EXHIBIT 99.1
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CHILLED WATER SERVICE AGREEMENT
Dated as of March 23, 1999
Between
Northwind Boston LLC
and
BP Prucenter Acquisition LLC
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TABLE OF CONTENTS
1. Chilled Water Service ........................................................ 1
1.1. Services .............................................................. 1
1.2. Contract Capacity ..................................................... 1
1.2.1. Reduction in Contract Capacity ................................. 1
1.2.2. Contract Capacity Charge ....................................... 2
1.2.3. Contract Capacity Charge Adjustment ............................ 2
1.2.4. Metering ....................................................... 2
1.2.5. Demand Limiting Devices ........................................ 2
1.3. Temporary Additional Capacity ......................................... 3
1.3.1. First Three Annual Periods ..................................... 3
1.3.2. After the First Three Annual Periods ........................... 3
1.3.3. Charge for Temporary Additional Capacity Requests After the
First Three Annual Periods ..................................... 3
1.4. New Construction ...................................................... 3
1.5. Permanent Additional Capacity ......................................... 4
1.5.1. Notice ......................................................... 4
1.5.2. Permanent Additional Capacity Charge For Requests Within
the First Ten Annual Periods ................................... 4
1.5.3. Permanent Additional Capacity Charge For Requests After the
First Ten Annual Periods ....................................... 4
1.5.4. Cancellation ................................................... 5
2. Term
2.1. Commencement Date ..................................................... 5
2.2. Initial Term .......................................................... 5
2.3. Renewal ............................................................... 5
3. Charges and Adjustments
3.1. Consumption Charge .................................................... 6
3.1.1. Consumption Charge Adjustment .................................. 6
3.2. Effects of Changes of Law ............................................. 6
3.3. Taxes ................................................................. 6
4. Payment Terms ................................................................ 6
4.1. Invoices .............................................................. 6
4.2. Default Rate Interest ................................................. 7
5. Installation, Maintenance and Ownership of Energy Transfer Station,
Connection Equipment and Customer Cooling Equipment .......................... 7
5.1. Installation of Equipment ............................................. 7
5.2. Location of Equipment ................................................. 7
5.3. Maintenance of Energy Transfer Station ................................ 7
5.4. Connection Equipment; Customer Cooling Equipment ...................... 7
5.5. Customer Acquisition of Connection Equipment .......................... 7
5.6. Damage to Premises by Supplier ........................................ 7
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6. Rights of Access ............................................................. 8
6.1. Generally ............................................................. 8
6.2. Protection of Energy Transfer Station ................................. 8
7. Insurance Requirements ....................................................... 8
8. Events of Default ............................................................ 8
8.1. Supplier Default ...................................................... 8
8.1.1. Failure to Provide Chilled Water Service ....................... 8
8.1.2. Failure to Perform Other Obligations ........................... 9
8.2. Customer Default ...................................................... 9
8.2.1. Failure to Pay ................................................. 9
8.2.2. Failure to Perform Other Obligations ........................... 9
9. Planned Maintenance; Other Service Interruptions ............................. 9
9.1. Planned Maintenance ................................................... 9
9.2. Other Interruptions ................................................... 10
9.3. Generally ............................................................. 10
10. Force Majeure Events ......................................................... 10
11. Remedies Following Default ................................................... 11
11.1. Customer's Remedies upon Occurrence of a Supplier Default ............. 11
11.1.1. Abatement ..................................................... 11
11.1.2. Termination ................................................... 11
11.1.3. Other Rights and Remedies ..................................... 11
11.2. Supplier's Remedies upon Customer Default ............................. 11
11.2.1. Discontinue of Performance .................................... 11
11.2.2. Termination ................................................... 12
11.2.3. Other Rights and Remedies ..................................... 12
11.3. No Consequential Damages .............................................. 12
12. Effect of Termination of Agreement ........................................... 12
12.1. Payment; No Further Obligations ....................................... 12
12.2. Disconnection ......................................................... 12
13. Indemnification .............................................................. 13
13.1. Indemnification by Supplier ........................................... 13
13.2. Indemnification by Customer ........................................... 13
13.3. Notice of Claims ...................................................... 13
13.4. Amount of Claim ....................................................... 13
13.5. Defense of Action ..................................................... 13
13.6. Survival of Provisions ................................................ 14
14. Warranties ................................................................... 14
15. Miscellaneous Provisions ..................................................... 14
15.1. Notices ............................................................... 14
15.2. Assignment ............................................................ 14
15.3. Nondisturbance Agreement .............................................. 14
15.4. Memorandum of Agreement ............................................... 14
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15.5. Confidential Information .............................................. 15
15.6. Successors ............................................................ 15
15.7. Entire Agreement ...................................................... 15
15.8. Amendments to Agreement ............................................... 15
15.9. Waivers; Approvals .................................................... 15
15.10. Partial Invalidity .................................................... 16
15.11. Execution in Counterparts ............................................. 16
15.12. Governing Law ......................................................... 16
15.13. No Third Party Rights ................................................. 16
15.14. Interconnections ...................................................... 16
15.14.1. Performance Bond ............................................. 16
15.15 Other Transactions .................................................... 17
15.16. Cooperation ........................................................... 17
15.17. Supplier Operations ................................................... 17
15.18. Termination ........................................................... 18
15.19. Promotional Efforts ................................................... 18
15.20. Authorization ......................................................... 18
15.21. Hazardous Materials ................................................... 18
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NORTHWIND BOSTON LLC
CHILLED WATER SERVICE AGREEMENT COVER PAGE
This Cover Page is attached to and made a part of that certain Chilled Water
Service Agreement dated as of March 23. 1999 by and between the customer
identified below and Northwind Boston LLC, a Massachusetts limited liability
company.
CUSTOMER: BP Prucenter Acquisition LLC, a Delaware
limited liability company
CUSTOMER'S INTEREST IN PREMISES: FEE INTEREST
ADDRESS OF PREMISES: (i) Prudential Tower located at 800
Boylston Street, Boston, MA;
(ii) Prudential Retail area known as the
Shops at Prudential located at 800
Boylston Street, Boston, MA; and
(iii) 101 Huntington Avenue, Boston, MA.
((i), (ii) and (iii) are collectively
referred to hereinafter as the
"Premises")
PROJECTED COMMENCEMENT DATE: June 15, 1999
DURATION OF INITIAL TERM: 25 Annual Periods
CONTRACT CAPACITY: 4620 Tons of chilled water service
INITIAL CONTRACT CAPACITY CHARGE: $175 per Annual Period per Ton of
Contract Capacity. This charge shall
adjusted from time to time in accordance
with the terms of the Chilled Water
Service Agreement.
INITIAL CONSUMPTION CHARGE: $0.128 per Ton-Hour of chilled water
service. This charge will be adjusted
from time to time in accordance with the
terms of the Chilled Water Service
Agreement.
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NOTICES: All notices and other communications
shall be addressed as follows:
If to Supplier to:
Northwind Boston LLC
800 Boylston Street
Boston, MA 02199
Attn: President
With a copy to:
Northwind Attorney
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Attn: Vincent M. Sacchetti, Esq.
If to Customer to:
BP Prucenter Acquisition LLC
c/o Boston Properties, Inc.
8 Arlington Street
Boston, MA 02116
Attn: David Barrett
With a copy to:
BP Prucenter Acquisition LLC
c/o Boston Properties, Inc.
8 Arlington Street
Boston, MA 02116
Attn: Peter See
This Cover Page is an integral part of the Chilled Water Service Agreement and
its termsare incorporated into such Agreement by reference.
CHILLED WATER SERVICE AGREEMENT
THIS CHILLED WATER SERVICE AGREEMENT (this "Agreement") is dated as of
March 23, 1999, [INITIALED RPT] by and between Northwind Boston LLC, a
Massachusetts liability company (the "Supplier"), and the customer (the
"Customer") identified on the Cover Page (this and all other capitalized terms
used in this Agreement shall have the meanings ascribed to those terms in
Appendix A attached to this Agreement).
RECiTALS:
A. Customer possesses an interest in the Premises, which interest is
described more fully on the Cover Page and the plan attached as Exhibit A
hereto.
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B. Customer desires to purchase from Supplier, and Supplier desires to
provide to Customer, chilled water service to cool space within the Premises, on
the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Supplier and Customer agree as
follows:
1. Chilled Water Service.
1.1. Services. Supplier agrees to supply Customer with chilled water
service at the Premises as set forth in this Agreement. The specifications for
such service, including the scope of work and temperature and pressure of the
water, are set forth in the IOM Specifications attached hereto as Exhibit C. The
chilled water provided to Customer pursuant to this Agreement shall be used by
Customer as the primary source of cooling for the Premises. Customer shall be
responsible for the temperature levels of all space within the Premises.
1.2. Contract Capacity. Supplier shall supply Customer with chilled water
service at the Premises up to the Contract Capacity.
