Exhibit 4.15-a
- --------------------------------------------------------------------------------
NASSAU COUNTY
INDUSTRIAL DEVELOPMENT AGENCY
AND
KEYSPAN-GLENWOOD
ENERGY CENTER, LLC
-----------------------
LEASE AGREEMENT
-----------------------
Dated as of November 1, 2003
$53,275,000
Nassau County Industrial Development Agency
Industrial Development Revenue Bonds
(KeySpan-Glenwood Energy Center, LLC Project)
Series 2003A
Affecting the Facility located at the Facility Realty
described in Appendix A hereto in the Town of Oyster Bay,
County of Nassau and State of New York
PHILLIPS LYTLE LLP
1100 Franklin Avenue, 4th floor
Garden City, New York 11530
Attention: Milan K. Tyler, Esq.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
ARTICLE I Definitions and Representations..........................................................................4
- -----------------------------------------
Section 1.1 Definitions.........................................................................4
Section 1.2 Construction........................................................................7
Section 1.3 Representations and Warranties by Agency............................................7
Section 1.4 Findings by Agency..................................................................7
Section 1.5 Representations and Warranties by Lessee............................................8
ARTICLE II The Project 10
Section 2.1 The Project........................................................................10
Section 2.2 Completion by Lessee...............................................................10
Section 2.3 Issuance of Series 2003A Bonds.....................................................11
ARTICLE III Lease Of Facility And Rental Provisions...............................................................11
Section 3.1 Duration of Term...................................................................11
Section 3.2 Lease of the Facility..............................................................11
Section 3.3 Rental Provisions; Pledge of Agreement and Rents...................................11
Section 3.4 Obligation of Lessee Unconditional.................................................13
Section 3.5 Payment of Purchase Price of Tendered Bonds........................................13
Section 3.6 Credit Facility....................................................................13
ARTICLE IV Maintenance, Taxes, Payments In Lieu Of Taxes And Insurance............................................14
Section 4.1 Maintenance, Alterations and Improvements..........................................14
Section 4.2 Removal of Property of the Facility................................................15
Section 4.3 No Exemption From Real Estate Taxes................................................16
Section 4.4 Taxes, Assessments and Charges.....................................................17
Section 4.5 Insurance..........................................................................17
Section 4.6 Advances by Agency or the Trustee..................................................18
Section 4.7 Compliance with Law................................................................18
ARTICLE V Damage, Destruction And Condemnation....................................................................18
Section 5.1 Damage, Destruction and Condemnation...............................................19
ARTICLE VI Particular Covenants...................................................................................20
Section 6.1 Restrictions on Lessee.............................................................20
Section 6.2 Indemnity..........................................................................21
Section 6.3 Compensation and Expenses of Trustee, Bond Registrar, Paying Agents and Agency.....24
Section 6.4 Retention of Agency's Leasehold Interest in Facility; Grant of Easements;
Release of Certain Portions of Facility...........................................25
Section 6.5 Lessee's Covenant as to Tax Exemption..............................................26
Section 6.6 Financial Statements; No-Default Certificates......................................27
Section 6.7 Discharge of Liens.................................................................28
Section 6.8 Agency's Authority; Covenant of Quiet Enjoyment....................................28
Section 6.9 No Warranty of Condition or Suitability............................................29
Section 6.10 Amounts Remaining in Funds..............................................29
Section 6.11 Issuance of Additional Bonds............................................29
Section 6.12 Redemption Under Certain Circumstances; Special Covenants...............29
Section 6.13 Further Assurances......................................................30
Section 6.14 Non-Discrimination; Employment Information, Opportunities and
Guidelines............................................................30
Section 6.15 Recording and Filing....................................................32
Section 6.16 Right to Cure Agency Defaults...........................................32
Section 6.17 Description of Facility Equipment.......................................32
ARTICLE VII Events Of Default; Remedies...........................................................................33
Section 7.1 Events of Default..................................................................33
Section 7.2 Remedies on Default................................................................34
Section 7.3 Reserved...........................................................................35
Section 7.4 Remedies Cumulative................................................................35
Section 7.5 No Additional Waiver Implied by One Waiver.........................................36
Section 7.6 Effect on Discontinuance of Proceedings............................................36
Section 7.7 Agreement to Pay Attorneys' Fees and Expenses......................................36
ARTICLE VIII Options 36
Section 8.1 Options............................................................................36
Section 8.2 Conveyance on Exercise of Option to Terminate......................................39
Section 8.3 Option to Purchase or Invite Tenders of Bonds......................................39
Section 8.4 Termination of Agreement...........................................................39
Section 8.5 Mode Change Notice.................................................................40
ARTICLE IX Miscellaneous 40
Section 9.1 Indenture; Amendment...............................................................40
Section 9.2 Force Majeure......................................................................40
Section 9.3 Assignment or Sublease.............................................................41
Section 9.4 Priority of Indenture..............................................................42
Section 9.5 Benefit of and Enforcement by Bondholders..........................................42
Section 9.6 Amendments.........................................................................42
Section 9.7 Notices............................................................................42
Section 9.8 Prior Agreements Superseded........................................................42
Section 9.9 Severability.......................................................................43
Section 9.10 Inspection of Facility..................................................43
Section 9.11 Effective Date; Counterparts............................................43
Section 9.12 Binding Effect..........................................................43
Section 9.13 Net Lease...............................................................43
Section 9.14 Law Governing...........................................................43
Section 9.15 Investment of Funds.....................................................43
Section 9.16 Investment Tax Credit...................................................43
Section 9.17 Waiver of Trial by Jury.................................................44
Section 9.18 Consent to Jurisdiction; Service of Process.............................44
Section 9.19 No Recourse Under This Agreement or on Bonds............................44
Section 9.20 Date of Agreement for Reference Purposes Only...........................45
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into as of November 1, 2003, by and
between NASSAU COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a corporate governmental
agency constituting a body corporate and politic and a public benefit
corporation of the State of New York, duly organized and existing under the laws
of the State of New York (the "Agency"), having its principal office at 400
County Seat Drive, Mineola, New York 11501, party of the first part, and
KEYSPAN-GLENWOOD ENERGY CENTER, LLC, a Delaware limited liability company
qualified to do business under and by virtue of the laws of the State of New
York, having its principal office at c/o KeySpan Corporation, One MetroTech
Center, Brooklyn, New York 11201 (the "Lessee"), party of the second part:
WITNESSETH:
WHEREAS, the New York State Industrial Development Agency Act, constituting
Title 1 of Article 18-A of the General Municipal Law, Chapter 24 of the
Consolidated Laws of New York, as amended (the "Enabling Act") has been
heretofore enacted by the Legislature of the State of New York for the purposes,
among others, of providing for the creation of industrial development agencies
in the several counties, cities, villages and towns in the State of New York, to
promote, develop, encourage, assist and advance the job opportunities, health,
general prosperity and economic welfare of the people of the State of New York
and to improve their prosperity and standard of living; and
WHEREAS, the Agency has been heretofore established under said Enabling Act
pursuant to Chapter 674 of the 1975 Laws of New York, as amended (together with
the Enabling Act, the "Act"), and is authorized to acquire real property and
interests therein, buildings and other improvements thereon and machinery and
equipment and interests therein in connection therewith for the purposes set
forth above, and to lease the same as herein more particularly described; and
WHEREAS, the Agency is further authorized by the Act to issue its
industrial development revenue bonds payable solely from and secured by the
revenues derived from the leasing of the land, buildings and other improvements
and the machinery and equipment so acquired; and
WHEREAS, the Lessee and KeySpan, have entered into negotiations with the
Agency in connection with a "project" as such term is defined under the Act (the
"Project") consisting of the refinancing and reimbursing of certain costs
incurred by the Lessee in connection with the acquisition and construction of
three buildings of approximately 1,700 square feet each and one building of
approximately 5,000 square feet and the acquisition and installation therein of
two single cycle generating units to be used by the Lessee for the purpose of
providing an aggregate of approximately 79 megawatts to the existing Long Island
electric grid (the "Facility"); and
WHEREAS, the Facility is located on an existing 2.9 acre site known as The
Glenwood Energy Center, and located on the eastern shore of Hempstead Harbor, in
the Town of Oyster Bay (the "Facility Realty") as more particularly described in
Appendix A hereto; and
2
WHEREAS, pursuant to a certain Agreement of Lease, dated May 3, 2002 (the
"Ground Lease"), between the Long Island Lighting Company, doing business as
LIPA ("LIPA") and the Lessee, LIPA has leased the Facility Realty to the Lessee;
and
WHEREAS, the Lessee is the owner of the Facility; and
WHEREAS, pursuant to the Company Lease Agreement, the Lessee has leased the
Facility to the Agency; and
WHEREAS, the Project is complete and the Facility began full operations on
June 1, 2002; and
WHEREAS, the Agency has determined that Agency financing assistance is
necessary to provide employment in, and is beneficial for the economy and
prosperity of, the inhabitants of Nassau County and the offer of such assistance
to the Lessee was reasonably necessary to induce the Lessee to proceed with the
Project; and
WHEREAS, as a result of such negotiations, the Lessee has requested the
Agency to issue its bonds in the aggregate principal amount of $53,275,000 to
finance a portion of the costs of the Project; and
WHEREAS, the Agency adopted a bond resolution on November 24, 2003,
authorizing the Project and the issuance of its industrial development revenue
bonds to finance a portion of the costs of the Project, the leasing of the
Facility to the Agency and the subleasing of the Facility to the Lessee (the
"Bond Resolution"); and
WHEREAS, the Agency, in order to provide funds for a portion of the cost of
the Project and for incidental and related costs thereto, will issue and sell
its $53,275,000 aggregate principal amount of Industrial Development Revenue
Bonds (KeySpan-Glenwood Energy Center, LLC Project), Series 2003A (the "Series
2003A Bonds"), pursuant to the Act, the Bond Resolution, and an Indenture of
Trust of even date herewith by and between the Agency and The Bank of New York,
as Trustee, securing said Bonds and any Additional Bonds (as hereinafter
defined) issued thereunder; and
WHEREAS, simultaneously herewith, the Lessee will deliver a Payment
Agreement, dated November 26, 2003 (the "Payment Agreement"), to the Agency,
providing for the payment of an amount equal to the principal of, Redemption
Premium and interest on the Series 2003A Bonds; and
WHEREAS, the payment of all amounts due under the Payment Agreement and any
other amounts due hereunder shall be guaranteed by KeySpan Corporation (the
"Guarantor"), a corporation organized and existing under the laws of the State
of New York pursuant to a Guaranty Agreement, dated November 26, 2003 (the
"Guaranty"), from the Guarantor to the Agency; and
NOW, THEREFORE, in consideration of the premises and the respective
representations and agreements hereinafter contained, the parties hereto agree
as follows (provided that in the performance of the agreements of the Agency
herein contained, any obligation it may incur for the payment of money shall not
3
subject the Agency to any pecuniary or other liability nor create a debt of the
State of New York or of Nassau County, and neither the State of New York nor
Nassau County shall be liable on any obligation so incurred, but any such
obligation shall be payable solely out of the lease rentals, revenues and
receipts derived from or in connection with the Facility, including moneys
received under this Lease Agreement):
ARTICLE I
Definitions and Representations
Section 1.1 Definitions. Terms not otherwise defined herein shall have the
same meanings as used in the Indenture or the Tax Certificate herein below
defined. The following terms shall have the following meanings in this Lease
Agreement:
Agency shall mean the Nassau County Industrial Development Agency, a
corporate governmental agency constituting a body corporate and politic and a
public benefit corporation of the State, duly organized and existing under the
laws of the State, and any body, board, authority, agency or other governmental
agency or instrumentality which shall hereafter succeed to the powers, duties,
obligations and functions thereof.
Agreement shall mean this Lease Agreement, dated as of November 1, 2003,
between the Agency and the Lessee, and shall include any and all amendments and
supplements thereto hereafter made in conformity herewith and with the
Indenture.
Application shall mean, collectively, the application and all other
materials or information (orally or otherwise) heretofore submitted by or on
behalf of the Lessee and its Affiliates to the Agency.
Approved Facility shall mean the use of the Facility by the Lessee for the
"local furnishing of electric energy" as described in Section 142(a)(8) of the
Code and as a qualified "project" within the meaning of the Act.
Authorized Representative shall mean, (i) in the case of the Agency, the
Chairman, Vice Chairman, Treasurer, Assistant Treasurer, Secretary, Assistant
Secretary, Executive Director, Administrative Director, or any officer or
employee of the Agency authorized to perform specific acts or to discharge
specific duties, and (ii) in the case of the Lessee, its President, Vice
President, Treasure, Secretary, or any member of the Lessee.
Bonds shall mean the Series 2003A Bonds and any Additional Bonds.
Code shall mean the Internal Revenue Code of 1986, as amended, including
the regulations thereunder.
Commencement Date shall mean, November 26, 2003, the date of original
issuance and delivery of the Series 2003A Bonds.
Company Lease shall mean the Company Lease Agreement, dated as of November
1, 2003, between the Lessee and the Agency, and shall include any and all
4
amendments and supplements thereto hereafter made in conformity therewith and
with the Indenture.
County shall mean the Nassau County, New York.
Event of Default shall have the meaning specified in Section 7.1 hereof.
Facility shall have the meaning specified in the recitals hereto.
Facility Equipment shall mean all fixtures, machinery, equipment, chattels
and articles of personal property and all appurtenances and additions thereto
and substitutions and replacements thereof, now or hereafter attached to or
contained in or located at the Facility or placed on any part thereof, though
not attached thereto, the costs of which are refined or reimbursed with the
proceeds of Bonds and which are used or usable in connection with the present or
future operation thereof or the activities at any time conducted therein and all
other property used in connection with the production of income from the
Facility and/or improvements located therein or adapted for use therein,
including, without limitation, any machinery, equipment and other tangible
personal property acquired and installed at the Facility, together with all
repairs, replacements, improvements, substitutions and renewals thereof or
therefor and all parts, additions and accessories incorporated therein or
affixed thereto, but excluding Lessee's Property within the meaning of Section
4.1(c) hereof or Existing Facility Property released pursuant to Section 4.2
hereof.
Facility Realty shall have the meaning specified in the recitals hereto.
Fiscal Year of the Lessee shall mean a year of 365 or 366 days, as the case
may be, commencing on January 1 and ending on December 31, or such other year of
similar length as to which the Lessee shall have given prior written notice
thereof to the Agency and the Trustee at least ninety (90) days prior to the
commencement thereof.
Ground Lease shall have the meaning specified in the recitals hereto.
Improvements shall mean all structures, fixtures and other improvements
existing on the Commencement Date or at any time made, erected or incorporated
into the Facility (including any improvements made as part of the Project
pursuant to Section 2.2 hereof) and all replacements, improvements, extensions,
substitutions, restorations, repairs or additions thereto.
Indenture shall mean the Indenture of Trust of even date herewith by and
between the Agency and the Trustee, as from time to time amended or supplemented
by Supplemental Indentures in accordance with Article XI of the Indenture.
KeySpan shall mean KeySpan Corporation, a corporation organized and
existing under and by virtue of the laws of the State of New York, and its
permitted successors and assigns.
Legal Requirements shall mean the Constitutions of the United States and of
the State of New York all laws, statutes, codes, acts, ordinances, resolutions,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements (including but not limited to
5
zoning, land use, planning, environmental protection, air, water and land
pollution, toxic wastes, hazardous wastes, solid wastes, wetlands, health,
safety, equal opportunity, minimum wages, and employment practices) of all
governments, departments, commissions, boards, courts, authorities, agencies,
officials and officers, foreseen or unforeseen, ordinary or extraordinary, that
are applicable now or may be applicable at any time hereafter to (i) the Lessee,
(ii) the Facility or any part thereof, or (iii) any use or condition of the
Facility or any part thereof.
Lessee or Company shall mean KeySpan-Glenwood Energy Center, LLC, a limited
liability company organized and existing under and by virtue of the laws of the
State of Delaware, and qualified to do business in the State, and its permitted
successors and assigns pursuant to Sections 6.1 and 9.3 hereof (including any
surviving, resulting or transferee corporation as provided in Section 6.1
hereof).
Lessee Property shall have the meaning specified in Section 4.1(c) hereof.
LIPA shall have the meaning specified in the recitals hereto.
Net Proceeds shall mean, when used with respect to any insurance proceeds
or condemnation award, compensation or damages, the gross amount from any such
proceeds, award, compensation or damages less all expenses (including attorneys'
fees, adjuster's fees and any expenses of the Agency or the Trustee) incurred in
the collection thereof.
Payment Agreement shall have the meaning specified in the recitals hereto.
Project shall have the meaning specified in the recitals hereto.
