MGEE » Topics » SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

These excerpts taken from the MGEE 10-Q filed Nov 8, 2005.

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT


This SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”), dated as of ____ __, 200_, made by and among WISCONSIN ELECTRIC POWER COMPANY, a Wisconsin corporation, having a principal place of business at 333 W. Everett Street, Milwaukee, Wisconsin, 53203 (“WEPCO”), MGE POWER ELM ROAD, LLC, a Wisconsin limited liability company with an address at [__________], [__________] (“MGE Power”) and WISCONSIN PUBLIC POWER INC. a Wisconsin municipal electric company with an address at [__________], [__________] (“WPPI”; MGE Power and WPPI, collectively “Easement Grantee”) and [__________], a [____________] with an address at [__________], [__________] (the “Mortgagee”),


WITNESSETH:


WHEREAS, WEPCO has heretofore executed and delivered to Mortgagee the following security instruments (collectively, the “Mortgage”): [List of mortgage documents to be inserted here], recorded in Book ___, Page ___, in the records of ___________, Wisconsin and encumbering the property described therein located in Milwaukee County and Racine County, respectively, (“Mortgaged Premises”) to secure payment of the indebtedness described therein; and


WHEREAS, WEPCO and Easement Grantee made and entered into that certain Easement and Indemnification Agreement dated the ___ day of ________, 2004 (the “Easement Agreement”), with respect to certain premises described on Exhibit A thereof (the “Easement Area”); and


WHEREAS, the parties hereto desire to enter into certain agreements with respect to the Mortgage and the Easement Agreement, as set forth herein;


NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:


1.

Subordination. Subject to the terms of this Agreement, the Easement Agreement is and shall at all times remain, subject and subordinate to the Mortgage and to all renewals, modifications, consolidations, replacements and extensions thereof.


2.

Existence of Easement Agreement. Neither a foreclosure of the Mortgage, entry by the Mortgagee, nor any other action by the Mortgagee with respect to the Mortgage will affect the continued existence of the Easement Agreement, or the rights and obligations of Easement Grantee thereunder.


3.

Nondisturbance. Except as is otherwise provided in this Agreement, if the interest of WEPCO under the Easement Agreement shall be acquired by Mortgagee, by reason of exercise of the power of sale or the foreclosure of the Mortgage or other proceedings brought to enforce the rights of the holder thereof, whether by deed in lieu of foreclosure or by any other method, so long as Easement Grantee is not in default of its obligations under the Easement Agreement beyond all available cure periods, Easement Grantee shall peaceably and quietly have, hold and enjoy the Easement Area and the appurtenant rights thereto for the full term of the Easement Agreement, as the same may be extended or earlier terminated in accordance with the provisions of the Easement Agreement, subject to the terms, covenants, conditions, provisions, and agreements of the Easement Agreement.


4.

Attornment. Easement Grantee shall attorn to Mortgagee, as fee owner, that attornment to be effective and self-operative without the execution of any other instruments on the part of either party upon receipt by Easement Grantee of notice of Mortgagee’s succeeding to the interest of WEPCO under the Easement Agreement, and the Easement Agreement shall continue in full force and effect in accordance with its terms between Easement Grantee, as grantee thereunder, and Mortgagee, as grantor.


5.

Mortgagee Covenants. In consideration of the foregoing agreements of Easement Grantee, Mortgagee agrees that, so long as Easement Grantee is not in material default of the terms of the Easement Agreement beyond all available cure periods, it will not join or name Easement Grantee as party in any proceedings to foreclose the Mortgage unless applicable law requires Easement Grantee to be made a party thereto as a condition to proceeding against WEPCO or prosecuting such rights and remedies, it will not disturb Easement Grantee’s possession of the Easement Area under the Easement Agreement upon Mortgagee’s coming into possession of or acquisition of title to all or any portion of the Mortgaged Premises as a result of a foreclosure or other enforcement of the Mortgage, or as a result of any other means, it will accept the attornment of Easement Grantee, and subject to the limitations contained in this Agreement, it will assume and perform, (but only while owner or in possession or control of all or any portion of the Mortgaged Premises) all of WEPCO’s obligations under the Easement Agreement, except as otherwise provided in this Agreement.


6.

Limitation of Liability. Notwithstanding anything to the contrary in the Easement Agreement or the Mortgage, if Mortgagee succeeds to the interest of WEPCO under the Easement Agreement, Mortgagee shall not be liable for or bound by any of the following matters:


a.