1.2.1. Reduction in Contract Capacity. If the Customer institutes
energy conservation procedures which reduce its Actual Capacity during warm
weather months below the sum of the Contract Capacity and the Permanent
Additional Capacity, the Customer may request in writing a capacity
reduction from the Supplier; provided, that the Customer shall not make
such a request more than once during any consecutive four (4) Annual
Periods. Upon receipt of such request, the Supplier will, during the next
twelve (12) months, study the Customer's chilled water requirements by
plotting Actual Capacity data points occurring during the warmest four (4)
months of such twelve-month period against temperature data points for the
corresponding dates during the same cooling period of the previous Annual
Period which resulted in corresponding temperatures in the Boston
metropolitan area. The Supplier will extrapolate the resulting
relationships and in the event of a difference of five percent (5%) or more
in the Actual Capacity during such dates, the Supplier will determine a new
Contract Capacity and/or Permanent Additional Capacity for chilled water at
the standard design temperatures contemplated under this Agreement.
Supplier shall determine the new capacity charges by first reducing
Permanent Additional Capacity, and if the reduction is greater than
Permanent Additional Capacity, it will then reduce the Contract Capacity.
In no event, however, shall the Contract Capacity for chilled water be
re-established at less than 80% of the initial Contract Capacity plus
Permanent Additional Capacity. In the event of any reduction in the
Contract Capacity pursuant to this Section, the Contract Capacity Charge
will be reduced by the number of Tons by which the Contract Capacity is
reduced multiplied by the Contract Capacity Charge, per Ton of Contract
Capacity, effective immediately prior to such reduction. In the event of
any reduction in the Permanent Additional Capacity, the Permanent
Additional Capacity Charge will be reduced by the number of Tons by which
the Permanent Additional Capacity is reduced multiplied by the Permanent
Additional Capacity Charge, per Ton of Permanent Additional Capacity,
effective immediately prior to such reduction.
1.2.2. Contract Capacity Charge. Pursuant to Section 4.1 hereof,
Customer shall pay to Supplier monthly during the term of this Agreement
1/12th of the Contract Capacity Charge for the Annual Period for Supplier's
undertaking to supply
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chilled water service up to the Contract Capacity, regardless of whether
Customer actually requires Contract Capacity during that Month.
1.2.3. Contract Capacity Charge Adjustment. (A) On the commencement of
the eleventh Annual Period after the Commencement Date, the Contract
Capacity Charge shall be increased to $201.25 per Annual Period per Ton of
Contract Capacity, and shall remain fixed for a period of ten Annual
Periods.
(B) On the commencement of the twenty-first Annual Period after the
Commencement Date, the Contract Capacity Charge shall be increased to
$231.44 per Annual Period per Ton of Contract Capacity, and shall remain
fixed for a period of ten Annual Periods (or five Annual periods in the
event the term of this Agreement is not extended for the Renewal Term).
(C) In the event the term of this Agreement is extended for the
Renewal Term, on the commencement of the sixth Annual Period after the
Renewal Term start date, the Contract Capacity Charge shall be increased to
$266 per Annual Period per Ton of Contract Capacity.
The Contract Capacity Charge, as increased, shall then remain
unchanged until it is adjusted again pursuant to the terms of this Section
or Section 3.2. below.
1.2.4. Metering. (A) Customer's Contract Capacity shall be metered
based on the peak coincident cooling demand for the Premises.
(B) Supplier shall retain a third party to calibrate Supplier's
metering equipment for the Premises prior to June 1 of each year during the
term of this Agreement, and shall provide Customer with written calibration
and testing results. Customer shall have the right to audit Supplier's
calibration and testing, at its own cost, and retain a third party to
perform its own testing to verify Supplier's results. If Customer's test
results are different than Supplier's test results by +/- 3%, Customer and
Supplier shall select an independent third party to retest Supplier's
metering equipment. Supplier shall calibrate the metering equipment for the
Premises based upon such independent third party's test results.
1.2.5. Demand Limiting Devices. Supplier shall install a demand
limiting device, in accordance with the IOM Specifications, for the purpose
of limiting excess capacity requirements and avoiding accidental peaks. On
or after the commencement of the fourth Annual Period after the
Commencement Date, Customer may request the temporary removal of such
demand limiting devices. Upon the removal of such demand limiting devices,
any chilled water service provided in excess of the Contract Capacity and
Permanent Additional Capacity shall be treated as Temporary Additional
Capacity pursuant to the terms of Sections 1.3 of this Agreement, unless
the demand limiting devices are removed due to (i) Supplier's failure to
satisfy .the IOM Specification's temperature requirements, or (ii) abnormal
weather conditions defined as the occurrence of dry bulb temperatures in
excess of 95 [degrees] Fahrenheit as recorded by Supplier at its Back Bay
West Energy Center for a period of four (4) consecutive hours.
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1.3. Temporary Additional Capacity. Upon Customer's request or action,
Supplier may temporarily supply chilled water service in Tons exceeding the
Contract Capacity (such additional temporary service being referred to herein as
"Temporary Additional Capacity").
1.3.1. First Three Annual Periods. If Temporary Additional Capacity is
requested within the first three Annual Periods of the Commencement Date,
such Temporary Additional Capacity shall not result in an increase in the
Contract Capacity and there shall be no Contract Capacity Charge therefor.
1.3.2. After the First Three Annual Periods. Commencing on the fourth
Annual Period after the Commencement Date, if Customer requests and
Supplier delivers Temporary Additional Capacity on more than three separate
occasions or for more than thirty-two (32) hours in the aggregate in an
Annual Period, the Contract Capacity shall be increased for the balance of
the term of this Agreement to include the highest amount in Tons of any
such Temporary Additional Capacity request. Thereafter, if Customer
requests Temporary Additional Capacity during such Annual Period, the
Contract Capacity shall be increased for the balance of the term of this
Agreement by an additional amount in Tons equal to the amount of any such
Temporary Additional Capacity request.
1.3.3. Charge for Temporary Additional Capacity Charge for Requests
After the First Three Annual Periods. On the commencement of the fourth
Annual Period after the Commencement Date, for each Temporary Additional
Capacity requested prior to the date such Temporary Additional Capacity
requests are converted to Contract Capacity, Customer shall pay to Supplier
for such billing period a charge for each such Temporary Additional
Capacity requested equal to the product of (i) the amount of such Temporary
Additional Capacity (as measured in Tons), multiplied by (ii) the Contract
Capacity Charge as modified pursuant to Section 1.2.3.
1.4. New Construction. Customer plans to commence construction of new
properties located at the south side of the Prudential Tower consisting of an
office tower located at 111 Huntington Avenue, Boston, MA (the "111 Office
Tower"), additional retail space (the "111 Retail Space") and residential space
(the "Residential Tower") (collectively the "New Construction") by approximately
April 1, 1999. In anticipation of such New Construction, Supplier agrees to
reserve 2500 Tons of chilled water service capacity at its Back Bay West Energy
Center to supply chilled water service to such New Construction, unless the New
Construction has not materially commenced prior to December 31, 2000 or some
other mutually agreeable date set by the Parties. If Customer constructs the 111
Office Tower and the 111 Retail Space, Customer will be obligated to accept
chilled water service from Supplier pursuant to this Agreement and, upon
commencement of such construction, Customer and Supplier shall agree upon a
schedule for the construction by Supplier of the facilities required to supply
chilled water to the 111 Office Tower and the Ill Retail Space. Supplier shall
supply chilled water to the Residential Tower at the option of Customer
exercised not later than sixty (60) days after commencement of construction of
the Residential Tower and, upon exercise of such option, Supplier and Customer
will agree upon a schedule for the construction by Supplier of the facilities
required to supply chilled water to the Residential Tower. If the New
Construction has not commenced prior to December 31, 2000 or such other mutually
agreeable date set by the Parties, so long as Supplier reasonably demonstrates
to Customer that Supplier has the ability to serve the New Construction from an
alternate cooling capacity source, then Supplier shall have the right to sell
the Back Bay West Energy Center reserved capacity to a third party and the New
Construction shall be serviced from Supplier's alternative capacity source. In
any event the rights of Customer to receive chilled water service for the New
Construction shall expire as to any of the three projects for which construction
has not been started on or before December 1, 2002.
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(C) On the commencement of the twenty-first Annual Period after each
request for Permanent Additional Capacity pursuant to Section 1.5.3.(A),
the Permanent Additional Capacity Charge for such capacity shall be
increased by an additional fifteen percent (15%).
The Permanent Additional Capacity Charge, as increased, shall then
remain unchanged until it is adjusted again pursuant to the terms of this
Section or Section 3.2. below. Each request for Permanent Additional
Capacity shall be subject to the provisions of this Section.
1.5.4 Cancellation. If Customer requests Permanent Additional Capacity
after the fifth Annual Period after the Commencement Date and Supplier
constructs and modifies its production facilities in order to provide such
increased capacity, and Customer subsequently cancels or fails to accept
delivery of such increased capacity within ninety (90) days of the date
first offered by Supplier, Supplier will be relieved from its obligations
to deliver such Permanent Additional Capacity, and Customer shall pay an
additional monthly Permanent Additional Capacity Charge for such increased
capacity from the date such increased capacity was scheduled to be
delivered until such time as Supplier sells such capacity to another
customer.
