HomeMy WebLinkAboutWaterloo RNG 1 LLC - Ground Lease Agreement - 5.6.2024 CONFIDENTIAL
GROUND LEASE AGREEMENT
This Ground Lease Agreement(this"Agreement")by and between City of Waterloo,an Iowa municipality
("Landlord"),and Waterloo RNG 1 LLC,an Oklahoma corporation("Tenant"),is effective as of May 6,2024
(the "Effective Date"). Landlord and Tenant are hereafter sometimes collectively referred to as the
"Parties"and individually as a "Party."
RECITALS
A. Landlord owns that certain parcel of land located in Black Hawk County, Iowa, as more
particularly described on Exhibit A (the "Subject Property"), and owns and operates on the
Subject Property the City of Waterloo's primary wastewater treatment plant (the "WWTP
Business");
B. Landlord produces quantities of biogas("Biogas"),generated from its operation of the WWTP
Business at the Subject Property, and such production requires a significant expenditure of
time and resources by Landlord;
C. Tenant desires to install,construct,own,and operate a biogas conditioning facility comprised
of gas conditioning and cleaning equipment, and related equipment and facilities for the
production and sale of saleable renewable natural gas ("RNG") and other beneficial uses
included in the Permitted Use (all as more fully defined and described in this Agreement), at
a location on the Subject Property(the"Facility");
D. The Facility will rely upon Biogas meeting the quality requirements set forth in that certain
Biogas Supply Agreement entered into between the Parties of even date herewith(the"BSA")
in order to fully effectuate the purposes of this Agreement.
E. This Agreement is entered into pursuant to Landlord's award of project contract to Tenant
based on Tenant's proposal ("Proposal") submitted in response to Operator's Request for
Qualifications/Proposals to Develop Renewable Natural Gas Projects(the"RFQ/RFP").
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing Recitals, the mutual covenants, conditions,
and provisions set forth herein,and other good and valuable consideration,the receipt and sufficiency of
which are hereby acknowledged,the Parties agree as follows:
1. Definitions. Capitalized terms defined in this Agreement have the meanings set forth below in
this Section or as set forth in the Section or subsection in which such terms are defined.
1.1 "Additional Rent" means all monetary payments required to be made under this
Agreement, including, but not limited to, taxes, insurance premiums, utility payments, late charges,
default interest and all other sums Tenant is obligated to pay under this Agreement other than Term Rent.
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1.2 "Affiliate" means, as to a Party,any legal entity or natural person who owns or controls,
is owned or controlled by,or who is under common ownership or control with,such Party,with "control"
meaning the legal right and authority to direct the management of such Party.
1.3 "Applicable Law" means any federal, state, or local constitution, statute,writ, law, rule,
regulation,ordinance,judgment,order,decree,any published directive or requirement that has the force
of law, any other governmental restriction that has the force of law, or any determination or
interpretation of any of the foregoing by any governmental or judicial authority having jurisdiction with
respect thereto applicable to or binding on either or both of the Parties, the Subject Property, the
Premises, the Facility, or this Agreement, as the context may require, and in each case as amended,
modified, or supplemented, and including any Governmental Approvals issued pursuant thereto.
1.4 "Environmental Law" shall mean any federal or applicable state or local statute,
regulation or ordinance or any applicable judicial or administrative decree or decision, whether now
existing or hereinafter enacted,promulgated or issued,with respect to any Hazardous Materials,drinking
water, groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid
waste, wastewater,storm water runoff,waste emissions or wells. Without limiting the generality of the
foregoing,the term"Environmental Law"shall encompass each of the following statutes,and regulations,
orders, decrees, permits, licenses and deed restrictions now or hereafter promulgated thereunder, and
amendments and successors to such statutes and regulations as may be enacted and promulgated from
time to time: (i)the Comprehensive Environmental Response,Compensation and Liability Act(codified in
scattered sections of 26 U.S.C., 33 U.S.C.,42 U.S.C.and 42 U.S.C.Section 9601 et seq.)("CERCLA");(ii)the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA"); (iii) the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.); (iv) the Toxic Substances Control Act (15
U.S.C. Section 2061 et seq.);(v)the Clean Water Act(33 U.S.C.Section 1251 et seq.); (vi)the Clean Air Act
(42 U.S.C.Section 7401 et seq.); (vii)the Safe Drinking Water Act(21 U.S.C.Section 349,42 U.S.C. Section
201 and Section 300f et seq.); (viii)the National Environmental Policy Act(42 U.S.C.Section 4321 et seq.);
(ix) the Superfund Amendments and Reauthorization Act of 1986 (codified in scattered sections of 10
U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.); (x)Title Ill of the Superfund Amendment and Reauthorization
Act(40 U.S.C.Section 1101 et seq.);(xi)the Uranium Mill Tailings Radiation Control Act(42 U.S.C.Section
7901 et seq.); (xii)the Occupational Safety and Health Act(29 U.S.C.Section 655 et seq.); (xiii)the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.); (xiv) the Noise Control Act (42
U.S.C.Section 4901 et seq.);and(xv)the Emergency Planning and Community Right to Know Act(42 U.S.C.
Section 1100 et seq.).
1.5 "Facility Improvements" means all buildings, structures, improvements, fixtures and
facilities installed or constructed by or for Tenant on the Premises during the Term pursuant to this
Agreement.
1.6 "Good Industry Practice" means practices,methods,and acts engaged in by a significant
portion of the renewable natural gas generation or organic material processing industry in the United
States with respect to the operation and maintenance of facilities similar to the Facility that would
reasonably and ordinarily be expected from a skilled and experienced manager that,at a particular time,
in the exercise of reasonable judgment in light of the facts known, or that should reasonably have been
known, at the time a decision was made, would have been expected to accomplish the performance of
the Tenant's operation and maintenance obligations under this Agreement.
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1.7 "Governmental Approvals" means all permits, licenses,approvals, waivers,exemptions,
variances,franchises, certifications,consents, authorizations, and similar orders from any Governmental
Authority necessary for the construction, installation, ownership, operation, and/or maintenance of the
Facility, including any as may pertain to the WWTP Business.
1.8 "Governmental Authority" means any federal, state, or local government authority,
agency,court or other body,officer or public entity, including any zoning authority, building inspector,or
health or safety inspector, having jurisdiction over the relevant Party or particular requirement under
Applicable Laws.
1.9 "Handling" means the production, use, treatment, storage, transportation, generation,
manufacture, processing, distribution, disposal, Release(as defined below)or threatened Release of any
Hazardous Substance.
1.10 "Hazardous Materials" means each and every element, compound, chemical mixture,
contaminant, pollutant, material, waste or other substance which is defined,determined or identified as
hazardous or toxic under any Environmental Law, including,without limitation, "Hazardous Substance(s)"
as defined in CERCLA, the Superfund Amendments and Reauthorization Act of 1986, or Title HI of the
Superfund Amendment and Reauthorization Act, each as amended, and regulations promulgated
thereunder including, but not limited to, asbestos or any substance containing asbestos, polychlorinated
biphenyls, any explosives, radioactive materials, chemicals known or suspected to cause cancer or
reproductive toxicity, pollutants,effluents,contaminants, emissions,infectious wastes,any petroleum or
petroleum-derived waste or product or related materials and any items defined as hazardous,special or
toxic materials, substances or waste; "Hazardous Waste" as defined in the Resource Conservation and
Recovery Act of 1976, as amended, and regulations promulgated thereunder; "Materials" as defined as
"Hazardous Materials" in the Hazardous Materials Transportation Act, as amended, and regulations
promulgated thereunder;and"Chemical Substance or Mixture"as defined in the Toxic Substances Control
Act,as amended,and regulations promulgated thereunder.
1.11 "Related Parties"means,as to either Party,such Party's members,owners,shareholders,
directors, officers, agents, representatives, employees, contractors, consultants, lessees or sublessees
and invitees.
1.12 "Release" means any emission, discharge, spilling, leaking, pumping, pouring, emptying,
discharging, injecting, escaping, leaching, disposal or dumping into the environment or the workplace of
any Hazardous Materials or as otherwise defined by Environmental Law, and includes any definition
thereof set forth in any Environmental Law, provided that in the event of conflict, the most inclusive
definition will apply.
2. Agreement to Lease.
2.1 Grant of the Premises. Subject to the terms and conditions of this Agreement, Landlord
hereby leases and grants to Tenant,and Tenant leases and accepts from Landlord the following described
premises(collectively,the"Premises"):
(a) the right to enter upon the Subject Property during Landlord's normal business
hours for purposes of conducting feasibility studies and investigations and pre-construction activities
(including without limitation grading, equipment and materials staging and preliminary installation as
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appropriate) upon the Subject Property during the Contingency Period (as defined below in Section 3.1);
and
(b) commencing at the commencement of the Construction Period(as defined below
in Section 3.2):
(i) the exclusive use and occupancy of a portion of the Subject Property to
be identified as provided below in this Section 2 (the "Facility Site") for the purpose of installing,
constructing, owning, operating, using, maintaining, replacing, and removing the Facility in accordance
with the Site Plan approved as provided below in this Section 2;
(ii) a non-exclusive easement on the Subject Property for installing,
constructing, owning, operating, using, maintaining, replacing, and removing a pipeline and related
facilities for the purpose of conveying RNG to the Interconnection Area (as defined in the following
subsection) in the location to be determined as provided below in this Section 2 (the "RNG Conveyance
Pipeline");
(iii) the exclusive use and occupancy of a minimum fifty foot by fifty foot(5(Y
x 50')portion of the Subject Property and related easements necessary for construction and operation of
the equipment, to be identified as provided below in this Section 2 for the purpose of installing,
constructing, owning, operating, using, maintaining, replacing, and removing facilities for the transfer of
RNG produced by the Facility (such facilities, the "Interconnection Facilities", and such area, the
"Interconnection Area")to the Gas Transmission Pipeline (as defined below);
(iv) during the Construction Period,the exclusive use and occupancy of one
or more areas on the Subject Property to be identified as provided below in this Section 2 for the purpose
of staging and storage of equipment and materials in connection with construction of the Facility,the RNG
Conveyance Pipeline, any Access Easement roadway(s), and the Interconnection Facilities (the
"Construction Area(s)");
(v) subject to prior satisfaction of Landlord's reasonable requirements to
maintain the security of the Subject Property, a non-exclusive easement on the Subject Property for
access, ingress and egress for vehicles, equipment and pedestrians to and from Easton Avenue in the
location(s)to be determined as provided below in this Section 2, including the right to construct and/or
pave roadways within such easement(the"Access Easement");
(vi) such non-exclusive easements on the Subject Property as are required to
provide utilities required to construct and operate the Facility, RNG Conveyance Pipeline, and
Interconnection Facilities, including water, electricity, telephone, internet and/or fiber optic("Utilities")
in the location(s)to be determined as provided below in this Section 2 (the"Utility Easements");and
(vii) the non-exclusive right to enter upon other areas of the Subject Property
as reasonably necessary(including with vehicles and equipment)for Tenant to perform its obligations and
exercise its rights and privileges pursuant to this Agreement. Landlord shall have the right to enter the
Subject Property for operational or maintenance purposes, with prior consent from Tenant, which
consent shall not be unreasonably withheld, conditioned or delayed.
