EXHIBIT 10.74
STEAM PRODUCING FACILITIES
LEASE AGREEMENT
BETWEEN
COGEN TECHNOLOGIES NJ, INC.
AND
IMTT-BAYONNE
DATED
MAY 22, 1986
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS................................................................. 2
ARTICLE 2
TERMS OF THE LEASE.......................................................... 6
2.1 Equipment Leased...................................................... 6
2.2 Rent.................................................................. 6
2.3 Term.................................................................. 6
2.4 Termination........................................................... 7
ARTICLE 3
CONDITION OF STEAM PRODUCING FACILITIES..................................... 7
ARTICLE 4
OWNERSHIP AND OTHER RIGHTS.................................................. 8
4.1 Ownership and Inspection.............................................. 8
4.2 No Liens.............................................................. 8
4.3 Improvements.......................................................... 8
ARTICLE 5
USE OF FACILITIES........................................................... 8
5.1 Operation and Maintenance............................................. 8
5.2 Safe and Lawful Use................................................... 9
5.3 Right of the Non-Obligated Party to Contest
By Appropriate Legal Proceeding....................................... 11
5.4 Change of Obligated Party............................................. 12
5.5 Emergency Condition................................................... 13
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TABLE OF CONTENTS
-----------------
PAGE
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ARTICLE 6
PAYMENT OF TAXES........................................................... 14
ARTICLE 7
INSURANCE AND RISK OF LOSS................................................. 14
7.1 Liability Insurance Coverage......................................... 14
7.2 Property and Business Interruption
Insurance Coverage................................................... 15
7.3 Conditions Concerning Insurance Carriers............................. 15
7.4 Risk of Loss......................................................... 16
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF IMTT..................................... 17
8.1 Organization and Good Standing....................................... 17
8.2 Authority............................................................ 17
8.3 No Violation of Other Agreements..................................... 17
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF COGEN.................................... 18
9.1 Organization and Good Standing....................................... 18
9.2 Authority............................................................ 18
9.3 No Violation of Other Agreements..................................... 18
9.4 Title to Steam Producing Facilities.................................. 18
9.5 Operability of the Steam Producing Facilities........................ 19
ARTICLE 10
QUIET ENJOYMENT............................................................ 19
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TABLE OF CONTENTS
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PAGE
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ARTICLE 11
DEFAULT AND REMEDIES THEREFOR............................................... 20
11.1 Default.............................................................. 20
11.2 Remedies............................................................. 20
ARTICLE 12
INDEMNIFICATION............................................................. 21
ARTICLE 13
FORCE MAJEURE............................................................... 22
13.1 Definition........................................................... 22
13.2 Burden of Proof...................................................... 22
13.3 Effect of Force Majeure.............................................. 22
ARTICLE 14
SUCCESSORS AND ASSIGNS...................................................... 23
ARTICLE 15
MISCELLANEOUS............................................................... 25
15.1 Notice............................................................... 25
15.2 Amendments........................................................... 26
15.3 Choice of Law........................................................ 26
15.4 Other Agreements..................................................... 26
15.5 Captions............................................................. 26
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STEAM PRODUCING FACILITIES
LEASE AGREEMENT
THIS LEASE AGREEMENT, made as of this 22nd day of May, 1986, by and between
COGEN TECHNOLOGIES NJ, INC. a Delaware corporation having its principal place
of business at 14614 Falling Creek Drive, Suite 212, Houston, Texas 77068, as
lessor ("Cogen") and IMTT-BAYONNE, a Delaware partnership having its principal
place of business at Foot of East 22nd Street, Bayonne, New Jersey 07002, as
lessee ("IMTT ").
BACKGROUND
----------
BI and IMTT have this day entered into the Purchase and Sale Agreement
providing for the sale of the Steam Producing Facilities, together with certain
other assets, to Cogen. IMTT operates the Bayonne Facility and desires to enter
into this Lease with Cogen so that it is assured of the ability to have steam
available for its operations at the Bayonne Facility pursuant to terms of this
Lease and the Steam Sale Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
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ARTICLE 1
---------
DEFINITIONS
-----------
The following terms when used herein shall have the following meanings,
unless a different meaning shall be expressly stated or apparent from the
context:
"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.
"Annual Period" means any one of a succession of consecutive 12-month
periods, the first of which shall begin on the Date of Initial Commercial
Operation, 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 the Date of
Initial Commercial Operation occurs.
"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.
"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.
"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.
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"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.
"Cogeneration Facility" means the waste heat boilers, gas and steam
turbines, generators and all appurtenant structures, equipment, including
Cogen's interconnection facilities, and real property interests owned or leased
and operated by Cogen at the Bayonne Facility, for purposes of generating
electricity, steam, or other forms of useful thermal output.