2. Term.
2.1. Commencement Date. (A) The Commencement Date shall be the date on
which Supplier is ready and able to begin supplying Customer with the chilled
water service in accordance with the terms of this Agreement, provided such date
shall not be earlier than the Projected Commencement Date as defined on the
Cover Page unless otherwise agreed by Supplier and Customer.
(B) In the event Supplier does not begin to supply Customer with chilled
water service within ninety (90) days alter the Projected Commencement Date for
any reason other than the occurrence of a Force Majeure Event or a delay caused
by Customer, then Customer may, at its option, terminate this Agreement upon not
less than thirty days prior written notice to Supplier. Failure to provide such
service shall not constitute a Supplier Default
2.2. Initial Term. The Initial Term of this Agreement commences on the
Commencement Date and continues for the period specified on the Cover Page,
unless terminated earlier pursuant to the terms of this Agreement
2.3. Renewal. The term of this Agreement may be extended for one subsequent
period of ten (10) Annual Periods each (the "Renewal Term"), upon written notice
from Customer to Supplier given not less than two (2) years prior to the
expiration date of the Initial Term.
3. Consumption, Changes of Law and Taxes.
3.1. Consumption Charge. Customer shall pay to Supplier the monthly
Consumption Charge for chilled water service actually provided to Customer
during such month.
3.1.1. Consumption Charge Adjustment. On each annual anniversary of
the Commencement Date, the Consumption Charge shall be adjusted to the sum
of the following:
(i) the initial Consumption Charge, plus (or minus)
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(ii) the product of (A) the initial Consumption Charge,
multiplied by (B) 70% of the percentage increase (or decrease), if
any, in the Regional Electricity Index from the calendar month
immediately preceding the month in which the Commencement Date occurs
to the calendar month immediately preceding the month in which the
adjustment to the Consumption Charge is to occur, plus
(iii) the product of (A) the initial Consumption Charge,
multiplied by (B) 30% of the percentage increase (or decrease), if
any, in the Consumer Price Index from the calendar month immediately
preceding the month in which the Commencement Date occurs to the
calendar month immediately preceding the month in which the adjustment
to the Consumption Charge is to occur.
The Consumption Charge, as adjusted, shall then remain unchanged until it
is adjusted again pursuant to the terms of this Section or Section 3.2
below.
3.2. Effects of Changes of Law. Supplier shall adjust the Contract Capacity
Charge and the Permanent Additional Capacity Charge as provided below to reflect
fifty percent (50%) of Customer's pro rata share (determined as set forth below)
of Supplier's capital expenditures required at the Back Bay West Energy Center,
relating to providing chilled water to Customer directly resulting from a Change
of Law.. Such adjustments shall become effective immediately upon written notice
of the adjustment to Customer provided that, except as set forth below, Customer
shall have no liability for such adjustments applicable to any period prior to
such notice. There shall be only included in such adjustments fifty percent
(50%) of the depreciation for such capital improvements made by Supplier, plus
an interest factor equal to the interest rate then charged for long term
mortgages by institutional lenders on like properties within the general
locality in which the Properties are located. Depreciation shall be determined
by dividing the original cost of such capital expenditure by the longer of (i)
the number of years of its useful life, which such useful life shall be
reasonably determined by Supplier in accordance with generally accepted
accounting principles and practices in effect at the time of the capital
expenditure, and (ii) the remaining term of this Agreement. Overhead and general
administrative expenses relating to Supplier's principal office and capital
expenditures which are made in the Back Bay West Energy Center and are not
related to the providing of chilled water to Customer shall not be reflected in
such adjustments and shall not be recoverable by Supplier pursuant to this
Section 3.2. Customer's pro rata share of chilled water at the Back Bay West
Energy Center for purposes of calculating the foregoing adjustment to Contract
Capacity Charge and the Permanent Additional Capacity Charge shall be determined
by dividing the total ton hours of chilled water delivered to Customer for the
twenty-four month period preceding the month in which the adjustment is to be
made by the total ton hours of chilled water delivered to all customers of the
Back Bay West Energy Center during such period. If a Change of Law occurs during
the first twenty-four months of this Agreement, the adjustment contemplated by
this Section 3.2 shall be made in the twenty-fifth month but shall be
retroactive to the later of the date of the costs resulting from the Change of
Law are first incurred by Supplier or the date Supplier first gives Customer
notice of such Change of Law.
3.3. Taxes. Customer shall pay to Supplier any Taxes pertaining to the
supply of chilled water service under this Agreement upon receipt of Supplier's
invoice for such Taxes, except that Supplier shall be responsible for all
interest, penalties and additions thereto unless such interest, penalties and
additions are caused by Customer.
4. Payment Terms.
4.1. Invoices. Beginning on the Commencement Date, Supplier shall deliver
to Customer monthly invoices reflecting all amounts then owing by Customer. The
Contract Capacity
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Charge and Permanent Additional Capacity Charge shall be prorated for partial
first and last months within the term of this Agreement and shall be due and
payable each month in rears. The Consumption Charge shall be due and payable
each month in arrears. Payment shall be due in full, on or before the 25th day
following the date of each invoice. Customer shall not be permitted to setoff
any amounts owing by Customer to Supplier against any amounts owing by or
claimed to be owing by Supplier to Customer or otherwise reduce any amounts
owing by Customer to Supplier.
4.2. Default Rate Interest. Any amounts owing by Customer to Supplier
pursuant to the terms of this Agreement and not paid within five (5) days of
notice from Supplier of such past due amounts shall bear interest from the date
such amounts were originally due until paid at a floating annual rate equal to
4.0% plus the "prime rate" of interest announced from time to time by BankBoston
or its successor, or the highest rate permitted by law, whichever is less.
Payment of such interest is not Supplier's sole remedy for the failure of
Customer to make timely payments under this Agreement.
5. Installation, Maintenance and Ownership of Energy Transfer Station,
Connection Equipment and Customer Cooling Equipment.
5.1. Installation of Equipment. Supplier shall install, at its own expense,
the Equipment in accordance with the IOM Specifications. Customer shall
cooperate with Supplier to the extent necessary to facilitate the installation
of the Equipment in a timely, safe and efficient manner. The Energy Transfer
Station shall remain the personal property of Supplier and shall not be deemed a
fixture of the Premises, and Supplier may file a memorandum of this Agreement
and/or informational financing statements affecting the Premises to provide
notice to third parties of its ownership of the Energy Transfer Station.
5.2. Location of Equipment. Customer shall provide, at its own expense, a
safe and secure space within the Premises that is reasonable and appropriate for
the installation, inspection, testing, servicing, maintenance, operation,
replacement and removal of the Equipment, which space shall include the
location(s) described in the IOM Specification.
5.3. Maintenance of Energy Transfer Station. Supplier shall maintain the
Energy Transfer Station during the term of this Agreement, at Supplier's sole
cost and expense, in accordance with IOM Specifications, provided that if the
Energy Transfer Station is damaged or destroyed as a direct result of the
negligent acts or willful misconduct of Customer or its agents, employees,
tenants, customers, contractors or other Persons for whom Customer is
responsible, then Customer shall be liable for the reasonable cost of the
required repair or replacement
5.4. Connection Equipment; Customer Cooling Equipment. Customer shall
maintain the Connection Equipment and the Customer Cooling System during the
term of this Agreement, at Customer's sole cost and expense, in accordance with
IOM Specifications. The Connection Equipment shall become the property of
Customer upon payment in full of the amounts set forth in the Sections 5.5.
5.5. Customer's Acquisition of Connection Equipment. Provided no Customer
Default then exists, tide to the Connection Equipment shall transfer to Customer
immediately and without further action by the parties upon payment in full of
the sum of (i) all Contract Capacity Charges through the end of the Initial Term
or the Renewal Term (if this Agreement is extended pursuant to Section 2.3) and
(ii) all other amounts owing by Customer to Supplier. Customer and Supplier
shall execute any such documents or agreements necessary to effecuate such
transfer.
5.6. Damage to Premises by Supplier. Supplier shall promptly repair, at its
expense, any damage to the Premises or Property caused directly by any Supplier
Group Member.
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6. Rights of Access.
6.1. Generally. Commencing on the date of this Agreement, Supplier and its
employees, agents, contractors and representatives shall have a non-exclusive
right of access to and through the Premises at all times to the extent
reasonably necessary for the efficient exercise and performance of Supplier's
rights, duties and obligations under this Agreement, including the installation,
testing, maintenance, operation, repair, replacement and removal of the
Equipment, provided that (i) Supplier shall take all reasonable efforts to
minimize interference with other parties that have a right of access to the
Premises, (ii) Supplier shall first register with Customer's security officer
before entering the Premises, and (iii) Supplier shall provide Customer with 48
hours notice prior to any access of the Premises other than for emergency
repairs. Supplier shall have 24 hours access to the Premises for any emergency
work on the Equipment.