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2.2 Easement for Gas Transmission Pipeline. In addition to the foregoing grants, during the
Construction Period, Landlord will timely grant an easement upon the Subject Property to the party
designated or identified by Tenant to be the party to own and operate the gas transmission line for
purposes of taking RNG from the Facility at the Interconnection Area ("Gas Transmission Pipeline
Owner") for purposes of installing, constructing, owning, operating, using, maintaining, replacing, and
removing a pipeline and related facilities("Gas Transmission Pipeline")for the purpose of conveying RNG
received at the Interconnection Area,which easement will be in the location to be determined as provided
below in this Section 2 and will be on terms required by such Gas Transmission Pipeline Owner and
reasonably acceptable to Landlord (the"Gas Transmission Pipeline Easement").
2.3 Determination of Location of Facility Site, Interconnection Area, Construction Areas,
Access Easement,Utility Easements,RNG Conveyance Pipeline Easement,and Offtake Purchaser Pipeline
Easement.During the Contingency Period,Tenant and Landlord will cooperate in a timely manner to agree
on the locations of the Facility Site, Interconnection Area, Construction Areas, Access Easement, Utility
Easements,RNG Conveyance Pipeline Easement,and the Offtake Purchaser Pipeline Easement,which will
be in locations selected by Tenant as expedient for the efficient development,construction and operation
of the Facility,and approved in writing by Landlord ("Preliminary Approval"),which approval may not be
unreasonably withheld,conditioned,or delayed, and in any case, Landlord must either approve or object
to Tenant's proposed locations within fifteen (15) business days after receipt of Tenant's proposal,or be
conclusively deemed to have approved such proposed location(s). Once the locations are generally
approved in writing as provided in the foregoing sentence,Tenant shall have the locations surveyed at its
own expense by a professional land surveyor (collectively, the "Survey(s)"). Tenant will provide the
preliminary draft Survey to Landlord for Landlord's review,but Landlord will have no right to object to all
or any portion of the Survey unless and only to the extent that it or any portion of it is materially
inconsistent with the Parties' Preliminary Approval. Landlord must either approve or object to the
preliminary draft Survey within fifteen(15) business days after receipt of the draft Survey from Tenant or
be conclusively deemed to have approved the Survey.if Landlord timely makes any objections,which are
consistent with the terms of this Section, then Tenant will have the Survey revised to address such
objections and submit the revised Survey to Landlord for review, which Landlord will review and either
approve or object to pursuant to the same 15-day review period and terms and conditions as set forth
above in this Section and such process will be repeated until the Parties reach final agreement on the
Survey. If any proposed locations are submitted to Landlord separately for review, the time periods for
review and the above terms and conditions of this Section will apply to each discrete submittal of a
proposed location or Survey. Upon final approval or deemed approval of the Survey, the Parties will
promptly execute an amendment or addendum to this Agreement confirming their agreement upon the
Survey and the descriptions of the Premises set forth thereon.
2.4 Approval of Facility Site Plan. During the Contingency Period, Tenant may, at its cost,
conduct the design and engineering required to develop a site plan for the Facility and the Facility
Improvements (the "Site Plan"), which Tenant considers to be most expedient for the efficient
development, construction and operation of the Facility. Landlord will timely and reasonably cooperate
with Tenant in the development of such Site Plan.Once developed,Tenant will provide Landlord with the
preliminary draft of the Site Plan to Landlord for Landlord's review and approval, which may not be
unreasonably withheld, conditioned, or delayed, and which Landlord must either approve or object to
within fifteen (15) business days after receipt of the draft Site Plan or be conclusively deemed to have
approved the Site Plan. If Landlord timely makes any objections, which are consistent with the terms of
this Section,then Tenant will have the Site Plan revised to address such objections and submit the revised
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Site Plan to Landlord for review, which Landlord will review and either approve or object to pursuant to
the same 15-day review period and terms and conditions as set forth above in this Section and such
process will be repeated until the Parties reach final agreement on the Site Plan.
2.5 Operations Supply Water. In addition to the foregoing grants, commencing on the
commencement of the Construction Period, but subject to any applicable regulatory approvals required
under Applicable Law, Landlord shall provide to Tenant reasonable quantities of potable water (the
"Supply Water")for use in connection with Tenant's operations pursuant to this Agreement that cannot
utilize grey water or effluent. Landlord shall cooperate with Tenant, at no material cost to Landlord, in a
timely manner to obtain any regulatory approvals required under Applicable Law for Tenant's use of the
Supply Water in accordance with this Agreement. As part of Additional Rent, Tenant shall reimburse
Landlord for Tenant's share of the direct charges for Tenant's use of the Supply Water, which Landlord
will invoice to Tenant on the same schedule on which such charges are billed to Landlord together with
copies of such bills and reasonable supporting documentation of the calculation of Tenant's share thereof,
which will be due and payable within thirty (30) days after Tenant's receipt of each such invoice with
supporting documentation.
3. Term.
3,1 Contingency Period. Tenant's obligations under this Agreement are conditioned upon
Tenant obtaining, satisfying, or waiving (in writing), within one hundred eighty (180) days following the
Effective Date(the"Contingency Period"),the following(the "Contingencies"):
(a) Tenant obtaining from all appropriate governmental bodies (and all other
councils,boards and parties having a right to control,permit,approve or consent to the use and operation
of the Premises)all approvals, permits,licenses and consents necessary or appropriate to allow Tenant to
develop and use the Premises for the Permitted Use,including all approvals for rezoning or conditional or
special use grants.
(b) Tenant being satisfied, in its sole discretion,with the ability of the Premises and
Property to allow for the construction,support and operation of the Facility.
(c) Tenant obtaining and approving a current environmental audit of the Premises
addressed to Tenant by an environmental engineer satisfactory to Tenant, which audit may include soil
borings, soil tests, ground water tests and other tests and samplings and shall determine that no
hazardous material or condition exists on, in or with respect to the Premises. Landlord further agrees that
Tenant may from time to time during the Term of this Lease obtain and conduct similar environmental
audits and tests.
(d) Tenant obtaining a title insurance commitment for a standard current form ALTA
leasehold owner's policy for the Premises satisfactory to Tenant and disclosing no matters other than
those which are satisfactory to Tenant and which would not materially affect Tenant's Permitted Use;
Landlord delivering such consents, resolutions, certificates, authorizations, approvals, releases,
terminations, satisfactions (including, without limitation, any terminations of prior leases, mortgages or
financing statements and satisfactions of any existing judgments or construction liens), affidavits,
undertakings,indemnities and such other documents as may be required by the title company in order to
issue Tenant's ALTA leasehold owner's policy for the Premises in a form satisfactory to Tenant.
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(e) Tenant obtaining a current ALTA/NSPS survey of the Premises satisfactory to
Tenant and disclosing no matters which would materially affect Tenant's Permitted Use.
(f) Tenant confirming that all utilities are or will be available at the Premises
sufficient for Tenant's Permitted Use pursuant to agreements acceptable to Tenant.
(g) Each representation and warranty made by Landlord in this Agreement being true
and accurate as of the Effective Date, and Landlord not having defaulted under or breached any of the
terms of this Agreement.
Unless Tenant gives written notice to Landlord on or before the last day of the Contingency Period
confirming that the Contingencies are satisfied or waived by the Tenant,then this Agreement shall,at the
option of Tenant, be subject to termination upon written notice to Landlord on or before the last day of
the Contingency Period; provided, however, that should the Tenant require additional time to satisfy any
of the Contingencies, the Contingency Period may be extended for a reasonable period as to those
Contingencies identified by Tenant in writing to Landlord.
3.2 Construction Period. If Tenant does not terminate this Agreement during the Contingency
Period,this Agreement will continue in force through the Commercial Operations Date(as defined in the
BSA,the"Construction Period"),which is reasonably anticipated to be not later than twenty-four months
following the execution of this Agreement.
3.3 Initial Term and Extension Terms.
(a) Initial Term.The period commencing on the first day after the expiration of the
Construction Period, and ending on the twentieth (20th) anniversary of Commercial Operations Date (as
defined in the BSA) is the "Initial Term" and is coterminous with the term of the BSA, including any
extensions thereof.Any termination of the BSA shall also automatically and simultaneously terminate this
Agreement.
(b) Extension Terms. Tenant shall have right to extend the Initial Term for two
additional, successive periods of five years each (each, an "Extension Term" and together with the
Initial Term,the Contingency Period,and the Construction Period,the"Term")by delivering written notice
of such extension to Landlord no earlier than twelve(12)months and no later than six(6)months prior to
the expiration of the then-current Term.
3.4 Removal Period. If Tenant has elected to remove the Facility Improvements pursuant to
Section 16 of this Agreement, then Tenant will have the period commencing on the first day after the
expiration of the Term and ending on the last day of the twelfth (12th)full calendar month following the
termination or expiration of the Term (the "Removal Period") in which to remove the Facility
Improvements pursuant to Section 16 of this Agreement.
4. Rent. During the Term,Tenant will pay to Landlord the rental payments described in this Section
4(collectively, "Term Rent").
4.1 Prior to and during the Initial Term and Extension Term(s). Prior to the Commercial
Operations Date, no Term Rent will be payable to Landlord. During the Initial Term and any Extension
Term, Tenant will pay to Landlord monthly Term Rent in the amounts calculated and paid pursuant to
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terms described in the Biogas Supply Agreement executed by the Parties, which Landlord and Tenant
agree is consideration for each party's respective entry into,and performance under,this Agreement.
4.2 During the Removal Period. No Term Rent will be payable during the Removal Period.
5. Property Taxes.
5.1 Payment. Commencing on the first day of the Initial Term and during the remainder of
the Term, Tenant shall be responsible to pay (a) any incremental increase, if any, in ad valorem real
property taxes levied upon,assessed against,or applicable to the Premises,which increase is attributable
to the Facility Improvements(if any); (b) all taxes,assessments and other charges, levied upon,assessed
against,or applicable to the Facility Improvements(if any); and(c)all taxes levied upon,assessed against,
or applicable to personal property owned by Tenant or leased by Tenant from third parties. Except as
provided in the following sentence, Tenant shall make all such payments directly to the appropriate
charging or taxing authority prior to delinquency.With respect to the taxes described in clause(a)above,
if Tenant is not able to receive a separate assessment for such taxes, Landlord shall provide such
assessment to Tenant and Tenant shall pay such amount to Landlord and Landlord will pay such amount
to the taxing authority prior to delinquency.