"Date of Initial Commercial Operation" means 12:01 a.m. on the day Cogen
designates in writing as the initial date of commercial operation of the
Cogeneration Facility.
"Easement" means that certain easement of even date herewith from BI and
IMTT to Cogen, pursuant to which BI and IMTT grant to Cogen 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 Cogen under the Ground Lease.
"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 such loans, and the nominee or designee of any such
person.
"Governmental Authorization" means any governmental authorization, license,
permit, or certificate that is
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necessary to Operate and Maintain the Steam Producing Facilities in compliance
with all applicable federal, state, and local laws.
"Ground Lease" means that certain agreement between BI and IMTT, as Lessor,
and Cogen, as Lessee, of even date herewith for certain property located in
Bayonne, New Jersey, including all exhibits and amendments thereto that may be
made from time to time.
"IMTT" means IMTT-Bayonne, a Delaware partnership.
"Lease" means this lease between Cogen, as lessor, and IMTT, as lessee,
pursuant to which the Steam Producing Facilities are leased to IMTT, including
all exhibits and amendments thereto that may be made from time to time.
"Note" means the promissory note of even date herewith of Cogen payable to
BI in the principal amount of $2,600,000.00.
"Obligated Party" means, from the date hereof until the Date of Initial
Commercial Operation, IMTT, and means, from the Date of Initial Commercial
Operation until the end of the Initial Term or any Extended Term of this Lease,
Cogen, except as otherwise modified as provided in Article 5.4.
"Operate and Maintain" means the engineering, purchasing, repair,
supervision, training, inspection, testing, protection, operation, use,
management, replacement, maintenance and improvement of and for the Steam-
Producing Facilities in accordance with applicable industry standards, good
engineering practice and applicable law.
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"Option Agreement" means that certain option agreement of even date
herewith between Cogen and BI, including all exhibits and amendments thereto
that may be made from time to time.
"Party" or "Parties" means the signatories to this Agreement and their
successors and assigns.
"Purchase and Sale Agreement" means that certain agreement of even date
herewith pursuant to which Cogen purchases and BI and IMTT sell the Steam
Producing Facilities together with certain other assets, including all exhibits
and amendments thereto that may be made from time to time.
"Rent Note" means that certain promissory note of even date herewith of
Cogen, payable to BI in the principal amount of $600,000.00.
"Security Agreement" means that certain security agreement of even date
herewith between BI and Cogen, executed and delivered by Cogen as security for
the payment of the Note, including all exhibits and amendments thereto that may
be made from time to time.
"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, as more
particularly described in Exhibit A appended hereto, 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.
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"Steam Sale Agreement" means that certain agreement between Cogen and IMTT
dated June 13, 1985, for the Sale of Steam and Electricity from a Cogeneration
Plant, including all exhibits and amendments thereto they may be made from time
to time.
ARTICLE 2
---------
TERMS OF THE LEASE
------------------
2.1 Equipment Leased. Cogen hereby leases to IMTT, and IMTT hereby leases
from Cogen, the Steam Producing Facilities pursuant to the terms and conditions
herein contained.
2.2 Rent. IMTT shall pay to Cogen as rent for the Steam Producing
Facilities the amount of the Ten Dollars ($10,00), plus other good and valuable
consideration as set forth herein, for the Initial Term hereof, payable in
advance, on the date hereof. The rent for any Extended Term shall be in the same
amount and shall be payable in advance on or before the first day of the
Extended Term.
2.3 Term. The term of this Lease shall commence on the date hereof and
shall continue for an initial period of ten (10) Annual Periods from the Date of
Initial Commercial Operation (the "Initial Term"); thereafter, the term of this
Lease shall be automatically extended for so long as the Steam Sale Agreement
shall remain in effect (the "Extended Term").
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2.4 Termination. This Lease shall terminate if, either during the Initial
Term or during the Extended Term, BI shall become the owner of the Steam
Producing Facilities pursuant to the Purchase and Sale Agreement, the Security
Agreement or the Option Agreement.
ARTICLE 3
---------
CONDITION OF STEAM PRODUCING FACILITIES
---------------------------------------
IMTT represents that it has thoroughly inspected the Steam Producing
Facilities and agrees that the Steam Producing Facilities are of a size, design,
capacity and manufacture such that they are suitable for IMTT's purpose, and
that same are in good order. Cogen makes no warranties or representations,
express or implied, except as to title of the Steam Producing Facilities as set
forth in Article 9.4 hereof, nor shall it be deemed to have made any such
warranties, representations as to the fitness, design or condition of or as to
the quality or capacity of the Steam Producing Facilities, or as to the material
components or workmanship of the Steam Producing Facilities, or any other
representation or warranties whatsoever, express or implied, with respect to
the Steam Producing Facilities.