Claims Against WEPCO. Any offset right that Easement Grantee may have against WEPCO relating to any event or occurrence before the date of attornment, including any claim for damages of any kind whatsoever as the result of any breach by WEPCO that occurred before the date of attornment unless Easement Grantee shall have given notice of the event or circumstance giving rise to the offset right to Mortgagee. (The foregoing shall not limit either (i) Easement Grantee’s right to exercise against WEPCO any offset right otherwise available to Easement Grantee because of events occurring after the date of attornment, or (ii) Mortgagee’s obligation to correct any conditions that existed as of the date of attornment and violate Mortgagee’s obligations as grantor under the Easement Agreement.)


b.

Prepayments. Any payment of the Annual Fee that Easement Grantee may have made to WEPCO more than one year before the date such Annual Fee was first due and payable under the Easement Agreement with respect to any period after the date of attornment other than, and only to the extent that, the Easement Agreement expressly required such a prepayment.


c.

Modification, Amendment or Waiver. Any modification or amendment of the Easement Agreement hereafter made without Mortgagee’s written consent, which materially adversely affects Mortgagee’s rights, duties or obligations under this Agreement.


7.

Exculpation of WEPCO. Notwithstanding anything to the contrary in this Agreement or the Easement Agreement, upon any attornment pursuant to this Agreement the Easement Agreement shall be deemed to have been automatically amended to provide that Mortgagee’s obligations and liability under the Easement Agreement shall never extend beyond Mortgagee’s (or its successors’ or assigns’) interest, if any, in the Easement Area from time to time, including insurance and condemnation proceeds, interest in the Easement Agreement, and the proceeds from any sale or other disposition of WEPCO’s property by Mortgagee (collectively, “Mortgagee’s Interest”). Easement Grantee shall look exclusively to Mortgagee’s Interest (or that of its successors and assigns) for payment or discharge of any obligations of Mortgagee under the Easement Agreement as affected by this Agreement. If Easement Grantee obtains any money judgment against Mortgagee with respect to the Easement Agreement or the relationship between Mortgagee and Easement Grantee, then Easement Grantee shall look solely to Mortgagee’s Interest (or that of its successors and assigns) to collect such judgment. Easement Grantee shall not collect or attempt to collect any such judgment out of any other assets of Mortgagee.


8.

Notices. All notices or other written communications hereunder shall be deemed to have been properly given (a) upon delivery, if delivered in person with receipt acknowledged by the recipient thereof, (b) one business day after having been deposited for overnight delivery with any reputable overnight courier service, or (c) three (3) business days after having been deposited in any post office or mail depository regularly maintained by the U. S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the receiving party at its address set forth below:


If to WEPCO:

Wisconsin Electric Power Company
231 W. Michigan Street
Milwaukee, WI 53203

Attn: General Counsel

Vice President – Fossil Operations




If to MGE Power:

MGE Power Elm Road, LLC
P.O. Box 1231
Madison, WI 53701

Attn:

Chief Financial Officer

General Counsel

Vice President Power Operations

If to WPPI:

Wisconsin Public Power Inc.
1425 Corporate Center Drive
Sun Prairie, WI 5359-9109

Attn:

Senior Vice President – Legal and
Regulatory Affairs

Senior Vice President – Power Supply



If to Mortgagee:


or addressed as such party may from time to time designate by written notice to the other parties. Either party by notice to the other may designate additional or different addressees for subsequent notices or communications.


9.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. Such counterparts shall constitute but one and the same instrument and shall be binding upon, and shall inure to the benefit of, each of the undersigned individually as fully and completely as if all had signed one instrument.


10.

Successors and Assigns. The obligations and rights of the parties pursuant to this Agreement shall bind and inure to the benefit of the successors, assigns, heirs and legal representative of the respective parties.



[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]






IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.