Prohibited Person shall mean (i) any Person (A) that is in default or in
breach, beyond any applicable grace period, of its obligations under any written
agreement with the Agency or the County, or (B) that directly or indirectly
controls, is controlled by, or is under common control with a Person that is in
default or in breach, beyond any applicable grace period, of its obligations
under any written agreement with the Agency or the County, unless such default
or breach has been waived in writing by the Agency or the County, as the case
may be, and (ii) any Person (A) that has been convicted in a criminal proceeding
for a felony or any crime involving moral turpitude or that is an organized
crime figure or is reputed to have substantial business or other affiliations
with an organized crime figure, or (B) that directly or indirectly controls, is
controlled by, or is under common control with a Person that has been convicted
in a criminal proceeding for a felony or any crime involving moral turpitude or
that is an organized crime figure or is reputed to have substantial business or
other affiliations with an organized crime figure.
Security Documents shall mean, collectively and severally, the Company
Lease, the Lease Agreement, the Payment Agreement, and the Indenture, together
with any and all other agreements or instruments delivered or assigned to the
Trustee as security for the payment of the principal of and redemption premium,
if any, and interest on the Bonds.
6
Series 2003A Bonds shall mean the $53,275,000 aggregate principal amount of
Industrial Development Revenue Bonds (KeySpan-Glenwood Energy Center, LLC
Project), Series 2003A of the Agency issued, executed, authenticated and
delivered under the Indenture.
SEQRA shall mean, collectively, the State Environmental Quality Review Act,
being Article 8 of the New York State Environmental Conservation Law, and the
implementing regulations.
Trustee shall mean The Bank of New York, in its capacity as Trustee, and
its successors in such capacity and its hereafter appointed in the manner
provided in the Indenture.
Section 1.2 Construction. In this Agreement, unless the context otherwise
requires:
(a) The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any
similar terms, as used in this Agreement, refer to this Agreement, and the term
"hereafter" shall mean after, and the term "heretofore" shall mean before, the
date of the execution and delivery of this Agreement.
(b) Words of the masculine gender shall mean and include correlative words
of the feminine and neuter genders and words importing the singular number shall
mean and include the plural number and vice versa.
(c) Words importing persons shall include firms, associations, partnerships
(including limited partnerships), trusts, corporations, limited liability
companies and other legal entities, including public bodies, as well as natural
persons.
(d) Any headings preceding the texts of the several Articles and Sections
of this Agreement, and any table of contents appended to copies hereof, shall be
solely for convenience of reference and shall not constitute a part of this
Agreement, nor shall they affect its meaning, construction or effect.
Section 1.3 Representations and Warranties by Agency. The Agency makes the
following representations and warranties:
(a) The Agency is a corporate governmental agency constituting a body
corporate and politic and a public benefit corporation duly organized and
existing under the laws of the State, and is authorized and empowered to enter
into the transactions contemplated by this Agreement and to carry out its
obligations hereunder. By proper action of its members, the Agency has duly
authorized the execution and delivery of this Agreement.
(b) In order to finance a portion of the cost of the Project, the Agency
proposes to issue the Series 2003A Bonds in the aggregate principal amount of
$53,275,000. The Series 2003A Bonds will mature, bear interest, be redeemable
and have the other terms and provisions set forth in the Indenture.
Section 1.4 Findings by Agency. The Agency, based upon the representations
and warranties of the Lessee contained in this Agreement and the information
7
contained in the Application, hereby finds and determines that the financing of
a portion of the costs of the Project by the Agency is reasonably necessary to
induce the Lessee to proceed with the Project.
Section 1.5 Representations and Warranties by Lessee. The Lessee makes the
following representations and warranties:
(a) The Lessee is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, is not in
violation of any provision of its articles of organization or operating
agreement, has the power and authority to own its property and assets, to carry
on its business as now being conducted by it and to execute, deliver and perform
this Agreement. The Lessee is duly qualified to do business in New York.
(b) The execution, delivery and performance of this Agreement and the other
Security Documents to which the Lessee is a party and the consummation of the
transactions herein contemplated have been duly authorized by all requisite
company action on the part of the Lessee and will not violate any provision of
law, any order of any court or agency of government, or the articles of
organization or operating agreement of the Lessee, or any indenture, agreement
or other instrument to which the Lessee is a party or by which it or any of its
property is subject to or bound, or be in conflict with or result in a breach of
or constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or other instrument or result in the imposition of any
lien, charge or encumbrance of any nature whatsoever other than Permitted
Encumbrances.
(c) The financial assistance of the Agency in the financing of a portion of
the costs of the Project is reasonably necessary to induce the Lessee to proceed
with the Project.
(d) The Project and the operation of the Facility by the Lessee will
advance .the Agency's public purposes by promoting employment opportunities and
preventing economic deterioration within the County.
(e) Any costs incurred with respect to that part of the Project paid from
the proceeds of the sale of the Series 2003A Bonds shall be capable of being
treated on the books of the Lessee as capital expenditures in conformity with
generally accepted accounting principles applied on a consistent basis.
(f) The property included in the Facility is property of the character
subject to the allowance for depreciation under Section 167 of the Code.
(g) No part of the proceeds of the Series 2003A Bonds will be used to
finance inventory or will be used for working capital.
(h) Expenses for supervision by the officers or employees of the Lessee,
and expenses for work done by such officers or employees in connection with the
Project will be included as a Project Cost only to the extent that such Persons
were specifically employed for such particular purpose, the expenses do not
exceed the actual cost thereof and are to be treated on the books of the Lessee
as a capital expenditure in conformity with generally accepted accounting
principles applied on a consistent basis.
8
(i) This Agreement and the other Security Documents to which the Lessee is
a party constitute the legal, valid and binding obligations of the Lessee
enforceable against the Lessee in accordance with their respective terms, except
to the extent enforcement may be limited by bankruptcy, moratorium,
reorganization and other similar laws affecting creditors' rights generally and
by application of equitable principles.
(j) The Facility has been designed, and the operation of the Facility will
be, in compliance with all applicable Federal, State and local laws or
ordinances (including rules and regulations) relating to zoning, building,
safety and environmental quality.
(k) There is no action or proceeding pending or to the best knowledge of
the Lessee threatened by or against the Lessee by or before any court or
administrative agency that might adversely affect the ability of the Lessee to
perform its obligations under this Agreement and each other Security Document to
which the Lessee shall be a party, except as previously disclosed to the Agency,
and all authorizations, consents and approvals of governmental bodies or
agencies required to be obtained by the Lessee as of the date hereof in
connection with the execution and delivery of this Agreement and each other
Security Document to which the Lessee shall be a party or in connection with the
performance of the obligations of the Lessee hereunder and under each of the
Security Documents have been obtained.
(l) The Lessee shall operate the Facility or cause the Facility to be
operated in accordance with this Agreement and as an Approved Facility.
(m) No part of the proceeds of the Series 2003A Bonds will be used to
finance a project where facilities or property that are primarily used in making
retail sales to customers who personally visit such facilities constitute more
than one third of the total project cost. For purposes of this representation,
retail sales shall mean: (i) sales by a registered vendor under article
twenty-eight of the New York State Tax Law primarily engaged in the retail sale
of tangible personal property, as defined in subparagraph (i) of paragraph four
of subdivision (b) of section eleven hundred one of the Tax Law; or (ii) sales
of a service to such customers.
(n) Pursuant to the Company Lease, the Agency has a valid leasehold
interest in the Facility.
(o) The total cost of the Project being funded with the Series 2003A Bonds
is at least $$53,275,000, which represents only a portion of the total cost
incurred by the Lessee in connection with the Project.
(p) The Project will not have a "significant effect on the environment" as
defined in SEQRA.
(q) There have been no material changes in the Project since the submittal
of the Application by the Lessee and the Agency's adoption of its negative
declaration, dated May 29, 2002, pursuant to SEQRA.
(r) The Application is true, correct and complete.
(s) Neither the Lessee nor any Affiliate thereof is a Prohibited Person.
9
(t) The Project shall not result in the removal of any facility or plant of
the Lessee or any other occupant or user of the Project from outside of the
County (but within the State) to within the County or in the abandonment of one
or more facilities or plants of the Company or any other occupant or user of the
Project located within the State but outside of the County.
(u) No funds of the Agency shall be used in connection with the Project for
the purpose of preventing the establishment of an industrial manufacturing plant
or for the purpose of advertising or promotional materials which depict elected
or appointed government officials in either print or electronic media, nor shall
any funds of the Agency be given in connection with the Project to any group or
organization which is attempting to prevent the establishment of an industrial
or manufacturing plant within the State of New York.
(v) Not more than one-third of the total cost of the Project is in respect
of facilities or property primarily used in making retail sales of goods or
services to customers who personally visit such facilities within the meaning of
the Act.
(w) Issuance of the Bonds by the Agency shall result in reduced electrical
power rates for the Long Island ratepayers.
ARTICLE II
The Project
Section 2.1 The Project.
-----------
(a) The Lessee shall cause to be conveyed to the Agency at the time of the
delivery and payment of the Series 2003A Bonds a leasehold interest in the
Facility free and clear of all liens, claims, charges, encumbrances, security
interests and servitudes other than Permitted Encumbrances, all against payment
therefor by the Agency from the proceeds of the Series 2003A Bonds deposited in
the Project Fund to the extent permitted in Section 2.2 hereof and Section 6.02
of the Indenture.
(b) The Lessee shall pay (i) all of the costs and expenses in connection
with the preparation of any instruments of conveyance and transfer of the
Facility to the Agency, the delivery of any instruments and documents and their
filing and recording, if required, (ii) all taxes and charges payable in
connection with such conveyance and transfer, or attributable to periods prior
to the conveyance and transfer, to the Agency as set forth in Section 2.1(a)
hereof, and (iii) all shipping and delivery charges and other expenses or claims
incurred in connection with the Project.
(c) The Lessee covenants that it has obtained all necessary approvals from
any and all governmental agencies with respect to the Project and the operation
of the Facility, all of which were done in compliance, in all material respects,
with all Legal Requirements.
Section 2.2 Completion by Lessee. The Lessee represents and warrants to the
Agency that, as of the Commencement Date, the Project is complete and the
Facility is and has been fully operational since June 1, 2002.
10
Section 2.3 Issuance of Series 2003A Bonds. Contemporaneously with the
execution and delivery of this Agreement, the Agency will sell and deliver the
Series 2003A Bonds in the aggregate principal amount of $53,275,000 under and
pursuant to the Bond Resolution, authorizing the issuance of the Series 2003A
Bonds, and under and pursuant to the Indenture. The proceeds of sale of the
Series 2003A Bonds equal to (i) the interest accruing on the Series 2003A Bonds
to the date of delivery thereof, if any, shall be deposited in the Interest
Account of the Bond Fund, and (ii) the balance of the proceeds shall be
deposited in the Project Fund and applied to the payment of Project Costs in
accordance with the provisions of the Indenture. Pending such application,
amounts in the Project Fund may be invested as provided in the Indenture.
ARTICLE III
Lease Of Facility And Rental Provisions
Section 3.1 Duration of Term. The term of this Agreement shall commence on
the date of execution and delivery of this Agreement and shall expire June 1,
2027 or such earlier or later date as this Agreement may be terminated as
hereinafter provided. The Agency hereby delivers to the Lessee and the Lessee
hereby accepts sole and exclusive possession of the Facility.
Section 3.2 Lease of the Facility. The Agency hereby leases to the Lessee
and the Lessee hereby leases from the Agency the Facility, all for and during
the term herein provided and upon and subject to the terms and conditions herein
set forth. The Lessee shall during the term of this Agreement occupy, use and
operate the Facility, or cause the Facility to be occupied, used and operated,
in accordance with the provisions of the Act and for the general purposes
specified in the recitals to this Agreement. The Lessee shall not occupy, use or
operate the Facility or allow the Facility or any part thereof to be occupied,
used or operated for any unlawful purpose or in violation of any certificate of
occupancy affecting the Facility or which may constitute a nuisance, public or
private, or make void or voidable any insurance then in force with respect
thereto.
Section 3.3 Rental Provisions; Pledge of Agreement and Rents.
------------------------------------------------
(a) The Lessee covenants to make rental payments which the Agency agrees
shall be paid by the Lessee directly to the Trustee on each Lease Rental Payment
Date for deposit in the Bond Fund in an amount equal to the sum of (i) with
respect to interest due and payable on the Bonds, an amount equal to the
interest next becoming due and payable on the Bonds on the immediately
succeeding Interest Payment Date, (ii) the principal amount of the Bonds then
Outstanding which will become due on the immediately succeeding Interest Payment
Date (whether at maturity or by redemption or acceleration as provided in the
Indenture), and (iii) the principal of and Redemption Premium, if any, on the
Bonds to be redeemed which will become due on the immediately succeeding
redemption date together with accrued interest to the date of redemption. The
Lessee further agrees to pay such additional amounts as set forth in the
Indenture with respect to interest on the Series 2003A Bonds in the event of a
Determination of Taxability or an Event of Default.
11
(b) Notwithstanding anything in the foregoing to the contrary, if the
amount on deposit and available in the Bond Fund is not sufficient to pay the
principal of, and Redemption Premium, if any, and interest on the Bonds when due
(whether at maturity or by redemption or acceleration or otherwise as provided
in the Indenture), the Lessee shall forthwith pay the amount of such deficiency
in immediately available funds to the Trustee for deposit in the Bond Fund and
such payment shall constitute rental payments under this Section 3.3.
(c) The Lessee further covenants to make rental payments which shall be
paid by the Lessee in immediately available funds directly to the Tender Agent
for deposit into the Bond Fund on or prior to each Purchase Date for the Bonds
in an amount equal to Purchase Price for such Bonds tendered or deemed tendered
for purchase solely to the extent amounts available under any applicable Credit
Facility or amounts on deposit in the Purchase Fund shall be insufficient to pay
the Purchase Price thereof on a Purchase Date therefor.
(d) In the event the Lessee should fail to make or cause to be made any of
the payments required under the foregoing provisions of this Section, the item
or installment not so paid shall continue as an obligation of the Lessee until
the amount not so paid shall have been fully paid.
(e) The Lessee shall have the option to prepay its rental obligation with
respect to the Bonds, in whole or in part at the times and in the manner
provided in Article VIII hereof as and to the extent provided in the Indenture
for redemption of the Bonds. (f) No further rental payments need be made to the
Agency during the term of this Agreement when and so long as the amount of cash
and/or Government Obligations on deposit in the Bond Fund is sufficient to
satisfy and discharge the obligations of the Agency under the Indenture and pay
the Bonds as provided in Section 10.01 of the Indenture.
(g) Pursuant to the Indenture the Agency will pledge and assign to the
Trustee as security for the Bonds all of the Agency's right, title and interest
in this Agreement (except for the Agency's Reserved Rights), including all
rental payments hereunder, and in furtherance of said pledge the Agency will
unconditionally assign such rental payments to the Trustee for deposit in the
Bond Fund in accordance with the Indenture. The Lessee hereby consents to the
above-described lien and security interest, and pledge and assignment of this
Agreement.
(h) The Lessee covenants and agrees that it will comply with the provisions
of the Indenture with respect to the Lessee and that the Trustee shall have the
power, authority, rights and protections provided in the Indenture. The Lessee
further covenants to use its best efforts to cause there to be obtained for the
Agency any documents or opinions required of the Agency under the Indenture.
(i) The Lessee covenants and agrees to provide to the Trustee for deposit
into the Rebate Fund sufficient moneys as necessary to meet the Rebate
Requirement described in the Tax Certificate.
(j) The Lessee covenants and agrees to make any and all payments required
pursuant to Sections 6.2 and 6.3 hereof.
12
Section 3.4 Obligation of Lessee Unconditional. The obligation of the
Lessee to pay the rent and all other payments provided for in this Agreement and
to maintain the Facility in accordance with Section 4.1 of this Agreement shall
be absolute and unconditional, irrespective of any defense or any rights of
set-off, recoupment or counterclaim or deduction and without any rights of
suspension, deferment, diminution or reduction it might otherwise have against
the Agency, the Trustee or the Holder of any Bond and the obligation of the
Lessee shall arise whether or not the Project has been completed as provided in
this Agreement. The Lessee will not suspend or discontinue any such payment or
terminate this Agreement (other than such termination as is provided for
hereunder) for any cause whatsoever, and the Lessee waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate, cancel or
surrender this Agreement or any obligation of the Lessee under this Agreement,
or the Facility or any part thereof except as provided in this Agreement, or to
any abatement, suspension, deferment, diminution or reduction in the rentals or
other payments hereunder.
Section 3.5 Payment of Purchase Price of Tendered Bonds.