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ARTICLE 4
---------
OWNERSHIP AND OTHER RIGHTS
--------------------------
4.1 Ownership and Inspection. The Steam Producing Facilities shall at all
times remain the property of Cogen, and Cogen shall have free access to the
Steam Producing Facilities at all reasonable times for the purpose of
inspection and for any other purpose contemplated by this Lease.
4.2 No Liens. IMTT shall keep the Steam Producing Facilities free and clear
of all liens and encumbrances.
4.3 Improvements. Any improvements made by an Obligated Party to the Steam
Producing Facilities in order to operate and Maintain such Facilities shall
remain the property of Cogen during the term of, and subsequent to the
termination of this Lease.
ARTICLE 5
---------
USE OF FACILITIES
-----------------
5.1 Operation and Maintenance. The Obligated Party shall Operate and
Maintain the Steam Producing Facilities, solely at its own expense except as may
be provided in Article 3.5.A of the Steam Sale Agreement. Prior to the earlier
of the Date of Initial Commercial Operation or the date that any Governmental
Authorization is transferred, issued or reissued to Cogen, IMTT or BI shall be
obligated to maintain al1 Governmental Authorizations. Beginning with the
execution of this
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Agreement, Cogen shall have the right to have any Governmental Authorization
transferred, issued, or reissued to it. Cogen shall become obligated to maintain
such Governmental Authorizations upon the earlier of such transfer, issue or
reissue, or the Date of Initial Commercial Operation. BI and IMTT shall perform
any and all steps necessary to effectuate the transfer, issue or reissue of all
Governmental Authorizations to Cogen and shall not take any act or omit to take
any act the effect of which would be to limit Cogen's rights or interfere with
the fulfillment of Cogen's obligations under this Article 5.1. To the extent
that a failure by Cogen to obtain the transfer, issue or reissue of any
Governmental Authorization is the result of a failure by IMTT or BI to act in
accordance with this Article 5.1 or with Article 2.4 of the Purchase and Sale
Agreement, Cogen shall not be responsible for the maintenance of such
Governmental Authorization or to carry out any other obligations hereunder for
which such Governmental Authorization is necessary in order to perform the same.
At such time as there is a change in the Obligated Party, the Party that was
formerly the Obligated Party shall take all steps required to cause all
Governmental Authorizations to be transferred, issued or reissued in the name of
the then Obligated Party.
5.2 Safe and Lawful Use. The Obligated Party shall not use, occupy suffer
or permit the Steam Producing Facilities or any part thereof to be used during
the term hereof in any
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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/or recognized industry
safety standards and guidelines applicable to the Operation and Maintenance of
the Steam Producing Facilities and shall be responsible for all taxes relating
to the Steam Producing Facilities. The Obligated Party shall Operate and
Maintain the Steam Producing Facilities in a careful, safe, lawful and proper
manner and shall not use or permit the use of the Steam Producing Facilities in
any way which will injure the reputation of the same or which shall constitute
an unreasonable interference with IMTT's or BI's business at the Bayonne
Facility or a nuisance, annoyance or inconvenience to IMTT or BI or any of
IMTT's or BI's neighbors or which shall damage IMTT or BI or any of IMTT's or
BI's neighbors. If an Obligated Party shall Operate and Maintain the Steam
Producing Facilities in a manner as heretofore operated and maintained or as may
be required by law, the same shall not be construed to be a nuisance, annoyance
or inconvenience. In particular, the Obligated Party shall:
A. cause all Governmental Authorizations to be transferred, issued or
reissued in its name upon becoming the Obligated Party, make any payment for
fees or other costs related thereto, maintain all Governmental Authorizations,
and
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keep such Authorizations safe from termination, cancellation, or voidance by
regulatory authorities;
B. have the right to contest by appropriate legal proceedings
diligently conducted in good faith, in its name, or if legally required, in the
name of the non-Obligated Party, at the sole cost of the Obligated Party, the
validity or Application of any law, ordinance, order, rule, regulation,
requirement, or tax of the nature referred to in this Article 5.2. If by the
terms of any such law, ordinance, order, ruler regulation, requirement, or tax,
compliance therewith may legally be delayed pending the prosecution of any such
proceeding, the Obligated Party may delay such compliance therewith until the
final determination of such proceeding. In connection with any such contest,
each Party shall execute and deliver any appropriate papers or other instruments
which may be necessary or proper to permit the Obligated Party to so contest the
validity or application of any such law, ordinance, order, rule, regulation,
requirement, or tax and to fully cooperate in such contest, all at the expense
of the Obligated Party.