5.2 Separate Tax Assessment. Tenant, at its sole cost and expense, and subject to the
approval of Landlord,shall undertake all reasonable actions necessary to cause the Facility Improvements
to be assessed separately from the Subject Property and other property owned by Landlord,and Landlord
shall timely cooperate in Tenant's efforts to establish such separate tax assessments.
5.3 Right to Contest. Landlord and Tenant each shall have the right to review real estate taxes
by legal proceedings, instituted and conducted at the sole expense of the Party commencing such
proceedings, and in case, as a result of such proceedings, or otherwise, any such taxes or assessments
shall be reduced, cancelled, set aside or to any extent discharged, Tenant's final liability hereunder shall
be based on the amount that shall be finally imposed or be adjudicated to be due and payable on any
such disputed or contested items. If Tenant commences such a proceeding, it agrees to notify Landlord
and Landlord shall reasonably and timely cooperate with Tenant in the prosecution of such proceeding
provided that Tenant shall pay all expenses of such proceeding.If Landlord commences such a proceeding,
Landlord shall notify Tenant and Tenant shall reasonably timely cooperate in the prosecution of such
proceeding provided that Landlord shall pay all expenses of such proceeding. If any such proceeding shall
result in the reduction,abatement or return of any such taxes,the reasonable out-of-pocket costs of such
proceeding may first be recovered by the Party incurring the same out of the amount of such reduction,
abatement or return.
5.4 Transfer or Roll Back Taxes.Landlord shall be solely liable and responsible for any deferred
or"roll back"taxes charged or assessed,or which otherwise become due as a result of a change in use of
the Subject Property or as a result of this Agreement.
6. Utilities. Tenant will be responsible at its own cost, with Landlord's timely and reasonable
cooperation, for procuring Utilities services for the Facility. Commencing on the first day of the
Construction Period,and continuing for the remainder of the Term,Tenant shall be solely responsible for
and promptly pay all charges for Utilities furnished to the Premises and used solely in connection with
Tenant's Permitted Use (as defined below). Landlord will not be liable for an interruption or failure in
supply of any Utilities service except to the extent caused by Landlord's negligence or Landlord Default.
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Tenant shall install meters to record the usage of Utilities to the Premises,separate from Landlord's other
Subject Property. In the event that the cost of additional infrastructure or system upgrades constructed
to accommodate Tenant's consumption of Utilities services are assessed or otherwise charged to
Landlord, Tenant shall be responsible for reimbursing Landlord for a pro-rata share of such additional
amounts based on Landlord and Tenant's intended or actual usage of such additional infrastructure or
upgrades.
7. Permitted Use.Subject to the terms and conditions of this Agreement,Tenant may use the Subject
Property for the purposes of development, construction, installation, operation, use, maintenance,
alteration, replacement and removal of the Facility and Facility Improvements for all purposes
contemplated under this Agreement and any other lawful purposes related thereto or in connection
therewith,all in compliance with Applicable Law and Good Industry Practice(the"Permitted Use").
8. Development and Construction.
8.1 Governmental Approvals; Permits. Tenant will be responsible, at its own cost, for
obtaining all Government Approvals which are required in connection with Tenant's Permitted Use.
Landlord will timely and reasonably cooperate with Tenant in obtaining such Governmental Approvals,
including by signing applications as owner of the Subject Property or as may otherwise be required by
Governmental Authorities,including with respect to any required amendments to existing Governmental
Approvals of the WWTP Business.
8.2 Construction. During the Construction Period,Tenant agrees to develop and construct the
Facility,at its own cost,in accordance with the Site Plan approved pursuant to Section 2 of this Agreement,
all required Governmental Approvals,and the other terms and conditions of this Agreement.
9. Operation and Ownership.
9.1 Operation and Maintenance. As between Landlord and Tenant, Tenant will be solely
responsible for the operation and maintenance of all Facility Improvements in accordance with this
Agreement.Tenant will keep the Facility in good operating condition in compliance with Applicable Law
and Good Industry Practice.
9.2 Ownership. During the Term, Tenant will own all Facility Improvements and any other
property, real or personal installed or brought upon the Premises by or for Tenant pursuant to this
Agreement.
9.3 Environmental Incentives and Credits. Any Environmental Attributes (as defined in the
BSA)shall belong to or become the property of Tenant as provided in and subject to the terms,covenants
and conditions set forth with respect thereto in the BSA.
10. Avoidance and Discharge of Liens.Except for any Leasehold Mortgage(as defined in Section 18 of
this Agreement)or other financing security interests granted by Tenant, and any Landlord Mortgage (as
defined in Section 19 of this Agreement), each Party will keep the Premises and Tenant's leasehold
interest therein free and clear of, and will indemnify, defend and hold harmless other against, all liens,
charges, mortgages, and encumbrances which may result from such Party's or its Related Parties use of
or activities on or about the Premises. Provided, however, notwithstanding the foregoing in this Section,
each Party may contest any such lien or other charges provided that(I) such contest will not expose the
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other Party to civil or criminal liability, fine or penalty; (ii) such contest will not subject the Premises or
any portion thereof to sale,forfeiture,foreclosure or interference;and(iii)such Party provides such bond
or other security required under Applicable Law to prevent the Premises or any portion thereof from
becoming subject to sale,forfeiture,foreclosure or interference.
11. Environmental Compliance and Responsibility.
11.1 Existing Environmental Conditions. No later than thirty(30)days after the Effective Date
of this Agreement, Landlord shall provide Tenant with all pertinent information known to Landlord, and
all pertinent documentation in Landlord's possession or control, with respect to compliance with
Environmental Laws and the presence or potential presence of Hazardous Materials in, on, under,from
or about the Subject Property(excluding any caused by Tenant or Tenant's Related Parties, "Pre-Existing
Hazardous Materials"),which Landlord shall supplement and update as needed no earlier than sixty(60)
days prior or later than thirty (30) days prior to the expiration of the Contingency Period, and which, in
combination with any Phase I environmental site assessment and other testing or investigation, if any,
conducted by or for Tenant during the Contingency Period, shall comprise the "Environmental Baseline
Documents". Pre-Existing Hazardous Materials and any matters disclosed, or which should be or have
been disclosed in the Environmental Baseline Documents are the "Existing Environmental Conditions."
Notwithstanding any other provisions of this Agreement,neither Tenant nor its Related Parties shall have
any liability or obligation with respect to Existing Environmental Conditions.
11.2 Landlord's Obligations. Landlord covenants that Landlord shall bear at its sole cost and
expense with respect to Existing Environmental Conditions, without limitation: (i)all reasonable costs
associated with the remediation, handling, and disposition of Pre-Existing Hazardous Materials in
concentrations exceeding applicable clean-up levels and required to be remediated by a state or federal
agency with regulatory authority, or that exceed applicable risk-based levels under Applicable Law, and
(ii)all reasonable costs associated with permitting,sampling, handling,storage or disposal of Pre-Existing
Hazardous Materials and of contaminated soil, surface water, or groundwater, discovered, excavated,
pumped or otherwise encountered in the course of constructing the Facility and any Facility
Improvements, to the extent that such costs are attributable to the presence of any Pre-Existing
Hazardous Materials in the soils,water, or groundwater in concentrations exceeding applicable clean-up
levels and required to be remediated by a state or federal agency with regulatory authority or that exceed
applicable risk-based levels under Applicable Law.
11.3 Compliance with Environmental Laws. During the Term and the Removal Period,Tenant
and Tenant's Related Parties will comply with all applicable Environmental Laws,including Governmental
Approvals issued pursuant to Environmental Laws, applicable to the Premises and the Facility. Landlord
and Landlord's Related Parties will comply with all applicable Environmental Laws, including
Governmental Approvals issued pursuant to Environmental Laws, applicable to the WWTP Business or
other Subject Property not included in the Premises,and,to the extent Landlord is bound to comply with
Governmental Approvals required for the Facility, then also with such Governmental Approvals required
for the Facility. Landlord and Tenant shall be permitted to keep and use such Hazardous Materials on or
about the Premises in such amounts and as may be used incidentally in connection with Tenant's
Permitted Use or Landlord's operation of the WWTP Business, each as applicable, in compliance with
applicable Environmental Laws, including those with respect to use, storage, containment and disposal
(collectively, "Permitted Hazardous Materials").
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11.4 Notifications. Tenant and Landlord will each promptly notify the other in the event of any
Release or discovery of Hazardous Materials on or which may affect the Premises or the Subject Property.
In addition to such notice,the notifying Party must provide the following documentation:
(a) copies of any notifications submitted by the notifying Party to any governmental
entity relating to the Release or presence of Hazardous Materials at the same time they are submitted to
the appropriate Governmental Authorities;
(b) any inspection report, complaint, order, fine, request, notice, or other
correspondence from any entity pursuant to any Environmental Law with respect to such Release or
discovery,within ten (10)days of receiving such documentation;
(c) all reports, manifests, material safety data sheets ("MSDS"), or any other
documentation related to such Release or discovery,upon written request by the other Party.
11.5 Hold Harmless and Indemnity. Subject to Sections 11.1, 11.2, and 11.3 above, Tenant's
and Landlord's indemnification, defense and hold harmless obligations set forth in Section 13 of this
Agreement,as it pertains to a Release of Hazardous Substance or violation of any provision of this Section
11, will include, but not be limited to, environmental response and remedial costs, other cleanup costs
and charges, environmental consultants' fees, attorneys' fees, civil and criminal fines and penalties,
laboratory testing fees,claims by third parties and Governmental Authorities for death, personal injuries,
property damage, natural resource damages and any other costs.Tenant's obligations under this Section
shall survive termination of this Agreement.
12. Insurance.
12.1 Required Insurance. Each Party shall,at its sole cost and expense,obtain and maintain in
full force and effect insurance the types, amounts and periods of coverage as set forth in Exhibit B. Each
Party shall provide the other Party with copies of the certificates of insurance and additional insured
endorsements for all insurance coverage required by this Section. This Section shall not be construed in
any manner as waiving, restricting, or limiting the liability of either Party for any obligations imposed
under this Agreement(including but not limited to,any provisions requiring a Party to indemnify,defend,
or hold the other harmless under this Agreement).
