EXHIBIT 10.13
AMENDED AND
RESTATED
GROUND
LEASE AGREEMENT
BUNGE
MILLING, INC.,
AS
LANDLORD
-and-
BIOFUELS COMPANY OF AMERICA,
LLC,
AS
TENANT
FOR
THE PROJECT SITE OF A
BIODIESEL PRODUCTION
FACILITY
TO BE
CONSTRUCTED IN DANVILLE, IL
November 3,
2006
AMENDED AND RESTATED GROUND LEASE
AGREEMENT
This AMENDED AND RESTATED GROUND LEASE
AGREEMENT (this “ Lease ”) is made and entered
into as of November 3, 2006 (the “ Effective Date
”) by and between BUNGE MILLING, INC. , an Illinois
corporation (“ Landlord ”), and BIOFUELS
COMPANY OF AMERICA, LLC, an Illinois limited liability company
(“ Tenant ”).
RECITALS
A .
Landlord is the owner of
fee simple title to that certain real property consisting of
approximately 5.924 acres of land (the “ Land ”)
located in Danville, Illinois, and legally described on
Exhibit A attached
hereto.
B .
Landlord desires to lease
the Land to and Tenant desires to lease the Land from
Landlord.
C .
Tenant, at Tenant’s
sole cost, shall construct, or cause to be constructed, on the Land
a biodiesel production facility capable of producing forty-five
(45) million gallons of biodiesel fuel per year (the “
Plant ”). The Plant, together with all
improvements to be constructed on the Land, or offsite, in
connection with the Plant are sometimes collectively referred to
herein as the “ Improvements ”). The Land
and the Improvements are sometimes collectively referred to herein
as the “ Premises ”.
D .
Landlord and Tenant
previously entered into a Ground Lease, dated as of
September 5, 2006, with respect to the Land (the “Prior
Lease”), and Landlord and Tenant desire to amend and restate
the terms thereof as set forth herein.
E .
The parties desire to
enter into this Lease, on the terms and conditions set forth
below.
NOW, THEREFORE
, in consideration of the
monetary consideration, mutual covenants, conditions and promises
and other good and valuable consideration herein set forth, the
receipt and sufficiency of which are hereby acknowledged, the
parties agree that the foregoing Recitals are true and correct and
are incorporated herein by this reference, and further agree as
follows:
ARTICLE I – DEFINITIONS
The
following capitalized terms shall have the meaning indicated for
each below.
“ ADA ” means the Americans
with Disabilities Act of 1990 and all regulations promulgated
thereunder, as the same may be amended from time to
time.
“ Alterations ” means any
improvements, renovations, construction, demolition, or other
changes to the Land or the Plant, or both, after completion of the
Project.
“ Base Rent ” is defined in
Section 4.1.2 .
“ Builder’s Risk Insurance
” is defined in Section 10.5 .
“ Certificate of Occupancy ”
means a certificate of occupancy issued by the appropriate
governmental authority upon completion of the Plant.
“ City ” means
Danville, Illinois.
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“ Compensation ” is defined
in Section 8.1 .
“ Construction Contract ”
means that certain Construction Management Services Agreement
between Tenant and Fagen, Inc.
“ Default Interest Rate ”
means, as of any day, a rate of interest per annum equal to the
lesser of (i) five percent (5%) over the Prime Rate , or
(ii) the maximum interest rate allowable under applicable
Law.
“ Effective Date ”
means the first date on which this Lease has been fully executed
and delivered by both Landlord and Tenant.
“ FEMA Lots ” is defined in
Section 2.1.1 .
“ Fiscal Year ” means the
twelve (12) month period selected by the Tenant as its fiscal year
for accounting purposes.
“ Force Majeure ” means any
act or occurrence beyond the reasonable control of the parties
which reasonably causes a delay in the Project, including, without
limitation, the following: fire or unavoidable casualties;
windstorm, earthquake or unusually adverse weather conditions;
unanticipated subsurface conditions; strikes, lockouts or other
labor disputes; shortages of materials, equipment or labor; acts of
vandalism or terrorism; or acts or omissions of governmental or
political bodies.
“ Improvements ” is defined
in Recital C above.
“ Insurance Proceeds ” means
the insurance proceeds paid pursuant to the Required Insurance as a
result of any insured loss or damage to the
Improvements.
“ Land ” is defined in
Recital A above.
“ Landlord and Mortgagee Agreement
” means the agreement so entitled between Landlord and
Leasehold Lender of even date herewith.
“ Landlord Caused Liens ”
means any liens, claims of liens or other claims against the
Premises caused by the wrongful acts or omissions of
Landlord.
“ Landlord Indemnified Parties
” means, collectively, Landlord and its officers, directors,
shareholders, employees, agents, contractors, affiliated entities
and attorneys.