6.2. Protection of Energy Transfer Station. Neither Customer nor its
agents, employees, tenants, customers, contractors or other Persons under its
control shall authorize or permit any Person (other than a duly authorized
employee or agent of Supplier) to operate, maintain, alter or otherwise have
access to the Energy Transfer Station, any component of the Energy Transfer
Station or other property of Supplier located on or in the Premises, or to break
or replace any seal or lock of Supplier, or to alter or interfere with the
operation of meters or Supplier's connection or metering equipment, or any other
equipment (other than the Connection Equipment) installed by Supplier on the
Premises; provided, however, that if Customer reasonably believes that access to
the aforementioned equipment or property is necessary to prevent imminent harm
to persons or property, then such access shall be permissible and Customer may
take only those actions with respect to such equipment as are reasonably
necessary to prevent said imminent harm. Supplier shall be promptly notified of
such access and other action taken by Customer in connection with such actions.
7. Insurance Requirements. The respective insurance requirements for
Supplier and Customer are set forth in Exhibit B attached hereto, and shall be
maintained throughout the term of this Agreement. The liability of each party
under this Agreement to the other party shall not be diminished by the insurance
limitations set forth in said Exhibit B. All insurance policies required by this
Section shall provide that such policies may not be canceled or terminated
without 30 days prior written notice to both Customer and Supplier. Supplier
shall name Customer, Boston Properties. Inc., Boston Properties Limited
Partnership, BP Management, LP, BP Prucenter Development LLC and any other
affiliated entities reasonably designated by Customer as an additional insured
on all policies in Exhibit B except workers compensation insurance.
8. Events of Default
8.1. Supplier Default. The occurrence at any time of any of the following
events shall constitute a "Supplier Default":
8.1.1. Failure to Provide Chilled Water Service. The failure of
Supplier to provide chilled water service as required by this Agreement, if
and only if
(i) Supplier has not provided Customer with substitute chilled
water service (at the same cost per ton payable hereunder) reasonably
acceptable to Customer up to the lesser of (A) the Contract Capacity
and Permanent Additional Capacity, or (B) the Tons of chilled water
service then required by Customer, and
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(ii) such failure is not due to an interruption of service that
is permitted pursuant to Section 9.2 below and such failure continues
for two (2) consecutive days, and
(iii) Customer is ready, willing and able to receive such chilled
water service and Supplier's failure is not otherwise the result of
Customer's acts or omissions or those of its agents, employees,
tenants, customers or contractors or of any other Persons for whom
Customer is responsible or over which Customer has control other than
Supplier.
8.1.2. Failure to Perform Other Obligations. The failure of Supplier
to perform or cause to be performed any obligation required to be performed
by Supplier under this Agreement other than a failure described in the
preceding Section; provided, however, that if such failure by its nature
can be cured, then Supplier shall have a period of forty-five (45) days
after written notice from Customer of such failure to cure the same and a
Supplier Default shall not be deemed to exist during such period, and
provided further, that if Supplier commences to cure such failure during
such period and is diligently and in good faith attempting to effect such
cure, said period shall be extended for 60 additional days.
8.2. Customer Default The occurrence at any time of any of the following
events shall constitute a "Customer Default":
8.2.1. Failure to Pay. The failure of Customer to pay any amounts
owing to Supplier under this Agreement on or before the fifth day following
notice of past due payment.
8.2.2. Failure to Perform Other Obligations. The failure of Customer
to perform or cause to be performed any other obligation required to be
performed by Customer under this Agreement; provided, however, that if such
failure by its nature can be cured, then Customer shall have a period of
forty-five (45) days after written notice from Supplier of such failure to
cure the same and a Customer Default shall not be deemed to exist during
such period, and provided further, that if Customer commences to cure such
failure during such period and is diligently and in good faith attempting
to effect such cure, said period shall be extended for 60 additional days.
9. Planned Maintenance; Other Service Interruptions.
9.1. Planned Maintenance. Supplier shall have the right to interrupt or
reduce Customer's chilled water service for a reasonable duration, upon prior
notice to Customer, for the purpose of performing ordinary maintenance, repairs,
replacements, connections or changes (on or off the Premises) of or to the
Energy Transfer Station or any other equipment or apparatus, including any of
the foregoing which is required by good engineering and operating practices or
by manufacturers' specifications. Supplier shall diligently attempt to restore
service as soon as is reasonably possible and in order to minimize interference
with the normal operations of the Premises, Supplier, to the extent reasonably
practicable, shall schedule such interruptions and reductions during non-summer
months and during non-business hours. Supplier shall give Customer three (3)
days notice prior to any such interruption or reduction.
9.2. Other Interruptions. Supplier shall have the right to interrupt or
reduce Customer's chilled water service for a duration determined necessary by
Supplier, in its good faith judgment, without prior notice to Customer, if (i) a
Force Majeure Event has occurred that causes or requires such interruption or
reduction of such service, or (ii) the Customer Cooling System, the Connection
Equipment or the Premises has become dangerous in Supplier's good faith judgment
and, as a
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result thereof, Supplier believes that such interruption or reduction is
necessary to prevent injury to other Persons or damage to or destruction of any
component of the Energy Transfer Station or Supplier's other equipment and
piping or to prevent the interruption or reduction of Supplier's service to its
other customers.
9.3. Generally. Interruptions or reductions by Supplier in chilled water
service for the reasons set forth in Sections 9.1 and 9.2 above shall not be
deemed to be Supplier Defaults.
10. Force Majeure Events. If either party to this Agreement is prevented
from or delayed in performing any of its obligations under this Agreement by
reason of a Force Majeure Event, such party shall notify the other party in
writing as soon as practicable after the outset of such Force Majeure Event and
shall be excused from the performance of its obligations under this Agreement to
the extent such Force Majeure Event has interfered with such performance. The
party whose performance under this Agreement is prevented or delayed as the
result of a Force Majeure Event shall use reasonable efforts to remedy its
inability to perform; provided, however, nothing in this Section shall be
construed to require the settlement of any strike, walkout or other labor
dispute on terms that, in the good faith judgment of the nonperforming party,
are contrary to its interests. If a party's failure to perform its obligations
under this Agreement is due to a Force Majeure Event, then such failure shall
not be deemed a Supplier Default or a Customer Default. If a Force Majeure Event
shall occur and be continuing for not less than 10 days, Customer shall be
entitled to an abatement of the Contract Capacity Charge and Permanent
Additional Capacity Charge from the date on which such Force Majeure Event
commenced through the date on which such Force Majeure Event is remedied or this
Agreement is terminated.
If a Force Majeure Event shall occur and be continuing for not less than
six (6) consecutive months, each of Customer and Supplier shall have the right
to terminate this Agreement upon five (5) days written notice to the other
Party.
11. Remedies Following Default.
11.1. Customer's Remedies upon Occurrence of a Supplier Default
11.1.1. Abatement If a Supplier Default described in Section 8.1.1
above has occurred, Customer shall be entitled to an abatement of the
Contract Capacity Charge and Permanent Additional Capacity Charge from the
date on which such Supplier Default commenced through the date on which
such Supplier Default is waived or this Agreement is terminated (provided
that if substitute chilled water service is provided to Customer in an
amount less than Contract Capacity, Customer shall be entitled only to a
pro rata abatement of the Contract Capacity Charge). Notwithstanding
anything in this Agreement, at law or in equity to the contrary, abatement
of the Contract Capacity Charge and Permanent Additional Capacity Charge
specified in this Section 11.1.1 and Supplier's indemnification of Customer
per Section 13.1 (reduced by the amount of the aforesaid abatement) shall
be Customer's sole and exclusive remedy upon the occurrence of a Supplier
Default described in Section 8.1.1 above, subject to Customer's termination
right under Section 11.1.2 below.
11.1.2. Termination. If a Supplier Default as described in Section
8.1.1 above has occurred and the conditions causing such Supplier Default
have continued thereafter for not less than (i) three (3) consecutive days
if no chilled water service is being provided, (ii) (A) eight (8)
consecutive days during the months of June, July, August or September or
(B) twenty-three (23) consecutive days during the other months, if some but
less than ninety percent (90%) of the amount specified in Section 8.1.1(i)
is being delivered, or (iii) ninety (90) consecutive days if some but less
than one hundred percent (100%) of the amount specified in Section 8.1.1(i)
is
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being delivered, and if Supplier fails to correct or cure such conditions
within five days after the date on which Customer gives Supplier written
notice of Customer's intent to terminate this Agreement as a result of such
Supplier Default, then this Agreement shall terminate and be of no further
force or effect as of the last day of such five day period.
11.1.3. Other Rights and Remedies. If any Supplier Default has
occurred other than the Supplier Default described in Section 8.1.1, or if
a Supplier Default as described in Section 8.1.1 above has occurred and
Customer has terminated this Agreement as a result thereof in accordance
with the terms of Section 11.1.2 above, Customer may pursue any and all
rights or remedies available to it at law or in equity, subject, however,
to the limitations set forth in Section 11.3 below and provided that
Customer's right to terminate this Agreement or abate the Contract Capacity
Charge shall be permitted only in accordance with Sections 11.1.1 and
11.1.2 above.
11.2. Supplier's Remedies upon Customer Default.
11.2.1. Discontinue of Performance. If any Customer Default has
occurred and is continuing, Supplier shall have the right, upon five days
prior written notice to Customer, to immediately discontinue the supply of
chilled water service to Customer, and also shall have the right to
disconnect all related piping and connections, all without liability to
Customer.