5.3 Right of the Non-Obligated Party to Contest By Appropriate Legal
Proceeding. If the Obligated Party decides not to contest by appropriate legal
proceeding the validity or application of any law, ordinance, order, rule,
regulation, requirement, or tax of the nature referred to in Article 5.2,
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it shall give the non-Obligated Party written notice of its decision not to
contest by appropriate legal proceeding within sufficient time to permit the
non-Obligated Party to contest by appropriate legal proceeding the validity of
such law, ordinance, order, rule, regulation, or tax. The non-Obligated Party
may, but shall not be obligated to, contest by appropriate legal proceeding the
validity or application of any law, ordinance, order, rule, regulation,
requirement, or tax of the nature referred to in Article 5.2.
5.4 Change of Obligated Party.
A. At any time Cogen is the Obligated Party, it shall have the right,
which may be exercised in its sole discretion and without cause, to designate
IMTT as the Obligated Party to be effective sixty (60) days after giving written
notice to IMTT of such designation or an appropriately shorter time if time is
of the essence.
B. At any time Cogen is the Obligated Party, IMTT shall have the
right to substitute itself for Cogen as the obligated Party, with such
substitution to be effective sixty (60) days after giving written notice to
Cogen, or an appropriately shorter time if time is of the essence. IMTT may
exercise such right only in the event that Cogen is in default of its obligation
as an Obligated Party under Article 5.1 to Operate and Maintain the Steam
Producing Facilities.
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C. Notwithstanding any change in Obligated Parties pursuant to the
provisions of this Agreement, the relationship between Cogen and IMTT as lessor
and lessee under this Agreement shall not be vitiated.
5.5 Emergency Condition. When Cogen is the Obligated Party, IMTT shall have
the right, notwithstanding the fact that Cogen is the Obligated Party, to cause
the Steam Producing Facilities to be fired either by directing Cogen to do so or
by itself doing so safely and with legally qualified personnel in accordance
with industry standards, if (1) the Maximum Steam Production, as defined in
Section 1.14 of the Steam Sale Agreement, is not being supplied to IMTT by
Cogen, and (2) an emergency condition exists. As used herein, the term
"emergency condition" means a situation in which the Maximum Steam Production is
not available to IMTT on an instantaneous basis and is likely to result in loss
of property or business interruption. It is the intention of the Parties that
IMTT act as Cogen's agent under all Governmental Authorizations when IMTT acts
pursuant to this Article 5.5 and that Cogen shall take all steps necessary to
make IMTT its agent for said purpose and to permit IMTT to continue as such when
it acts pursuant to this Article 5.5. IMTT shall indemnify Cogen to the extent
that Cogen is held liable for any breach of applicable law caused by IMTT when
it operates the Steam Producing Facilities pursuant to this Article 5.5.
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ARTICLE 6
---------
PAYMENT OF TAXES
----------------
All local, state and federal taxes, and any assessments, or licensing fees
levied or imposed upon the Steam Producing Facilities, or in connection with
this Lease and/or the operation or use of the Steam Producing Facilities, shall
be paid by the Obligated Party. For purposes of determining which of the Parties
hereto is the Obligated Party for any such impost, tax or levy, all such
imposts, taxes and levies shall be pro-rated evenly over the period of time to
which they relate. In the event that a tax bill is delivered to the non-
Obligated Party, the non-Obligated Party shall forthwith deliver such tax bill
to the Obligated Party.
ARTICLE 7
---------
INSURANCE AND RISK OF LOSS
--------------------------
7.1 Liability Insurance Coverage. The non-Obligated Party shall have the
right, from time to time, to make such reasonable requirements of the Obligated
Party with reference to insurance that will reasonably cover liabilities to
which the non-Obligated Party may be exposed by virtue of this Lease, but in no
event will the non-Obligated Party require that the Obligated Party carry limits
or coverages in excess of those otherwise carried by IMTT with regard to the
Bayonne Facility.
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7.2 Property and Business Interruption Insurance Coverage. With respect to
the Steam Producing Facilities, the Obligated Party shall obtain or cause to be
obtained and at all time carry or cause to be carried insurance against loss or
damage by fire and risks embraced within "all-risk boiler and machinery
coverage" with companies licensed to do business in the State of New Jersey for
amounts sufficient to prevent the non-Obligated Party from being a coinsurer
within the policy and in any event, in an aggregate amount not less than one
hundred percent (100%) of the full insurable replacement coverage value of the
Steam Producing Facilities. The required insurance coverage may be effected
under combined single limit (as to public liability insurance), overall blanket
or excess coverage policies of the Obligated Party, and shall name the other
Party hereto as an additional insured. The foregoing policy or policies shall
also contain provisions insuring against loss of profits (business interruption)
and provide for cleanup and debris removal.