-------------------------------------------
(a) Any payment by the Lessee to the Tender Agent of amounts necessary to
pay the Purchase Price of the Bonds pursuant to the Indenture shall be in
immediately available funds and paid to the Tender Agent at its principal
corporate trust office on the dates set forth in the Indenture.
(b) The Lessee hereby approves and agrees to be bound by the provisions of
the Indenture regarding the purchase, offer, sale and delivery of the Bonds
required to be tendered for purchase thereunder. The Lessee shall have all of
the rights and obligations provided in the Indenture with respect to the Lessee
in connection with such transactions and the appointment of the Tender Agent and
the Remarketing Agent thereunder. The Agency shall have no obligation or
responsibility with respect to the purchase of the Bonds or any related
arrangements, except that the Agency at the expense of the Lessee shall
cooperate in the making of any such arrangements.
Section 3.6 Credit Facility.
---------------
(a) On the first date that the Bonds bears interest at a rate other than a
Term Rate or a Fixed Rate, the Lessee will cause to be delivered to the Trustee
the Credit Facility and other necessary documents or opinions related thereto
referred to in the Indenture. The Lessee hereby authorizes and directs the
Trustee to draw moneys under the Credit Facility that may at the time be in
effect with respect to the Bonds in accordance with its terms and the provisions
of the Indenture to the extent necessary to (i) make payments of the principal
of, redemption premium (if any, and only to the extent provided for in such
Credit Facility) and interest on the Bonds as and when the same become due, and
(ii) pay the Purchase Price required to be paid pursuant to the Indenture as and
when the same become due.
(b) The Lessee shall have the option to terminate, modify, extend or
otherwise reduce the coverage of the Credit Facility or to replace the Credit
Facility with an Alternate Credit Facility as provided in the Indenture. So long
as a Series of Bonds bears interest at a Term Rate or a Fixed Rate, the Lessee
shall not be required to provide or maintain a Credit Facility with respect to
the Bonds.
13
(c) If at any time (i) there shall have been delivered to the Trustee an
Alternate Credit Facility with respect to the Bonds, together with the documents
and opinions required by the Indenture, or (ii) the Lessee shall give written
instructions to the Trustee to terminate the then existing applicable Credit
Facility, then the Trustee shall promptly surrender the same to the issuer
thereof for cancellation, in accordance with the terms of such Credit Facility
and the Indenture.
(d) Notwithstanding any other provision of this Section 3.6, the Lessee
shall not pledge, or otherwise grant a lien on or security interest in, any
cash, security or other assets (other than the Bonds) as security for the issuer
of the Credit Facility unless the Lessee furnishes to the Agency and Trustee a
Favorable Opinion of Bond Counsel as to such pledge, lien or other security
interest.
(e) So long as a Credit Facility shall remain in effect, the principal of
and interest on the Bonds shall be paid in the first instance from proceeds of
draws under the Credit Facility and second from any amounts payable by the
Lessee, and any available moneys representing the payments by the Lessee and
other amounts referred to in Section 3.3 shall at the direction of the Lessee be
used to reimburse the Credit Facility Provider for such draws as provided in the
Indenture and payments of the Purchase Price of the Bonds shall be paid from
remarketing proceeds and, if necessary, from the proceeds of draws under the
Credit Facility and any available moneys representing payments by the Lessee and
other amounts referred to in Section 3.3(c) shall at the direction of the Lessee
be used to reimburse the Credit Facility Provider for such draws as provided in
the Indenture.
ARTICLE IV
Maintenance, Taxes, Payments In Lieu Of Taxes And Insurance
Section 4.1 Maintenance, Alterations and Improvements.
-----------------------------------------
(a) During the term of this Agreement, the Lessee will keep the Facility in
good and safe operating order and condition, ordinary wear and tear excepted,
will occupy, use and operate the Facility in the manner for which it was
designed and intended and contemplated by this Agreement, and will make all
replacements, renewals and repairs thereto (whether ordinary or extraordinary,
structural or nonstructural, foreseen or unforeseen) reasonably necessary to
ensure that the security for the Bonds shall not be materially impaired. All
replacements, renewals and repairs shall be substantially equal in quality,
class and value to the original work and be made and installed in compliance
with the requirements of all governmental bodies. The Agency shall be under no
obligation to replace, service, test, adjust, erect, maintain or effect
replacements, renewals or repairs of the Facility, to effect the replacement of
any inadequate, obsolete, worn-out or unsuitable parts of the Facility, or to
furnish any utilities or services for the Facility and the Lessee hereby agrees
to assume full responsibility therefor.
(b) The Lessee shall have the privilege of making such alterations of or
additions to the Facility or any part thereof from time to time as it in its
discretion may determine to be desirable for its uses and purposes, provided
that (i) the fair market value of the Facility is not reduced below its value
immediately before such alteration or addition and the usefulness, structural
integrity or operating efficiency of the Facility is not substantially impaired,
(ii) such additions or alterations are effected with due diligence, in a good
14
and workmanlike manner and in compliance, in all material respects, with all
applicable Legal Requirements, (iii) such additions or alterations to the
Facility are promptly and fully paid for by the Lessee in accordance with the
terms of the applicable contract(s) therefor, and in order that the Facility
shall at all times be free of any mortgage, lien, charge, encumbrance, security
interest or claim other than Permitted Encumbrances, and (iv) such additions or
alterations do not substantially change the nature of the Facility so that it
would not constitute a qualified "project" as defined in and as contemplated by
the Act. All such alterations of and additions to the Facility shall constitute
a part of the Facility, subject to this Agreement, and the Indenture, and the
Lessee shall deliver or cause to be delivered to the Agency appropriate
documents as may be reasonably necessary to convey a leasehold interest in such
property to the Agency and to subject such property to this Agreement and the
lien and security interest of the Indenture, free and clear of all liens,
charges, encumbrances, security interests or claims other than Permitted
Encumbrances.
(c) The Lessee shall have the right to install or permit to be installed at
the Facility, machinery, equipment and other personal property not constituting
part of the Facility (the "Lessee's Property") without conveying a leasehold
interest in such property to the Agency nor subjecting such property to this
Agreement. The Agency shall not be responsible for any loss of or damage to the
Lessee's Property. The Lessee shall have the right to create or permit to be
created any mortgage, encumbrance, lien or charge on, or conditional sale or
other title retention agreement with respect to, the Lessee's Property.
(d) The Lessee shall not create, permit or suffer to exist any mortgage,
encumbrance, lien, security interest, claim or charge against the Facility or
any part thereof, or the interest of the Lessee in the Facility or this
Agreement except for Permitted Encumbrances.
Section 4.2 Removal of Property of the Facility.
-----------------------------------
(a) The Lessee shall have the privilege from time to time of removing from
the Facility any fixture constituting part of the Facility (the "Existing
Facility Property") and thereby acquiring such Existing Facility Property,
provided that:
(i) such Existing Facility Property is substituted or replaced by
property (A) having equal or greater fair market value, operating
efficiency and/or utility and (B) being free of all mortgages, liens,
charges, encumbrances, claims and security interests other than Permitted
Encumbrances; or
(ii) if such Existing Facility Property is not to be substituted or
replaced by other property but is instead to be sold, scrapped, traded-in
or otherwise disposed of in an arms'-length bona fide transaction for
consideration in excess of $100,000, the Lessee shall pay to the Trustee
for deposit in the Redemption Account of the Bond Fund the amounts derived
from such sale or scrapping, the trade-in value credit received or the
proceeds received from such other disposition if the Bonds are subject to
optional redemption;
provided, however, no such removal as set forth in paragraph (i) or (ii) above
shall be effected if (w) such removal would change the nature of the Facility so
it would not constitute an Approved Facility, (x) such removal would impair the
15
usefulness, structural integrity or operating efficiency of the Facility, (y)
such removal would reduce the fair market value of the Facility below its value
immediately before such removal (except by the amount deposited in the
Redemption Account of the Bond Fund pursuant to paragraph (ii) above), or (z) if
there shall exist and be continuing an Event of Default hereunder. Any amounts
received pursuant to paragraph (ii) above which are not in excess of $100,000
shall be retained by the Lessee.
(b) The Lessee shall deliver or cause to be delivered to the Agency and the
Trustee appropriate documents conveying to the Agency a leasehold interest in
any property installed or placed upon the Facility pursuant to Section 4.2(a)
(i) hereof and subjecting such substitute or replacement property to this
Agreement, and upon written request of the Lessee, the Agency shall deliver to
the Lessee, within sixty (60) days after receipt of such written report,
appropriate documents to terminate the Agency's leasehold interest in any
property removed from the Facility pursuant to Section 4.2(a) hereof. The Lessee
agrees to pay all costs and expenses (including reasonable counsel fees and
disbursements) incurred in subjecting to this Agreement of any property
installed or placed at Facility as part of the Facility pursuant to this Section
4.2.
(c) The removal from the Facility of any Existing Facility Property
pursuant to the provisions of Section 4.2(a) hereof shall not entitle the Lessee
to any abatement or reduction in the rentals and other amounts payable by the
Lessee under this Agreement.
Section 4.3 No Exemption From Real Estate Taxes.
-----------------------------------
(a) It is recognized that under the provisions of the Act, the Agency is
required to pay no real estate taxes upon any of the property acquired by it or
under its jurisdiction or control or supervision or upon its activities.
Notwithstanding the foregoing, neither the Lessee nor any of its Affiliates
shall claim exemption from such real estate taxes by virtue of the Agency's
leasehold interest in the Facility.
(b) In the event the Facility is exempt from real estates taxes solely due
to the Agency's leasehold interest in the Facility, the Lessee shall pay all
real estate taxes to the appropriate taxing authorities that would otherwise be
imposed on the Facility if the Agency had no leasehold interest in the Facility.
(c) Nothing in this Section 4.3 shall be construed (i) to limit, amend or
modify any exemption that the Lessee, the Facility or LIPA may otherwise be
entitled to for any reason other than the Agency's involvement with the
Facility, or (ii) to limit or impair the Lessee's or LIPA's rights, to the
extent permitted by law, to obtain reductions in the valuation of the Facility
or the right to obtain exemptions (and discounts, if any) therefrom and to seek
to obtain a refund of any such payments made.
(d) The Lessee may, at its sole cost and expense, contest in good faith the
validity, existence or imposition of real estate taxes on the Facility if (i)
such contest shall not result in the Facility or any part of any thereof or
interest therein being in any danger of being sold, forfeited or lost, (ii) such
contest shall not result in the Lessee, the Agency, or the Trustee being in any
danger of any civil or any criminal liability other than normal accrual of
16
interest, for failure to comply therewith, and (iii) the Lessee shall have
furnished such security, if any, as may be reasonably requested by the Agency or
the Trustee to protect the security intended to be offered by the Security
Documents.
Section 4.4 Taxes, Assessments and Charges.
------------------------------
(a) The Lessee shall pay when the same shall become due all taxes and
assessments, general and specific, if any, levied and assessed upon or against
the Facility, this Agreement, any estate or interest of the Agency or the Lessee
in the Facility, or the rentals hereunder during the term of this Agreement, and
all water and sewer charges, special district charges, assessments and other
governmental charges and impositions whatsoever, foreseen or unforeseen,
ordinary or extraordinary, under any present or future law, and charges for
public or private utilities or other charges incurred in the occupancy, use,
operation, maintenance or upkeep of the Facility, all of which are herein called
"Impositions". The Agency shall promptly forward to the Lessee any notice, bill
or other statement received by the Agency concerning any Imposition. The Lessee
may pay any Imposition in installments if so payable by law, whether or not
interest accrues on the unpaid balance.
(b) In the event the Facility is exempt from Impositions solely due to the
Agency's leasehold interest in the Facility, the Lessee shall pay all
Impositions to the appropriate taxing authorities equivalent to the Impositions
which would have been imposed on the Facility if the Agency had no leasehold
interest in the Facility.
Section 4.5 Insurance.
---------
(a) At all times throughout the term of this Agreement, including without
limitation during any period of construction or reconstruction of the Facility,
the Lessee shall maintain general liability (naming the Agency as an additional
insured), property damage and worker's compensation insurance, against such
risks, loss, damage and liability (including liability to third parties) and for
such amounts as are customarily insured against by other entities of like size
and type as that of the Lessee. Such insurance coverage is subject to the
reasonable approval of the Agency from time to time taking into account the
financial wherewithal of Guarantor (on a consolidated basis).
(b) Concurrently with the original issuance of the Series 2003A Bonds, the
Lessee shall deliver or cause to be delivered to the Agency and the Trustee the
following documents evidencing compliance with this Section 4.5: (i) on or prior
to the execution and delivery of this Agreement, (A) a broker's certificate of
coverage, and (B) certificate of liability insurance, evidence of property
insurance, and certificates or other evidence of other required insurance, and,
(ii) as soon as practicable thereafter, duplicate copies of insurance policies
and/or binders. At least seven (7) Business Days prior to the expiration of any
such policy, the Lessee shall furnish the Agency and the Trustee with evidence
that such policy has been renewed or replaced or is no longer required by this
Agreement.
(c) The Lessee shall, at its own cost and expense, make all proofs of loss
and take all other steps necessary or reasonably requested by the Agency or the
Trustee to collect from insurers for any loss covered by any insurance required
17
to be obtained by this Section 4.5. The Lessee shall not do any act, or suffer
or permit any act to be done, whereby any insurance required by this Section 4.5
would or might be suspended or impaired.
(d) THE AGENCY DOES NOT IN ANY WAY REPRESENT THAT THE INSURANCE REFERRED TO
HEREIN, WHETHER IN SCOPE OR COVERAGE, IS ADEQUATE OR SUFFICIENT TO PROTECT THE
BUSINESS OR INTEREST OF THE LESSEE OR ANY AFFILIATE THEREOF.
Section 4.6 Advances by Agency or the Trustee. In the event the Lessee
fails to make any payment or perform or observe any obligation required of it
under this Agreement, the Agency or the Trustee, after first affording ten (10)
days notice notifying the Lessee of any such failure on its part, upon notice by
the Agency or the Trustee (except if any emergency condition shall exist) may
(but shall not be obligated to), and without waiver of any of the rights of the
Agency or the Trustee under this Agreement, the Indenture or any other Security
Documents, make such payment or otherwise cure any failure by the Lessee to
perform and observe its other obligations hereunder. All amounts so advanced
therefor by the Agency or the Trustee shall become an additional obligation of
the Lessee to the Agency or the Trustee, which amounts, together with interest
thereon at the rate of the Trustee's "prime rate" plus four percent (4%) per
annum from the date advanced, the Lessee will pay upon demand therefor by the
Agency or the Trustee. Any remedy herein vested in the Agency or the Trustee for
the collection of the rental payments or other amounts due hereunder shall also
be available to the Agency or the Trustee for the collection of all such amounts
so advanced.
Section 4.7 Compliance with Law.
-------------------
(a) The Lessee shall not use or occupy, and will not permit any use or
occupancy of, the Facility, or any part thereof, in violation of any applicable
Legal Requirements. The Lessee shall, throughout the term of this Lease
Agreement and at its sole cost and expense, promptly observe and comply with all
material Legal Requirements, and shall observe and comply with all conditions,
requirements, and schedules necessary to preserve and extend all rights,
licenses, permits (including without limitation zoning variances, special
exception and non-conforming uses), privileges, franchises and concessions. The
Lessee shall not, without the prior written consent of the Agency, initiate,
join in or consent to any private restrictive covenant, private zoning
ordinance, or other private restrictions, limiting or defining the uses which
may be made of the Facility or any part thereof.
(b) The Lessee may contest in good faith the validity, existence or
applicability of any of the foregoing if (i) such contest shall not result in
the Facility or any part of any thereof or interest therein being in any danger
of being sold, forfeited or lost, (ii) such contest shall not result in the
Lessee, the Agency, or the Trustee being in any danger of any civil or any
criminal liability other than normal accrual of interest, for failure to comply
therewith, and (iii) the Lessee shall have furnished such security, if any, as
may be reasonably requested by the Agency, or the Trustee to protect the
security intended to be offered by the Security Documents.
18
ARTICLE V
Damage, Destruction And Condemnation
Section 5.1 Damage, Destruction and Condemnation.
------------------------------------
(a) In the event that at any time during the term of this Agreement the
whole or substantially all of the Facility shall be damaged or destroyed, or
taken or condemned by a competent authority for any public use or purpose, or by
agreement between the Agency and those authorized to exercise such right, or if
the temporary use of the Facility shall be so taken by condemnation or agreement
(a "Loss Event"):
(i) the Agency shall have no obligation to rebuild, replace, repair or
restore the Facility,
(ii) there shall be no abatement, postponement or reduction in the
rent or other amounts payable by the Lessee under this Agreement, and
(iii) the Lessee will promptly give written notice of such Loss Event
to the Agency and the Trustee, generally describing the nature and extent
thereof.