11.2.2. Termination. If a Customer Default as described in Section
8.2.1 above has occurred and is continuing, and if Customer fails to
correct or cure the conditions causing such Customer Default within five
days after the date on which Supplier gives Customer written notice of
Supplier's intent to terminate this Agreement as a result of such Customer
Default, then this Agreement shall terminate and be of no further force or
effect as of the last day of such five day period. If any Customer Default
has occurred other than the Customer Default described in Section 8.2.1,
and if such Customer Default is not waived by Supplier in writing within
thirty days after the date on which Supplier gives Customer written notice
of Supplier's intent to terminate this Agreement as a result of such
Customer Default, then this Agreement shall terminate and be of no further
force or effect as of the last day of such thirty day period. If this
Agreement is terminated pursuant to the terms of this Section, the
applicable amount set forth in Exhibit D attached hereto shall be
immediately due and payable, without further notice.
11.2.3. Other Rights and Remedies. In addition to the rights and
remedies of Supplier set forth above, Supplier may pursue any and all other
rights or remedies available to it at law or in equity upon the occurrence
of a Customer Default, subject, however, to the limitations set forth in
Section 11.3 below and the notice requirements of this Agreement.
11.3. No Consequential Damages. Nothing in this Agreement is intended to
cause either party to be, and neither party shall be, liable to the other party
for any lost business, lost profits or revenues (other than revenues lost by
Supplier from Customer under this Agreement on account of a Customer Default) or
other special or consequential damages, all claims for which are hereby
irrevocably waived by Customer and Supplier. Notwithstanding the foregoing, a
third party claim against either Supplier or Customer against which such party
has a right of indemnification pursuant to Section 13 shall not be considered to
be a consequential damage.
12. Effect of Termination of Agreement.
12.1. Payment; No Further Obligations. Upon the termination or expiration
of this Agreement, any amounts then owing by a party to this Agreement to other
party to this Agreement shall become immediately due and payable, and subject to
the provisions of Section 11.2.2., the then future
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obligations of Customer and Supplier under this Agreement shall be terminated
(other than the indemnity obligations set forth in Section 13 below). Such
termination shall not relieve either party from obligations accrued prior to the
effective date of termination or expiration.
12.2. Disconnection. As soon as reasonably practicable after the date on
which this Agreement is terminated or expires, Supplier shall physically
disconnect the Customer Cooling System from the Energy Transfer Station. Within
ninety days after such termination or expiration, Customer may give Supplier
written notice of Customer's desire to have Supplier (a) remove from the
Premises any or all of the components of the Energy Transfer Station and
Supplier's other equipment, piping and other property installed or located on
the Premises, in which case Supplier shall have the right and obligation to do
so, and Customer will provide Supplier with access to the Premises as reasonably
requested by Supplier to allow Supplier to complete such removal, or (b) abandon
any or all of such property to Customer without liability to Customer or
Supplier. If no such notice is given within ninety days of such termination or
expiration, Customer shall be deemed to have elected removal rather than
abandonment. If Supplier is required to remove the Energy Transfer Station and
its other equipment from the Premises pursuant to the preceding sentence,
Supplier shall be responsible for patching and repairing all surfaces disrupted
by the removal of Supplier's equipment and Supplier shall leave in place all
valves as directed by Customer.
13. Indemnification.
13.1. Indemnification by Supplier. Supplier shall fully indemnify, save
harmless and defend each Customer Group Member from and against any and all
Losses and Expenses incurred by such Customer Group Member in connection with or
arising from any claim by a third party for physical damage to or physical
destruction of property, or death of or bodily injury to any Person, caused by
(i) the gross negligence or willful misconduct of Supplier or its agents or
employees or others under Supplier's control, (ii) any damage to the Premises or
Property caused directly by any Supplier Group Member, or (iii) a Supplier
Default provided, however, that nothing in this Section 13.1 is intended to
modify the limitation of Supplier's liability set forth in Sections 11.1 and
11.3 above. Notwithstanding anything in this Agreement to the contrary, Supplier
shall in no event indemnify any Customer Group Member or otherwise be liable to
any Customer Group Member for any Losses as a result of claims by any tenant or
occupant of the Premises based upon a breach of Supplier's obligations under
this Agreement.
13.2. Indemnification by Customer. Customer shall fully indemnify, save
harmless and defend each Supplier Group Member from and against any and all
Losses and Expenses incurred by such Supplier Group Member in connection with or
arising from the following: (i) any physical damage to or physical destruction
of property (other than the personal property of Supplier located on the
Premises), or death of or bodily injury to any Person, caused by (A) the gross
negligence or willful misconduct of Customer or its agents or employees or
others under Customer's control or (B) a Customer Default; or (ii) any action by
any Person (excluding the tenants, licensees and occupants of the Premises)
regarding the supply of or failure to supply chilled water service pursuant to
the terms of this Agreement, which action is not based upon a tort claim against
Supplier, but rather is based upon a breach of Supplier's obligations under this
Agreement. Nothing in this Section is intended to modify the limitation of
Customer's liability set forth in Section 11.3 above.
13.3. Notice of Claims. Any Indemnified Party seeking indemnification under
this Section 14 shall deliver to the Indemnitor a Claim Notice describing the
facts underlying its indemnification claim and the amount of such claim. A
notice describing any action at law or in equity involving an Indemnified Party
shall be delivered promptly to the Indemnitor after the such Indemnified Party
receives notice that such action or suit has commenced; provided, however, that
failure to deliver
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such notice as aforesaid shall not relieve the Indemnitor of its obligations
under this Section 13, except to the extent that such Indemnitor has been
prejudiced by such failure.
13.4. Amount of Claim. The amount to which an Indemnified Party is entitled
under this Section 14 shall be determined by (i) a mutually satisfactory written
agreement between such Indemnified Party and the Indemnitor, (ii) a final
judgment or decree of any court of competent jurisdiction, or (iii) any other
means agreed upon by such Indemnified Party and the Indemnitor.
13.5. Defense of Action. If requested by an Indemnified Party, the
Indemnitor shall assume on behalf of the Indemnified Party, and conduct with due
diligence and in good faith, the defense of such Indemnified Party with counsel
reasonably satisfactory to the Indemnified Party; provided, however, that if the
Indemnitor is a defendant in any such action and the Indemnified Party believes
that there may be legal defenses available to it which are inconsistent with
those available to the Indemnitor, the Indemnified Party shall have the right to
select separate counsel to participate in the defense of such action at the
Indemnitor's expense. If any claim, action, proceeding or investigation arises
as to which the indemnity provided for in this Section 14 applies, and the
Indemnitor fails to assume the defense of such claim, action, proceeding or
investigation after having been requested to do so by the Indemnified Party,
then the Indemnified Party may, at the Indemnitor's expense, contest or, with
the prior written consent of the Indemnitor, which consent shall not be
unreasonably withheld, settle such claim, action, proceeding or investigation.
All costs and expenses incurred by the Indemnified Party in connection with any
such contest or settlement shall be paid upon demand by the Indemnitor.
13.6. Survival of Provisions. The provisions of this Section 14 shall
survive the expiration or termination of this Agreement
14. Warranties. Concurrently with the transfer to Customer of the
Connection Equipment pursuant to the terms of this Agreement, Supplier shall
assign to Customer without recourse any warranties which third parties have
provided to Supplier with respect to the Connection Equipment and which are
assignable. ALL WARRANTIES OF SUPPLIER, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE REGARDING THE CONNECTION EQUIPMENT OR THE SERVICES PROVIDED
PURSUANT TO THIS AGREEMENT ARE HEREBY DISCLAIMED.
15. Miscellaneous Provisions.
15.1. Notices. All notices, communications and waivers under this Agreement
shall be in writing and shall be (i) delivered in person or (ii) mailed, postage
prepaid, either by registered or certified mail, return receipt requested, or
(iii) sent by overnight express courier, addressed in each case as set forth on
the Cover Page, or to any other address as to either of the parties to this
Agreement as such party shall designate in a written notice to the other party
to this Agreement. All notices sent pursuant to the terms of this Section shall
be deemed received (x) if personally delivered, then on the date of delivery,
(y) if sent by overnight, express courier, then on the next Business Day
immediately following the day sent, or (z) if sent by registered or certified
mail, then on the earlier of the third Business Day following the day sent or
when actually received.
15.2. Assignment. Customer shall not assign this Agreement in whole or in
part except that (i) Customer may assign this entire Agreement to a subsequent
owner of all of the Premises, and (ii) Customer may make a partial assignment of
its rights hereunder to a subsequent owner of the New Construction so long as
such subsequent owner is an affiliate of Customer, in each case with Suppliers
consent, which consent shall not be unreasonably withheld. If Supplier consents
to a partial assignment to a subsequent owner of the 111 Officer Tower, Supplier
will enter into a new agreement, substantially
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in the form of this Agreement, with the owner of the 111 Office Tower, and this
Agreement will be amended to reflect such assignment.
