entitled to any prepaid rent called for by this Lease Agreement. However,
this Article 15.3 shall not preclude Lessee from the recovery from Lessor of any
damages due as the result of a breach of this Lease Agreement.
-27-
15.4 Notice to Financiers and Opportunity to Cure.
A. Lessor shall look only to Lessee or to any successor of Lessee
under Article 21.3 to satisfy all obligations hereunder. No Financier shall have
any obligation to satisfy any obligation or indebtedness of Lessee to Lessor,
except the obligations and indebtedness to Lessor required under the terms of
this Lease Agreement.
B. Notwithstanding the provisions of Article. 15.4A, a Financier shall
be liable to the Lessor for uninsured liabilities only to the extent such
liabilities represent defaults or breaches hereunder caused by Financier's
actions. Financier's liability to Lessor for uninsured liabilities which have
not been caused by Financier's actions shall be limited to the extent of such
Financier's interest in the Cogeneration Facility.
C. Lessee shall promptly notify the Lessor of the names and addresses
of all Financiers. Notwithstanding Article 3.2 or Article 15.1, Lessor shall not
terminate this Lease Agreement until it has given thirty (30) days written
notice of any breach thereof to each of such Financiers, and Lessor hereby
agrees to promptly notify all such Financiers of any breach. If Lessor fails to
give such notice, Lessor shall not be liable for damages to any Financier as a
result of such failure, but any termination of this Lease Agreement shall be of
no force and effect. Thereafter, Lessor shall not terminate this Lease Agreement
as a result of any such breach if within such thirty (30) day period any
Financier has either:
-28-
(i) cured the breach if it can be cured by payment of money; or
(ii) if the breach cannot be so cured, caused the initiation of
and is diligently pursuing proceedings to give the Financier
possession of the Demised Premises or has diligently commenced to cure
the breach and for so long as the Financier diligently continues such
efforts.
D. If a Financier is prohibited by any process or injunction issued by
any court or by reason of any action by any court having jurisdiction of any
bankruptcy or insolvency proceeding involving the Lessee or by an automatic stay
thereunder from curing such breach (other than a breach that may be cured by the
payment of money), the time specified above in Article 15.4C shall be extended
for the period of such prohibition.
E. Nothing in this Lease Agreement shall require a Financier to cure
any default hereunder in advance of entering upon the Demised Premises with the
purpose of continuing to operate the Cogeneration Facility thereon. Actions by a
Financier against Leasehold Improvements under a mortgage or other security
right or encumbrance shall not in themselves be deemed an election by Financier
to continue operation of the Cogeneration Facility.
-29-
15.5 Written Notice of Termination. Termination of this Lease Agreement
shall be valid only if the terminating Party provides written notice of its
intent to terminate to the other Party.
15.6 Condition of Demised Premises at Termination. At the termination of
this Lease Agreement, for any reason, Lessee shall, at its sole cost, remove all
Leasehold Improvements from the Demised Promises and any personal property owned
by Lessee and located at the Bayonne Facility within twelve (12) months of the
termination and shall restore the Demised Premises to its same condition prior
to the commencement of this Lease Agreement, with the exception of any
foundation laid at or near ground level, and shall repair any damage to the
Demised Premises caused during the term of this Lease Agreement. In the event
Lessee's Leasehold Improvements are not so removed, all such Leasehold
Improvements shall be deemed abandoned to Lessor without any payment being due
from Lessor, reserving to Lessor all rights for damages resulting from Lessee's
failure to remove Leasehold Improvements and restore the Demised Premises as
described above.