7.3 Conditions Concerning Insurance Carriers. Insurance companies issuing
policies required in this Lease 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 insurance policies required
to be furnished by the
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Obligated Party hereunder shall name Cogen, BI and IMTT (and mortgagees, if any)
as named insureds and each such policy shall be noncancellable with respect to
the non-Obligated Party without thirty (30) days written notice to the non-
Obligated Party. The policy or policies of insurance or certified copies
thereof shall be delivered to the non-Obligated Party, 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 or the date when IMTT shall enter
into possession of the Steam Producing Facilities, whichever occurs sooner. At
least fifteen (15) days prior to the expiration or termination date on any
policy, the Obligated Party shall deliver a renewal or replacement policy with
proof of the payment of the premium therefor; provided, however, that in the
event that the non-Obligated Party cannot deliver a renewal or replacement
policy within such period, the obligated Party shall deliver to the non-
Obligated Party a binder or certificate of insurance as soon as possible.
7.4 Risk of Loss. In the event of any loss, damage or destruction on or
with respect to the Steam Producing Facilities, the Obligated Party shall bear
the risk of all such loss, damage or destruction and shall be obligated to
repair and/or restore the Steam Producing facilities to their condition
immediately preceeding such loss, damage or destruction, regardless of the
sufficiency of the insurance coverage provided in compliance with this
Article 7.
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ARTICLE 8
---------
REPRESENTATIONS AND WARRANTIES OF IMTT
--------------------------------------
IMTT hereby represents and warrants to Cogen as follows:
8.1 Organization and Good Standing. IMTT is a partnership duly organized
and validly existing under the laws of the State of Delaware.
8.2 Authority. The execution, delivery and performance of this Lease has
been duly and validly authorized and approved by IMTT in accordance with the
terms of its partnership agreement. This Lease constitutes the valid and binding
agreement of IMTT enforceable against it in accordance with its terms.
8.3 No Violation of Other Agreements. The execution, delivery and
performance of this Lease by IMTT will not conflict with or cause a breach of or
default under any other agreement to which IMTT is a party or by which it may be
bound. IMTT has no reason to believe that any consents or approvals of any other
persons, firms, corporations, entities or governmental authorities are required
in connection with the execution and delivery of this Lease.
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ARTICLE 9
---------
REPRESENTATIONS AND WARRANTIES OF COGEN
---------------------------------------
Cogen hereby represents and warrants to IMTT as follows:
9.1 Organization and Good Standing. Cogen is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
9.2 Authority. The execution, delivery and performance of this Lease have
been duly and validly authorized and approved by the board of directors and, to
the extent necessary, the shareholders of Cogen and constitutes the valid and
binding agreement of Cogen enforceable against it in accordance with its terms.
9.3 No Violation of Other Agreements. The execution, delivery and
performance of this Lease by Cogen will not conflict with or cause a breach of
or default under any other agreement to which Cogen is a party or by which its
properties may be bound. Cogen has no reason to believe that any consents or
approvals of any other persons, firms, corporations, entities or governmental
authorities are required in connection with the execution and delivery of this
Lease.
9.4 Title to Steam Producing Facilities. Cogen has not taken any steps or
executed any documents to convey or encumber title to or to lease the Steam
Producing Facilities to any other party since the acquisition thereof from BI
other than as provided in the Security Agreement.
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9.5 Operability of the Steam Producing Facilities. Cogen agrees to Operate
and Maintain the Cogeneration Facility in a manner such that when the
Cogeneration Facility is not supplying IMTT with the maximum Steam Production,
as defined in Section 1.14 of the Steam Sale Agreement, the Steam Producing
Facilities may be used to produce steam up to the Maximum Steam Production
without violating any Governmental Authorizations.
ARTICLE 10
----------
QUIET ENJOYMENT
---------------
Cogen covenants and agrees with IMTT that so long as IMTT keeps and
performs all of the covenants and conditions required to be kept and performed
by it, IMTT (when it is the Obligated Party or during periods to which Article
5.5 applies) shall have quiet and undisturbed and continued possession of the
Steam Producing Facilities, free from any claims Against Cogen and all persons
claiming under, by or through Cogen. Cogen, its agents and representatives, at
all reasonable times, may enter the Steam Producing Facilities for the purpose
of inspecting the same and ascertaining compliance with the terms of this Lease.