15.3. Nondisturbance Agreement. As a condition precedent to Supplier's
obligations under this Agreement, Customer shall obtain from each third party
holding an interest in the Premises (including, without limitation, any
mortgagees, ground lessors and ground mortgagees, but excluding tenants holding
leasehold interests within the Premises) to the extent required by any agreement
between Customer and such third party, a consent to this Agreement and an
agreement by such third party not to interfere with or prevent the exercise by
Supplier of its rights and remedies under this Agreement in accordance with its
terms, nor to take any action that results in the termination of this Agreement,
together with an acknowledgment by all such third parties that Supplier
possesses an interest in the Energy Transfer Station and the Connection
Equipment and that such equipment shall not constitute a fixture attached to the
Premises. Each third party must also acknowledge and agree that if it succeeds
to Customer's or any other interest in the Premises, it shall also be bound by
or subject to the terms and conditions of this Agreement. Such consents and
agreements shall be in recordable form and otherwise satisfactory to Supplier.
15.4. Memorandum of Agreement. Supplier shall have the right to record a
memorandum of this Agreement in the real estate records for the county in which
the Premises is located in a form reasonably acceptable to Supplier, which
memorandum shall set forth or summarize the interest of Supplier in the Energy
Transfer Station and the Connection Equipment and the rights granted to Supplier
under this Agreement with respect to the Premises.
15.5. Confidential Information. Supplier and Customer each agree to treat
in confidence all information regarding this Agreement and the performance by
them of their respective obligations under this Agreement, and all information
which either Supplier or Customer obtained from the other party in contemplation
of entering into, or in the performance of, this Agreement (including without
limitation, the rates charged under this Agreement provided that nothing in this
Section is intended to limit or restrict Supplier's right to disseminate
information regarding service rates to existing and potential customers or the
identity of the parties to this Agreement). Neither Customer nor Supplier shall
make any use of any of such information for any purpose other than complying
with its obligations under this Agreement. Such information shall not be
communicated to any party other than Supplier or Customer and their respective
officers, directors, employees, agents, lenders, attorneys and professional
consultants to the extent such Persons need to know such information, except to
the extent disclosure of such information (i) is required by law or governmental
authority, or in any judicial or administrative proceedings (ii) is made
pursuant to litigation between the parties, (iii) is made to any lender or
prospective lender to such party (provided such lender or prospective lender is
informed of the terms set forth in this Section), (iv) is made to a tenant of
the Premises whose lease with Customer requires such disclosure (provided such
tenant is informed of the terms set forth in this Section), or (v) is made to a
Person under contract with the disclosing party, or to which the disclosing
party wishes to sell its business or property, which Person has given a
confidentiality undertaking which is substantially similar to this one. The
obligation of each party to treat in confidence, and not to use, information
which it obtains from the other party shall not apply to any information which
is or becomes rightfully available to such party from a source other than the
party providing such information, or is or becomes available to the public other
than as a result of disclosure by such party or its agents in breach of this
Section or by any other Person who is bound by a similar confidentiality
agreement in breach of such agreement
15.6. Successors. The rights, powers and remedies of each party to this
Agreement shall inure to the benefit of such party and its successors.
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15.7. Entire Agreement. This Agreement represents the entire agreement
between the parties to this Agreement with respect to the subject matter of this
Agreement and supersedes all prior and contemporaneous oral and prior written
agreements.
15.8. Amendments to Agreement. This Agreement shall not be amended,
modified or supplemented without the written agreement of Supplier and Customer
at the time of such amendment, modification or supplement.
15.9. Waivers; Approvals. No waiver of any provision of this Agreement
shall be effective unless set forth in writing signed by the party making such
waiver, and any such waiver shall be effective only to the extent it is set
forth in such writing. Failure by a party to this Agreement to insist upon full
and prompt performance of any provision of this Agreement, or to take action in
the event of any breach of any such provision or upon the occurrence of any
Supplier Default or Customer Default, as applicable, shall not constitute a
waiver of any rights of such party, and, subject to the notice requirements of
this Agreement, such party may at any time after such failure exercise all
rights and remedies available under this Agreement with respect to such Supplier
Default or Customer Default. Receipt by a party to this Agreement of any
instrument or document shall not constitute or be deemed to be an approval of
such instrument or document. Any approvals required under this Agreement must be
in writing, signed by the party whose approval is being sought
15.10. Partial Invalidity. In the event that any provision of this
Agreement is deemed to be invalid by reason of the operation of law, or by
reason of the interpretation of such provision by any administrative agency or
any court, Supplier and Customer shall negotiate an equitable adjustment in the
provisions of the same in order to effect, to the maximum extent permitted by
law, the purpose of this Agreement and the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected
by such adjustment and shall remain in full force and effect.
15.11. Execution in Counterparts. This Agreement may be executed in
counterparts, and all said counterparts when taken together shall constitute one
and the same Agreement.
15.12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
15.13. No Third Party Rights. This Agreement is only for the benefit of the
parties to this Agreement, their successors and Persons expressly benefited by
the indemnity provisions of this Agreement. No other Person (including, without
limitation, tenants of the Premises) shall be entitled to rely on any matter set
forth in, or shall have any rights on account of the performance or
non-performance by any party of its obligations under, this Agreement.
15.14. Interconnections. Supplier shall install all interconnections, at
its sole expense, necessary to provide the chilled water services pursuant to
the terms and conditions of this Agreement.
15.14.l.Performance Bonds. (A) Upon the execution of this Agreement,
in order to guarantee the full and faithful performance of Supplier's
obligations to perform the interconnection work under this Agreement (other
than New Construction interconnection work), Supplier shall post a
performance bond in an amount equal to two times the estimated cost of such
interconnection work (currently estimated at $1,800,000). Supplier shall
provide contractor cost estimates for such interconnection work to Customer
prior to release of such bond. Such bond shall remain in effect until the
completion of the interconnection work to Customer's reasonable
satisfaction (other than New Construction interconnection work).
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(B) Upon Customer's request at any time after the commencement of the
New Construction, in order to guarantee the full and faithful performance
of Supplier's obligations to perform the New Construction interconnection
work, Supplier shall post a performance bond in an amount equal to two
times the estimated cost of such interconnection work (currently estimated
at $1,000,000). Such bond shall remain in effect until the completion of
the New Construction interconnection work to Customer's reasonable
satisfaction.
15.15. Other Transactions. Supplier hereby agrees that during the term of
this Agreement in the event Supplier agrees to supply chilled water services to
a similarly situated third party at a premises located in the City of Boston
under the same or substantially similar technical requirements including
time/season of use, service requirements, cooling load factor, cooling demands,
contract term, and interconnection requirements, pursuant to terms and
conditions which, when such terms and conditions are viewed in their totality,
are more favorable to such customer than the terms and conditions set forth in
this Agreement, Supplier agrees to amend this Agreement to reflect such terms
given to such third party.
15.16. Cooperation. Supplier and Customer agree to work cooperatively
throughout the term of this Agreement to optimize building system operations,
reduce operating costs and minimize capacity requirements. Customer agrees to
use its reasonable best efforts to limit excess capacity requirements and to
operate the Premises within standard operating conditions.
15.17. Supplier Operations. (A) Supplier shall continually maintain, and
update from time to time, the Back Bay West Energy Center in accordance with
prudent operating standards of reliability, efficiency and operational security.
In the event Customer reasonably determines that Supplier has failed to maintain
such standards and as a result Supplier has materially failed to fully perform
its obligations herein for a period of three (3) months, Customer shall have the
right to recommend an independent third party review of Supplier's operations by
an independent third party acceptable to both parties. Such independent third
party shall produce a written report identifying any deviations from prudent
operating standards and recommendations for corrective action. Supplier shall
comply in all material respects with such independent third party's
recommendations as set forth in a final written report within three (3) months
of receipt of such a report. In the event Supplier materially fails to comply
with such recommendations and as a result Supplier continues to materially fail
to perform its obligations herein for a period of three (3) months from the
later of (i) the report by such independent third party or (ii) such longer
period as reasonably required to implement such recommendations of such third
party provided the Supplier is diligently pursuing such implementation, Customer
shall have the right to propose an alternate operator of the Back Bay West
Energy Center. Any such alternate operator shall then replace Supplier as
operator and operate the Back Bay West Energy Center for a period of 3 years,
provided such alternate operator (i) has at least five (5) years operating
experience with facilities such as the Back Bay West Energy Center, (ii) is not
a direct competitor of Supplier in the greater Boston area, (iii) is acceptable
to any lender(s) who have a mortgage or security interest in the Back Bay Energy
Center, in such lenders' sole discretion, and (iv) such operator enters into an
operations and maintenance agreement with Supplier in form and substance
reasonably satisfactory to Supplier and its lenders for a term of three (3)
years.
(B) Supplier shall provide Customer with at least two (2) years prior
written notice of its intent to discontinue operations at the Back Bay West
Energy Center and shall cooperate with Customer during such two year period to
develop alternative cooling sources. Such notice shall include an early
termination fee as set forth in Section 15.1 8(A).