ARTICLE 16
----------
REMEDIES UPON LESSEE'S BREACH
-----------------------------
If there should occur any event under Article 15.1 which results in Lessor
terminating this Lease Agreement, or if during the term hereof the Demised
Premises or any part thereof shall be
-30-
or become abandoned or deserted, vacated or vacant, or should the Lessee be
evicted by summary proceedings or otherwise, the Lessor, in addition to any
other remedies herein contained or as may be permitted by law, including but not
limited to Distress and/or Landlord's Lien Proceedings, may either by force or
otherwise, without being liable for prosecution therefor, or for damages, re-
enter the said Demised Premises and the same have and again possess and enjoy;
and, as agent for the Lessee or otherwise, re-let the Demised Premises and
receive the rents therefor and apply the same, first to the payment of such
expenses, reasonable attorney fees and costs, as the Lessor may have been put to
in re-entering and repossessing the same and in making such repairs and
alterations as may be necessary, and second to the payment of rents due
hereunder. The Lessee shall remain liable for such rents as may be in arrears
and also the rents as may accrue subsequent to the re-entry by the Lessor, to
the extent of the difference between the rents reserved hereunder and the rents,
if any, received by the Lessor during the remainder of the unexpired term
hereof, after deducting the aforementioned expenses, fees and costs, the same to
be paid as such deficiencies arise and are ascertained each month.
-31-
ARTICLE 17
----------
ATTENDANT LAND RIGHTS
---------------------
In connection with this Lease Agreement of the Demised Premises and for so
long as this Lease Agreement shall remain effective, Lessor hereby grants to
Lessee all attendant rights of way and other land rights required for Lessee:
(1) to install or erect any equipment or other property to be used by Lessee to
interconnect with Lessor or any third-party purchasers of steam or electrical
power, or to otherwise transmit or receive steam or electrical power to or from
the Demised Premises; and (2) to arrange for the provision of normal utility
services to the Cogeneration Facility. Notwithstanding the foregoing, Lessor
shall retain the right to designate the location of all such rights of way
and/or other land rights. Lessor shall commit such rights of way and/or land
rights otherwise granted to writing in recordable form and shall provide that
the term thereof shall extend for a period of twelve (12) months following the
termination of this Lease Agreement solely for the purposes set forth in Article
15.6. Lessor shall grant Lessee and its business invitees and licensees an
easement for reasonable ingress and egress over Lessor's property to the Demised
Premises, which ingress and egress shall not unreasonably interfere with the
operation and use of Lessor's Plant. Lessor reserves the right, at any time
during the Base Term of this Lease or any renewal thereof, to, on one or more
occasions, at
-32-
Lessee's expense, relocate the aforementioned easement for ingress and egress,
provided Lessor gives Lessee prior written notice of such requirement to
relocate sufficient to allow Lessee to do so without disruption of Lessee's
continuous right to ingress and egress to and from the Demised Premises and the
Boiler House. The status of title for any alternate easement for ingress and
egress shall not have any greater liens or encumbrances than those which may
exist with respect to the easement granted concurrently herewith. All such
grants of attendant rights-of-way and other land rights must be in writing to be
of effect and Lessor agrees to execute any and all documents, agreements and
instruments and to take all other actions, in order to effectuate the same, all
at Lessee's cost and expense.
ARTICLE 18
----------
MORTGAGE PRIORITY
-----------------
This Lease Agreement shall be a prior lien against the Demised Premises
with respect to any mortgages that may hereafter be placed upon the Demised
Premises. The recording of this Lease Agreement shall have preference and
precedence and be superior and prior in lien to any mortgage on the Demised
Premises.
-33-
ARTICLE 19
----------
NONWAIVER
---------
The various rights, remedies, options, and elections of the Lessor and
Lessee, expressed herein, are cumulative, and the failure of the Lessor or
Lessee to enforce strict performance the other Party of the conditions and
covenants of this Lease Agreement or to exercise any election or option or to
resort or have recourse to any remedy herein conferred or the acceptance by the
Lessor of any installment of rent after any breach by the Lessee in any one or
more instances, shall not be construed or deemed to be a waiver or a
relinquishment for the future by the Lessor of any such conditions and
covenants, options, elections, or remedies, but the same shall continue in full
force and effect.
ARTICLE 20
----------
FORCE MAJEURE
-------------
20.1 Definition. "Force Majeure" means unforeseeable causes beyond the
reasonable control of and without the willful fault or negligence of the Party
claiming Force Majeure. It shall include failure to perform due to causes beyond
that Party's control, including but not limited to war, sabotage, acts of God,
riots, drought or accidents not reasonably foreseeable.
-34-
20.2 Burden of Proof. The burden of proof as to whether a Force Majeure
has occurred shall be upon the Party claiming the Force Majeure.