(b) Upon the occurrence of a Loss Event, the Lessee shall either:
(i) at its own cost and expense, promptly and diligently rebuild,
replace, repair or restore the Facility to substantially its condition
immediately prior to the Loss Event, or to a condition of at least
equivalent value, operating efficiency and function, and the Lessee shall
not by reason of payment of any such excess costs be entitled to any
reimbursement from the Agency, the Trustee or any Bondholder, nor shall the
rent or other amounts payable by the Lessee under this Agreement be abated,
postponed or reduced, or
(ii) if, to the extent and upon the conditions permitted to do so
under Section 8.1 hereof and under the Indenture, exercise its option to
terminate the Agency's leasehold interest in the Facility and make advance
rental payments to redeem the Bonds in whole.
Not later than ninety (90) days after the occurrence of a Loss Event, the Lessee
shall advise the Agency and the Trustee in writing of the action to be taken by
the Lessee under this Section 5.1(b), a failure to so timely notify being deemed
an election in favor of subdivision (i) above to be exercised in accordance with
the provisions of clause (i) above.
(c) All such rebuilding, replacements, repairs or restorations shall
(i) automatically be deemed a part of the Facility and leased by the
Agency and be subject to this Agreement, the Company Lease and the
Indenture,
(ii) not change the nature of the Facility as an Approved Facility,
and
(iii) be effected with due diligence in a good and workmanlike manner,
in compliance, in all material respects, with all applicable Legal
Requirements and be promptly and fully paid for by the Lessee in accordance
with the terms of the applicable contract(s) therefore.
19
(d) Pending the disbursement or transfer thereof, the Net Proceeds in the
Renewal Fund shall be applied and may be invested as provided in the Indenture.
(e) The Agency, the Trustee and the Lessee shall cooperate and consult with
each other in all matters pertaining to the settlement, compromising,
arbitration or adjustment of any claim or demand on account of any Loss Event,
and the settlement, compromising, arbitration or adjustment of any such claim or
demand shall be subject to the written approval of the Lessee (such approval not
to be unreasonably withheld).
(f) If all or substantially all of the Facility shall be taken or
condemned, or if the taking or condemnation renders the Facility unsuitable for
use by the Lessee as contemplated hereby, the Lessee shall exercise its option
to terminate the Agency's leasehold interest in the Facility pursuant to Section
8.1 hereof, and the amount of the Net Proceeds so recovered shall be transferred
from the Renewal Fund and deposited in the Redemption Account of the Bond Fund,
and the Lessee shall thereupon pay to the Trustee for deposit in the Redemption
Account of the Bond Fund an amount which, when added to any amounts then in the
Bond Fund and available for that purpose, shall be sufficient to retire and
redeem the Bonds in whole at the earliest possible date (including, without
limitation, principal and interest to the maturity or redemption date and
redemption premium, if any), and to pay the expenses of redemption, the fees and
expenses of the Agency, the Bond Registrar, the Trustee and the Paying Agents,
together with all other amounts due under the Indenture, the Tax Certificate and
under this Agreement, and such amount shall be applied, together with such other
available moneys in such Bond Fund, if applicable, to such redemption or
retirement of the Bonds on said redemption or maturity date.
(g) The Lessee shall be entitled to any insurance proceeds or condemnation
award, compensation or damages attributable to the Lessee's Property.
(h) The Lessee hereby waives the provisions of Section 227 of the New York
Real Property Law or any law of like import now or hereafter in effect.
ARTICLE VI
Particular Covenants
Section 6.1 Restrictions on Lessee. The Bonds will be payable by the Agency
as to principal, interest and redemption premium, if any, out of the revenue
derived from the leasing of the Facility, including all revenues and rental
income derived from or in connection with the Facility and moneys received under
this Agreement, and the parties hereto understand that the purchasers of the
Bonds will make their purchase in reliance in part upon the credit and financial
condition of the Lessee. Except as provided in this Section 6.1, the Lessee
agrees that at all times during the term of this Agreement it will (i) maintain
its existence, (ii) continue to be a limited liability company subject to
service of process in the State and either organized under the laws of the
State, or organized under the laws of any other state of the United States and
duly qualified to do business in the State, (iii) not sell, transfer, pledge or
otherwise encumber all or substantially all of the assets which constitute the
Facility, (iv) not liquidate, wind-up or dissolve or otherwise dispose of all or
substantially all of its property, business or assets remaining after the
execution and delivery of this Agreement and (v) not consolidate with or merge
into another entity or permit one or more entities to consolidate with or merge
into it. The Lessee may, however, without violating the foregoing, consolidate
20
with or merger into another entity or permit one or more other entities to
consolidate with or merge into it, or sell by public offering or otherwise
transfer all or substantially all of its property, business or assets to another
such entity (and thereafter liquidate, wind-up or dissolve or not, as the Lessee
may elect) if (i) the Lessee is the surviving, resulting or transferee entity,
as the case may be, and the resulting entity has a net worth at least equal to
that of the Lessee prior to such merger or consolidation or otherwise acceptable
to a majority in interest of the Bondholders Outstanding, or (ii) in the event
that the Lessee is not the surviving, resulting or transferee entity, as the
case may be, such entity (A) is a solvent entity subject to service of process
in the State and either organized under the laws of the State, or organized
under the laws of any other state of the United States and duly qualified to do
business in the State, (B) assumes in writing all of the obligations of the
Lessee contained in this Agreement and all other Security Documents to which the
Lessee shall be a party, and (1) in the Opinion of Counsel, (x) such entity
shall be bound by all of the terms applicable to the Lessee of this Agreement
and all other Security Documents to which the predecessor Lessee shall have been
a party, and (y) such action does not legally impair the security for the
Holders of the Bonds afforded by the Security Documents, and (2) in the Opinion
of Nationally Recognized Bond Counsel, such merger, consolidation, sale or
transfer will not cause the interest on the Bonds to become includable in gross
income for Federal income tax purposes, and (C) has a net worth (as determined
in accordance with generally accepted accounting principles after the merger,
consolidation, sale or transfer at least equal to that of the Lessee immediately
prior to such merger, consolidation, sale or transfer or otherwise acceptable to
a majority in interest of the Bondholders Outstanding. The Lessee further
represents, covenants and agrees that it is and through the term of the Lease
Agreement will (y) continue to be duly qualified to do business in the State and
that any company succeeding to its rights under this Agreement shall be duly
qualified to do business in the State, and (z) not constitute a Prohibited
Person.
Section 6.2 Indemnity. (a) The Lessee shall at all times indemnify, defend
(with counsel selected by the Agency and reasonably approved by the Lessee),
protect and hold the Agency, and any director, member, officer, employee,
servant, agent (excluding for this purpose the Lessee, which is not obligated
hereby to indemnify its own employees, affiliated companies or affiliated
individuals) thereof and persons under the Agency's control or supervision, the
Trustee, the Bond Registrar and the Paying Agents (collectively, the
"Indemnified Parties") harmless of, from and against any and all claims (whether
in tort, contract or otherwise), taxes (of any kind and by whomsoever imposed),
demands, penalties, fines, liabilities, lawsuits, actions, proceedings,
settlements, reasonable costs and expenses (collectively, "Claims") of any kind
for losses, damage, injury and liability (collectively, "Liability") of every
kind and nature and however caused, arising during the period commencing from
March 21, 2002, the date on which the Lessee submitted to the Agency its
application for financial assistance, and continuing until the later of (i) the
expiration of the period stated in the applicable statute of limitations during
which a claim or cause of action may be brought and (ii) payment in full or the
satisfaction of such claim or cause of action and of all expenses and charges
incurred by the Indemnified Party relating to the enforcement of the provisions
herein specified, other than, with respect to any Indemnified Party, losses
arising from the gross negligence or willful misconduct of such Indemnified
Party, arising upon or about the Facility or resulting from, arising out of, or
in any way connected with:
21
(i) the financing of the costs of the Project and the marketing,
issuance, sale and remarketing of the Bonds for such purpose,
(ii) the planning, design, acquisition, site preparation,
construction, renovation, equipping, installation or completion of the
Project or any part thereof or the effecting of any work done in or about
the Facility, or any defects (whether latent or patent) in the Facility,
(iii) the maintenance, repair, replacement, restoration, rebuilding,
upkeep, use, occupancy, ownership, leasing, subletting or operation of the
Facility or any portion thereof,
(iv) the execution and delivery by the Indemnified Party, the Lessee
or any other Person of, or performance by the Indemnified Party, the Lessee
or any other Person, as the case may be, of, any of their respective
obligations under, this Agreement, the Indenture or any other Security
Document, or other document or instrument delivered in connection herewith
or therewith or the enforcement of any of the terms or provisions hereof or
thereof or the transactions contemplated hereby or thereby,
(v) any injury to any Person or the personal property of any Person in
or on the premises of the Facility,
(vi) any imposition arising from, burden imposed by, violation of, or
failure to comply with any Legal Requirement,
(vii) any damage or injury to the person or property of (A) the Lessee
or (B) any other Person or their respective officers, directors, officials,
partners, members, employees, attorneys, agents or representatives, or
persons under the control or supervision of the Lessee, or (C) any other
Person who may be in or about the premises of the Facility,
(viii) the presence, disposal, release, or threatened release of any
Hazardous Materials (as hereinafter defined) that are on, from, or
affecting the Facility; any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such
Hazardous Materials; any lawsuit brought or threatened, settlement reached,
or government order relating to such Hazardous Materials, and/or any
violation of Legal Requirements, including demands of government
authorities, or any policies or requirements of the Agency or the Trustee,
which are based upon or in any way related to such Hazardous Materials
including, without limitation, reasonable attorney and consultant fees and
expenses, investigation and laboratory fees, court costs, and litigation
expenses, or
(ix) any Claim commenced against an Indemnified Party, or other action
or proceeding taken by an Indemnified Party, in any case with respect to
any of the matters set forth in subparagraphs (i) through (viii) of this
Section 6.2(a),
22
Such indemnification set forth above shall be binding upon the Lessee
for any and all Claims set forth herein and shall survive the termination
of this Agreement.
(b) The Lessee releases each Indemnified Party from, and agrees that no
Indemnified Party shall be liable for, any Claims or Liability incurred as a
result of action taken by such Indemnified Party with respect to any of the
matters set forth in subdivision (i) through (ix) of Section 6.2(a) hereof,
excluding any Claims or Liability, arising from or incurred as a result of the
gross negligence or willful misconduct of such Indemnified Party, or at the
direction of the Lessee or any other obligor under any of the Security Documents
with respect to any of such matters above referred to. An Indemnified Party
shall promptly notify the Lessee in writing of any claim or action brought
against such Indemnified Party in which indemnity may be sought against the
Lessee pursuant to this Section 6.2; such notice shall be given in sufficient
time to allow the Lessee to defend or participate in such claim or action, but
the failure to give such notice in sufficient time shall not constitute a
defense hereunder nor in any way impair the obligations of the Lessee under this
Section 6.2 if (x) the Indemnified Party shall not have had knowledge or notice
of such claim or action, or (y) the Lessee's ability to defend such claim or
action shall not thereby be materially impaired. In the event, however, that (i)
the Indemnified Party shall not have timely notified the Lessee of any such
claim or action, (ii) the Lessee shall not have knowledge or notice of such
claim or action, and (iii) the Lessee's ability to defend or participate in such
claim or action is materially impaired by reason of not having received timely
notice thereof from the Indemnified Party, then the Lessee's obligation to so
defend and indemnify shall be qualified to the extent (and only to the extent)
of such material impairment.
(c) (i) In addition to and without limitation of any other representations,
warranties and covenants made by the Lessee under this Agreement, the Lessee
further represents, warrants and covenants that the Lessee has not used
Hazardous Materials on, from, or affecting the Facility in any manner that
violates any material, applicable Legal Requirements governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and except as provided in Schedule A-3 hereto,
that, to the best of the Lessee's knowledge, prior existing conditions at the
Facility Realty have been accurately described in the Environmental Assessment
Report, dated November 13, 2001, a copy of which was previously provided by the
Company to the Agency.
(ii) Without limiting the foregoing, the Lessee shall not cause or permit
the Facility or any part thereof to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer, produce or process Hazardous
Materials, in violation of any applicable Legal Requirements, and Lessee shall
use best efforts to ensure compliance with all material applicable Legal
Requirements regarding any release of Hazardous Materials onto the Facility or
onto any other property.
(iii) Except as provided in Schedule A-3 hereto, the Lessee shall comply
with and shall use best efforts to ensure compliance, in all material respects,
by all occupants and users of the Facility with all material applicable Legal
Requirements, whenever and by whomever triggered, and shall obtain and comply
with, and shall use best efforts to ensure that all occupants and users of the
Facility obtain and comply with, any and all approvals, registrations or permits
required thereunder; provided, however, that if any such occupant or user shall
23
be an Affiliate of the Lessee, the obligations of the Lessee with respect to
such Persons shall be absolute and not limited to best efforts.
(iv) The Lessee shall conduct and complete all investigations, studies,
sampling, and testing, and all remediation, removal and other actions required
by the applicable governmental authority or agency to clean up and remove
Hazardous Materials, on, from, or affecting the Facility in accordance with
requirements established by such governmental authority or agency.
For purposes of this Section 6.2, the term "Hazardous Materials" includes,
without limit, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related materials
defined in, and to the extent prohibited by, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Sections 5101, et seq.), the Resource Conservation and Recovery Act,
as amended (42 U.S.C. Sections 6901, et seq.), and in the regulations adopted
and publications promulgated pursuant thereto, or any other federal, state or
local environmental law, ordinance, rule, or regulation.
(d) The indemnifications and protections set forth in this Section 6.2
shall be extended, with respect to each Indemnified Party, to its members,
directors, officers, employees, agents (other than the Lessee) and servants and
persons under its control or supervision.
(e) To effectuate the purposes of this Section 6.2, the Lessee will provide
for and insure, in the public liability policies required in Section 4.5 hereof,
not only its own liability in respect of the matters therein mentioned but also
the liability pursuant to this Section 6.2 (excluding, however, those
obligations of the Lessee (1) requiring payment of taxes, (2) set forth in
Section 6.2(a)(i) or (iv) hereof and (3) under Section 6.2(a)(viii) hereof to
the extent not available to the Lessee at commercially reasonable rates).
Anything to the contrary in this Agreement notwithstanding, the covenants of the
Lessee contained in this Section 6.2 shall remain in full force and effect after
the termination of this Agreement until the later of (i) the expiration of the
period stated in the applicable statute of limitations during which a claim or
cause of action may be brought and (ii) payment in full or the satisfaction of
such claim or cause of action and of all expenses and charges incurred by the
Indemnified Party relating to the enforcement of the provisions herein
specified.
(f) For the purposes of this Section 6.2, the Lessee shall not be deemed an
employee, agent or servant of the Agency or a person under the Agency's control
or supervision.
(g) The provisions of this Section 6.2 shall be in addition to any and all
other obligations and liabilities the Lessee may have to any Indemnified Party
in any other agreement or at common law, and shall survive the termination of
this Agreement.
Section 6.3 Compensation and Expenses of Trustee, Bond Registrar, Paying
Agents and Agency. The Lessee shall, to the extent not paid out of the proceeds
of the Bonds as financing expenses, pay the following annual fees, charges and
expenses and other amounts (i) the initial and annual fees of the Trustee for
24
the ordinary services of the Trustee rendered and its ordinary expenses incurred
under the Indenture, including fees and expenses as Bond Registrar and in
connection with preparation of new Bonds upon exchanges or transfers or making
any investments in accordance with the Indenture, (ii) the reasonable fees and
charges of the Trustee and any Paying Agents on the Bonds for acting as paying
agents as provided in the Indenture, (iii) the reasonable fees and charges of
the Trustee for extraordinary services rendered by it and extraordinary expenses
incurred by it under the Indenture, including reasonable counsel fees, and (iv)
the fees, costs and expenses of the Bond Registrar, and the fees, costs and
expenses (including legal, accounting and other administrative expenses) of the
Agency. The Lessee shall further pay the reasonable fees, costs and expenses of
the Agency together with any reasonable fees and disbursements incurred by the
Agency's Bond Counsel and General Counsel in performing services for the Agency
in connection with this Agreement or the Indenture or any other Security
Document.
On the Commencement Date, the Lessee shall pay to the Agency, the Agency's
fees pursuant to the application for financial assistance filed by or on behalf
of the Lessee with the Agency. In addition, the Lessee agrees to pay, as an
annual administrative servicing fee to the Agency, the amount of $1,000 (as
adjusted by the Agency from time to time to account for inflation) payable
initially on the sale and delivery by the Agency of the Series 2003A Bonds and
on every January 1 until the termination of this Agreement.