12.2 General Insurance Requirements. Each Party shall ensure that all insurance policies
required pursuant to this Section 12:
(a) are issued by insurance companies licensed and in good standing in the state in
which the Premises are situated and otherwise are reasonably acceptable to the other Party;
(b) provide that such insurance carriers give the other Party at least ten (10) days
prior written notice of cancellation or non-renewal of policy coverage (to the extent such provision is
available on commercially reasonable terms);
(c) provide that such insurance is primary (non-contributory) insurance and any
similar insurance in the name of or for the benefit of the other Party shall be excess and non-contributory;
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(d) with respect to liability policies (not including workers compensation or
employers liability policies), provide contractual liability coverage for each Party's assumed obligations
under this Agreement as an insured contract and name the other Party as an additional insured; and
(e) to the extent required pursuant to Section 12.4 below, include a waiver of the
insurer's right of subrogation against the other Party.
12.3 Violations, Cancellations,or Reductions of Insurance. Neither Party shall do or permit to
be done anything that will violate or invalidate any insurance policy required to be maintained by said
Party hereunder.
12.4 Mutual Release and Waiver of Right of Recovery and Insurer's Subrogation Rights.
Notwithstanding anything in this Agreement to the contrary, neither Party, nor its Related Parties,nor, in
case of Tenant, its sublessees, shall be liable to the other Party or to any insurance company(by way of
subrogation or otherwise) insuring the other Party, for any loss or damage to any building, structure or
other property(whether real or personal) arising from any cause that (i)would be insured against under
the terms of any property insurance required to be carried hereunder,or(ii) is insured against under the
terms of any property insurance actually carried, regardless of whether the same is required hereunder,
even though such loss or damage might have been occasioned by the negligence of such Party or its
Related Parties. Each Party shall notify their respective insurance companies of this waiver of any rights
of subrogation that such companies may have against Landlord or Tenant, as the case may be and shall
obtain any necessary endorsement to avoid such waiver's invalidating the policy in whole or in part.
13. Indemnification.
13.1 By Tenant. To the greatest extent permitted by Applicable Law, Tenant shall indemnify,
defend, and hold harmless Landlord and Landlord's Related Parties and their respective successors and
assigns for, from and against all liability, loss, penalty, claim, demand, fine,judgment, action, costs, and
expenses (including reasonable attorneys' fees and litigation expenses), and proceedings of any nature
whatsoever based upon or arising out of damage to property, injury to persons (including death) or
violation of law, to the extent the same is caused by Tenant's or Tenant's Related Parties' (a) use or
occupancy of or activities on the Premises; (b) failure to perform any obligation or breach of any
representation or warranty under this Agreement,(c)Release of Hazardous Materials, but not Hazardous
Materials existing due to Pre-Existing Environmental Conditions; or(d) negligent or intentional wrongful
acts or omissions relating to this Agreement; except that Tenant's obligations under this Section will not
apply to indemnify Landlord or any Landlord Related Parties against their own negligence or intentional
wrongful acts or omissions.
13.2 By Landlord. To the greatest extent permitted by Applicable Law, Landlord shall
indemnify,defend,and hold harmless Tenant and Tenant's Related Parties and their respective successors
and assigns for, from and against all liability, loss, penalty, claim, demand, fine,judgment, action, costs,
and expenses (including reasonable attorneys' fees and litigation expenses), and proceedings of any
nature whatsoever based upon or arising out of damage to property, injury to persons(including death)
or violation of law, to the extent the same is caused by or attributable to (a) any Pre-Existing
Environmental Conditions; or (b) Landlord's or Landlord's Related Parties' (i) use or occupancy of or
activities on the Subject Property other than the Premises; (ii)failure to perform any obligation or breach
of any representation or warranty under this Agreement; (iii) Release of Hazardous Materials; or (iv)
negligent or intentional wrongful acts or omissions relating to this Agreement; except that Landlord's
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obligations under this Section will not apply to indemnify Tenant or any Tenant Related Parties against
their own negligence or intentional wrongful acts or omissions.
13.3 Survival. The Parties' obligations under Sections 13.1 and 13.2 shall survive termination
of this Agreement.
14. Default and Remedies.
14.1 Events of Default by Tenant. Each of the following events shall constitute an event of
default of this Agreement by Tenant(a Tenant"Default"or"Event of Default"):
(a) If Tenant files a petition in bankruptcy or insolvency or for reorganization under
any bankruptcy act, or shall voluntarily take advantage of any such act by answer or otherwise, or shall
make a general assignment for the benefit of creditors;
(b) If involuntary proceedings under any bankruptcy law or insolvency act are
instituted against Tenant, or if a receiver or trustee shall be appointed for all or substantially all of the
property of Tenant, and such proceedings are not dismissed, or the receivership or trusteeship vacated
within one hundred twenty(120)days after the institution or appointment;
(c) If Tenant fails to pay to Term Rent or Additional Rent when due, taking into
account any grace period for payment provided hereunder, and thereafter fails to pay such sum within
ten(10) business days after receipt from Landlord of written notice of such failure;
(d) If Tenant fails to provide or maintain the insurance required under this
Agreement,and such failure continues for thirty(30)business days after receipt from Landlord of written
notice of such failure;
(e) If this Agreement or the interest of Tenant under this Agreement is assigned,
sublet or otherwise transferred to or shall pass to or devolve on any other person or party,voluntarily or
involuntarily,except in the manner expressly permitted in this Agreement;or
(f) If Tenant fails to perform or comply with any other obligation or requirement of
this Agreement, and if the nonperformance continues for a period of thirty (30) days after notice of
nonperformance or violation given by Landlord to Tenant or, if the performance cannot be reasonably
accomplished within the thirty(30)day period,Tenant does not commence performance within the thirty
(30)day period and thereafter diligently pursue performance or cure of such violation.
14.2 Landlord's Remedies. Upon an Event of Default by Tenant and failure to cure, or
commence curing, such Event of Default beyond any applicable time period set forth in this Agreement,
including pursuant to Section 14.1 above, but subject to the rights of any Leasehold Mortgagee provided
under this Agreement or any other Agreement between Landlord and any such Leasehold Mortgagee and
Landlord's duty to reasonably mitigate its damages, Landlord may exercise such rights and remedies as
may be available under Applicable Law (except in no event shall Tenant be liable for consequential,
incidental, indirect, special or punitive damages) and specifically may take any one or more of the
following actions,each being cumulative and not exclusive in nature.
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(a) Landlord may recover all Term Rent and Additional Rent due and owing under
this Agreement;
(b) Landlord may terminate this Agreement;
(c) If Landlord terminates this Agreement pursuant to its terms, if Tenant fails to
vacate and surrender the Premises during the Removal Period as required by this Agreement, Landlord
may re-enter the Premises and,without limitation,remove the personal property and personnel of Tenant
and Tenant's Related Parties, and store the property in a public warehouse or at a place reasonably
elected by Landlord,at the expense of Tenant;and/or
(d) Landlord may seek to have a receiver appointed to protect Landlord's interest in
the Premises and enforce Landlord's rights under this Agreement.
14.3 Events of Default by Landlord.it shall constitute an event of default of this Agreement by
Landlord (a Landlord "Default" or "Event of Default") if Landlord fails to perform or comply with any
obligation or requirement of this Agreement, and if the nonperformance continues for a period of thirty
(30)days after notice of nonperformance or violation given by Tenant to Landlord or, if the performance
cannot be reasonably accomplished within the thirty (30) day period, Landlord does not commence
performance within the thirty (30) day period and thereafter diligently pursue performance or cure of
such violation.
14.4 Tenant's Remedies. Upon an Event of Default by Landlord, Tenant may exercise such
rights and remedies as may be available under Applicable Law to recover damages for such Default or to
specifically enforce Landlord's obligation or enjoin Landlord's breach, or without waiving or limiting its
other rights and remedies available under Applicable Law(all of which are cumulative)Tenant may,at its
option (but without obligation) proceed to cure such Default; and in any event, if Landlord is in Default
under any of its obligations under this Agreement and such default materially interferes with Tenant's
Permitted Use, Tenant will be entitled to an abatement of Term Rent hereunder in proportion to the
extent of and during the period of any such interference. If Tenant expends any sums in curing Landlord's
Default as permitted above, all reasonable sums incurred by Tenant(together with Tenant's reasonable
cost of funds) shall be reimbursed by Landlord to Tenant within thirty (30)days following Landlord's
receipt of written demand therefor accompanied by reasonable supporting documentation of such costs,
and if Landlord fails to repay the same when due, such amounts will accrue interest at the Default Rate
and Tenant may deduct such amount from any installment of Term Rent that becomes due hereunder or
from any other payments due hereunder or under any other agreement, including the BSA,from Tenant
to Landlord until Tenant is fully reimbursed.
15. Quiet Enjoyment. Tenant shall be entitled to, and Landlord shall warrant and defend, Tenant's
peaceful and quiet enjoyment and possession of the Premises in accordance with the terms and
conditions of this Agreement.
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16. Termination and Surrender; Removal.
16.1 Termination and Surrender.Upon the expiration or earlier termination of this Agreement,
Tenant will surrender and deliver possession of the Premises to Landlord subject to and in accordance
with the provisions of this Section.
16.2 Election to Remove Facility Improvements. No later than six (6) months prior to the
expiration of the Term, Tenant shall elect, by giving written notice to Landlord, whether the Facility
Improvements (or any portion thereof) are to remain on or be removed from the Premises. If Tenant
elects to remove the Facility Improvements,Tenant will remove such Facility Improvements and restore
the Premises to the conditions required in this Section below during the Removal Period. If Tenant elects
to leave any portion of the Facility Improvements on the Subject Property upon termination, Tenant
agrees that such Facility Improvements will become the sole property of Landlord, without payment of
any compensation, and Tenant agrees (i) to execute and deliver such documents as are reasonably
necessary to confirm title in such Facility Improvements in Landlord's name and (ii) to assign all related
Facility Governmental Approvals,entitlements,approvals and/or authorizations to Landlord,to the extent
assignable,so as to allow Landlord to operate the Facility. Notwithstanding the foregoing,if either Tenant
or Landlord terminates this Agreement prior to the expiration of the Term,Tenant will give prompt written
notice to Landlord whether the Facility Improvements are(or any portion thereof)are to remain on or be
removed from the Subject Property, and Tenant will remove such Facility Improvements and restore the
Premises to the conditions required in this Section below.
16.3 Condition Upon Surrender. In the event of termination or expiration of the Term of this
Agreement,Tenant will do the following.
(a) Except as required in connection with removal of Facility Improvements as
provided in this Agreement,Tenant will remove from the Premises and Subject Property all of Tenant's
personnel and moveable personal property,including furniture,fixtures and equipment,which is not part
of the Facility Improvements.
(b) If Tenant has either not constructed the Facility Improvements at the time of
termination of this Agreement,or if Tenant has elected to leave the Facility Improvements on the Subject
Property as provided above,then upon expiration or termination of this Agreement,Tenant will surrender
and deliver possession of the Premises,and any Facility Improvements,if any,to Landlord in the condition
which Tenant was required to maintain them during the Term according to the terms and conditions of
this Agreement, ordinary wear and tear and destruction or damage due to condemnation or casualty
excepted.