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ARTICLE 11
----------
DEFAULT AND REMEDIES THEREFOR
-----------------------------
11.1 Default. If either of the Parties hereto shall fail to perform or
observe any of the covenants, conditions or agreements to be performed or
observed hereunder, and such failure shall continue unremedied for a period of
thirty (30) days after the giving of notice by the other Party of such failure
to perform or observe, then the Party so failing to perform or observe shall be
in default of this Lease (each such failure constituting an "Event of Default"
hereunder), provided, however, that a Party shall not be in default hereunder if
it diligently commences to cure such failure to perform or observe the
covenants, conditions or agreements hereunder within the thirty (30) day
period following notice by the other Party and for so long as it diligently
continues such efforts. Further, an Event of Default by Cogen under the Ground
Lease, the Steam Sale Agreement, or the Security Agreement shall constitute an
Event of Default on the part of Cogen hereunder.
11.2 Remedies. Upon the occurrence of an Event of Default hereunder, the
non-defaulting Party shall be entitled either (a) (i) to terminate this Lease
and (ii) to exercise any and all rights and remedies available to it at law and
in equity, or (b) to have the provisions of this Lease specifically enforced by
any court having equity jurisdiction,
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it being acknowledged and agreed that any such Event of Default will cause
immediate and irreparable injury to the nondefaulting Party and that money
damages will not provide an adequate remedy therefor.
ARTICLE 12
----------
INDEMNIFICATION
---------------
Each Party agrees to and hereby does indemnify and hold the other Party and
its shareholders, partners, officers and directors, agents and employees (each
an "Indemnified Party") harmless from and against any and all loss, cost, damage
and expenses (including reasonable attorney's fees and expenses) suffered or
incurred by any of them arising out of or relating to the misrepresentation or
breach of any warranty of such Party contained herein or for any failure of such
Party to comply with its covenants and obligations contained in this Lease. In
case a claim may be asserted or action brought against any party entitled to
indemnification hereunder, such Indemnified Party shall promptly notify the
other Party in writing and such other Party shall assume the defense thereof,
including the employment of counsel satisfactory to the Indemnified Party, the
payment of all costs and expenses with respect thereto. Any one or more of the
Indemnified Parties shall at its own cost have the right to employ separate
counsel in any such action and to participate in the defense thereof.
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The Party obligated to indemnify under this Article 12 (the "Indemnifying
Party") shall not be liable for any settlement of any such claim or action
effected without its consent. The Indemnifying Party may not settle such claim
or action without the consent of the Indemnified Party which consent shall be
conditioned upon the Indemnifying Party demonstrating to the Indemnified Party
that the Indemnifying Party has sufficient financial means to make all payments
under any such settlement as and when due.
ARTICLE 13
----------
FORCE MAJEURE
-------------
13.1 Definition. "Force Majeure" means unforseeable 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 forseeable.
13.2 Burden of Proof. The burden of proof as to whether a Force Majeure has
occurred shall be upon the Party claiming the Force Majeure.
13.3 Effect of Force Majeure. If either Party is rendered wholly or partly
unable to perform its obligations under this Lease because of Force Majeure,
that Party shall be
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excused from whatever performance is affected by the Force Majeure to the
extent so affected, provided that: (1) the nonperforming 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.
ARTICLE 14
----------
SUCCESSORS AND ASSIGNS
----------------------
14.1 This Lease shall be binding upon and inure to the benefit of the
Parties and any permitted assignees as provided herein.
14.2 Except as is expressly set forth in this Lease, neither the rights nor
the obligations of any Party under this Lease may be assigned, pledged,
hypothecated or otherwise transferred.
14.3 Cogen is expressly permitted to assign this Agreement as provided in
this Article 14.3. Cogen may assign this Agreement to Cogen Technologies NJ
Venture, provided that such assignment shall be of no force and effect unless
and until Cogen Technologies NJ Venture shall have assumed in
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writing all of Cogen's obligations under the following instruments and notes,
and shall have agreed in writing to cure any existing defaults and breaches of
Cogen hereunder and thereunder:
(1) The Steam Sale Agreement
(2) The Ground Lease
(3) The Option Agreement
(4) Purchase and Sale Agreement
(5) The Note
(6) The Security Agreement
(7) The Rent Note
Cogen may assign this Agreement to any Financier which shall be obligated
hereunder only as provided in Articles 21.6 and 21.7 of the Ground Lease.
14.4 IMTT is expressly permitted to assign this 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 IMTT's
obligations under this Agreement and under the instruments referred to in
Article 14.3, 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.