In addition, the Lessee shall pay to the New York State Department of
Taxation and Finance the bond issuance charge required pursuant to Section 2976
of the Public Authorities Law.
Section 6.4 Retention of Agency's Leasehold Interest in Facility; Grant of
Easements; Release of Certain Portions of Facility. The Agency shall not sell,
assign, encumber (other than Permitted Encumbrances), convey or otherwise
dispose of the Facility or any part thereof or interest therein during the term
of this Agreement, except as set forth below and in Sections 4.2 and 7.2 hereof,
without the prior written consent of the Lessee and the Trustee and any
purported disposition without such consent shall be void.
Notwithstanding any other provision of this Agreement, so long as there
exists no Event of Default hereunder, and with the prior written consent of the
Trustee, the Lessee may from time to time request in writing to the Agency the
release of and removal from this Agreement and the leasehold estate created
hereby of any part of the Facility not required for the Lessee's operation
provided that such release and removal will not adversely affect the use or
operation of the Facility. Upon any such request by the Lessee, the Agency
shall, at the reasonable sole cost and expense of the Lessee, execute and
deliver and cause and direct the Trustee to execute and deliver any and all
instruments necessary or appropriate to so release and remove such portion of
the Facility and terminate the Agency's leasehold interest therein, subject to
the following: (a) any liens, easements, encumbrances and reservations to which
the Agency's leasehold interest was subject at the time of recording of this
Agreement; (b) any liens, easements and encumbrances created at the request of
the Lessee or to the creation or suffering of which the Lessee consented; (c)
any liens and encumbrances or reservations resulting from the failure of the
Lessee to perform or observe any of the agreements on its part contained in this
Agreement; (d) Permitted Encumbrances (other than the lien of this Agreement);
(e) any liens for taxes or assessments not then delinquent and (f) Lessee shall
provide the Agency with a Favorable Opinion of Bond Counsel as to such release.
25
No conveyance or release effected under the provisions of this Section 6.4
shall entitle the Lessee to any abatement or diminution of the rents payable
under Section 3.3 hereof or the other payments required to be made by the Lessee
under this Agreement.
Section 6.5 Lessee's Covenant as to Tax Exemption.
-------------------------------------
(a) The Lessee covenants to comply with each requirement of the Code
necessary to maintain the exclusion of interest on the Bonds from gross income
for federal income tax purposes pursuant to Section 103 of the Code. In
furtherance of the covenant contained in the preceding sentence, the Lessee
agrees to comply with the provisions of the Tax Certificate as a source of
guidance for complying with the Code.
(b) The Lessee covenants that it will not take any action or fail to take
any action with respect to the Bonds which would cause such Bonds to be
"arbitrage bonds", within the meaning of such term as used in Section 148 of the
Code and the regulations promulgated thereunder, as amended from time to time.
(c) The Lessee agrees that it shall promptly pay to the Trustee, as
additional sums under this Agreement, the amount of any Rebate Requirement, as
defined in the Tax Certificate the Agency is obligated to pay to the United
States Department of the Treasury.
(d) The obligation of the Lessee to make the payments provided for in this
Section shall be absolute and unconditional, and the failure of the Agency, the
Trustee or any other Person to execute or deliver or cause to be executed or
delivered any documents or to take any action required under this Agreement or
otherwise shall not relieve the Lessee of its obligation under this Section.
(e) Notwithstanding any other provision of the Indenture or this Agreement
to the contrary, so long as necessary in order to maintain the exclusion of
interest on the Bonds from gross income for federal income tax purposes, the
covenants contained in this Section shall survive the discharge and satisfaction
of the Bonds (in accordance with Section 10.01 of the Indenture) and the term of
this Agreement.
(f) The Lessee will not use any of the funds provided by the Agency
hereunder, or any other funds, nor will it permit any of the funds provided by
Agency hereunder, or any other funds, to be used in a manner which would impair
the exclusion of the interest on the Bonds from gross income for federal income
tax purposes. In furtherance of this covenant the Lessee agrees to comply with
the terms of the Tax Certificate executed by the Lessee in connection with the
issuance of the Bonds.
(g) The Lessee agrees that none of the proceeds of the Bonds shall at any
time be used directly or indirectly for any purpose which would cause any
component of the Project to be financed with proceeds of the Bonds to become a
facility that is not an Approved Facility.
26
(h) Neither the Lessee nor any related party within the meaning of Treasury
Regulation Section 1.150-1(b) shall purchase Bonds in an amount related to the
amount of the proceeds of the Bonds provided to the Lessee by the Agency under
this Agreement.
(i) The representations, warranties, covenants and statements of
expectation of the Lessee set forth in the Tax Certificate (including the
exhibits and other attachments thereto) are hereby incorporated in this
Agreement as though fully set forth herein.
Section 6.6 Financial Statements; No-Default Certificates.
---------------------------------------------
(a) The Lessee agrees to furnish to the Agency, and to the Trustee, (i) as
soon as available and in any event within one hundred-twenty (120) days after
the close of each fiscal year of the Lessee, a copy of the annual unaudited
financial statements of the Lessee, including balance sheets as at the end of
such year, and the related statements of income, balances, earnings, retained
earnings and changes in financial position for such fiscal year, prepared in
accordance with generally accepted accounting principles and practices, and (ii)
upon request of the Agency and as soon as thereafter available after the close
of each of the first three quarters of each fiscal year of the Lessee, a copy of
the unaudited consolidated financial statements of the Lessee, including balance
sheets as at the end of such quarter, and the related statements of income,
balances, earnings, retained and changes in financial position for such quarter,
prepared in accordance with generally accepted accounting principles and
practices, certified by a member of the Lessee.
(b) The Lessee shall deliver to the Agency and to the Trustee with each
delivery of annual unaudited financial statements required by Section 6.6(a)(i)
hereof, (i) a certificate of an Authorized Representative of the Lessee as to
whether or not, to the best of its knowledge after due and diligent inquiry, as
of the close of such preceding Fiscal Year of the Lessee, and at all times
during such Fiscal Year, the Lessee was in compliance with all the provisions
which relate to the Lessee in this Agreement and in any other Security Document
to which it shall be a party, and as to whether or not a Determination of
Taxability has occurred, and if such Authorized Representative shall have
obtained knowledge of any default in such compliance or notice of such default
or Determination of Taxability, shall disclose in such certificate such default
or defaults or notice thereof and the nature thereof, whether or not the same
shall constitute an Event of Default hereunder, and any action proposed to be
taken by the Lessee with respect thereto and (ii) a certificate of an Authorized
Representative of the Lessee that the insurance it maintains complies with the
provisions of Section 4.5 of this Agreement, that such insurance has been in
full force and effect at all times during the preceding Fiscal Year of the
Lessee, and that duplicate copies of all policies or certificates thereof have
been filed with the Agency and the Trustee and are in full force and effect. In
addition, upon twenty (20) days' prior request by the Agency or the Trustee, the
Lessee will execute, acknowledge and deliver to the Agency and the Trustee a
certificate of an Authorized Representative of the Lessee either stating that to
his knowledge no default or breach exists hereunder or specifying each such
default or breach of which he has knowledge.
(c) The Lessee shall immediately notify the Agency and the Trustee of the
occurrence of any Event of Default or any event which with notice and/or lapse
of time would constitute an Event of Default under any Security Document of
which it has knowledge. Any notice required to be given pursuant to this
27
subsection shall be signed by an Authorized Representative of the Lessee and set
forth a description of the default and the steps, if any, being taken to cure
said default. If no steps have been taken, the Lessee shall state this fact on
the notice.
Section 6.7 Discharge of Liens.
------------------
(a) If any lien, encumbrance or charge is filed or asserted, or any
judgment, decree, order, levy or process of any court or governmental body is
entered, made or issued or any claim (such liens, encumbrances, charges,
judgments, decrees, orders, levies, processes and claims being herein
collectively called "Liens"), whether or not valid, is made against the Facility
or any part thereof or the interest therein of the Agency, the Lessee or the
Trustee or against any of the rentals or other amounts payable under this
Agreement or the interest of the Lessee under this Agreement other than Liens
for Impositions (as defined in Section 4.4) not yet payable, Permitted
Encumbrances, or Liens being contested as permitted by Section 6.7(b), the
Lessee forthwith upon receipt of notice of the filing, assertion, entry or
issuance of such Lien (regardless of the source of such notice) shall give
written notice thereof to the Agency and the Trustee and take all reasonable
action (including the payment of money and/or the securing of a bond) at its own
cost and expense as may be necessary or appropriate to obtain the discharge in
full thereof and to remove or nullify the basis therefor. Nothing contained in
this Agreement shall be construed as constituting the express or implied consent
to or permission of the Agency for the performance of any labor or services or
the furnishing of any materials that would give rise to any Lien against the
Agency's interest in the Facility.
(b) The Lessee may at its sole cost and expense contest (after prior
written notice to the Agency and the Trustee), by appropriate action conducted
in good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Lien, if (1) such proceeding shall suspend the
execution or enforcement of such Lien against the Facility or any part thereof
or interest therein, or in the Lease Agreement, of the Agency, the Lessee or the
Trustee or against any of the rentals or other amounts payable under this
Agreement, (2) neither the Facility nor any interest therein would be in any
danger of being sold, forfeited or lost, (3) neither the Lessee, the Agency nor
the Trustee would be in any danger of any civil or any criminal liability, other
than normal accrual of interest, for failure to comply therewith, and (4) the
Lessee shall have furnished such security, if any, as may be required in such
proceedings or as may be reasonably requested by the Trustee to protect the
security intended to be offered by the Indenture.
Section 6.8 Agency's Authority; Covenant of Quiet Enjoyment. The Agency
covenants and agrees that it has full right and lawful authority to enter into
this Agreement for the full term hereof, including the right to grant a
leasehold interest in the Facility to the Lessee, and that, subject to the terms
and provisions of the Indenture and Permitted Encumbrances, so long as the
Lessee shall pay the rent and all other sums payable by it under this Agreement
and shall duly observe all the covenants, stipulations and agreements herein
contained obligatory upon it and an Event of Default shall not exist hereunder,
the Lessee shall have, hold and enjoy, during the term hereof, peaceful, quiet
and undisputed possession of the Facility, and the Agency (at the sole cost and
expense of the Lessee) shall from time to time take all necessary action to that
end, subject to Permitted Encumbrances.
28
Section 6.9 No Warranty of Condition or Suitability. THE AGENCY HAS MADE
AND MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER, EITHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE MERCHANTABILITY, CONDITION, FITNESS, DESIGN, OPERATION OR
WORKMANSHIP OF ANY PART OF THE FACILITY, ITS FITNESS FOR ANY PARTICULAR PURPOSE,
THE QUALITY OR CAPACITY OF THE MATERIALS IN THE FACILITY, OR THE SUITABILITY OF
THE FACILITY FOR THE PURPOSES OR NEEDS OF THE LESSEE OR THE EXTENT TO WHICH
PROCEEDS DERIVED FROM THE SALE OF THE BONDS WILL BE SUFFICIENT TO PAY THE COST
OF COMPLETION OF THE PROJECT. THE LESSEE IS SATISFIED THAT THE FACILITY IS
SUITABLE AND FIT FOR ITS PURPOSES. THE AGENCY SHALL NOT BE LIABLE IN ANY MANNER
WHATSOEVER TO THE LESSEE OR ANY OTHER PERSON FOR ANY LOSS, DAMAGE OR EXPENSE OF
ANY KIND OR NATURE CAUSED, DIRECTLY OR INDIRECTLY, BY THE PROPERTY OF THE
FACILITY OR THE USE OR MAINTENANCE THEREOF OR THE FAILURE OF OPERATION THEREOF,
OR THE REPAIR, SERVICE OR ADJUSTMENT THEREOF, OR BY ANY DELAY OR FAILURE TO
PROVIDE ANY SUCH MAINTENANCE, REPAIRS, SERVICE OR ADJUSTMENT, OR BY ANY
INTERRUPTION OF SERVICE OR LOSS OF USE THEREOF OR FOR ANY LOSS OF BUSINESS
HOWSOEVER CAUSED.
Section 6.10 Amounts Remaining in Funds. It is agreed by the parties hereto
that any amounts remaining in the Earnings Fund, the Rebate Fund, the Bond Fund,
the Project Fund or the Renewal Fund upon the expiration or sooner or later
termination of the term of this Agreement as provided in this Agreement, after
payment in full of the Bonds (in accordance with Section 10.01 of the
Indenture), the reasonable fees, charges and expenses of the Trustee, the Bond
Registrar, the Paying Agents and the Agency in accordance with the Indenture and
after all rents and all other amounts payable hereunder, shall have been paid in
full, and after all amounts required to be rebated to the Federal government
pursuant to the Tax Certificate or the Indenture shall have been so paid, shall
belong to and be paid to the Lessee by the Trustee as overpayment of rents.
Section 6.11 Issuance of Additional Bonds. The Agency and the Lessee
recognize that under the provisions of and subject to the conditions set forth
in the Indenture, the Agency may in its sole discretion authorize the entering
into a Supplemental Indenture and issue one or more series of Additional Bonds
on a parity with the Series 2003A Bonds for the purpose of (i) providing funds
in excess of the Net Proceeds of insurance or eminent domain to repair,
relocate, replace, rebuild or restore the Facility in the event of damage,
destruction or taking by eminent domain, (ii) providing extensions, additions or
improvements to the Facility, or (iii) refunding Outstanding Bonds. If the
Lessee is not in default hereunder, the Agency will consider the issuance of
Additional Bonds in a principal amount as is specified in a written request in
accordance with the applicable provisions set forth in the Indenture.
Any such completion, repair, relocation, replacement, rebuilding,
restoration, additions, extensions or improvements shall become a part of the
Facility and shall be included under this Agreement to the same extent as if
originally included hereunder.
Section 6.12 Redemption Under Certain Circumstances; Special Covenants.
---------------------------------------------------------
29
(a) Upon the determination by resolution of the members of the Agency that
the Lessee is operating the Facility or any portion thereof, or is allowing the
Facility or any portion thereof to be operated, (i) in violation of applicable
material law or (ii) not as a qualified "project" in accordance with the Act and
the failure of the Lessee within sixty (60) days, (or such longer period as may
be established pursuant to the proviso to this sentence) of the receipt by the
Lessee of written notice of such noncompliance from the Agency to cure such
noncompliance together with such resolution (a copy of which notice shall be
sent to the Trustee), the Lessee covenants and agrees that it shall, on the
immediately succeeding Interest Payment Date following the termination of such
sixty (60) day (or longer) period, as the case may be, pay to the Trustee
advance rentals in immediately available funds in an amount sufficient to redeem
the Bonds Outstanding in whole at the Redemption Price of 103% the aggregate
principal amount of the Outstanding Bonds together with interest accrued thereon
to such Interest Payment Date, provided, however, that if such noncompliance
cannot be cured within such period of sixty (60) days with diligence (and is
capable of being cured) and the Lessee promptly commences the curing of such
non-compliance and thereafter prosecutes the curing thereof with diligence and
to the Agency's reasonable satisfaction, such period of time within which the
Lessee may cure such failure shall be extended for such additional period of
time as may be necessary to cure the same with diligence and the Agency shall
notify the Trustee and the Bondholders of any such extension.
(b) The Agency shall give prior written notice of the meeting at which the
members of the Agency are to consider such resolution to the Lessee and the
Trustee, which notice shall be no less than three (3) Business Days prior to a
meeting called to consider matters set forth in clauses (a)(i) and (a)(ii) of
this Section. The holders of one hundred percent (100%) of the Bonds Outstanding
shall have the right but not the obligation, at any time subsequent to the
receipt of such notice but prior to the Interest Payment Date referred to above,
to tender to the Trustee all of the Bonds then Outstanding for cancellation in
accordance with the Indenture.
(c) Upon the circumstances set forth in Section 3.01 of the Indenture, the
Lessee shall pay or cause the prepayment of its lease rental obligation upon the
circumstances and in the manner set forth in the Indenture.
Section 6.13 Further Assurances. The Lessee will do, execute, acknowledge
and deliver or cause to be done, executed, acknowledged and delivered such
further acts, instruments, conveyances, transfers and assurances, including
Uniform Commercial Code financing statements, at the sole cost and expense of
the Lessee, as the Agency or the Trustee deems reasonably necessary or advisable
for the implementation, effectuation, correction, confirmation or perfection of
this Agreement and any rights of the Agency or the Trustee hereunder, or under
the Indenture.