(c) If Tenant has elected to remove Facility Improvements as provided above, then
Tenant shall remove all such Facility Improvements(excluding subsurface improvements or fixtures) to
level grade during the Removal Period and leave the Premises in an orderly condition free of debris or
refuse.
17. Holdover. In the event Tenant for any reason holds over after the expiration of the Term of this
Agreement, except as permitted during the Removal Period, without written consent by Landlord, such
holding over shall not be deemed to operate as a renewal or extension of this Agreement but shall only
create a month-to-month tenancy terminable by either Party on thirty(30)days' advance written notice.
Tenant shall continue to be bound by all other pertinent provisions of this Agreement.
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18. Leasehold Mortgage Provisions.
18.1 Leasehold Mortgage. Tenant shall have the right to encumber all or any portion of its
interest in this Agreement,including the leasehold estate and all appurtenant rights thereto, any Facility
Improvements(collectively, the "Leasehold Interest") by deed of trust, mortgage, assignment of leases
and rents, assignment, security agreement and/or other security interest (a "Leasehold Mortgage");
provided that any such conveyance or pledge of Tenant's interest shall be expressly subject and
subordinate to the covenants, conditions and restrictions set forth in this Agreement, and provided that
such conveyance or pledge does not create any encumbrance of any kind on Landlord's Subject Property
other than Tenant's Leasehold Interest therein. Tenant covenants and agrees to pay the indebtedness
secured by any Leasehold Mortgage entered into in compliance with the provisions thereof, when the
same shall become due and payable,and to perform, when such performance is required, all obligations
of the mortgagee thereunder. Tenant further agrees not to suffer or permit any default to occur and
continue under any Leasehold Mortgage beyond any applicable cure period. The Leasehold Mortgage
shall specify that the indebtedness is that of Tenant only and is not the indebtedness of Landlord and that
the lien of the Leasehold Mortgage is limited to Tenant's Leasehold Interest. Any Leasehold Mortgage
must,by its own terms, have a stated maturity date which is no later than the expiration of the Term,and
Tenant covenants that it will be so paid and that the Leasehold Interest will be released from such lien
prior to the expiration of the Term.Tenant shall cause a true, complete, and correct copy of the original
of each Leasehold Mortgage,together with written notice containing the name and address of the holder
thereunder ("Tenant's Lender") to be delivered to Landlord within ten (10) days of Tenant's execution
and delivery of such Leasehold Mortgage.
18.2 In connection with any Leasehold Mortgage, Landlord agrees as follows:
(a) Notice of Default. If Tenant or Tenant's Lender has delivered to Landlord prior
written notice of the address of Tenant's Lender,Landlord shall transmit to Tenant's Lender a copy of any
notice of default given under this Agreement (a "Tenant Default"), concurrently with such notice being
given to Tenant.
(b) Lender Cure Period. In the event of any Tenant Default, Tenant's Lender shall
have the same periods as are given to Tenant for remedying such Tenant Default plus, in each case, an
additional period of sixty (60) days, and in such event Tenant's Lender, without prejudice to its rights
against Tenant, shall have the right to cure such Tenant Default within the applicable grace periods
provided for herein, and Landlord shall accept such performance by Tenant's Lender as though the same
had been done or performed by Tenant. Upon the occurrence of any Tenant Default, if Tenant's Lender
gives Landlord written notice prior to the expiration of the applicable cure period that it intends to
undertake the curing of such Tenant Default,or to cause the same to be cured, or to exercise its rights to
acquire the leasehold interest of Tenant by foreclosure or otherwise, and provided that Tenant's Lender
promptly commences and proceeds with all due diligence to effect a cure of Tenant's Default,whether by
performance on behalf of Tenant of its obligations under this Agreement,or by entry on the Premises by
foreclosure or otherwise, then Landlord shall not terminate or take any action to effect a termination of
this Agreement or reenter,take possession of or relet the Premises or similarly enforce rights under this
Agreement so long as Tenant's Lender is undertaking to cure such Tenant Default with all due diligence
and in good faith. In all such events,to the extent that any such Tenant Default materially and adversely
affects the operations of the WWTP Business, Landlord shall have the right to cure any such Tenant
Default by engaging in reasonable self-help remedies, or to take any other action with respect to the
Facility which is reasonably necessary for Landlord to ensure the operation of the WWTP Business in the
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ordinary course of business, and Landlord shall be entitled to recover from Tenant any reasonable costs
and expenses incurred in connection therewith.
(c) Prior Consent of Lender. If Tenant's Lender has previously delivered to Landlord
written notice of the address of Tenant's Lender, no surrender(except a surrender upon the expiration of
this Agreement or upon termination of this Agreement by Landlord pursuant to the provisions of this
Agreement and subject to Tenant's Lender's cure rights hereunder) by Tenant to Landlord of this
Agreement,or of the Premises,or any part thereof, or of any interest therein,and no termination of this
Agreement by Tenant shall be valid or effective, and neither this Agreement nor any of the terms hereof
may be amended, modified, changed or canceled and no consent of Tenant to any of the foregoing shall
be valid or effective without the prior written consent of Tenant's Lender. Tenant's Lender shall provide
its written consent (or any reasonable objections thereto) to such surrender, termination, amendment,
modification, or cancellation of this Agreement within thirty (30) days of written notice by Landlord or
Tenant to Tenant's Lender requesting the same, and if no such written consent is received within such
thirty (30) period, then Landlord or Tenant shall send a second notice to Tenant's Lender marked
"URGENT: LENDER RESPONSE REQUESTED" in the subject line. If Tenant's Lender fails to provide its
consent after ten (10)days following such second notice, then Tenant's Lender shall be deemed to have
consented to such request.
(d) Amendments at Request of Lender.At Tenant's request,and at Tenant's sole cost
and expense, Landlord shall amend this Agreement to include any provisions that may reasonably be
requested by an existing or prospective Tenant's Lender,and shall execute such additional documents as
may reasonably be required to evidence such Tenant's Lender's rights hereunder;provided,however,that
such amendment shall not materially impair the rights or materially increase the liabilities of Landlord
under this Agreement, nor unreasonably interfere with the WWTP Business operations.
(e) Extension of Termination. If Landlord elects to terminate this Agreement by
reason of any Default of Tenant,the Tenant's Lender, in addition to the other rights available under this
Agreement,shall also have the right to postpone and extend the specified date for the termination of this
Agreement as fixed by Landlord in its notice of termination, for a period of six(6) months, provided that
the Tenant's Lender shall cure or cause to be cured any then-existing defaults in payment of Term Rent
and Additional Rent and meanwhile pay the Term Rent and Additional Rent (but not less than$1,000.00
per month), and provided further that the Tenant's Lender shall forthwith take steps to acquire or sell
Tenant's interest in this Agreement by foreclosure of the Permitted Leasehold Mortgage or otherwise and
shall prosecute the same to completion with all due diligence. If,at the end of the six-month period, the
Tenant's Lender is actively engaged in steps to acquire or sell Tenant's interest,the time of the Tenant's
Lender to comply with the provisions of this Section 19(c) shall be extended for such period as is
reasonably necessary to complete such steps with reasonable diligence and continuity.
(f) Loss Payee. Landlord agrees that the name of the Tenant's Lender may be added
to the "Loss Payable Endorsement" of any and all insurance policies required to be carried by Tenant or
Landlord.
(g) New Lease. Landlord agrees that in the event of termination of this Agreement
by reason of any Default by Tenant, and if Tenant's Lender or nominee agrees to operate the Facility
substantially in accordance with the terms and conditions of the BSA,Landlord will enter into a new lease
of the Premises with the Tenant's Lender or its nominee,for the remainder of the Term, effective on the
date of such termination,at the Term Rent and Additional Rent and on the terms, provisions,covenants,
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and agreements contained in this Agreement and subject only to the same conditions of title as this
Agreement is subject to on the date this Agreement is executed, and to the rights, if any, of any parties
then in possession of any part of the Premises, provided:
(i) The Tenant's Lender or its nominee shall make written request on
Landlord for such new lease within fifteen (15)days after the date of termination indicated in the notice
of termination given to Tenant's Lender and such written request shall be accompanied by payment to
Landlord of Term Rent and Additional Rent then due to Landlord under this Agreement.
(ii) The Tenant's Lender or its nominee shall pay to Landlord, at the time the
new lease is executed and delivered,any and all Term Rent and Additional Rent that would be due at the
time of the execution and delivery of the new lease pursuant to this Agreement but for such termination,
and in addition any expenses, including reasonable attorneys' fees, to which Landlord shall have been
subjected by reason of such Default.
(iii) The Tenant's Lender or its nominee shall ensure that any security and
guaranty(ies) are in full force and effect, and shall perform and observe all covenants contained in this
Agreement on Tenant's part to be performed and further shall remedy any other conditions that Tenant
under the terminated Agreement was obligated to perform;and upon execution and delivery of such new
lease, any subleases, security that may have been assigned and transferred previously by Tenant to
Landlord,as security under this Agreement,shall then be held by Landlord as security for the performance
of all the obligations of Tenant under the new lease.
(iv) Such new lease shall be expressly made subject to the rights, if any, of
Tenant under the terminated Agreement.
(v) The Tenant's lender or its nominee,as tenant under such new lease,shall
have the same right,title,and interest in and to the Facility Improvements on the Premises as Tenant had
under the terminated Agreement.
(h) Status Defaults. Nothing contained in this Agreement requires the Tenant's
Lender or its nominee to cure any Default that occurs as a result of the status of Tenant,such as Tenant's
bankruptcy or insolvency, or to discharge any Lien, charge, or encumbrance against Tenant's interest in
this Agreement junior in priority to the lien of the Permitted Leasehold Mortgage.
(i) Proceedings. Tenant's Lender shall be given notice of any arbitration or other
proceeding or Dispute by or between the Parties and shall have the right to intervene and be made a party
to any such arbitration or other proceeding. In any event, Tenant's Lender shall receive notice of, and a
copy of, any award or decision made in the arbitration or other proceeding. Tenant shall be responsible
for providing all notices required under this paragraph.
(j) Awards. Any award or payment in condemnation or eminent domain payable to
Tenant pursuant to this Agreement shall be paid to the Tenant's Lender,for the benefit of the Parties,as
applicable, and applied in the manner specified in this Agreement.
(k) Insurance Proceeds. No property loss claims shall be settled and no agreement
will be made in respect of any award or payment in condemnation or eminent domain without in each
case the prior written consent of the Tenant's Lender.