20.3 Effect of Force Majeure. If either Party is rendered wholly or partly
unable to perform its obligations under this Lease Agreement because of Force
Majeure, that Party shall be excused from whatever performance is affected by
the Force Majeure to the extent so affected, provided that: (1) the
non-performing Party, within one (1) week after the occurrence of the Force
Majeure, gives the other Party written notice describing the particulars of the
occurrence; (2) the suspension of performance shall be of no greater scope and
of no longer duration than is required by the Force Majeure; and (3) no
obligations of either Party that matured before the occurrence of the Force
Majeure shall be excused as a result of such occurrence.
20.4 Prepaid Rent Nonrefundable. In the event that this Lease Agreement is
terminated or suspended pursuant to the provisions of this Article 20, Lessee
shall not be entitled to any refund of the prepaid rent called for by this Lease
Agreement.
-35-
ARTICLE 21
----------
SUCCESSORS AND ASSIGNS
----------------------
21.1 This Agreement shall be binding upon and inure to the benefit of the
Parties and any permitted assignees as provided herein.
21.2 Except as is expressly set forth in this Lease Agreement, neither the
rights nor the obligations under this Lease Agreement may be assigned, pledged,
hypothecated or otherwise transferred.
21.3 Lessee is expressly permitted to assign this Agreement as provided in
this Article 21.3. Lessee may assign this Agreement to any person or entity, but
only with the consent of Lessor, provided that such assignment shall be of no
force and effect unless and until any such person or entity shall have assumed
in writing all of Lessee's obligations under the following instruments and
notes, and shall have agreed in writing to cure any existing defaults and
breaches hereunder and thereunder:
(1) The Steam Sale Agreement
(2) The Purchase and Sale Agreement
(3) The Option Agreement
(4) The SPF Lease
(5) The Note
(6) The Security Agreement
(7) The Rent Note
-36-
Lessee may assign this Agreement to any Financier which shall be obligated
hereunder only as provided in Articles 21.6 and 21.7 of this Lease Agreement.
21.4 Lessor is expressly permitted to assign this Lease Agreement to any
person or entity, provided that such assignment shall be of no force and effect
unless and until such person or entity shall have assumed in writing all of
Lessor's obligations under this Lease Agreement and under the agreements
referred to in Article 21.3, with the exception of the Note and the Rent Note,
and shall have agreed in writing to cure any defaults and breaches hereunder and
thereunder. In the event that the Bayonne Facility is assigned, sold,
transferred, leased or subleased to any other party, which action would affect
Lessor's ability to fulfill its obligations under the Steam Sale Agreement, the
Purchase and Sale Agreement, the Easement or the SPF Lease, the Lessor may not
do so unless the assignee, buyer, transferee, lessee or sublessee assumes
Lessor's obligations under the foregoing agreements.
21.5 Notwithstanding any such assignment by Lessor or Lessee, the assignor
shall remain fully liable for its obligations hereunder.
21.6 No Financier succeeding to Lessee's rights under this Lease Agreement
by reason of the exercise of its remedies against Lessee under a leasehold
mortgage or security agreement shall be required to cure any defaults under, or
assume Lessee's
-37-
obligations under, any agreement (other than this Lease Agreement, the Rent
Note, the first $2,400,000.00 of installments of principal, with interest
thereon, under the Note, and the obligations under Article 21.7 (2) of this
Lease Agreement) in order to succeed to Lessee's interest under this Lease
Agreement. If a Financier does not cure defaults under, and assume Lessee's
obligation under, all such other agreements, no subsequent assignee of a
Financier shall be obligated to do so and Lessor shall not be obligated to such
Financier or any subsequent assignee of a Financier under any of such
agreements. A Financier shall be entitled to the rights accorded to a Financier
under Article 15 of this Lease Agreement in performing its obligations under
Articles 21.6 and 21.7.