14.5 Notwithstanding any such assignment by IMTT or Cogen, the assignor
shall remain fully liable for its obligations hereunder.
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ARTICLE 15
----------
MISCELLANEOUS
-------------
15.1 Notice. All notices, including communications and statements which are
required or permitted under the terms of this Lease, 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
deemed served eighteen (18) hours after delivery to the telegram company.
Notices may be sent to the Parties at the following addresses:
(a) Cogen: Cogen Technologies NJ, Inc.
14614 Falling Creek Drive
Suite 212
Houston, Texas 77068
Attention: Mr. Robert C. McNair
President
With information copy to:
Cogen Technologies NJ, Inc.
Foot of East 22nd Street
Bayonne, New Jersey 07002
Attention: Plant Manager
(b) IMTT: International-Matex Tank Terminals
Ninth Floor
321 St. Charles Avenue
New Orleans, Louisiana 70130
Attention: Mr. Thomas B. Coleman,
Partnership Manager
or
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Bayonne Industries, Inc.
Foot of East 22nd Street
Bayonne, New Jersey 07002
Attention: Glynn Esteves
15.2 Amendments. No amendment or modification of the terms of this Lease
shall be binding on IMTT, BI (only with respect to Article 5.1), or Cogen unless
reduced in writing and signed by the Parties.
15.3 Choice of Law. This Lease shall be governed by and construed in
accordance with the laws of the State of New Jersey.
15.4 Other Agreements. This Lease supersedes any and all oral or written
agreements and leases and understandings heretofore made relating to the subject
matters herein, and together with the instruments and notes referred to in
Article 14.3 constitutes the entire agreement and understanding of the Parties
relating to the subject matters herein.
15.5 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.
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IN WITNESS WHEREOF, the Parties have entered into this Agreement to be
signed in quadruplicate original as of the date first written above.
WITNESS: IMMT-BAYONNE
/s/ BERTRAND B. ARTIGUES By: /s/ RICHARD B. JURISICH
- -------------------------------- ---------------------------------
Bertrand B. Artigues Richard B. Jurisich,
Secretary
[SEAL]
ATTEST COGEN TECHNOLOGIES NJ, INC.
/s/ JOHN B. WING By: /s/ ROBERT C. MCNAIR
- -------------------------------- ---------------------------------
John B. Wing, Robert C. McNair,
Assistant Secretary President
BI with regard to Article 5.1.
[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
Agreements: IMTT Steam Sale Agreement
and Amendment thereto, both
dated June 13, 1985
Steam Producing Facilities
Lease Agreement dated
May 22, 1986
CONSENT TO ASSIGNMENT
---------------------
WHEREAS, Cogen Technologies NJ Venture, a general partnership
organized under the laws of the State of New Jersey (the "Borrower"), has
entered into a Security Agreement and Assignment dated as of December 15, 1988
(the "Security Agreement") with The Prudential Insurance Company of America (the
"Lender"), pursuant to which the Borrower has assigned all its rights, title and
interests in and to certain Assigned Agreements (all capitalized terms used
herein and defined in the Security Agreement shall have the same meaning when
used herein unless otherwise defined herein); and
WHEREAS, the Borrower and the undersigned are parties to an Agreement
for the Sale of Steam and Electricity from a Cogeneration Plant as amended to
date, dated June 13, 1985 (the "Steam Sale Agreement"), by and between Cogen
Technologies NJ, Inc. and IMTT-Bayonne and a Steam Producing Facilities Lease
Agreement, dated May 22, 1986 (the "SPF Lease"), between Cogen Technologies NJ,
Inc. and IMTT-Bayonne (both as assigned to Cogen Technologies NJ Venture
pursuant to the Amended and Restated Joint Venture Agreement dated as of August
28, 1986) (the Steam Sale Agreement and the SPF Lease are sometimes hereinafter
collectively called the "Agreements") relating to the Cogeneration Facility (as
defined in the Steam Sale Agreement) which Agreements are included within the
Assigned Agreements; and
WHEREAS, the undersigned is agreeable to consenting to the assignment
by the Borrower to the Lender of the Agreements as provided in the Security
Agreement;
NOW, THEREFORE, in order to satisfy its obligation to permit the
Borrower to assign the Agreements to a "Financier" as defined in and pursuant to
the provisions relating
to assignment as set forth in the Agreements, the undersigned hereby:
1. Agrees that:
(a) To the best of its knowledge the execution and delivery of the
Agreements and this Consent to Assignment, and the performance by it of its
obligations thereunder and hereunder, are within its powers, have been duly
authorized, have received all necessary governmental approvals (if any shall be
required) and do not and will not contravene or conflict with any provision of
law or of any agreement binding upon it or of its Articles of Incorporation or
By-laws.