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(I) No Imposition. Except as otherwise provided in this Section, no liability for the
payment of Term Rent and Additional Rent or the performance of any of Tenant's covenants and
agreements shall attach to or be imposed on the Tenant's Lender(other than any obligations assumed by
the Tenant's Lender),all such liability(other than any obligations assumed by the Tenant's Lender)being
expressly waived by Landlord.
(m) Landlord Certificate. Landlord, within ten (10) days after request in writing by
Tenant or any Tenant's Lender,shall furnish a written statement,duly acknowledged,that this Agreement
is in full force and effect and unamended,or if there are any amendments,such statement will specify the
amendments, and that there are no Defaults by Tenant that are known to Landlord, or if there are any
known Defaults,such statement shall specify the Defaults Landlord claims exist.
(n) Return of Payment. No payment made to Landlord by any Tenant's Lender shall
constitute agreement that such payment was, in fact, due under the terms of this Agreement; and the
Tenant's Lender having made any payment to Landlord pursuant to Landlord's wrongful, improper, or
mistaken notice or demand shall be entitled to the return of any such payment or portion, provided it
shall have made demand not later than one year after the date of its payment.
(o) Confirmation Agreement. Landlord,on request,shall execute,acknowledge,and
deliver to each Tenant's Lender an agreement prepared at the sole cost and expense of Tenant, in form
satisfactory to the Tenant's Lender and Landlord, among Landlord,Tenant, and the Permitted Leasehold
Mortgagee,agreeing to all the provisions of this Section.
(p) No Subordination of Fee. Landlord shall at no time be required to subordinate its
fee simple interest in the Premises to the lien of any leasehold mortgage, nor to mortgage its fee simple
interest in the Premises as collateral or additional security for any leasehold mortgage. Landlord shall
attorn to any Tenant's Lender or any other person who becomes Tenant by,through,or under a Tenant's
Lender.
(q) Landlord Bankruptcy. If Landlord declares bankruptcy and Landlord's bankruptcy
trustee rejects this Agreement when there is a Permitted Leasehold Mortgagee,Tenant's right to elect to
terminate this Agreement or to retain its rights pursuant to 11 USC §365(h)(1) shall be exercised by the
Permitted Leasehold Mortgagee.
18.3 Waiver and Release of Lien. Upon request by Tenant's Lender, Landlord shall waive and
release any lien it may have in and to the Facility and the Facility Improvements or any of Tenant's
property,and Landlord acknowledges and understands that Tenant may from time to time grant a security
interest to Tenant's Lender with respect to the Facility and Facility Improvements or other property of
Tenant(all such property and the records relating thereto shall be hereafter called the"Collateral").
19. Subordination and Non-Disturbance. This Agreement shall be subordinate to any financing now
existing or hereafter placed upon the Premises or any portion thereof by Landlord, and to any and all
advances to be made thereunder and to interest thereon and all modifications thereof(each,a"Landlord
Mortgage"). The preceding provision shall be self-operative,but shall be conditioned on Tenant's receipt
of a non-disturbance agreement from the holder of a Landlord Mortgage, in a form agreeable to Tenant
and any Tenant's Lender stating that such holder shall not disturb or interrupt Tenant's continued quiet
enjoyment of the Premises absent an Event of Default of this Agreement by Tenant(beyond any applicable
cure period and subject to the rights of Tenant's Lender provided in this Agreement).
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20. Estoppel Certificates.Tenant and Landlord shall each,at any time and from time to time without
charge,and within ten (10)days after written request therefor by the other Party,complete,execute,and
deliver to the requesting Party a written statement concerning the terms of this Agreement,whether it is
in full force and effect, if there are any Defaults thereunder, and such other information as may be
reasonably required by the requesting Party, but only as typically provided in an estoppel certificate.
21. Property Damage or Destruction.
21.1 Restoration or Termination.In the event the Facility Improvements or any portion thereof
are damaged or destroyed by fire or any other insured peril,Tenant will or will cause to repair and restore
such Facility Improvements in substantially the same location and condition as existed before the damage
or destruction occurred. Any insurance proceeds of Tenant's policies, if any, shall be paid to and shall
belong solely to Tenant and any deficiency between insurance proceeds and the actual cost of repair,
restoration,replacement or demolition shall be the risk and liability of Tenant;provided,however,Tenant
shall have no obligation to repair or restore if(i)Tenant reasonably determines that the damage exceeds
fifty percent(50%)of the replacement cost thereof; (ii)Tenant reasonably determines that the repairs or
restoration will take longer than one (1) year to complete; (iii) less than three (3) years remain on the
then-current Term (excluding any Extension Terms); or (iv) the damage or destruction also includes
damage or destruction to the WWTP Business, which materially adversely affects the operational utility
of the Premises, which Tenant reasonably determines will take longer than one (1) year to repair and
restore. In any of such events (i), (ii), (iii), or(iv) described in the preceding sentence, Tenant shall have
the option to elect either to repair and restore the damaged Facility Improvements to substantially the
same location and condition as existed before damage occurred or to terminate this Agreement. In the
event Tenant elects to terminate this Agreement: (i) Tenant shall give Landlord written notice of such
termination within ninety(90)days of the date of damage.
21.2 Abatement. In the event the Facility Improvements or any portion thereof is damaged or
destroyed, to whatever extent, but Tenant elects to maintain this Agreement, during the time of repair
and restoration,Tenant shall be entitled to an equitable reduction of Term Rent based on the remaining
operational utility of the Premises for the Permitted Use as a result of the damage and/or destruction so
long as Tenant is at all times diligently pursuing such repair or restoration to completion with commercially
reasonable efforts.
21.3 Damage or Destruction to WWTP Business. In the event the WWTP Business or any
portion thereof,shall be damaged or destroyed by fire or any other insured peril,then and in such event,
unless Tenant elects to terminate this Agreement as provided above, Landlord will or will cause to repair
and restore the damaged property or facilities in substantially the same location and condition as existed
before damage occurred and any insurance proceeds of Landlord's policies, if any, shall be paid to
Landlord and used by Landlord solely for purposes of performing such repairs and restoration, and shall
belong solely to Landlord and any deficiency between insurance proceeds and the actual cost of repair,
restoration, replacement or demolition shall be the risk and liability of Landlord.Tenant shall be entitled
to an equitable reduction of Term Rent based on the remaining operational utility of the Premises for the
Permitted Use as a result of the damage and/or destruction. In the event of any Default by Landlord to
perform its repair, restoration and replacement obligations in accordance with this Section,Tenant may
immediately exercise such rights and remedies as may be otherwise permitted in this Section 21 upon
such Default by Landlord including proceeding to cure such Default.
22. Condemnation.
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CONFIDENTIAL
22.1 Temporary Taking. if,during the Term of this Agreement, (i) the use of the whole or any
portion of the Premises is temporarily taken under power of eminent domain,or(ii)if the use of the whole
or any portion of the WWTP Business is temporarily taken under power of eminent domain and, as a
result,the operational utility of the Premises for the Permitted Use has been diminished such that Tenant
(as determined by Tenant in its reasonable discretion) is unable to commercially operate the Facility,
Tenant shall be entitled to the entire compensation and award for any and all damage, loss or injury
suffered to Tenant's interest in this Agreement as a result of such temporary taking, and this Agreement
shall continue in full force and effect without any abatement of the rental or other payments required to
be made by Tenant hereunder; provided, however, that if such temporary use extends beyond the Term
of this Agreement,the compensation and award shall be apportioned between Landlord and Tenant in an
equitable manner upon which Landlord and Tenant shall agree, and if Landlord and Tenant shall not be
able to agree on such apportionment, such award shall be apportioned between them in an equitable
manner by the court or administrative body having jurisdiction over such proceedings.
22.2 Total Taking of Whole or Affecting Whole by Eminent Domain. If,during the Term of this
Lease, (I) all of the Premises is permanently taken under power of eminent domain, (ii) a portion of the
Premises is taken under power of eminent domain with resulting damages to any Facility Improvements
and/or Tenant determines in its reasonable discretion that the operational utility of the Premises for the
Permitted Use has been diminished such that Tenant is unable to commercially operate the Facility,or(iii)
the whole or any portion of the WWTP Business is taken under power of eminent domain and Tenant
determines in its reasonable discretion that the operational utility of the Premises for the Permitted Use
has been diminished such that Tenant is unable to commercially operate the Facility,then this Agreement
shall on the date of vesting of title in such proceedings terminate, but subject,to the extent applicable,to
the provisions of Section 16(Termination and Surrender;Removal). The total award shall be apportioned
between Landlord and Tenant in an equitable manner upon which Landlord and Tenant shall agree, and
if Landlord and Tenant shall not be able to agree on such apportionment,such award shall be apportioned
between them in an equitable manner by the court or administrative body having jurisdiction over such
proceedings.
22.3 Substantial Taking Not Affecting Whole. If, during the Term of this Lease, (i) a portion of
the Premises is taken under power of eminent domain and Tenant determines that the portion of the
Premises not taken may still be commercially operated for the Permitted Use and Tenant does not elect
to terminate this Agreement as provided above; or(ii)if any portion of the WWTP Business is taken under
power of eminent domain and Tenant determines that Tenant may still commercially operate the Facility
notwithstanding such taking,then:
(a) this Agreement shall upon vesting of title in such proceedings terminate as to the
area so taken,
(b) the total award shall be apportioned between Landlord and Tenant in an
equitable manner upon which Landlord and Tenant shall agree, and if Landlord and Tenant shall not be
able to agree on such apportionment, such award shall be apportioned between them in an equitable
manner by the court or administrative body having jurisdiction over such proceedings,and
(c) Term Rent shall abate from and after vesting of title in such proceedings in the
proportion that the area of the Facility Site and Interconnection Area taken bears to the entire aggregate
area of the entire Facility Site and Interconnection Area.
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CONFIDENTIAL
22.4 Operational Alternatives. Notwithstanding the foregoing provisions of this Section 22, in
the event of any taking by eminent domain affecting the Premises or the operational utility thereof,
Landlord agrees to work with Tenant in good faith to identify alternative areas, facilities, and/or
operational solutions in order to provide Tenant with alternative arrangements for the Permitted Use that
have equivalent operational utility to the leasehold interest and ancillary rights originally granted in this
Lease,to the extent such alternatives are reasonably available within the Port or otherwise under control
of the Landlord.
23. Representations and Warranties; Covenants.
23.1 By Landlord and Tenant.As of the Effective Date,and on an ongoing basis throughout the
Term,each of Landlord and Tenant represents and warrants,each to the other:
(a) that it is duly formed or incorporated, as applicable,validly existing,and in good
standing under the laws of the state of its formation or incorporation, as applicable,and is fully qualified
to do business in the State of Iowa;
(b) that it has the right and authority to enter into this Agreement and to perform its
obligations hereunder; the execution and delivery by it of this Agreement, and the performance of its
obligations hereunder, will not result in the breach,contravention, or violation of any Applicable Law, its
organizational documents,or other material agreement or arrangement between it and any other person,
entity,or party;and
(c) that each of the individuals whose signature is set forth at the end of this
Agreement have been duly authorized by all necessary entity action on its part to execute and delivery
this Agreement on its behalf.