21.7 During the period beginning on the date of execution of this Lease
Agreement and ending at the expiration of the Base Term of the Steam Sale
Agreement as specified therein, a Financier may not assume Lessee's obligations
and rights under this Lease Agreement, unless, within ninety (90) days following
the date on which it has commenced the exercise of its remedies against Lessee,
the Financier either:
(1) assumes all of the Lessee's obligations under the agreements
referred to in Article 21.3 in which event any termination of any
such instrument by Lessor or any exercise by Lessor of its rights
thereunder shall be null and void and such instruments shall be
reinstated, or
-38-
(2) agrees to pay to Lessor on or before the beginning of each
remaining Annual Period, up to the end of the Tenth Annual Period
following the Date of Initial Commercial Operation, the amount of
$500,000.00 as Additional Rent for such period, except that:
(i) with respect to the Annual Period during which such Financier
has commenced its remedies against Lessee, the amount payable
shall be determined by multiplying $500,000.00 by a factor,
which shall be equal to one (1) minus a fraction the
numerator of which is the number of k lbs. of steam which was
furnished by Lessee to Lessor under the Steam Sale Agreement
during such Annual Period up to and including the expiration
of such ninety (90) day period (but in no event greater than
450,000 k lbs. for purposes of this calculation), and the
denominator of which is 450,000 k lbs. of steam; and
(ii) the Financier may terminate this Lease Agreement and its
obligations hereunder prior to the end of the Tenth Annual
Period following the Date of Initial Commercial Operation by
giving written notice to the
-39-
Lessor of its election to terminate the Lease Agreement 90
days prior to the beginning of any remaining Annual Period
for which it would otherwise be obligated to pay rent under
this Article 21.7 (2) and thereafter, the Financier shall
have no future obligation to pay any further rent under this
Article 21.7 (2).
If within such ninety (90) day period, the Financier does not assume all of
Lessee's obligations referred to in Article 21.7 (1) or does not agree to pay
the Additional Rent pursuant to Article 21.7 (2), this Lease Agreement shall
terminate effective as of the end of such ninety (90) day period.
ARTICLE 22
----------
MISCELLANEOUS
-------------
22.1 Duplicates; Recordation. The Parties will at any time, at the request
of either Party, promptly execute duplicate originals of an instrument, in
recordable form, which will constitute a short form of this Lease Agreement,
setting forth a description of the Demised Premises, the term of the Lease
Agreement and any other portions thereof, excepting the rental provisions, as
either Party may request.
-40-
22.2 Consent Not to be Unreasonably Withheld. Whenever the Lessee requests
any consent, permission, or approval which may be required or desired by the
Lessee pursuant to the provisions hereof, the Lessor shall not unreasonably
withhold or postpone the grant of such consent, permission, or approval.
22.3 Termination of Preexisting Lease. By executing this Lease Agreement,
BI and IMTT hereby terminate any leasehold interest that may exist with regard
to the Demised Premises and such leasehold interest shall hereafter be of no
force and effect.
22.4 Covenants Running with Land. All covenants, promises, conditions, and
obligations herein contained or implied by law are covenants running with the
land and shall attach and bind and inure to the benefit of the Lessor and Lessee
and their respective successors and assigns, except as otherwise provided
herein.
22.5 Notice. All notices, including communications and statements which are
required or permitted under the terms of this Lease Agreement, shall be in
writing, except as otherwise provided. Service of a notice may be accomplished
by personal service, telegram or registered or certified mail. If a notice is
sent by registered or certified mail, it shall be deemed served within three (3)
days, excluding Saturdays, Sundays or legal Federal holidays, except as
otherwise demonstrated by a signed receipt. If a notice is served by telegram,
it shall be
-41-
deemed served eighteen (18) hours after delivery to the telegram company.
Notices may be sent to the Parties at the following addresses:
(a) Lessee: Cogen Technologies NJ Venture
c/o Cogen Technologies NJ, Inc.,
Managing Venturer
14614 Falling Creek Drive
Suite 212
Houston, Texas 77068
Attn: Mr. Robert C. McNair
President
With information copy to:
Cogan Technologies NJ, Inc.
Foot of E. 22nd Street
Bayonne, New Jersey 07002
Attn: Plant Manager
(b) Lessor: IMTT-Bayonne
Foot of E. 22nd Street
Bayonne, New Jersey 07002
Attn: Glynn Esteves
or
International-Matex Tank Terminals
Ninth Floor
321 St. Charles Avenue
New Orleans, Louisiana 70130
Attn: Mr. Thomas B. Coleman
Partnership Manager
22.6 Amendments. No amendment or modification of the terms of this Lease
Agreement shall be binding on either the Lessor or Lessee unless reduced to
writing and signed by both Parties.