(b) The Agreements and this Consent to Assignment are its legal, valid
and binding obligations and are enforceable against it in accordance with their
terms.
(c) The Agreements are in full force and effect and no default on its
part or, to the best of its knowledge, on the part of the Borrower exists
thereunder.
2. Agrees with the Lender that until it receives notice from the
Lender that the Security Agreement has been terminated (i) it will not agree to
any modification, amendment or supplement of the Agreements without the prior
written consent of the Lender, (ii) it will not terminate either Agreement by
reason of any default thereunder by the Borrower without giving the Lender
notice of such default and the same opportunity to cure such defaults as is set
forth in the Agreements for a "Financier", (iii) it will deliver to the Lender a
copy of each demand, notice or other communication given by it to the Borrower
pursuant to the Agreements, (iv) it will not, without the prior written consent
of the Lender, acknowledge or consent to any sale or pledge of, or any other
assignment or part of a security interest by the Borrower of, any of the right,
title or interest of the Borrower in either Agreement, (v) upon execution and
delivery of this Agreement, it will pay all amounts payable by it to the
Borrower under the Agreements directly to the institution and account set forth
on Exhibit A hereto, unless notified otherwise by the Lender, and (vi) in the
event that the Lender succeeds to the interest of Borrower under the Agreements
by reason of the exercise of its rights under the Security Agreement the
undersigned will accept performance by the Lender or its successors or assigns
under such Agreements notwithstanding any restriction set forth in such
Agreements on the assignability of the Borrower's rights, but subject to
paragraph 6 hereof.
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3. Reconfirms our consent to the assignment of the Agreements to the
Borrower by Cogen Technologies NJ, Inc.
4. This Consent to Assignment shall be governed by and in accordance
with the laws of the State of New York and shall be binding on, and inure to the
benefit of, the undersigned and the Lender and their successors and assigns.
5. Agrees with the Lender and the Borrower that all references to the
"Ground Lease" contained in the SPF Lease and the Steam Sale Agreement shall
refer to the Site Lease dated October 18, 1986, by and between Bayonne
Industries, Inc. and IMTT-Bayonne and Cogen Technologies NJ Venture and that the
SPF Lease and the Steam Sale Agreement are hereby amended to the extent
necessary to incorporate such a reference.
6. Notwithstanding anything to the contrary contained herein, the
consent granted by the undersigned and evidenced hereby and the rights of Lender
hereunder are and shall be expressly limited to those rights conferred upon a
Financier (as defined in the Agreements) set forth in Sections 15.5 and 19.3 of
the Steam Sale Agreement and Section 14.3 of the SPF Lease; provided, however,
that the provisions of Section 14.3 of the SPF Lease and Section 19.3 of the
Steam Sale Agreement referencing and incorporating Sections 21.6 and 21.7 of the
"Ground Lease," shall be interpreted as indicated in the Consent to Assignment
of the Site Lease and the Purchase and Sale Agreement, by Bayonne Industries,
Inc. and IMTT-Bayonne dated as of even date herewith.
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IN WITNESS WHEREOF, the undersigned has executed this Consent to
Assignment as of December 15, 1988.
IMTT-BAYONNE
By /s/ RICHARD B. JURISICH
-----------------------------------
The undersigned hereby acknowledges
and agrees to the provisions set forth
in paragraph 5 above.
COGEN TECHNOLOGIES NJ VENTURE
By: Cogen Technologies NJ, Inc.
Managing Venturer
By [Signature appears here]
------------------------------------
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STATE OF LOUISIANA )
) ss.:
PARISH OF ORLEANS )
On this 27th day of December, 1988 before me personally came Richard
B. Jurisich, Sr., to me known, who, being by me duly sworn, did depose and say
that he resides at New Orleans, Louisiana, that he is the Chief Operating
Officer of IMTT-Bayonne, the partnership described in and which executed the
above instrument; and that he signed his name thereto by order of the
Partnership Committee of said partnership as the free act and deed of IMTT-
Bayonne and his free act and deed in his said capacity.
/s/ BERTRAND F. ARTIGUES
--------------------------------
Notary Public
Bertrand F. Artigues
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EXHIBIT A
---------
Midlantic National Bank
499 Thornall Street
Edison, New Jersey 08818
ABA No: 021200012
Attention: Michael Davoron
Account No: 10107290
Wire transfers only required with respect to payments made under the
IMTT Steam Sale Agreement and Amendment thereto, both dated June 13, 1985.