WISCONSIN ELECTRIC POWER COMPANY, a Wisconsin corporation

By: /s/ Scott A. Patulski
Title: Vice President

MGE POWER ELM ROAD, LLC, a
Wisconsin limited liability company

By: /s/ Gary J. Wolter
Title: Manager

WISCONSIN PUBLIC POWER INC., a Wisconsin municipal electric company

By: /s/ J. Leroy Thilly
Title: President and CEO


SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT


This SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”), dated as of ____ __, 200_, made by and among WISCONSIN ELECTRIC POWER COMPANY, a Wisconsin corporation, having a principal place of business at 333 W. Everett Street, Milwaukee, Wisconsin, 53203 (“WEPCO”), MGE POWER ELM ROAD, LLC, a Wisconsin limited liability company with an address at [__________], [__________] (“MGE Power”) and WISCONSIN PUBLIC POWER INC. a Wisconsin municipal electric company with an address at [__________], [__________] (“WPPI”; MGE Power and WPPI, collectively “Easement Grantee”) and [__________], a [____________] with an address at [__________], [__________] (the “Mortgagee”),


WITNESSETH:


WHEREAS, WEPCO has heretofore executed and delivered to Mortgagee the following security instruments (collectively, the “Mortgage”): [List of mortgage documents to be inserted here], recorded in Book ___, Page ___, in the records of ___________, Wisconsin and encumbering the property described therein located in Milwaukee County and Racine County, respectively, (“Mortgaged Premises”) to secure payment of the indebtedness described therein; and


WHEREAS, WEPCO and Easement Grantee made and entered into that certain Easement and Indemnification Agreement dated the ___ day of ________, 2004 (the “Easement Agreement”), with respect to certain premises described on Exhibit A thereof (the “Easement Area”); and


WHEREAS, the parties hereto desire to enter into certain agreements with respect to the Mortgage and the Easement Agreement, as set forth herein;


NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:


1.

Subordination. Subject to the terms of this Agreement, the Easement Agreement is and shall at all times remain, subject and subordinate to the Mortgage and to all renewals, modifications, consolidations, replacements and extensions thereof.


2.

Existence of Easement Agreement. Neither a foreclosure of the Mortgage, entry by the Mortgagee, nor any other action by the Mortgagee with respect to the Mortgage will affect the continued existence of the Easement Agreement, or the rights and obligations of Easement Grantee thereunder.






3.

Nondisturbance. Except as is otherwise provided in this Agreement, if the interest of WEPCO under the Easement Agreement shall be acquired by Mortgagee, by reason of exercise of the power of sale or the foreclosure of the Mortgage or other proceedings brought to enforce the rights of the holder thereof, whether by deed in lieu of foreclosure or by any other method, so long as Easement Grantee is not in default of its obligations under the Easement Agreement beyond all available cure periods, Easement Grantee shall peaceably and quietly have, hold and enjoy the Easement Area and the appurtenant rights thereto for the full term of the Easement Agreement, as the same may be extended or earlier terminated in accordance with the provisions of the Easement Agreement, subject to the terms, covenants, conditions, provisions, and agreements of the Easement Agreement.


4.

Attornment. Easement Grantee shall attorn to Mortgagee, as fee owner, that attornment to be effective and self-operative without the execution of any other instruments on the part of either party upon receipt by Easement Grantee of notice of Mortgagee’s succeeding to the interest of WEPCO under the Easement Agreement, and the Easement Agreement shall continue in full force and effect in accordance with its terms between Easement Grantee, as grantee thereunder, and Mortgagee, as grantor.


5.

Mortgagee Covenants. In consideration of the foregoing agreements of Easement Grantee, Mortgagee agrees that, so long as Easement Grantee is not in material default of the terms of the Easement Agreement beyond all available cure periods, it will not join or name Easement Grantee as party in any proceedings to foreclose the Mortgage unless applicable law requires Easement Grantee to be made a party thereto as a condition to proceeding against WEPCO or prosecuting such rights and remedies, it will not disturb Easement Grantee’s possession of the Easement Area under the Easement Agreement upon Mortgagee’s coming into possession of or acquisition of title to all or any portion of the Mortgaged Premises as a result of a foreclosure or other enforcement of the Mortgage, or as a result of any other means, it will accept the attornment of Easement Grantee, and subject to the limitations contained in this Agreement, it will assume and perform, (but only while owner or in possession or control of all or any portion of the Mortgaged Premises) all of WEPCO’s obligations under the Easement Agreement, except as otherwise provided in this Agreement.


6.

Limitation of Liability. Notwithstanding anything to the contrary in the Easement Agreement or the Mortgage, if Mortgagee succeeds to the interest of WEPCO under the Easement Agreement, Mortgagee shall not be liable for or bound by any of the following matters:


a.