22.7 Choice of Law. This Lease Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
-42-
22.8 Severability. Should any part of this Lease Agreement, for any reason,
be declared invalid, such decision shall not affect the validity of the
remaining portions, which remaining portions shall remain in force and effect as
if this Lease Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the Parties hereto that
they would have executed the remaining portion of this Lease Agreement without
including therein any such part, parts or portion which may for any reason be
hereafter declared invalid. Notwithstanding the foregoing sentence, should any
term or provision of this Lease Agreement, be found invalid by any court or
regulatory body having jurisdiction thereover, the Parties shall immediately
renegotiate such term or provision of the Lease Agreement to eliminate such
invalidity.
22.9 Other Agreements. This Lease Agreement supersedes any and all oral or
written agreements and understandings heretofore made relating to the subject
matters herein, and this Lease Agreement constitutes the entire agreement and
understanding of the Parties relating to the subject matters herein.
22.10 Captions. All indices, titles, subject headings, section titles and
similar items are provided for the purpose of reference and convenience and are
not intended to be inclusive, definitive or to affect the meaning, content or
scope of this Lease Agreement.
-43-
22.11 Counterparts. This Lease Agreement may be signed in one or more
counterparts, each of which shall be an original and all of which, taken
together, shall constitute one instrument.
IN WITNESS WHEREOF the Parties have entered into this Lease Agreement as of
the date first written above.
(SEAL)
ATTEST: BAYONNE INDUSTRIES, INC.
/s/ BERTRAND F. ARTIGUES BY: /s/ RICHARD B. JURISICH
- --------------------------------- -----------------------------
Bertrand F. Artigues Richard B. Jurisich
Assistant Secretary Executive Vice President/
Secretary
WITNESS: IMTT-BAYONNE
/s/ BERTRAND F. ARTIGUES BY: /s/ RICHARD B. JURISICH
- --------------------------------- -----------------------------
Bertrand F. Artigues Richard B. Jurisich
Secretary
(SEAL) COGEN TECHNOLOGIES NJ VENTURE
ATTEST: BY: COGEN TECHNOLOGIES NJ, INC.,
MANAGING VENTURES
/s/ JOE M. BOLLINGER BY: /s/ ROBERT C. MCNAIR
- --------------------------------- ------------------------------
Joe M. Bollinger Robert C. McNair
Assistant Secretary President
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, duly commissioned and
qualified in and for said Parish and State, personally came and appeared Richard
B. Jurisich, to me known, who declared and acknowledged to me, Notary, and the
undersigned competent witnesses that he is the Executive Vice President of
Bayonne Industries, Inc., that as such duly authorized officer, by and with the
authority of the Board of Directors of said corporation, he signed and executed
the foregoing instrument, as the free and voluntary act and deed of the said
corporation, for and on behalf of the said corporation and for the objects and
purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal and
the said appearer and the said witnesses have hereunto affixed their signatures
this 18th day of October, 1986.
WITNESSES:
/s/ SIGNATURE APPEARS HERE
- --------------------------
/s/ SIGNATURE APPEARS HERE /s/ RICHARD B. JURISICH
- -------------------------- -------------------------------
RICHARD B. JURISICH
Executive Vice-President
/s/ BERTRAND F. ARTIGUES
---------------------------
NOTARY PUBLIC
BERTRAND F. ARTIGUES
Embossed hereon is my Orleans Parish,
State of the Notary Public Seal
My Commission is issued for life.
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, duly commissioned and
qualified in and for said Parish and State, personally came and appeared Richard
B. Jurisich, to me known, who declared and acknowledged to me, Notary, and the
undersigned competent witnesses that he is the Secretary of IMTT Bayonne, that
as such duly authorized officer, by and with the authority of the Partnership
Committee of said partnership, he signed and executed the foregoing instrument,
as the free and voluntary act and deed of the said partnership, for and on
behalf of the said partnership and for the objects and purposes therein set
forth.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal and
the said appearer and the said witnesses have hereunto affixed their signatures
this 18th day of October, 1986.