23.2 By Landlord. As of the Effective Date, Landlord represents, warrants, and covenants as
follows.
(a) Title to Subject Property.Landlord owns indefeasible fee simple title in and to the
Subject Property free and clear of all liens and encumbrances. If Tenant seeks leasehold title insurance
with respect to this Agreement, Landlord agrees to execute such standard owner's affidavit or other
instruments as may be required by the title insurance company in connection with the issuance of such
title insurance.
(b) Access.The Subject Property and the Premises has,and shall have throughout the
Term, legal,open access to a public roadway.
(c) Supply Water. Landlord has, and shall have throughout the Term, all
Governmental Approvals required to provide the Supply Water pursuant to this Agreement.
(d) Environmental Baseline Documents; Conditions. The Environmental Baseline
Documents provided hereunder by Landlord are and will be complete and accurate and that Landlord has
(and shall have) no knowledge of any other documents not provided, but which are pertinent to the
Subject Property's compliance with Environmental Laws and/or the presence of Pre-Existing Hazardous
Materials which are not disclosed by such Environmental Baseline Documents.
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CONFIDENTIAL
(e) Environmental Conditions. (a) Except only as expressly set forth in the
Environmental Baseline Documents,no Hazardous Materials are present on,in or under,or are emanating
from, the Subject Property or the Premises, and no threatened or actual Release of any Hazardous
Materials has occurred on,in or under the Subject Property or Premises,and no Hazardous Materials have
been at any time generated, used, treated or stored on, in or under, or transported to or from, the
Premises or Subject Property, or on adjacent property that might migrate onto the Premises or Subject
Property, (b) no part of the Premises or Subject Property contains any underground storage tanks or
vessels of any kind which are not in compliance with Environmental Laws, (c)there is no friable asbestos
or asbestos containing material on, in or under the Premises or the Subject Property, (d) neither the
Premises or the Subject Property is listed in the National Priorities List or the Comprehensive
Environmental Response Compensation and Liability Information System promulgated pursuant to the
Comprehensive Environmental Response Compensation and Liability Act("CERCLA")or similar state lists
or laws, (e) neither the Premises nor the Subject Property has been used to treat or store or dispose of
materials regulated under the Resource Conservation and Recovery Act ("RCRA"), nor has the Premises
or the Subject Property been subject to RCRA interim status or required to obtain an RCRA permit or
permit application,(f)there are no pending or threatened claims under or relating to Environmental Laws
against Landlord or,to the knowledge of Landlord,any predecessor in title relating to the Premises or the
Subject Property, and (g) all documents, records and information of any kind within the possession or
control of Landlord and relating to the warranties in this Section have been made available to Tenant and
shall continue to be for the Term of this Lease and for a period of three years thereafter.
23.3 WWTP Business Compliance. The WWTP Business is in compliance with all Applicable
Laws and Governmental Approvals required for the operation thereof in connection with the commercial
operation of the Facility in accordance with the Permitted Use, including, without limitation, all permits
and Governmental Approvals required under Applicable Laws with respect to air quality, water quality,
and any other relevant requirements.
23.4 Due Diligence Materials;Title and Other Matters. Landlord agrees,at no material cost to
Landlord,to reasonably and promptly assist Tenant in Tenant's due diligence inspection,investigation and
evaluation of the Subject Property and as reasonably requested by Tenant in connection with the
facilitation of the Permitted Use, including, without limitation, by assisting in title curative matters and
permitting matters, and to, upon request by Tenant, provide Tenant with or make available to Tenant
copies of such title documents, land surveys, property reports or assessments, permits, notices, and/or
other material documents relating to the Subject Property as are in Landlord's possession or control.
24. Notices. All notices, requests, demands, and other communications hereunder shall be given in
writing and shall be: (a) personally delivered; (b)sent by email or other electronic means of transmitting
written documents; or(c) sent to the Parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier
service. All such notices, demands, or requests shall be to the following addresses, or to such other
address as either Party may designate, in writing,from time to time:
If to Landlord:
City of Waterloo
3505 Easton Avenue
Waterloo, IA 50702
Attention:Waste Management Operations Director
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CONFIDENTIAL
Telephone:(319)291-4553
Email:brian.bowman@waterloo-ia.org
With a copy to:
City of Waterloo
715 Mulberry Street
Waterloo, IA 50703
Attention: City Attorney
Telephone: (319)291-4327
If to Tenant:
Trillium Transportation Fuels, LLC
2929 Allen Parkway,Suite 4100
Houston TX 77019
Attention:Charles Love
Telephone:(304)947-2174
Email:Charles.love@TrilliumEnergy.com
With a copy to:
Trillium Transportation Fuels, LLC
2929 Allen Parkway,Suite 4100
Houston TX 77019
Attention: Legal Department
Telephone:(405)302-6793
Email: Morris.Collie@loves.com
Notices shall be deemed given on the earlier of actual delivery or refusal of a Party to accept delivery
thereof provided that notices sent electronically shall be deemed given on the date delivered, but only if
delivered before 5:00 PM Pacific Standard Time as shown on an electronic transmittal confirmation sheet
and simultaneously transmitted by another means allowed hereunder.
25. General.
25.1 Time is of the Essence; Force Majeure.
(a) Definition of Force Majeure. As used in this Agreement, "Force Majeure" shall
mean, with respect to either Party, any events, occurrences or circumstances, insofar as the same are
beyond the reasonable control of that Party and that prevents,impedes,or delays fulfillment by that Party
of its obligations or the satisfaction of a condition under this Agreement,including,without limitation,the
following: (a) fires, explosions, earthquakes, droughts, floods, tornados, and other natural disasters or
extreme weather conditions; (b) war, hostilities, invasion, act of foreign enemies, governmental
requisition, or embargo; (c) rebellion, revolution, insurrection, or civil war; (d) riot, commotion, strikes,
slow-downs, lock outs, or public disorder, unless solely restricted to the employees of either Party; (e)
acts or threats of terrorism;(g)shortages of or inability to procure materials;; or(h) epidemic, pandemic,
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CONFIDENTIAL
public health emergency, and governmental orders or regulations relating to same. Provided, "Force
Majeure"does not include the lack of funds of either Party.
(b) Notice of Force Majeure. If performance by either Party is delayed or precluded
by an event of Force Majeure, the affected Party shall notify the other Party as soon as reasonably
practicable of the nature and extent of the event and the expected impact on performance under this
Agreement, including the expected length of time the Force Majeure is anticipated to interfere with
performance.
(c) Effect of Force Majeure.Notwithstanding any other provisions of this Agreement,
neither Party shall be deemed to be in breach of this Agreement or otherwise be liable to the other Party
for any delay in performance or non-performance of any of its obligations under this Agreement to the
extent that the delay or non-performance is due to Force Majeure,and the time for performance of that
obligation shall be extended accordingly.The Party invoking Force Majeure shall use reasonable efforts
to remedy the situation so far as reasonably possible and, in the meantime, will comply with its other
obligations under this Agreement.The Party invoking Force Majeure shall give prompt written notice to
the other Party of the cessation of the cause thereof.
25.2 Public Statements; Confidentiality. Neither Party shall make any public disclosure,
including any press release or announcement, either in writing or orally, with respect to this Agreement
or the transactions contemplated herein without the prior written consent of the other Party, which
consent shall not be unreasonably withheld. Neither Party shall publish, release,disclose,or disseminate
to any third party any Confidential Information, as defined below, without the prior written consent of
the other Party;provided, however, that Confidential Information may be disclosed to a Party's affiliates
and its and their directors, partners, officers, employees, members, managers, advisors, attorneys,
accountants, financing sources (including equity providers and Lenders) or representatives (collectively,
"Representatives"), provided that (a) such Representatives shall be informed by the Party of the
confidential nature of such Confidential Information and shall be directed to keep such information
confidential, and (b) each Party shall be liable for any breaches of this Section by any of its
Representatives. The confidentiality obligations of this Section do not apply to any information,
knowledge,or data that is required to be disclosed by any law, regulation,legal process,court,regulatory
body, or governmental authority, including in connection with the resolution of any dispute hereunder.
The provisions of this Section 26.2 shall survive termination of this Agreement.As used in this Agreement,
"Confidential Information" means (a) any proprietary information, knowledge, or data that is not
generally known or readily ascertainable by third parties which is disclosed by either Party to the other
pursuant to or in connection with this Agreement(whether orally or in writing,and whether or not such
information is expressly stated to be confidential or marked as such)and (b)the terms and conditions of
this Agreement.Confidential Information shall not include information that: (i) at the time of disclosure,
is generally publicly known or available by publication,commercial use,or otherwise;(ii)becomes publicly
known other than as a result of disclosure in breach of this Agreement by receiving Party or its
Representatives; (iii) is known by or was in the possession of the receiving Party(as evidenced in written
documentation), through no wrongdoing and prior to it being furnished by disclosing Party under this
Agreement; (iv) becomes available to the receiving Party (as evidenced in written documentation) on a
non-confidential basis from a source other than the disclosing Party or its Representatives; (v) is or was
independently developed by the receiving Party without the use of Confidential Information (and such
independent development is documented in writing); or (vi) is requested or otherwise required to be
disclosed by any governmental authority or regulatory entity.
25.
CONFIDENTIAL
25.3 Independent Contractor; No Partnership. Each Party is and shall perform this Agreement
as an independent contractor, and, as such, shall have and maintain complete control over all of its
employees,agents,and operations.Neither Party, nor any of its agents or employees,shall be,represent,
act, purport to act, or be deemed to be the agent, representative, employee, partner, or servant of the
other Party. Nothing in this Agreement shall be construed as constituting a joint venture or partnership
between the Parties.
25.4 No Third-Party Beneficiaries. Except as expressly set forth in this Agreement, including
with respect to any Leasehold Mortgagee, there are no intended third-party beneficiaries to this
Agreement.
25.5 Attorney's Fees and Costs. In the event of any action at law or in equity between the
Parties, including arbitration, to enforce any of the provisions hereof, any unsuccessful Party to such
litigation (as determined by the tribunal thereof)shall pay to the prevailing Party all costs and expenses,
including reasonable attorneys'fees(including costs and expenses incurred in connection with all appeals
and in any Bankruptcy or similar proceeding)incurred by the prevailing or non-defaulting party,and these
costs,expenses and attorneys'fees may be included in and as part of the judgment.