Claims Against WEPCO. Any offset right that Easement Grantee may have against WEPCO relating to any event or occurrence before the date of attornment, including any claim for damages of any kind whatsoever as the result of any breach by WEPCO that occurred before the date of attornment unless Easement Grantee shall have given notice of the event or circumstance giving rise to the offset right to Mortgagee. (The foregoing shall not limit either (i) Easement Grantee’s right to exercise against WEPCO any offset right otherwise available to Easement Grantee because of events occurring after the date of attornment, or (ii) Mortgagee’s obligation to correct any conditions that existed as of the date of attornment and violate Mortgagee’s obligations as grantor under the Easement Agreement.)






b.

Prepayments. Any payment of the Annual Fee that Easement Grantee may have made to WEPCO more than one year before the date such Annual Fee was first due and payable under the Easement Agreement with respect to any period after the date of attornment other than, and only to the extent that, the Easement Agreement expressly required such a prepayment.


c.

Modification, Amendment or Waiver. Any modification or amendment of the Easement Agreement hereafter made without Mortgagee’s written consent, which materially adversely affects Mortgagee’s rights, duties or obligations under this Agreement.


7.

Exculpation of WEPCO. Notwithstanding anything to the contrary in this Agreement or the Easement Agreement, upon any attornment pursuant to this Agreement the Easement Agreement shall be deemed to have been automatically amended to provide that Mortgagee’s obligations and liability under the Easement Agreement shall never extend beyond Mortgagee’s (or its successors’ or assigns’) interest, if any, in the Easement Area from time to time, including insurance and condemnation proceeds, interest in the Easement Agreement, and the proceeds from any sale or other disposition of WEPCO’s property by Mortgagee (collectively, “Mortgagee’s Interest”). Easement Grantee shall look exclusively to Mortgagee’s Interest (or that of its successors and assigns) for payment or discharge of any obligations of Mortgagee under the Easement Agreement as affected by this Agreement. If Easement Grantee obtains any money judgment against Mortgagee with respect to the Easement Agreement or the relationship between Mortgagee and Easement Grantee, then Easement Grantee shall look solely to Mortgagee’s Interest (or that of its successors and assigns) to collect such judgment. Easement Grantee shall not collect or attempt to collect any such judgment out of any other assets of Mortgagee.


8.

Notices. All notices or other written communications hereunder shall be deemed to have been properly given (a) upon delivery, if delivered in person with receipt acknowledged by the recipient thereof, (b) one business day after having been deposited for overnight delivery with any reputable overnight courier service, or (c) three (3) business days after having been deposited in any post office or mail depository regularly maintained by the U. S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the receiving party at its address set forth below:


If to WEPCO:

Wisconsin Electric Power Company
231 W. Michigan Street
Milwaukee, WI 53203

Attn: General Counsel

Vice President – Fossil Operations








If to MGE Power:

MGE Power Elm Road, LLC
P.O. Box 1231
Madison, WI 53701

Attn:

Chief Financial Officer

General Counsel

Vice President Power Operations

If to WPPI:

Wisconsin Public Power Inc.
1425 Corporate Center Drive
Sun Prairie, WI 5359-9109

Attn:

Senior Vice President – Legal and
Regulatory Affairs

Senior Vice President – Power Supply



If to Mortgagee:


or addressed as such party may from time to time designate by written notice to the other parties. Either party by notice to the other may designate additional or different addressees for subsequent notices or communications.


9.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. Such counterparts shall constitute but one and the same instrument and shall be binding upon, and shall inure to the benefit of, each of the undersigned individually as fully and completely as if all had signed one instrument.


10.

Successors and Assigns. The obligations and rights of the parties pursuant to this Agreement shall bind and inure to the benefit of the successors, assigns, heirs and legal representative of the respective parties.



[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]






IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.


WISCONSIN ELECTRIC POWER COMPANY, a Wisconsin corporation

By: /s/ Scott A. Patulski
Title: Vice President

MGE POWER ELM ROAD, LLC, a
Wisconsin limited liability company

By: /s/ Gary J. Wolter
Title: Manager

WISCONSIN PUBLIC POWER INC., a Wisconsin municipal electric company

By: /s/ J. Leroy Thilly
Title: President and CEO

EXCERPTS ON THIS PAGE:

10-Q (2 sections)
Nov 8, 2005

"SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT" elsewhere:

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