Section 6.14 Non-Discrimination; Employment Information, Opportunities
and Guidelines.
---------------------------------------------------------
(a) The Lessee shall ensure and cause its Affiliates to ensure that all
employees and applicants for employment at the Facility are afforded equal
employment opportunity without discrimination.
30
(b) At all times during the construction, maintenance and operation of the
Facility, the Lessee shall not discriminate against any employee or applicant
for employment because of race, color, creed, age, sex or national origin. The
Lessee shall use reasonable efforts to ensure that employees and applicants for
employment with the Lessee, KeySpan, or any Affiliate or any subtenant of the
Facility are treated without regard to their race, color, creed, age, sex,
sexual orientation or national origin. As used herein, the term "treated" shall
mean and include, without limitation, the following: recruited, whether by
advertising or other means; compensated, whether in the form of rates or other
forms of compensation; selected for training, including apprenticeship;
promoted; upgraded; downgraded; demoted; transferred; laid off; and terminated.
(c) The Lessee shall, in all solicitations or advertisements for employees
placed by or on behalf of the Lessee, state that all qualified applicants will
be considered for employment without regard to race, color, creed or national
origin, age, sex or sexual orientation.
(d) The Lessee shall furnish to the Agency all information reasonably
required by the Agency pursuant to this Section 6.14 and will cooperate with the
Agency for the purposes of investigation to ascertain compliance with this
Section 6.14.
(e) Except as is otherwise provided by collective bargaining contracts or
agreements to which the Lessee is a party, the Lessee shall cause new employment
opportunities created as a result of the Project to be listed with the New York
State Department of Labor, Community Services Division, and with the
administrative entity of the service delivery area created by the Federal Job
Training Partnership Act (P.L. 97-300) in which the Project is located. Except
as is otherwise provided by collective bargaining contracts or agreements to
which the Lessee is a party, the Lessee covenants and agrees, where practicable,
to first consider persons eligible to participate in programs under the Federal
Job Training Partnership Act (P.L. No. 97-300) who shall be referred to
administrative entities or service delivery areas created pursuant to such
Federal Job Training Partnership Act or by the Community Services Division of
the New York State Department of Labor for such new employment opportunities.
(f) The Lessee hereby authorizes any private or governmental entity,
including but not limited to the New York State Department of Labor ("DOL"), to
release to the Agency or its successors and assigns (collectively, the
"Information Recipients"), any and all employment information under its control
and pertinent to Lessee, KeySpan or any Affiliate and their respective employees
at the Facility. In addition, upon the Agency's request, the Lessee shall
provide to the Agency any employment information in the Lessee's or KeySpan's
possession which is pertinent to the Lessee, KeySpan or any Affiliate and their
respective employees at the Facility. Information released or provided to
Information Recipients by DOL, or by any other governmental entity, or by any
private entity, or by the Lessee itself, or any information previously released
as provided by all or any of the foregoing parties (collectively, "Employment
Information") may be disclosed by the Information Recipients in connection with
the administration of the programs of the Agency, or its successors and assigns,
and/or Nassau County, and/or as may be necessary to comply with law; and,
without limiting the foregoing, the Employment Information may be included in
(y) reports required of the Agency, and (z) any reports required by law. This
authorization shall remain in effect throughout the term of this Agreement.
31
(g) Annually, by August 1 of each year, commencing on August 1, 2004, until
the termination of this Agreement, the Lessee shall submit to the Agency an
employment report relating to the period commencing July 1 of the previous year
and ending June 30 of the year of the obligation of the filing of such report,
substantially in the form of Schedule A-1 hereto, certified as to accuracy by an
Authorized Representative of the Lessee, and shall attach thereto a copy of the
Lessee's final payroll report evidencing the total number of employees at the
Facility employed by the Lessee during such reporting period. In addition, upon
a redemption of the Series 2003A Bonds, the Lessee shall submit to the Agency an
employment report, substantially in the form of Schedule A-2 hereto, certified
as to accuracy by an Authorized Representative of the Lessee, and shall attach
thereto a copy of the Lessee's final payroll report evidencing the total number
of employees at the Facility employed by the Lessee during the most recent
period commencing July 1 of the previous year and ending June 30 of the year of
the obligation of filing such report.
Section 6.15 Recording and Filing. This Agreement originally executed or a
memorandum thereof shall be recorded by the Lessee subsequent to the recordation
of the Indenture, in the appropriate office of the County Clerk of Nassau
County, or in such other office as may at the time be provided by law as the
proper place for the recordation thereof. The security interest of the Agency
created herein and the assignment of such security interest to the Trustee shall
be perfected by the filing of financing statements by the Lessee which fully
comply with the New York State Uniform Commercial Code - Secured Transactions in
the office of the Secretary of State of the State, in the City of Albany, New
York and in the appropriate office of the County Clerk of Nassau County. The
Lessee shall file or cause to be filed all necessary continuation statements
(and additional financing statements) within the time prescribed by the New York
State Uniform Commercial Code - Secured Transactions in order to continue (or
attach and perfect) the security interest created by this Agreement, to the end
that the rights of the Agency, the Holders of the Bonds and the Trustee in the
Facility shall be fully preserved as against creditors or purchasers for value
from the Agency or the Lessee. The Agency and the Trustee are authorized, if
permitted by applicable law, to file one or more Uniform Commercial Code
financing statements disclosing any security interest in the Facility, this
Agreement and the sums due under this Agreement, without the signature of the
Lessee (if so required) or signed by the Agency or the Trustee as
attorney-in-fact for the Lessee. The Lessee agrees to furnish the Agency and the
Trustee with the Opinion of Counsel addressed to the Agency and the Trustee
referred to in Section 7.08 of the Indenture and shall perform all other acts
(including the payment of all costs) necessary in order to enable the Agency to
comply with Section 7.08 of the Indenture.
Section 6.16 Right to Cure Agency Defaults. The Agency hereby grants the
Lessee full authority for account of the Agency to perform any covenant or
obligation the non-performance of which is alleged to constitute a default in
any notice received by the Lessee, in the name and stead of the Agency, with
full power of substitution.
Section 6.17 Description of Facility Equipment. The Lessee shall file with
the Agency by January 1, 2004 and every January 1 thereafter until the
termination of this Agreement, a certificate of an Authorized Representative of
the Lessee certifying as to the deletions and other updates that should be made
to the Appendix B hereof so that such Description of Facility Equipment shall
constitute (taking into consideration such additions and deletions and all
32
previously certified additions and deletions) an accurate and complete
description of the Facility Equipment.
ARTICLE VII
Events Of Default; Remedies
Section 7.1 Events of Default. Any one or more of the following events
shall constitute an "Event of Default" hereunder:
(a) Failure of the Lessee to pay any rental that has become due and payable
by the terms of Section 3.3 hereof which results in a default in the due and
punctual payment of the principal of and redemption premium, if any, or interest
on any Bond;
(b) Failure of the Lessee to pay any amount (except the obligation to pay
rent under Section 3.3 hereof) that has become due and payable or to observe and
perform any covenant, condition or agreement on its part to be performed under
Sections 4.4 or 4.5 hereof and continuance of such failure for a period of
thirty (30) days after receipt by the Lessee of written notice specifying the
nature of such default from the Agency, the Trustee or the Holders of more than
twenty-five per centum (25%) in aggregate principal amount of the Bonds
Outstanding;
(c) Failure of the Lessee to observe and perform any covenant, condition or
agreement hereunder on its part to be performed (except as set forth in Section
7.1(a) or (b) hereof) and (1) continuance of such failure for a period of thirty
(30) days after receipt by the Lessee of written notice specifying the nature of
such default from the Agency, the Trustee or the Holders of more than
twenty-five per centum (25%) in aggregate principal amount of the Bonds
Outstanding, or (2) if by reason of the nature of such default the same can be
remedied, but not within the said thirty (30) days, the Lessee fails to proceed
with reasonable diligence after receipt of said notice to cure the same or fails
to continue with reasonable diligence its efforts to cure the same;
The Lessee or any member thereof shall (i) apply for or consent to the
appointment of or the taking of possession by a receiver, liquidator, custodian
or trustee of itself or of all or a substantial part of its property, (ii) admit
in writing its inability, or be generally unable, to pay its debts as such debts
generally become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, (vi) take any action for the purpose of
effecting any of the foregoing, or (vii) be adjudicated a bankrupt or insolvent
by any court;
(d) A proceeding or case shall be commenced, without the application or
consent of the Lessee any member thereof in any court of competent jurisdiction,
seeking, (i) liquidation, reorganization, dissolution, winding-up or composition
or adjustment of debts, (ii) the appointment of a trustee, receiver, liquidator,
custodian or the like of the Lessee or any member thereof or of all or any
substantial part of their respective assets, (iii) similar relief under any law
relating to bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
33
an order, judgment or decree approving or ordering any of the foregoing against
the Lessee or any member thereof shall be entered and continue unstayed and in
effect, for a period of ninety (90) days or (iv) the Lessee shall fail to
controvert in a timely or appropriate manner, or acquiesce in writing to, any
petition filed against itself in an involuntary case under such Bankruptcy Code
or any order for relief against the Lessee or any member thereof shall be
entered in an involuntary case under such Bankruptcy Code or any order for
relief against the Lessee or any member thereof shall be entered in an
involuntary case under such Bankruptcy Code; the terms "dissolution" or
"liquidation" of the Lessee or any member thereof as used above shall not be
construed to prohibit any action otherwise permitted by Section 6.1 hereof; (e)
Failure of the Lessee to make any payment when due pursuant to Section 3.3(b)
hereof and such failure continues for ten (10) Business Days after written
notice to the Lessee;
(f) Any representation or warranty made (i) by or on behalf of the Lessee
or its Affiliates in the application, commitment letter and related materials
submitted to the Agency for approval of the Project or its financing, or (ii) by
the Lessee herein or in any of the other Security Documents or (iii) in the
Letter of Representation and Indemnity Agreement delivered to the Agency and the
Trustee, or (iv) in the Tax Certificate, or (v) in any report, certificate,
financial statement or other instrument furnished pursuant hereto or any of the
foregoing shall prove to be false, misleading or incorrect in any material
respect as of the date made; or
(g) An "Event of Default" under the Indenture or under any other Security
Document shall occur and be continuing.
(h) The Lessee or any Affiliate shall become a Prohibited Person.
Section 7.2 Remedies on Default. Whenever any Event of Default referred to
in Section 7.1 hereof shall have occurred and be continuing, the Agency, or the
Trustee where so provided, may, take any one or more of the following remedial
steps:
(a) The Trustee, as and to the extent provided in Article VIII of the
Indenture, may cause all principal installments of rent payable under Section
3.3 hereof for the remainder of the term of this Agreement to be immediately due
and payable, whereupon the same, together with the accrued interest thereon,
shall become immediately due and payable; provided, however, that upon the
occurrence of an Event of Default under Section 7.1(d) or (e) hereof, all
principal installments of rent payable under Section 3.3 hereof for the
remainder of the term of this Agreement, together with the accrued interest
thereon, shall immediately become due and payable without any declaration,
notice or other action of the Agency, the Trustee, the Holders of the Bonds or
any other Person being a condition to such acceleration;
(b) The Agency or the Trustee, may terminate this Agreement, provided
however that no such termination of this Agreement shall relieve the Lessee of
its liability and obligations hereunder and such liability and obligations shall
survive any such termination;
(c) The Agency or the Trustee may take whatever action at law or in equity
as may appear necessary or desirable to collect the rent then due and thereafter
34
to become due, or to enforce performance or observance of any obligations,
agreements or covenants of the Lessee under this Agreement;
(d) The Trustee may take any action permitted under the Indenture with
respect to an Event of Default thereunder; and
(e) The Agency, without the consent of the Trustee or any Bondholder or any
other Person but with notice to the Trustee, may proceed to enforce the Agency's
Reserved Rights by (i) an action for damages, injunction or specific
performance, and/or (ii) taking whatever action at law or in equity as may
appear necessary or desirable to collect payments of amounts due by the Lessee
under the Agency's Reserved Rights or to enforce the performance or observance
of any obligations, covenants or agreements of the Lessee under the Agency's
Reserved Rights and/or (iii) terminating the Agency's leasehold interest in the
Facility to the Lessee, which termination, the Lessee hereby irrevocably agrees
to execute and deliver to the Agency.
In the event that the Lessee fails to make any rental payment required in
Section 3.3 hereof, the installment so in default shall continue as an
obligation of the Lessee until the amount in default shall have been fully paid.
No action taken pursuant to this Section 7.2 (including repossession of the
Facility or termination of this Agreement pursuant to this Section 7.2 or by
operation of law or otherwise) shall, except as expressly provided herein,
relieve the Lessee from the Lessee's obligations hereunder, all of which shall
survive any such action.
Notwithstanding the foregoing, prior to the earlier of the commencement of
any legal proceedings by the Trustee to foreclose the lien and security interest
of the Indenture in the Facility, and if the Event of Default shall be capable
of being remedied by the Lessee, the Lessee may, at any time, pay all accrued
unpaid rentals (exclusive of any such rentals accrued solely by virtue of
acceleration of the due date of the Bonds as provided in Section 7.01 of the
Indenture), pay such other amounts in default hereunder, render such performance
hereunder and otherwise fully cure all other defaults hereunder; and in such
event, this Agreement shall be fully reinstated, as if it had never been
terminated.
If this Agreement shall be fully reinstated, upon written request by the
Lessee to the Agency and the Trustee, the Agency and the Trustee shall deliver
to the Lessee a written confirmation of such reinstatement.
Section 7.3 Reserved.
--------
Section 7.4 Remedies Cumulative. The rights and remedies of the Agency or
the Trustee under this Agreement shall be cumulative and shall not exclude any
other rights and remedies of the Agency or the Trustee allowed by law with
respect to any default under this Agreement. Failure by the Agency or the
Trustee to insist upon the strict performance of any of the covenants and
agreements herein set forth or to exercise any rights or remedies upon default
by the Lessee hereunder shall not be considered or taken as a waiver or
relinquishment for the future of the right to insist upon and to enforce by
mandatory injunction, specific performance or other appropriate legal remedy a
strict compliance by the Lessee with all of the covenants and conditions hereof,
35
or of the rights to exercise any such rights or remedies, if such default by the
Lessee be continued or repeated. Nothing in this Section 7.4 shall be deemed to
restrict the right of the Lessee to reinstate this Agreement as provided in
Section 7.2 hereof.
Section 7.5 No Additional Waiver Implied by One Waiver. In the event any
covenant or agreement contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder. No waiver shall be binding unless it is in writing and signed
by the party making such waiver. No course of dealing between the Agency and/or
the Trustee and the Lessee or any delay or omission on the part of the Agency
and/or the Trustee in exercising any rights hereunder or under the Indenture or
under any other Security Document shall operate as a waiver. To the extent
permitted by applicable law, the Lessee hereby waives the benefit and advantage
of, and covenants not to assert against the Agency or the Trustee, any
valuation, inquisition, stay, appraisement, extension or redemption laws now
existing or which may hereafter exist which, but for this provision, might be
applicable to any sale or reletting made under the judgment, order or decree of
any court or under the powers of sale and reletting conferred by this Agreement
or otherwise.
Section 7.6 Effect on Discontinuance of Proceedings. In case any proceeding
taken by the Trustee under the Indenture or this Agreement or under any other
Security Document on account of any Event of Default hereunder or under the
Indenture shall have been discontinued or abandoned for any reason or shall have
been determined adversely to the Trustee, then, and in every such case, the
Agency, the Trustee and the Holders of the Bonds shall be restored,
respectively, to their former positions and rights hereunder and thereunder, and
all rights, remedies, powers and duties of the Trustee shall continue as in
effect prior to the commencement of such proceedings.
Section 7.7 Agreement to Pay Attorneys' Fees and Expenses. In the event the
Lessee should default under any of the provisions of this Agreement, and the
Agency, the Trustee or any Bondholder should employ attorneys or incur other
expenses for the collection of rentals or other amounts payable hereunder or the
enforcement of performance or observance of any obligation or agreement on the
part of the Lessee herein contained or contained in any other Security Document,
the Lessee agrees that it will on demand therefor pay to the Agency, the Trustee
or such Bondholder the reasonable fees and disbursements of such attorneys and
such other expenses so incurred.
ARTICLE VIII
Options
Section 8.1 Options.