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15.18. Termination. (A) Pursuant to Section 15.17(B), Supplier shall have
the right to terminate the Agreement any time upon two (2) years of written
notice and the payment of a cancellation fee equal to the Capacity Charge for
the Annual Period in which such termination shall be effective.
(B) Customer shall have the right to terminate the Agreement at any time
upon two (2) years of written notice and the payment of a cancellation fee equal
to the then remaining unamortized interconnection costs and expenses based upon
an initial cost for interconnection of over an amortization period of
twenty-five (25) years with an interest rate of 8.5% per year, as set forth in
Exhibit D.
15.19. Promotional Efforts. Customer hereby agrees to allow Supplier to
make reference to the services supplied pursuant to this Agreement in Supplier's
marketing and promotional efforts, including but not limited to tours,
testimonials, print and media, subject to Customer's reasonable review and
consent. Supplier shall endeavor to portray the Customer as a leader in
technology, innovation, environmental responsibility and energy efficiency.
15.20 Authorization. Each of the Customer and Supplier hereby represent and
warrant that it has duly authorized, executed and delivered this Agreement and
that this Agreement is a legal, valid and binding obligation, enforceable
against such party in accordance with its terms, except to the extent of
bankruptcy, insolvency, moratorium, reorganization or other similar laws
effecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a preceding in equity or at
law).
15.21 Hazardous Materials. Supplier shall not, nor shall it permit its
employees, invitees, agents, independent contractors, contractors, assignees or
subtenants at the Premises or the Property to, keep, maintain, store or dispose
of (into the sewage or waste disposal system or otherwise) any substance which
is or may hereafter be classified as a hazardous material, waste or substance
(collectively "Hazardous Material,") under federal, state or local laws, rules
and regulations, including, without limitation ,42 U.S.C. Section 6901 et. seq.,
42 U.S.C. Section 9601 et. seq., 42 U.S.C. Section 2601 et seq., 49 U.S.C.
Section 1802 et seq. and Massachusetts General Laws, Chapter 21E and the rules
and regulations promulgated under any of the foregoing, as such laws, rules and
regulations may be amended from time to time (collectively "Hazardous Materials
Laws") other than in compliance with all such Hazardous Material Laws and in the
ordinary course of business of constructing and operating the Equipment and
supplying the services herein. Supplier shall immediately notify Customer of any
environmental condition in, on or about the Premises or the Property caused by
Supplier and known by Supplier which would require the filing of a notice under
any Hazardous Material Laws. Supplier shall materially comply, and shall cause
its employees, invitees, agents, independent contractors, contractors, assignees
and subtenants to so comply with each of the foregoing and Customer shall have
the right to make such inspections (including testing) as Customer shall elect
from time to time to determine that Supplier is in compliance with the
foregoing.
-24-
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date set forth above.
NORTHWIND BOSTON LLC,
a Massachusetts limited liability company
By: /s/ Robert P. Thornton
---------------------------------------
Name: Robert P. Thornton
-------------------------------------
Title: PRESIDENT
------------------------------------
BP Prucenter Acquisition LLC,
a Delaware limited liability company
By: Boston Properties Limited Partnership,
a Delaware limited partnership,
its Member
By: Boston Properties, Inc.,
its General Partner
By: /s/ David Barrett
---------------------------------------
Name: DAVID BARRETT
-------------------------------------
Title: SR. VICE PRESIDENT
------------------------------------
-25-
APPENDIX A
DEFINITIONS
The following terms shall have the meanings set forth below:
"Actual Capacity" means the number of Tons of chilled water service that
Supplier delivers to Customer, as determined by sampling actual instantaneous
demand of the entire Premises once every minute and averaging once every hour
period.
"Annual Period" means any period of twelve (12) consecutive months
beginning (i) on the first day of the first month that begins on or after the
Commencement Date, or (ii) on an anniversary of such day.
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"Agreement" means this Chilled Water Service Agreement, the Cover Page and
all exhibits, appendices and riders attached hereto, and any amendments or
modifications made thereto in writing from time to time by both Parties.
"Business Day" means a day on which commercial banks generally are open for
business in Boston, Massachusetts.
"Change of Law" means the adoption or modification of any applicable laws,
rules or regulations of any governmental authority, or from any change in the
interpretation by any court, tribunal or regulatory agency of any such
applicable laws, rules or regulations, after the date of this Agreement,
including but not limited to, any change in laws pertaining to the use of
refrigerants used by Supplier.
"Claim Notice" means a notice by a Customer Group Member or a Supplier
Group Member seeking indemnification pursuant to Section 14 of this Agreement.
"Commencement Date" shall have the meaning ascribed to such term in Section
2.1 of this Agreement.
"Connection Equipment" means all equipment and piping necessary to connect
the Customer Cooling System to the heat exchanger assembly included in the
Energy Transfer Station, as more fully described in the IOM Specifications.
"Consumer Price Index" means the Consumer Price Index - All Urban
Consumers; Series ID CUURAlO3SAOLIE; Boston - Brockton - Nashua, MA-NH-ME-CT,
all items other than food and energy, not seasonably adjusted, as published
monthly by the United States Department of Labor, Bureau of Labor Statistics;
provided, however, that if said Consumer Price Index shall cease to exist or the
method of calculating it is materially changed, then the term "Consumer Price
Index" shall mean such other or similar index reflecting changes in the cost of
living determined in a similar manner as Supplier reasonably selects.
"Consumption Charge" means the monthly charge payable by Customer to
Supplier for Ton-Hours of chilled water service provided to Customer during each
month of the term of this Agreement, as the same may be adjusted from time to
time pursuant to the terms of this Agreement, the initial amount of which is
specified on the Cover Page.
-26-
"Contract Capacity" means the number of Tons of chilled water service
specified on the Cover Page that Supplier is obligated by this Agreement to make
available to Customer from and after the Commencement Date through the date on
which this Agreement expires or is terminated. The Contract Capacity shall be
initially allocated to the Premises and the New Construction (if applicable) as
follows provided, however, that Customer shall have the discretion to adjust the
distribution allocation of the Contract Capacity among the Premises:
Premises Contract Capacity (Tons)
-------- ------------------------
1. Prudential Tower 2620
(Comfort 2500 Tons)
(Tenant 120 Tons)
(Condenser water excluded)
2. 101 Huntington Tower 800
(Comfort 800 Tons)
(Tenant 0 Tons)
3. Prudential Retail 1200
(1200 Tons includes 400 Tons
for Moven Pick)
----
4620 Tons Total
Estimated
New Construction Contract Capacity (Tons)
---------------- ------------------------
1. 111 Huntington Avenue Office Tower 2,000
2. 111 Retail Space 300
3. Residential Tower 200
----
2,500 Tons Total
"Contract Capacity Charge" means the monthly charge payable by Customer to
Supplier for making chilled water service up to the Contract Capacity available
for use by Customer pursuant to this Agreement, as the same may be adjusted from
time to time pursuant to the terms of this Agreement, the initial amount of
which is specified on the Cover Page. Customer's obligation to pay the monthly
Contract Capacity Charge for chilled water service up to the Contract Capacity
is unrelated to the amount of chilled water service actually used by Customer.
"Cover Page" means the Cover Page attached to and made a part of this
Agreement, as the same may be amended from time to time.
-27-
"Customer Cooling System" means the HVAC system serving the Premises,
including piping, pumps and other equipment, owned by Customer that are or will
be used by Customer to cool space within the Premises after the Commencement
Date.
"Customer Default" shall have the meaning ascribed to such term in Section
11.2 of this Agreement.
"Customer Group Member" means Customer and its Affiliates, and the
directors, officers, agents, employees, successors and assigns of each of them.
"Delivery Point" means the point of connection between the Connection
Equipment and the Energy Transfer Station, at which point Supplier delivers
chilled water service to Customer.
"Energy Transfer Station" means the equipment and related piping and
apparatus between Supplier's distribution piping and the Connection Equipment,
including, without limitation, a plate frame heat exchanger assembly or
equivalent device, piping, valves, metering equipment and controls and
additional equipment, if any, described in the IOM Specifications, installed by
Supplier on the Premises pursuant to the terms of this Agreement for use in
providing chilled water service to Customer, and all replacements and additions
from time to time. The Connection Equipment and Customer's chilled water pumps
is not a part of the Energy Transfer Station.
"Equipment" means the Energy Transfer Station and the Connection Equipment,
including associated piping, metering and other equipment
"Expenses" means any and all reasonable and actual costs and expenses
incurred in connection with investigating, defending or asserting any claim,
action, suit or proceeding incident to any matter indemnified against under this
Agreement (including, without limitation, court filing fees, court costs,
arbitration fees or costs, witness fees, and reasonable fees and disbursements
of legal counsel, investigators, expert witnesses, consultants, accountants and
other professionals).