“ Laws ” means,
collectively, any and all federal, state or local governmental
laws, rules, regulations, codes and orders, including, without
limitation, those relating to building and life safety, the
environment, zoning, land use and land divisions.
“ Leasehold Lender ” means
Fifth Third Bank and its successors and assigns.
“ Leasehold Mortgage ” means
that certain Leasehold Mortgage, Security Agreement and fixture
filing by and between Tenant and Fifth Third Bank, and any other
mortgage, deed to secure debt or similar instrument granting a
mortgage or lien against Tenant’s leasehold interest
hereunder.
“ Lease Term ” means the
period commencing on the Effective Date and terminating on the
Termination Date.
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“ Lease Term Expiration Date
” means the date which is (i) thirty (30) years after
the Effective Date subject to extension pursuant to
Section 3.2 hereof.
“ Major Alteration ” means
any Alteration which is not a Minor Alteration.
“ Minor Alteration ” means
any Alteration which satisfies all of the following
conditions: (a) the total cost of such Alteration does
not exceed $100,000; (b) Tenant has available funds in a
reasonably sufficient amount to pay for the entire cost of such
Alteration as and when such costs become due and payable;
(c) the production quality, capacity and efficiency of the
Plant will not be decreased as a result of the proposed alteration
by more than one percent (1%); (d) the footprint of the Plant
will not be materially changed by such Alteration; (e) the
location, quality, and design of the access drives, parking,
landscaping, and other outdoor amenities of the Premises will not
be materially changed by such Alteration; (f) the value of the
Premises, as completed, will not be diminished by such Alteration;
(g) neither the foundation, roof nor structural members of the
Plant will be affected by such Alteration; (h) the
architectural features of the Plant shell will not be impaired or
materially changed by such Alteration; (i) the design,
exterior material, type of roof, color, windows, and other
architectural features of any portion of the exterior of the
Premises will not be materially changed by such Alteration;
(j) Tenant has received a Plant permit for, and all other
requisite governmental approvals of, such Alteration;
(k) Tenant’s mortgage lender has approved the proposed
alteration (to the extent such approval is required);
(l) after completion of the proposed alteration, the Plant
will comply with all applicable Laws; (m) written notice of
such Alteration is promptly given to Landlord; and (n) such
Alteration will not violate any other provision of this
Lease.
“ Permitted Exceptions
” means those exceptions listed on Exhibit B attached hereto and any
other exception which satisfies all of the following conditions:
(i) the same is approved by Landlord and Tenant in writing
after the date hereof, and (ii) the same is recorded in the
Real Estate Records.
“ Person ” means an
individual, proprietorship, trust, corporation, partnership,
limited liability company, foundation or other entity or
organization, whether for profit or otherwise.
“ Plant ” is defined in
Recital C above.
“ Premises ” is defined in Recital C
above.
“ Prime Rate ” means the prime rate reported in
the “Money Rates” column or any successor column of
The Wall Street Journal, currently defined therein as the
base rate on corporate loans posted by at least 75% of the
nation’s 30 largest banks. If The Wall Street
Journal ceases publication of the Prime Rate, the “Prime
Rate” shall mean the ‘prime rate’ or “base
rate” announced by Bank of America, N.A., or any successor
thereto.
“ Project ” means the work,
labor, material and services required to construct the Plant and
the other Improvements on the Land, as provided in the Construction
Contract.
“ Project Agreements ”
means, collectively, all agreements relating to the design,
construction and equipping of the Project, including, without
limitation, all agreements between Tenant or its agents and the
following: architects, engineers, contractors, equipment
lessors, material suppliers, equipment vendors and the
like.
“ Property Insurance ” means
Special Perils Insurance, Flood Insurance, Earthquake Insurance,
Boiler and Machinery Insurance, and Builder’s Risk
Insurance.
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“ Qualified Appraiser ”
means an appraiser who is not an affiliate, employee, relative or
partner of any party to this Lease, who is a member in good
standing of the Appraisal Institute and has not less than ten
(10) years of experience in appraising industrial
properties.
“ Real Estate Records ”
means the official real estate records for the County and State in
which the Land is located.
“ Rent ” means all Base Rent
and all other amounts Tenant is required to pay herein.
“ Rental Commencement Date ”
means the date on which the Plant first becomes fully
operational.
“ Required Completion Date ”
means December 31, 2008, as the same may be extended due to
any delays caused by Force Majeure and as the same may be extended
for each day during the pendency of any foreclosure proceedings
diligently conducted by Leasehold Lender under the Leasehold
Mortgage.
“ Required Insurance ” means
the insurance coverage that Tenant is obligated to maintain under
this Lease, including, without limitation, the insurance described
in Article 10 below.
“ Restoration Work ” is
defined in Section 11.1.1 .
“ State ” means the State of
Illinois.
“ Sublessee ” means any
Person who leases all or any portion of the Premises from
Tenant.