-------
(a) The Lessee has the option to make advance rental payments for deposit
in the Redemption Account of the Bond Fund to effect the retirement of the Bonds
in whole or the redemption in whole or in part of the Bonds, all in accordance
with the terms of the Indenture; provided, however, that no partial redemption
of the Bonds may be effected through advance rental payments hereunder if there
shall exist and be continuing an Event of Default. The Lessee shall exercise its
option to make such advance rental payments by delivering a written notice of an
36
Authorized Representative of the Lessee to the Trustee in accordance with the
Indenture, with a copy to the Agency, at least twenty (20) days prior to the
date upon which the Trustee is to mail notice of redemption to Bondholders,
setting forth (i) the amount of the advance rental payment, (ii) the principal
amount of Bonds Outstanding requested to be redeemed with such advance rental
payment (which principal amount shall be in such minimum amount or integral
multiple of such amount as shall be permitted in the Indenture), and (iii) the
date on which such principal amount of Bonds are to be redeemed. Such advance
rental payment shall be paid to the Trustee in legal tender on or before the
redemption date and shall be an amount which, when added to the amount on
deposit in the Bond Fund and available therefor, will be sufficient to pay the
Redemption Price of the Bonds to be redeemed, together with interest to accrue
to the date of redemption and all expenses of the Agency, the Bond Registrar,
the Trustee and the Paying Agents in connection with such redemption. In the
event the Bonds are to be redeemed in whole or otherwise retired, the Lessee
shall further pay on or before such redemption date, in legal tender, to the
Agency, the Trustee, the Bond Registrar and the Paying Agents, as the case may
be, all fees and expenses owed such party or any other party entitled thereto
under this Agreement or the Indenture together with (i) all other amounts due
and payable under this Agreement and the other Security Documents, and (ii) any
amounts required to be rebated to the Federal government pursuant to the
Indenture or the Tax Certificate.
(b) The Lessee shall have the option to terminate the Agency's leasehold
interest in the Facility commencing on that date upon which the Bonds may first
optionally be redeemed in whole and on any date thereafter permitted therefor as
provided in the Indenture.
(c) The Lessee shall also have the option to terminate the Agency's
leasehold interest in the Facility on any date during the term of this Agreement
within ninety (90) days of the occurrence of any of the following events:
(i) The Facility shall have been damaged or destroyed to such extent
that as evidenced by a certificate of an Independent Engineer filed with
the Agency and the Trustee (A) the Facility cannot be reasonably restored
within a period of one year from the date of such damage or destruction to
the condition thereof immediately preceding such damage or destruction, (B)
the Lessee is thereby prevented or likely to be prevented from carrying on
its normal operation of the Facility for a period of one year from the date
of such damage or destruction, or (C) the restoration cost of the Facility
would exceed the total amount of all insurance proceeds, including any
deductible amount, in respect of such damage or destruction; or
(ii) Title to, or the temporary use of, all or substantially all of
the Facility shall have been taken or condemned by a competent authority
which taking or condemnation results, or is likely to result, in the Lessee
being thereby prevented or likely to be prevented from carrying on its
normal operation of the Facility for a period of one year from the date of
such taking or condemnation, as evidenced by a certificate of an
Independent Engineer filed with the Agency and the Trustee; or
37
(iii) As a result of changes in the Constitution of the United States
of America or of the State or of legislative or executive action of the
State or any political subdivision thereof or of the United States of
America or by final decree or judgment of any court after the contest
thereof by the Lessee, this Agreement becomes void or unenforceable or
impossible of performance in accordance with the intent and purpose of the
parties as expressed herein or unreasonable burdens or excessive
liabilities are imposed upon the Lessee by reason of the operation of the
Facility.
(d) The Lessee, in terminating the Agency's leasehold interest in the
Facility pursuant to Section 8.1(c) hereof, shall file with the Agency and the
Trustee the certificate prescribed by Section 8.1(c) (i) or (ii) hereof together
with a certificate of an Authorized Representative of the Lessee stating that,
as a result of the occurrence of the event giving rise to the exercise of such
option to terminate the Agency's leasehold interest in the Facility, the Lessee
has discontinued, or at the earliest practicable date will discontinue, the
operation of the Facility for its intended purposes, and in the case of Section
8.1(b) or 8.1(c) hereof, the Lessee shall pay to the Trustee as the purchase
price, in legal tender, advance rental payments, for deposit in the Bond Fund
(if payment in full of the principal of or the Redemption Price, if any, as the
case may be, of, and interest on, all the Outstanding Bonds, and the interest
thereon at maturity or upon earlier redemption has not yet been made) equal to
the sum of the following:
(i) an amount which, when added to the amount on deposit in the Bond
Fund and available therefor, will be sufficient to pay, retire and redeem
the Outstanding Bonds in accordance with the provisions of the Indenture,
including, without limitation, the principal of or the Redemption Price (as
the case may be) of, together with interest to maturity or redemption date
(as the case may be) on, the Outstanding Bonds;
(ii) expenses of redemption, the fees and expenses of the Agency, the
Trustee, the Bond Registrar and the Paying Agents and all other amounts due
and payable under this Agreement and the Indenture;
(iii) any amounts required to be rebated to the Federal government
pursuant to the Indenture or the Tax Certificate; and
(iv) one dollar.
(e) Upon the payment in full of the principal of and interest on the
Outstanding Bonds (whether at maturity or earlier redemption), the Lessee shall
have the option to terminate the Agency's leasehold interest in the Facility and
shall exercise such option by (1) delivering to the Agency prior written notice
of an Authorized Representative of the Lessee no more than thirty (30) days
after the payment in full of the Bonds of the exercise of such option to
purchase, which notice shall set forth a requested closing date for the purchase
of the Facility which shall be not later than sixty (60) days after the payment
in full of the Bonds, and (2) paying on such closing date a purchase price equal
to the sum of one dollar, the fees and expenses of the Agency, the Trustee, the
Bond Registrar and the Paying Agents and all other amounts due and payable under
38
this Agreement or the Indenture, together with any amounts required to be
rebated to the Federal government pursuant to the Indenture or the Tax
Certificate. Upon the written request of the Lessee, the Agency may approve the
extension or waiver of any of the time periods set forth in this paragraph.
(f) The Lessee shall not, at any time, assign or transfer its option to
purchase the Facility as contained in this Section 8.1 separate and apart from a
permitted assignment of this Agreement pursuant to Section 9.3 hereof without
the prior written consent of the Agency and the Trustee.
Section 8.2 Conveyance on Exercise of Option to Terminate. At the closing
of any termination of the Agency's leasehold interest in the Facility pursuant
to Section 8.1 hereof, the Agency and/or the Trustee, as applicable, will, upon
receipt of payment of the purchase price, deliver to the Lessee (i) such
documents necessary or appropriate to terminate the interests of the Agency
and/or the Trustee in and to the Facility, subject to the following: (1) the
nature, quality and extent of the Agency's leasehold interest in said property
shall have been conveyed to the Agency; (2) any Permitted Encumbrances to the
Agency's leasehold interest in said property when conveyed to the Agency; (3)
any liens, easements, security interests, claims, charges and encumbrances
created at the request of the Lessee or to the creation or suffering of which
the Lessee consented; (4) any liens, security interests, claims, charges and
encumbrances resulting from the failure of the Lessee to perform or observe any
of the agreements on its part contained in this Agreement; (5) any liens for
taxes or assessments not then delinquent; (6) the rights, if any, of any
condemning authority; (ii) documents releasing and conveying to the Lessee all
of the Agency's rights and interests in and to any rights of action, or any
insurance proceeds or condemnation award, with respect to the Facility; and
(iii) a release of the Lessee's obligations under the Payment Agreement.
Concurrently with the delivery of such documents, there shall be delivered by
the Agency to the Trustee any instructions or other instruments required by
Section 10.01 of the Indenture to defease and pay the Bonds.
Upon termination of the Agency's leasehold interest in the Facility
pursuant to this Section 8.2, this Agreement and all obligations of the Lessee
hereunder shall be terminated except the obligations of the Lessee under Section
6.2, 6.3 and 9.17 shall survive such termination.
Section 8.3 Option to Purchase or Invite Tenders of Bonds. The Lessee shall
have the option, at any time during the term of this Agreement, to purchase
Bonds for its own account, whether by direct negotiation, through a broker or
dealer, or by making a tender offer to the Holders thereof. The Bonds so
purchased by the Lessee or by any Affiliate thereof shall be delivered to the
Trustee for cancellation within fifteen (15) days of the date of purchase. The
Agency shall at all times make available or cause to be made available to the
Lessee its registration books (maintained at the principal corporate trust
office of the Trustee) containing the names and addresses of the Bondholders if
known.
Section 8.4 Termination of Agreement. After full payment of the Bonds or
provision for the payment in full thereof having been made in accordance with
Section 10.01 of the Indenture, the Lessee may terminate this Agreement by
paying the reasonable fees and expenses of the Agency, the Agency's Bond
Counsel, the Trustee, the Bond Registrar, the Tender Agent, the Remarketing
Agent and the Paying Agents and all other amounts due and payable under this
39
Agreement, the other Security Documents, the Remarketing Agreement together with
any amounts required to be paid to the United States government pursuant to the
Indenture or the Tax Certificate, and by giving the Agency notice in writing of
such termination and thereupon such termination shall forthwith become
effective, subject, however, to the survival of the obligations of the Lessee
under Sections 3.3, 4.3, 6.2, 6.3, 9.17 and 9.18 hereof. Upon termination of
this Agreement as set forth herein, the Agency shall execute and deliver to the
Lessee a termination of lease in recordable form.
Section 8.5 Mode Change Notice. No later fifty (50) days (or such shorter
time as may be agreed to by the Agency, the Trustee, the Lessee, the Paying
Agent and the Remarketing Agent in writing) preceding a proposed Mode Change
Date, the Lessee shall provide the Agency written notice of its intention to
effect a change in the Mode from the Mode then prevailing (for purposes of this
Section, the "Current Mode") to another Mode (for purposes of this Section, the
"New Mode") specified in such written notice, and, if the change is to a Term
Rate Mode, the length of the initial Interest Period and whether or not the
Bonds to be converted to the Term Rate Mode will be covered by the Letter of
Credit (if they will be covered, then the initial Interest Rate Period for such
Bonds selected by the Lessee cannot extend beyond the Expiration Tender Date).
The Agency may, in its sole and absolute discretion, waive the requirement of
such notice to be delivered by the Lessee pursuant to this Section 8.5.
ARTICLE IX
Miscellaneous
Section 9.1 Indenture; Amendment. The Lessee shall have and may exercise
all the rights, powers and authority stated to be in the Lessee in the Indenture
and in the Bonds, and the Indenture and the Bonds shall not be modified, altered
or amended in any manner which adversely affects such rights, powers and
authority so stated to be in the Lessee or otherwise adversely affects the
Lessee without the written consent of the Lessee.
Section 9.2 Force Majeure. In case by reason of force majeure either party
hereto shall be rendered unable wholly or in part to carry out its obligations
under this Agreement, then except as otherwise expressly provided in this
Agreement, if such party shall give notice and full particulars of such force
majeure in writing to the other party within a reasonable time after occurrence
of the event or cause relied on, the obligations of the party giving such notice
(other than the obligations of the Lessee to make the rental payments or other
payments required under the terms hereof, or to comply with Sections 4.5 or 6.2
hereof), so far as they are affected by such force majeure, shall be suspended
during the continuance of the inability then claimed which shall include a
reasonable time for the removal of the effect thereof, but for no longer period,
and such party shall endeavor to remove or overcome such inability with all
reasonable dispatch. The term "force majeure", as employed herein, shall mean,
without limitation, acts of God, strikes, lockouts or other industrial
disturbances, terrorism, acts of the public enemy, orders of any kind of the
Government of the United States or of the State or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fires, hurricanes, storms, floods, washouts, droughts, arrest, restraining of
government and people, civil disturbances, explosions, partial or entire failure
of utilities, shortages of labor, material, supplies or transportation, or any
other similar or different cause not reasonably within the control of the party
claiming such inability. It is understood and agreed that the settlement of
40
existing or impending strikes, lockouts or other industrial disturbances shall
be entirely within the discretion of the party having the difficulty and that
the above requirements that any force majeure shall be reasonably beyond the
control of the party and shall be remedied with all reasonable dispatch shall be
deemed to be fulfilled even though such existing or impending strikes, lockouts
and other industrial disturbances may not be settled but could have been settled
by acceding to the demands of the opposing person or persons.
Section 9.3 Assignment or Sublease. The Lessee may not at any time assign
or transfer this Agreement, or sublet the whole or any part of the Facility
without the prior written consent of the Agency and the Trustee; provided
further, that if the Agency and the Trustee consent to any such assignment,
transfer or subletting, (1) the Lessee shall nevertheless remain liable to the
Agency for the payment of all rent and for the full performance of all of the
terms, covenants and conditions of this Agreement and of any other Security
Document to which it shall be a party, (2) any assignee or transferee of the
Lessee in whole of the Facility shall have assumed in writing and have agreed to
keep and perform all of the terms of this Agreement on the part of the Lessee to
be kept and performed, shall be jointly and severally liable with the Lessee for
the performance thereof, shall be subject to service of process in the State,
and shall be qualified to do business in the State, (3) in the Opinion of
Counsel, such assignment, transfer or sublease shall not legally impair in any
respect the obligations of the Lessee for the payment of all rents nor for the
full performance of all of the terms, covenants and conditions of this Agreement
or of any other Security Document to which the Lessee shall be a party, nor
impair or limit in any respect the obligations of any obligor under any other
Security Document, (4) any assignee, transferee or sublessee shall utilize the
Facility as an Approved Facility, (5) such assignment, transfer or sublease
shall not violate any provision of this Agreement, the Indenture or any other
Security Document, (6) with respect to any subletting in part, the term of each
such sublease does not exceed five (5) years and at any given date, no more than
an aggregate of twenty percent (20%) of such space would be subleased by the
Lessee (excluding Affiliates of the Lessee), (7) such assignment, transfer or
sublease shall in no way diminish or impair the Lessee's obligation to carry the
insurance required under Section 4.5 of this Agreement and the Lessee shall
furnish written evidence satisfactory to the Agency and the Trustee that such
insurance coverage shall in no manner be limited by reason of such assignment,
transfer or sublease, (8) each such assignment, transfer or sublease contains
such other provisions as the Agency or the Trustee may reasonably require, and
(9) in the opinion of Nationally Recognized Bond Counsel, such assignment,
transfer or sublease shall not cause the interest on the Bonds to be includable
in gross income for Federal income tax purposes. The Lessee shall furnish or
cause to be furnished to the Agency and the Trustee a copy of any such
assignment, transfer or sublease in substantially final form at least twenty
(20) days prior to the date of execution thereof.
Any consent by the Agency or the Trustee to any act of assignment, transfer
or sublease shall be held to apply only to the specific transaction thereby
authorized. Such consent shall not be construed as a waiver of the duty of the
Lessee, or the successors or assigns of the Lessee, to obtain from the Agency
and the Trustee consent to any other or subsequent assignment, transfer or
sublease, or as modifying or limiting the rights of the Agency or the Trustee
under the foregoing covenant by the Lessee.
41
If the Facility or any part thereof be sublet or occupied by any Person
other than the Lessee, the Agency, in the event of the Lessee's default in the
payment of rent may, and is hereby empowered to, and the Lessee hereby grants
the Agency an irrevocable power of attorney (coupled with an interest to)
collect rent from the undertenant or occupant during the continuance of any such
default. In either of such events, the Agency may apply the net amount received
by it to the rent herein provided, and no such collection shall be deemed a
waiver of the covenant herein against assignment, transfer or sublease of this
Agreement, or constitute the acceptance of the under-tenant or occupant as
tenant, or a release of the Lessee from the further performance of the covenants
herein contained on the part of the Lessee.
Section 9.4 Priority of Indenture. Pursuant to the Indenture, the Agency
will pledge and assign the rentals and certain other moneys receivable under
this Agreement to the Trustee as security for payment of the principal or
Redemption Price, if applicable, of and interest on the Bonds, and this
Agreement shall be subject and subordinate to the Indenture and such mortgage
lien, security interest, pledge and assignment thereunder.
Section 9.5 Benefit of and Enforcement by Bondholders. The Agency and the
Lessee agree that this Agreement is executed in part to induce the purchase by
others of the Bonds and for the further securing of the Bonds, and accordingly
all covenants and agreements on the part of the Agency and the Lessee as set
forth in this Agreement are hereby declared to be for the benefit of the Holders
from time to time of the Bonds and may be enforced as provided in Article VIII
of the Indenture on behalf of the Bondholders by the Trustee.
Section 9.6 Amendments. This Agreement may be amended only with the
concurring written consent of the Trustee given in accordance with the
provisions of the Indenture and only if the Lessee shall assume in writing the
obligations of such amended Agreement.