25.6 Dispute Resolution.
(a) Management Negotiations. The Parties shall use all reasonable efforts to settle
disputes through negotiation between authorized members of each Party's senior management. Either
Party may,by written notice to the other Party,request a meeting to initiate negotiations to be held within
fifteen (15) business days after the other Party's receipt of such request, at a mutually agreed time and
place. If the matter is not resolved within thirty(30) business days after their first meeting, either Party
may pursue arbitration in accordance with Section 25.6(b).
(b) Arbitration. Any controversy or dispute not amicably resolved by the Parties or
through management negotiations shall be settled by binding arbitration. Either Party may initiate
arbitration by giving written notice to the other Party. The notice shall state the nature of the claim or
dispute, the amount involved, if any, and the remedy sought. The dispute shall be submitted to an
independent arbitrator mutually selected by the Parties. The decision of the appointed independent
arbitrator shall be final and binding on the Parties.In rendering a decision,the arbitrator shall comply with
the Rules of the American Arbitration Association ("AAA")then in effect. Notwithstanding that the MA
Rules may provide otherwise, the prevailing Party in any such arbitration shall be entitled to recover its
arbitration costs, inclusive of counsel, expert, arbitrators'and administrative fees, from the losing Party,
as determined by the arbitrator(s) in accordance with this Agreement. Any such arbitration shall be
conducted in Waterloo, Iowa. The Parties hereby irrevocably submit to the jurisdiction of the federal and
state courts having jurisdiction for Black Hawk County, Iowa, for the enforcement of any decision of the
arbitrator or for any other matter provided by Applicable Law.
(c) Performance to Continue. Unless otherwise agreed in writing, each Party shall
diligently continue to perform its obligations under this Agreement during the pendency of any disputes
or arbitration proceedings so long as all undisputed amounts payable hereunder have been paid.
(d) Notwithstanding anything to the contrary in this Section 25.6, nothing herein
limits the Parties from immediately seeking injunctive relief or specific performance of a breach or
threatened breach of this Agreement.
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CONFIDENTIAL
25.7 LIMITATION OF LIABILITY. OTHER THAN FOR TERM RENT OR ADDITIONAL RENT THEN
DUE AND OWING, AND OTHER THAN FOR TENANT'S RELEASE OF HAZARDOUS MATERIALS, TENANT'S
ENTIRE AND AGGREGATE LIABILITY TO LANDLORD ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT SHALL NOT EXCEED ONE MILLION DOLLARS ($1,000,000.00). NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,CONSEQUENTIAL,SPECIAL OR EXEMPLARY
DAMAGES(EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES),INCLUDING
BUT NOT LIMITED TO LOSS OF REVENUE OR ANTICIPATED PROFITS.
25.8 Application of Law.This Agreement shall be construed and enforced in accordance with
the laws of the State of Iowa without regard to conflict of law principles.Further,the parties stipulate that
this Agreement is deemed to have been made or entered into by them in the State of Iowa.
25.9 Waiver of Jury Trial. LANDLORD AND TENANT EACH WAIVES ANY RIGHT IT MAY HAVE TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER AGAINST THE
OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT,THE RELATIONSHIP OF LANDLORD AND TENANT,OR TENANT'S USE OR OCCUPANCY OF THE
PREMISES.
25.10 Assignment and Sublease.
(a) Successors and Assigns; Assignment Generally. This Agreement shall extend to,
be binding upon,and inure to the benefit of the Parties'respective heirs,legal representatives,successors,
and assigns. No assignments of this Agreement or any part of this Agreement shall be made by a Party
without the prior written consent of the other Party, except as expressly provided in this Section. Any
assignments not in compliance with this Section shall be void and of no effect other than as a violation of
this Agreement.
(b) Permitted Assignments.Tenant shall be entitled to assign this Agreement to any
Affiliate who agrees in writing to assume (as of the effective date of such assignment) the rights and
obligations of Tenant under this Agreement, upon which assignment, the assigning Tenant shall be
released from its obligations under this Agreement.Tenant may also freely assign a collateral or similar
interest in this Agreement for purposes of financing, in which case Landlord shall provide appropriate
consents and other information as Tenant's Leasehold Mortgagee(s) or other financing parties may
reasonably require. Landlord shall be entitled to assign this Agreement and its rights herein if it sells the
Subject Property and WWTP Business to a third party; provided that such third-party purchaser agrees in
writing to assume and be bound by all of Landlords rights and obligations hereunder and under the BSA.
(c) Sublease. Tenant may not sublease all or any portion of the Premises to any third
party without Landlord's prior written consent. Tenant may, subject to this Agreement and only during
the Term,sublease,license,or grant temporary sub-easements in and to all or any portion of the Premises
without Landlord's prior written consent to any third party off taker or interconnection provider, or to
any Affiliate of Tenant, provided that such Affiliate agrees to be bound by the Tenant's rights and
obligations under this Agreement with respect to the Premises or applicable subleased portion thereof.
No sublease will relieve Tenant of its obligations under this Agreement.
25.11 No Broker Commissions.Nothing contained in this Agreement shall impose any obligation
on Landlord or Tenant to pay a commission or fee to any party unless specifically agreed to in writing.
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CONFIDENTIAL
Tenant and Landlord each hereby agrees to indemnify,defend and hold the other harmless for,from and
against any claim for compensation or fee by any broker or agent engaged by such Party.
25.12 Entire Agreement; Amendment. This Agreement, including its Exhibits and any terms
incorporated herein by reference to other agreements, including the BSA, constitutes the entire
agreement between the Parties concerning the subject matter hereof and supersedes any and all other
communications, representations, proposals, understandings, or agreements, either written or oral,
between the Parties with respect to such subject matter. This Agreement may not be modified or
amended, in whole or in part,except by a written agreement signed by the Parties.
25.13 Non-Waiver.Any failure of either Party to enforce any of the provisions of this Agreement,
or to require compliance with any of its terms,shall in no way affect the validity of this Agreement,or any
part here of,and shall not be deemed a waiver of the right of such Party thereafter to enforce any part of
this Agreement.
25.14 Severability. If any provision of this Agreement or the application thereof to any person
or circumstance shall be invalid, illegal,or unenforceable to any extent,the remainder of this Agreement
and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted
by law.
25.15 Headings; Interpretation. The headings in this Agreement are inserted for convenience
only and are in no way intended to describe, interpret,define,or limit the scope,extent, or intent of this
Agreement or any provision of this Agreement.This Agreement has been reviewed and negotiated by the
Parties and their respective legal counsel and it shall be given a fair and reasonable interpretation in
accordance with the words contained in it without any weight being given to whether a provision was
drafted by that Party or its legal counsel. All documents incorporated into this Agreement shall be
construed and interpreted as a whole and to harmonize and give effect to all of the provisions of such
documents. As used in this Agreement, "including"shall mean"including without limitation," and "shall"
means mandatory and imperative.
25.16 Calculation of Time Periods. If the final day of a period or date of performance under this
Agreement falls on other than a business day,then the final day of the period or the date of performance
shall be deemed to fall on the next business day.As used herein,a "business day,"whether capitalized or
not, is any day other than a Saturday, Sunday, or a bank or federal or state (in the state in which
performance is to be delivered or received) legal holiday.
25.17 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall, for all purposes, be deemed an original and all of such counterparts, taken together, shall
constitute one and the same agreement.
25.18 Recording Memorandum. Simultaneous with the execution of this Agreement, or
otherwise upon request of Tenant, Landlord and Tenant shall execute a memorandum of this Agreement
including the basic terms hereof with respect to the Parties, the Premises and the Term, which Tenant
may have recorded in the official records of Black Hawk County, Iowa (the "Recording Office"), for
purposes of putting third parties on notice of this Agreement. Once the Parties have agreed upon the
precise locations of the Premises as provided in Section 2 of this Agreement,the Parties shall execute and
record an amendment to the recording memorandum showing such precise locations of the Premises,
which Tenant shall have recorded in the Recording Office.
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CONFIDENTIAL
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;SIGNATURE PAGE(S)FOLLOW]
29
CONFIDENTIAL
EXECUTED as of the Effective Date by the Parties as set forth below.
LANDLORD: TENANT:
City of Waterloo, Iowa Waterloo RNG 1 LLC
F
Name:Quentin Hart Name: Ryan Erickson
Title: Mayor Title:Vice President
CONFIDENTIAL
EXHIBIT A
SUBJECT PROPERTY
The below diagram shows potential locations for the Interconnection Point arid location of the Biogas
Upgrading Facilities. Final locations subject to engineering, permitting and other requirements.
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EXHIBIT A TO GROUND LEASE AGREEMENT
CONFIDENTIAL
EXHIBIT B
INSURANCE REQUIREMENTS
1. Tenant's Insurance:
1.1 During the Term, Tenant shall maintain commercial general liability insurance in the
amounts of one million dollars($1,000,000.00)per occurrence,and two million dollars($2,000,000)in the
aggregate, in respect to bodily injuries (including death) and property damage.
1.2 During the Term,Tenant shall maintain automobile liability insurance covering owned and
non-owned,hired vehicles,in the amounts of one million dollars($1,000,000.00)per occurrence,and two
million dollars($2,000,000)in the aggregate.
1.3 During the Term,Tenant shall maintain workers'compensation insurance Coverage A per
the statutory limits of the State of Iowa,with at least$500,000 in employers liability insurance.
1.4 During the Construction Period, Tenant shall maintain, or shall ensure that its
contractor(s) maintain, Builders Risk insurance upon the Facility Improvements during construction in
such amounts and on such terms and conditions as Tenant may deem appropriate.
1.5 During the Initial Term and any Extension Terms, Tenant shall, at all times, maintain "all
risk" property insurance upon the Facility Improvements with coverage for perils as set forth on the
Causes of Loss - Special Form in such amounts and on such other terms and conditions as Tenant may
deem appropriate.
1.6 During the Term, Tenant shall maintain "all risk" property insurance upon any personal
property owned by Tenant with coverage for perils as set forth on the Causes of Loss -Special Form in
such amounts and on such other terms and conditions as Tenant may deem appropriate.
1.7 Excess Liability: $10,000,000 per occurrence to follow the primary coverages.
1.8 Professional Errors and Omissions Liability:$1,000,000 per occurrence and$2,000,000 in
the aggregate.
1.9 Other Insurance to include(a) Liquor Liability-$1,000,000; Fire Legal Liability-$300,000;
Employee Dishonesty Bond-$100,000
2. Landlord's Insurance:
During the Term, Landlord shall maintain commercial general liability insurance in the amounts
of one million dollars($1,000,000.00) per occurrence,and two million dollars($2,000,000) in the
aggregate, in respect to bodily injuries(including death)and property damage.
EXHIBIT B TO GROUND LEASE AGREEMENT