WITNESSES:
/s/ SIGNATURE APPEARS HERE
- --------------------------
/s/ SIGNATURE APPEARS HERE /s/ RICHARD B. JURISICH
- -------------------------- -------------------------------
RICHARD B. JURISICH
Executive Vice-President
/s/ BERTRAND F. ARTIGUES
---------------------------
NOTARY PUBLIC
BERTRAND F. ARTIGUES
Embossed hereon is my Orleans Parish,
State of the Notary Public Seal
My Commission is issued for life.
THE STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
BE IT REMEMBERED, that, on this 20th day of October, 1986, before me,
the subscriber, a Notary Public of the State of Texas, personally appeared
ROBERT C. McNAIR, who, I am satisfied, is the person who has signed the within
instrument as President of Cogan Technologies NJ, Inc., a partner of Cogan
Technologies NJ Venture, the partnership named herein, and I having first made
known to him the contents thereof, he thereupon acknowledged that the said
instrument made by the partnership and sealed with its seal, was signed, sealed
and delivered by him in behalf of such partner and is the voluntary act and deed
of the partnership, made by virtue of authority from the partnership.
[SEAL APPEARS HERE] /s/ ELAINE A. CAMPBELL
----------------------------------
Elaine A. Campbell
Notary in and for Harris County, TX
My Commission expires: 7/27/89
EXHIBIT A
DESCRIPTION OF A PORTION OF
---------------------------
PROPERTY OWNED BY
-----------------
BAYONNE INDUSTRIES
------------------
CITY OF BAYONNE, HUDSON COUNTY, NEW JERSEY
------------------------------------------
TO BE LEASED BY
---------------
GENERAL ELECTRIC COMPANY
------------------------
BEGINNING at a point in a northeasterly corner of the herein described parcel,
all as shown on a map entitled "Proposed Access Easement and Lease Area for
Bayonne Industries", dated as revised to October 14,1986, prepared by Hirth
Weidener Associates, said point also being the termination of course number 27
of a twenty (20) foot wide access easement and running; thence,
1. South 36 degrees 03' 14" East, distant 40.99 feet to a point in the most
easterly Line of the herein described tract; thence,
2. South 5 degrees 33' 58" West, along said easterly line, distant 192.22 feet
to a point being the southeasterly corner of the herein described tract;
thence,
3. North 84 degrees 26' 02" West, along the southerly line of the proposed
leased area, distant 609.64 feet to a point; thence,
4. North 5 degrees 33' 58" East, along the westerly line of the herein
described parcel, said line being parallel with and distant 16 feet easterly
from the easterly wall of an existing one story metal building, distant
312.03 feet to a point; thence,
5. North 51 degrees 31' 01" East, distant 47.43 feet to a point in the
northerly line of the herein described parcel; thence,
6. South 84 degrees 26' 02" East, along said northerly line, distant 429.71
feet to a point; thence,
7. South 5 degrees 33' 58" West, distant 95.00 feet to a point; thence,
8. South 84 degrees 26' 02" East, distant 94.51 feet to the above described
point or place of BEGINNING.
Containing 4.463 acres of land.
The above described parcel is a portion of Bayonne Industries property to be
leased by General Electric Company, all as shown on the previously described
map.
Revised October 17, 1986
EXHIBIT C
---------
GNP DEFLATOR
------------
Example
Current rate Revised rate
------------ ------------
$5,000 $5,204
Calculations
------------
Billions of Dollars
1983 1984
----------- ----------
I. Gross National Product
A. Current dollars $3,401.6 $3,774.7
B. Constant (in this
case 1982) dollars 3,275.2 3,492.0
II. Deflator (A/B) 1.038593 1.080956
III. Percentage increase
1.080956 -- 1.038593 0.042363
-------------------- = -------- 0.040789
1.038593 1.038593
IV. Comments
A. The revised rate is the percentage increase as calculated above and
applied to the current rate.
B. See U. S. Dept. of Commerce, Bureau of Economic Analysis publication
"Survey of Current Business" for December, 1985, Tables 1.1 and 1.2,
page 20.
C. See "Federal Reserve Bulletin" for February, 1986, Table 2.16, page A51.