Section 9.7 Notices. All notices, certificates or other communications
hereunder shall be sufficient if sent by registered or certified United States
mail, postage prepaid, addressed, if to the Agency, to the Executive Director,
Nassau County Industrial Development Agency, 400 County Seat Drive, Mineola, New
York 11501, if to the Lessee, KeySpan-Glenwood Energy Center, LLC, c/o KeySpan
Corporation, One MetroTech Center, Brooklyn, New York 11021, Attention:
Treasurer, and if to the Trustee, to The Bank of New York, 101 Barclay, Floor
21W, New York, New York 10286, Attention: Corporate Trust - New York Municipal
Finance Unit. The Agency, the Lessee and the Trustee may, by like notice,
designate any further or different addresses to which subsequent notices,
certificates or other communications shall be sent. Any notice, certificate or
other communication hereunder shall, except as may expressly be provided herein,
be deemed to have been delivered or given as of the date it shall have been
mailed.
Section 9.8 Prior Agreements Superseded. This Agreement shall completely
and fully supersede all other prior understandings or agreements, both written
and oral (other than any Security Documents), between the Agency and the Lessee
relating to the Facility.
42
Section 9.9 Severability. If any clause, provision or section of this
Agreement be ruled invalid by any court of competent jurisdiction, the
invalidity of such clause, provision or section shall not affect any of the
remaining provisions hereof.
Section 9.10 Inspection of Facility. The Lessee will permit the Agency, the
Trustee, or their duly authorized agents (other than Lessee), at all reasonable
times upon written notice to enter upon the Facility and to examine and inspect
the Facility and exercise their rights hereunder, under the Indenture and under
the other Security Documents with respect to the Facility. The Lessee will
further permit the Agency, or its duly authorized agent (other than Lessee), at
all reasonable times to enter upon the Facility but solely for the purpose of
assuring that the Lessee is operating the Facility, or is causing the Facility
to be operated, as a qualified "project" under the Act consistent with the
purposes set forth in the recitals to this Agreement and with the public
purposes of the Agency, and to verify employment and other obligations hereunder
and under the other Security Documents, and not for any purpose of assuring the
proper maintenance or repair of the Facility as such latter obligation is and
shall remain solely the obligation of the Lessee.
Section 9.11 Effective Date; Counterparts. This Agreement shall become
effective upon its delivery. It may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 9.12 Binding Effect. This Agreement shall inure to the benefit of,
and shall be binding upon, the Agency, the Lessee and their respective
successors and assigns.
Section 9.13 Net Lease. It is the intention of the parties hereto that this
Agreement be a "net lease" and that all of the rent be available for debt
service on the Bonds, and this Agreement shall be construed to effect such
intent.
Section 9.14 Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE WITHOUT REGARD OR REFERENCE
TO CONFLICTS OF LAWS PRINCIPLES.
Section 9.15 Investment of Funds. Any moneys held as part of the Rebate
Fund, the Earnings Fund, the Project Fund, the Bond Fund or the Renewal Fund or
in any special fund provided for in this Agreement or in the Indenture to be
invested in the same manner as in any said Fund shall, at the written request of
an Authorized Representative of the Lessee, be invested and reinvested by the
Trustee as provided in the Indenture (but subject to the provisions of the Tax
Certificate). Neither the Agency nor the Trustee nor any of their respective
members, directors, officers, agents (other than the Lessee), servants or
employees shall be liable for any depreciation in the value of any such
investments or for any loss arising therefrom.
Interest and profit derived from such investments shall be credited and
applied as provided in the Indenture, and any loss resulting from such
investments shall be similarly charged.
Section 9.16 Investment Tax Credit. It is the intention of the parties that
any investment tax credit or comparable credit which may ever be available
accrue to the benefit of the Lessee and the Lessee shall, and the Agency upon
advice of counsel may, make any election and take other action in accordance
with the Code as may be necessary to entitle the Lessee to have such benefit.
43
Section 9.17 Waiver of Trial by Jury. THE PARTIES DO HEREBY EXPRESSLY WAIVE
ALL RIGHTS TO TRIAL BY JURY ON ANY CAUSE OF ACTION DIRECTLY OR INDIRECTLY
INVOLVING THE TERMS, COVENANTS OR CONDITIONS OF THIS AGREEMENT OR THE FACILITY
OR ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT.
The provision of this Agreement relating to waiver of a jury trial and the
right of re-entry or re-possession shall survive the termination or expiration
of this Agreement.
Section 9.18 Consent to Jurisdiction; Service of Process.
-------------------------------------------
(a) The Lessee represents that it is subject to service of process in the
State and covenants that it will remain so subject during the term of this
Agreement. If for any reason the Lessee should cease to be so subject to service
of process in the State, the Lessee hereby designates and appoints, without
power of revocation, John J. Bishar, Jr., Esq., as its agent for service of
process, and, if such agent shall cease to act or otherwise cease to be subject
to service of process in the State, the Lessee hereby irrevocably designates and
appoints the Secretary of State of the State of New York as the agent of the
Lessee upon whom may be served all process, pleadings, notices or other papers
which may be served upon the Lessee as a result of any of its obligations under
this Agreement or any other Security Document; provided, however, that the
serving of such process, pleadings, notices or other papers shall not constitute
a condition to any the Lessee's obligations hereunder or under any other
Security Document.
(b) The Lessee irrevocably and unconditionally (a) agrees that any suit,
action or other legal proceeding arising out of this Agreement or any other
Security Document may be brought in the courts of record of the State of New
York in Nassau County or the courts of the United States, Eastern District of
New York; (b) consents to the jurisdiction of each such court in any such suit,
action or proceeding; and (c) waives any objection which it may have to the
laying of venue of any such suit, action or proceeding in any of such courts.
The Lessee shall accept and acknowledge service of any and all process in any
such suit, action or proceeding brought in any such court. The Lessee agrees and
consents that any such service of process upon such agent set forth in
subsection (a) above and written notice of such service to the Lessee shall be
taken and held to be valid personal service upon the Lessees whether or not the
Lessee shall then be doing, or at any time shall have done, business within the
State and that any such service of process shall be of the same force and
validity as if service were made upon the Lessees according to the laws
governing the validity and requirements of such service in the State. Such agent
shall not have any power or authority to enter into any appearance or to file
any pleadings in connection with any suit, action or other legal proceedings
against the Lessee or to conduct the defense of any such suit, action or any
other legal proceeding except as expressly authorized by the Lessee.
44
Section 9.19 No Recourse Under This Agreement or on Bonds.
--------------------------------------------
(a) All covenants, stipulations, promises, agreements and obligations of
the Agency contained in this Agreement shall be deemed to be the covenants,
stipulations, promises, agreements and obligations of the Agency, and not of any
member, director, officer, employee or agent (other than Lessee) of the Agency
in his individual capacity, and no recourse shall be had for the payment of the
principal of, redemption premium, if any, or interest on the Bonds or for any
claim based thereon or hereunder against any member, director, officer, employee
or agent (other than the Lessee) of the Agency or any natural person executing
the Bonds.
(b) Anything in this Agreement, the Bonds or any other Security Document to
the contrary notwithstanding, any obligations of the Agency under this Agreement
or the Bonds or under any other Security Document or related document for the
payment of money shall not subject the Agency to any pecuniary or other
liability nor create a debt of the State or the County and neither the State nor
the County shall be liable on any obligation so incurred, but any such
obligation shall be a special obligation of the Agency secured and payable
solely as provided in the Indenture
Section 9.20 Date of Agreement for Reference Purposes Only. The date of
this Agreement shall be for reference purposes only and shall not be construed
to imply that this Agreement was executed on the date first above written. This
Agreement was executed and delivered on the Commencement Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
45
[This page intentionally left blank]
46
IN WITNESS WHEREOF, the Agency has caused its corporate name to be hereunto
subscribed by its duly authorized Chairman, Vice Chairman, Executive Director,
or Administrative Director and attested by its Assistant Secretary and the
Lessee has caused its name to be subscribed hereto by a Member, all being done
as of the year and day first above written.
ATTEST: NASSAU COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
_____________________________ By: /s/
Assistant Secretary ------------------------
Joseph Gioino
Executive Director
KEYSPAN-GLENWOOD ENERGY
CENTER, LLC
By: /s/
------------------------
Name: Michael Nilsen
Title: Vice President and Treasurer
47
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 25th day of November, in the year two thousand and three, before me,
the undersigned, personally appeared Joseph Gioino, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
-----------------------------------
Notary Public
48
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 25th day of November, in the year two thousand and three, before me,
the undersigned, personally appeared Michael Nilsen, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
-----------------------------------
Notary Public
49
APPENDIX A
DESCRIPTION OF FACILITY
-----------------------
The Facility means the refinancing of certain costs incurred by the Lessee
in connection with the acquisition and construction of three buildings of
approximately 1,700 square feet and one building of approximately 5,000 square
feet and the acquisition and installation therein of two single cycle generating
units located on an existing 2.9 acre facility known as The Glenwood Energy
Center, and located on the eastern shore of Hempstead Harbor, in the Town of
Oyster Bay (the "Facility"), to be used by the Lessee for the purpose of
providing an aggregate of approximately 79 megawatts to the existing Long Island
electric grid. Said building and generating units are located on that certain
lot, piece and parcel of land described in the legal description attached
hereto, known as the Facility Realty.
50
DESCRIPTION OF FACILITY REALTY
------------------------------
See attached description
51
APPENDIX B
DESCRIPTION OF FACILITY EQUIPMENT
All fixtures, machinery, equipment, chattels and articles of personal property
and all appurtenances and additions thereto and substitutions and replacements
thereof, now or hereafter attached to or contained in or located at the Facility
or placed on any part thereof, though not attached thereto, the costs of which
are refined or reimbursed with the proceeds of Bonds and which are used or
usable in connection with the present or future operation thereof or the
activities at any time conducted therein and all other property used in
connection with the production of income from the Facility and/or improvements
located therein or adapted for use therein, including, without limitation, any
machinery, equipment and other tangible personal property acquired and installed
at the Facility, together with all repairs, replacements, improvements,
substitutions and renewals thereof or therefor and all parts, additions and
accessories incorporated therein or affixed thereto, but excluding Lessee's
Property within the meaning of Section 4.1(c) hereof or Existing Facility
Property released pursuant to Section 4.2 hereof.
52
SCHEDULE A-1
Annual Employment Report
For the Year Ending June 30, ____
In order to comply with Local and State employment reporting requirements,
the Nassau County Industrial Development Agency must require all of its project
companies to complete and return the Report to the Agency no later than August
1, ____.
KeySpan-Glenwood Energy Center, LLC
c/o KeySpan Corporation
One MetroTech Center
Brooklyn, New York 11201
Telephone # __________________________________________
Tax ID # __________________________________________
Please provide information as of June 30th of jobs at the Project Location(s).
Do not include any subcontractors and consultants. Include only employees and
owners/principals on your payroll at the Project Location.
Number of existing FULL TIME JOBS _______________
Number of existing PART TIME JOBS _______________
Attached hereto is a copy of the Lessee's final payroll report (or similar
report) evidencing the total number of employees employed by the Sublessee
during the reporting period.
Certification: I, the undersigned, hereby certify to the best of my knowledge
and belief, that all information contained in this report is true and complete,
and that I understand it is submitted pursuant to agreement. The Company hereby
authorizes any private or governmental entity, including but not limited to The
New York State Department of Labor ("DOL"), to release to the Nassau County
Industrial Development Agency (the "Agency") and/or to the successors and
assigns thereof (collectively, the "Information Recipients"), any and all
employment information under DOL's control which is pertinent to the Company and
the Company's employees. In addition, upon the Agency's request, the Company
shall provide to the Agency any employment information in the Company's
possession which is pertinent to the Company and the Company's employees.
Information released or provided to Information Recipients by DOL, or by any
other governmental entity, or by any private entity, or by the Company itself,
or any information previously released as provided by all or any of the
foregoing parties (collectively, "Employment Information") may be disclosed by
the Information Recipients in connection with the administration of the programs
of the Agency and/or the successors and assigns thereof, and/or Nassau County,
and/or as may be necessary to comply with law; and, without limiting the
foregoing, the Employment Information may be included in (y) reports required of
the Agency, and (z) any other reports required by law. This authorization shall
remain in effect throughout the term of this transaction.
Principal/Owner/Chief Financial Officer _______________________________________
(Please Print)
Signature _________________________________ Date __________________________
Please send the completed form to:
Nassau County Industrial Development Agency
400 County Seat Drive
Mineola, New York 11501
53
SCHEDULE A-2
FOR BOND REDEMPTIONS AND TERMINATIONS
Annual Employment Report
For the Year Ending June 30, ____
In order to comply with Local and State employment reporting requirements,
the Nassau County Industrial Development Agency must require all of its project
companies to complete and return the Report to the Agency no later than August
1, ____.
KeySpan-Glenwood Energy Center, LLC
c/o KeySpan Corporation
One MetroTech Center
Brooklyn, New York 11201
Telephone # __________________________________________
Tax ID # __________________________________________
Please provide information as of June 30th of jobs at the Project Location(s).
Do not include any subcontractors and consultants. Include only employees and
owners/principals on your payroll at the Project Location.
Number of existing FULL TIME JOBS _______________
Number of existing PART TIME JOBS _______________
Attached hereto is a copy of the Lessee's final payroll report (or similar
report) evidencing the total number of employees employed by the Sublessee
during the reporting period.
Certification: I, the undersigned, hereby certify to the best of my knowledge
and belief, that all information contained in this report is true and complete,
and that I understand it is submitted pursuant to agreement. The Company hereby
authorizes any private or governmental entity, including but not limited to The
New York State Department of Labor ("DOL"), to release to the Nassau County
Industrial Development Agency (the "Agency") and/or to the successors and
assigns thereof (collectively, the "Information Recipients"), any and all
employment information under DOL's control which is pertinent to the Company and
the Company's employees. In addition, upon the Agency's request, the Company
shall provide to the Agency any employment information in the Company's
possession which is pertinent to the Company and the Company's employees.
Information released or provided to Information Recipients by DOL, or by any
other governmental entity, or by any private entity, or by the Company itself,
or any information previously released as provided by all or any of the
foregoing parties (collectively, "Employment Information") may be disclosed by
the Information Recipients in connection with the administration of the programs
of the Agency and/or the successors and assigns thereof, and/or Nassau County,
and/or as may be necessary to comply with law; and, without limiting the
foregoing, the Employment Information may be included in (y) reports required of
the Agency, and (z) any other reports required by law. This authorization shall
remain in effect throughout the term of this transaction.
Principal/Owner/Chief Financial Officer ______________________________________
(Please Print)
Signature __________________________________ Date _________________________
Please send the completed form to:
Nassau County Industrial Development Agency
400 County Seat Drive
Mineola, New York 11501
54
SCHEDULE A-3
1. A kerosene spill occurred at Lessee's Glenwood Landing LM 6000 internal
combustion site on June 5, 2002. The spill was caused when a valve on a
fuel filter line inadvertently remained open. The volume of kerosene
released was difficult to estimate but, as part of the cleanup effort,
approximately 75 tons of contaminated soil were removed along with
approximately 3,800 gallons of oily water. A remediation plan was approved
by DEC and an oxygen regeneration compound was injected in 2003 to help
further remediate the source area - sampling and monitoring is ongoing.
While remedial progress has been satisfactory, it is uncertain when a No
Further Action Letter will be issued by the DEC.
2. Remediation activities are ongoing pursuant to a Voluntary Cleanup
Agreement ("VCA") issued by the DEC. Soils remediation work was completed
and summarized in an August 2003 report. The VCA soil cleanup objectives
were met (as set forth in an approved work plan) but, in a letter dated
October 31, 2003, the DEC raised additional questions. It is therefore
uncertain when a No Further Action Letter will be issued. In addition, the
Facility Realty may become subject to a deed restriction in the future
which would permit only nonresidential uses. There is an approved work plan
to remediate the groundwater in the area of the Facility Realty. Activities
under this work plan are ongoing.
3. The Facility is currently operating during startup and shutdown periods in
a manner that technically exceeds its air permit limits. The New York State
Department of Environmental Conservation ("DEC") is planning to revised the
Facility's Title V permit to include special conditions that specifically
address startup and shutdown operations as part of a statewide effort for
similar units. EPA does not allow state agencies to include any condition
in an operating permit that allows a wholesale exemption from normal
operating limits for specific time periods attributable to startup and
shutdown. Instead, EPA recommends the establishment of specific startup and
shutdown limits for periods determined to be appropriate for each specific
source or process. Discussions are pending with the DEC to issue final
Title V permits for the Glenwood and Port Jefferson 79 MW combustion
turbines to establish permit conditions that are based on a reasonable
review of Facility data and reflect actual experience operating emission
units in startup and shutdown mode using both fuel types.
55