"Force Majeure Event" means acts of God, war, civil commotion, embargoes,
strikes, epidemic, fires, cyclones, droughts or floods; emergencies (other than
those caused by the gross negligence or willful misconduct of the party claiming
the Force Majeure Event), or labor, production or transportation difficulties or
accidents to or involving machinery, equipment or lines of pipe (other than
those accidents caused by the gross negligence or willful misconduct of
Supplier), or shortage of materials, power, fuel, equipment, transportation or
labor, or inability to obtain same without litigation or the payment of
penalties, premiums or unusual prices, or any governmental law, regulation (or
its interpretation), order, request, instruction or injunction, or failure to
provide or cancellation of rights-of-way, permits, licenses or other
authorization, whether valid or invalid, or any other cause, whether or not
similar to the foregoing, beyond the reasonable control of a party hereto.
"Indemnified Party" means a Customer Group Member or a Supplier Group
Member seeking indemnification pursuant to Section 14 of this Agreement.
"Indemnitor" means the Person from which indemnification is sought pursuant
to Section 14 of this Agreement
"Initial Term" shall mean the initial term of this Agreement, the duration
of which is set forth on the Cover Page.
-28-
"IOM Specifications" means the Installation, Operation and Maintenance
Specifications attached hereto as Exhibit C, as the same may be amended from
time to time in writing by the parties to this Agreement. In the event of any
conflict between the provision of Exhibit C and the other provisions of this
Agreement, such other provisions shall govern.
"Losses" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges.
"Permanent Additional Capacity" means the number of Tons of chilled water
service in excess of the Contract Capacity that Supplier is obligated to deliver
to Customer from and after the Commencement Date through the date on which this
Agreement expires or is terminated.
"Permanent Additional Capacity Charge" means the monthly charge payable by
Customer to Supplier for chilled water service in excess of the Contract
Capacity for use by Customer pursuant to this Agreement, as the same may be
adjusted from time to time pursuant to the terms of this Agreement.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or governmental authority or regulatory body.
"Premises" means the building(s) located on the property at the address
stated on the Cover Page alongside the caption "Address of Premises" and legally
described on Exhibit A attached to this Agreement.
"Property" means the property located at the addresses stated on the Cover
Page alongside the caption "Address of Premises" and legally described on
Exhibit A attached to this Agreement.
"Refrigerants" means all chlorofluorocarbons and other refrigerants
contained in, or owned and held by Customer for future use in, the Existing
Chiller Equipment.
"Regional Electricity Index" means the Consumer Price Index - All Urban
Consumers; Series ID CUURAlO3SEHFO1; Boston-Brockton-Nashua, MA-NH-ME-CT;
Electricity, not seasonably adjusted, as it appears in the Consumer Price Index
published by the United States Department of Labor, Bureau of Labor Statistics;
provided, however, that if said Consumer Price Index shall cease to exist or the
method of calculating it is materially changed, then the term "Regional
Electricity Index" shall mean such other or similar index or formula as Supplier
reasonably selects to measure change in the price for commercial electric power
as currently calculated under said Consumer Price Index.
"Return Point" means the point of connection between the Energy Transfer
Station and Supplier's chilled water delivery system, at which point chilled
water returns to Supplier's pipes after it has passed through the Energy
Transfer Station.
"Supplier Default" shall have the meaning ascribed to such term in Section
11.1 of this Agreement.
"Supplier Group Member" means Supplier and its Affiliates, and the
directors, officers, agents, employees, successors and assigns of each of them.
"Tax" means any present or future tax (including any sales and use taxes),
levy, impost, duty, charge, assessment or fee of any nature that is imposed by
any federal, state, local or other taxing
-29-
authority on chilled water service or equipment provided or used by Supplier or
on any aspect of such service, or on any payments made by Customer to Supplier,
under this Agreement.
"Temporary Additional Capacity" means the number of Tons of chilled water
service temporarily in excess of the Contract Capacity that Supplier delivers to
Customer pursuant to Section 1.5 from and after the Commencement Date through
the date on which this Agreement expires or is terminated.
"Temporary Additional Capacity Charge" means the monthly charge payable by
Customer to Supplier for delivering chilled water service in excess of the
Contract Capacity for use by Customer pursuant to this Agreement.
"Ton" means refrigeration capacity equivalent to the cooling capacity of
one ton of ice melting in a period of twenty-four hours (at a rate of 12,000 BTU
per hour).
"Ton-Hour" means cooling service equivalent to 12,000 BTU of cooling,
measured as a function of the gallons of chilled water which pass through the
Energy Transfer Station and the temperature difference of the chilled water at
the Delivery Point and the Return Point, and calculated on the basis of the
aggregate BTU gain occurring.
-30-
EXHIBIT A
Plan of Premises
EXHIBIT "A"
[GRAPHIC OMITTED]
[FLOOR PLAN OF DECK LEVEL]
DECK LEVEL
The Prudential Center
EXHIBIT "B"
[GRAPHIC OMITTED]
[FLOOR PLAN OF PROPSED CONSTRUCTION OF DECK LEVEL]
DECK LEVEL -- PROPOSED CONSTRUCTION
The Prudential Center
-31-
EXHIBIT B
Insurance Requirements
(a) Supplier's Insurance. At all times during the term of this Agreement,
Supplier, at its sole expense, shall purchase and maintain in full force and
effect, the following insurance coverages:
i) Workers' compensation insurance in statutory amounts and employers'
liability insurance with limits of not less than $1,000,000 per claim;
ii) General comprehensive public liability insurance (including a
contractual liability endorsement) with limits of not less than $2,000,000
per occurrence and $5,000,000 annually and in the aggregate, covering
liability claims arising or resulting from insured acts or omissions of
Supplier and its agents and employees; and
iii) If Supplier operates any motor vehicles, automobile liability
insurance covering all owned and non-owned licensed vehicles of Supplier,
with limits of not less than $1,000,000 per occurrence and combined single
limit.
All such insurance shall be placed with reputable companies licensed to do
business in the Commonwealth of Massachusetts, and may be provided as part of a
blanket policy. Prior to the commencement of the construction required by this
Agreement, Supplier shall deliver to Customer certificates of insurance
evidencing the insurance described in this Section. Additionally, not later than
30 days prior to the stated expiration date of any such policy of insurance,
Supplier shall deliver to Customer evidence of the renewal or replacement of
such policy with a certificate of insurance. All such insurance will require not
less than thirty days prior written notice to Customer in the event of
modification, cancellation or nonrenewal of coverage.
(b) Customer's Insurance. At all times during the term of this Agreement,
Customer, at its sole expense, shall purchase and maintain in full force and
effect, the following insurance coverages:
i) General comprehensive public liability insurance (including a
contractual liability endorsement) with limits of not less than $2,000,000
per occurrence and $5,000,000 annually in the aggregate, covering liability
claims arising or resulting from insured acts or omissions of Customer, its
agents, employees and others under its control; and
ii) All risk property insurance covering physical loss and damage to
all improvements forming part of the Premises, including all machinery,
equipment and fixtures on or connected to the Premises, for the full
replacement value thereof.
All such insurance shall be placed with reputable companies. Prior to the
commencement of the construction required by this Agreement, at Supplier's
request, Customer shall deliver to Supplier certificates of insurance evidencing
the insurance described in this Section.
Any insurance carried by either party with respect to the Premises or the
Property therein or occurrences thereon shall, if it can be so written without
additional premium or with an additional premium which the other party agrees to
pay, include a clause or endorsement denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to occurrence of injury or loss. Each party, notwithstanding any
provisions of this Agreement to the contrary, hereby waives any rights of
recovery against the other for injury or loss due to hazards covered by such
insurance to the extent of the indemnification received thereunder.
-32-
EXHIBIT C
Installation, Operation and Maintenance Specifications
[Attached hereto are the preliminary IOM Specifications as of the Effective
Date, the final IOM Specifications shall be attached to this Agreement pursuant
to an amendment to this Agreement.]
-33-
EXHIBIT D
Termination Payments
[based on a current estimate of $1,800,000 of costs for interconnection work
for the Premises]
Annual Amount
Period
1 $1,800,000
2 $1,777,119
3 $1,752,293
4 $1,725,357
5 $1,696,131
6 $1,664,421
7 $1,630,016
8 $1,592,687
9 $1,552,184
10 $1,508,238
11 $1,460,558
12 $1,408,824
13 $1,352,693
14 $1,291,791
15 $1,225,712
16 $1,154,017
17 $1,076,227
18 $ 991,825
19 $ 900,249
20 $ 800,890
21 $ 693,084
22 $ 576,115
23 $ 449,204
24 $ 311,505
25 $ 162,102
This Exhibit D may be amended from time to time in writing by the parties hereto
to reflect the actual interconnection costs and any increased interconnection
costs associated with any new capacity requirements.
EXHIBIT C
March 23, 1999
INTERCONNECTION, OPERATIONS & MAINTENANCE (IOM)
SPECIFICATIONS
Part 1 - Technical Scope and Exhibits per 12/11/98 Letter of Intent and
subsequent revisions
Part 2 - Interconnection, Operations & Maintenance Specifications
Part 3 - Design Documents: Schematic drawings, Equipment Selections,
Construction Drawings & Construction Specifications
Part 4 - Shop Drawings
Part 5 - Controls & Metering - Yokogawa
Part 6 - Prudential Center "Notice to All Contractors Working in Prudential
Center" Rev 8/98