This Sublease Agreement (this "Sublease"), is made as of March 1, 2000,
between AES RED OAK URBAN RENEWAL CORPORATION (the "SUBLESSOR"), a New Jersey
corporation, having an address at 777 Washington Road, Parlin, New Jersey 08859,
and AES RED OAK, L.L.C. (the "SUBTENANT"), a Delaware limited liability company,
having an address at 1001 North 19th Street, Arlington, Virginia 22209.
WHEREAS, SUBLESSOR is the tenant under a certain Ground Lease Agreement
(the "Underlying Lease") of even date herewith, between AES Red Oak, L.L.C., as
landlord (the "Landlord"), and AES Red Oak Urban Renewal Corporation, as tenant,
pursuant to which SUBLESSOR leases a certain tract of land lying and being in
the Borough of Sayreville, County of Middlesex and State of New Jersey, which
land is served by the Appurtenant Easements and the Conrail Licenses in
connection with access and utility connections from the land to Jernee Mill
Road, and including any current or future improvements constructed thereon that
are owned by Landlord (but excluding the Project Improvements) (the "Underlying
Premises"), with such land and the Appurtenant Easements being further described
as set forth in EXHIBIT A; and
WHEREAS, SUBLESSEE intends to construct the Project Improvements on the
Underlying Premises and thereafter lease the same from Sublessor in accordance
with the provisions of this Sublease; and
WHEREAS, SUBTENANT desires to sublease from SUBLESSOR and SUBLESSOR
desires to demise to SUBTENANT the entire Underlying Premises and the Project
Improvements (collectively the "Subleased Premises").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
provided, SUBLESSOR and SUBTENANT hereby covenant and agree as follows:
1.1. Unless the context clearly indicates a contrary intent or unless
specifically provided herein, all terms used in this Sublease and not defined
herein shall have the meanings ascribed to such words in the Underlying Lease
and the Trust Indenture.
1.2. As used in this Sublease, the following terms have the following
(a) ADDITIONAL RENT: defined in Section 4.1
(b) COMMENCEMENT DATE: the Commercial Operation Date for the Facility,
as such terms are defined in the Trust Indenture.
(c) LANDLORD: defined in the Preliminary Statement.
(d) RENT: defined in Section 3.1.
(e) SUBLEASED PREMISES: defined in the Preliminary Statement.
(f) SUBLESSOR: the party defined as such in the first paragraph of
(g) SUBTENANT: the party defined as such in the first paragraph of
(h) TERM: defined in Section 2.2.
(i) TERMINATION DATE: Twenty-fifth (25th) anniversary of the
(j) UNDERLYING LEASE: defined in the Preliminary Statement.
2.1. SUBLESSOR, for and in consideration of the covenants hereinafter
contained and made on the part of the SUBTENANT, does hereby demise and sublease
to SUBTENANT, and SUBTENANT does hereby hire from SUBLESSOR, the Subleased
Premises, subject, however, to the terms and conditions of this Sublease.
2.2. The term (the "Term") of this Sublease shall commence on the
Commencement Date and shall end on the Termination Date. Upon the Termination
Date the SUBTENANT shall surrender the Subleased Premises to the SUBLESSOR.
3.1 SUBTENANT shall pay rent ("Rent") to SUBLESSOR during the Term in
the amount of TWO MILLION SIX HUNDRED AND FIFTY THOUSAND DOLLARS ($2,650,000.00)
per year in lawful money of the United States of America. The Rent shall be paid
in four (4) equal quarterly installments of SIX HUNDRED AND SIXTY-TWO THOUSAND
FIVE HUNDRED DOLLARS ($662,500.00), with the first quarterly
installment of Rent being paid upon the Commencement Date by SUBTENANT and each
succeeding quarterly installment of Annual Rent being paid every three (3)
months thereafter, throughout the Term.
3.2. SUBTENANT hereby covenants and agrees to pay to SUBLESSOR during
the Term the Rent, without notice or demand. SUBTENANT may offset payment of the
Rent to SUBLESSOR against any sum due SUBTENANT from SUBLESSOR pursuant to the
Underlying Lease, or otherwise.
3.3. This Sublease shall not terminate, nor shall SUBLESSOR or
SUBTENANT have any right to terminate or avoid this Sublease, nor shall the
obligations and liabilities of SUBTENANT or SUBLESSOR hereunder be in any way
affected for any reason. The obligations of SUBTENANT and SUBLESSOR hereunder
shall be separate and independent covenants and agreements.