“ Tenant Indemnified Parties
” means, collectively, Tenant and its officers, directors,
members, managers, employees, agents, contractors, affiliated
entities and attorneys.
“ Termination Date ” means
the first to occur of (i) the Lease Term Expiration Date or
(ii) such earlier date as this Lease terminates in accordance
with the provisions hereof.
ARTICLE II - DEMISE AND GRANT
2 .1
Demise . Landlord and Tenant hereby terminate the
Prior Lease. Landlord does hereby lease to Tenant, and Tenant
does hereby lease from Landlord, the Land; to have and to hold the
Land, together with all rights, privileges, appurtenances,
easements, and other rights appertaining to the Land, unto Tenant,
Tenant’s successors and assigns, for the Lease Term (as
herein defined) upon the terms and conditions set forth in this
Lease.
2.1.1
Sublicense of City Lots .
Landlord has no ownership interest in lots 7, 8, 9, 10 and 11 as
shown on Plat Record 1, Page 161 of the Recorder’s
Office of Vermillion County, IL (the “ City Lots
”) and its sole rights thereto, if any, are as set out in
that certain “Five Parcel License Agreement” (the
“ License Agreement ”) between the City and
Landlord. The License Agreement in paragraph 10 thereof
expressly provides for the right of Landlord to sublicense its
rights thereunder. Landlord hereby sublicenses the City Lots
to Tenant, subject to the terms and conditions of the License
Agreement. Tenant hereby assumes and agrees to observe and
perform all of Landlord’s obligations under the License
Agreement. Landlord shall not be liable to Tenant for any
matter arising out of use of the City Lots by Tenant, its agents,
employees, contractors, representatives and invitees (the “
Tenant Parties ”). Tenant hereby releases
Landlord from any liability for any loss or damage of any kind or
for any injury or death of persons or damages to property of any of
the Tenant Parties from any cause whatsoever by reason of the use
of the City Lots or violation of the License Agreement by the
Tenant Parties. Tenant agrees to,
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and
does hereby, indemnify, defend and save harmless the Landlord, its
directors, officers, employees and representatives from all claims,
actions, demands, damages, costs, expenses and liabilities
whatsoever, including reasonable attorneys fees, on account of any
real or claimed loss, damage or liability occurring in or at the
City Lots which is the result of, or arises out of, the use of the
City Lots by Tenant. Except as provided in this
Section 2.1.1 , all other provisions and terms of the
Lease shall be applicable to the City Lots and Tenant rights and
obligations with respect thereto.
2 .2
Title . The Land is leased to Tenant subject to the
Permitted Exceptions. Neither Landlord nor Tenant shall create or
permit the creation of any further easement, covenant, condition,
lien, encumbrance or other exception to fee simple title to the
Premises, or any part thereof, without the prior written consent of
the other party hereto and all leasehold lenders. Landlord
acknowledges and agrees that during the term of this Lease and any
license pursuant to Section 7 of the Landlord and
Mortgagee Agreement, Tenant is the sole owner of the
Improvements.
2 .3
Quiet Enjoyment . Landlord covenants and agrees that
so long as this Lease is in full force and effect and so long as
Tenant is not in default hereunder beyond any applicable notice and
cure periods, Tenant, shall lawfully and quietly hold, occupy and
enjoy the Land during the Lease Term without hindrance of Landlord
or any person claiming by, through, or under Landlord, except as
otherwise specifically provided herein.
2 .4
Reservation of Development Rights . Tenant agrees that
Landlord, and any entity which owns Landlord, is owned by Landlord,
is under common ownership with Landlord, or is otherwise affiliated
with Landlord (collectively, “ Landlord Parties
”) shall retain control over the general use, organization
and layout of all property (other than the Land) which any Landlord
Party from time to time owns, leases, or otherwise has or acquires
any right to or interest in (the “ Other Properties
”), and shall have the sole, exclusive and absolute right to
apply for, obtain or attempt to obtain new or different zoning,
subdivision, permits, variances, development plans, conditional use
permits, building and other permits and other governmental
authorizations (collectively, and without limitation, “
Governmental Authorizations ”) with respect to the
Other Properties, and to develop or subdivide and use the Other
Properties in any manner, provided , however , any
such development, subdivision or use of the Other Properties shall
be at Landlord’s sole cost and expense and any such
subdivision shall not materially adversely affect Tenant’s
use of the Land, including, but not limited to, any ingress and
egress, utilities or any existing right of Tenant. Landlord
reserves the right, at any time and from time to time to further
subdivide, construct, reconstruct, develop, redevelop, alter,
remove or replace any and all improvements and buildings upon the
Landlord Parties’ Other Properties and any other lands owned
by Landlord (but not the Land). Tenant agrees to cooperate
with Landlord in connection with any such subdivision and agrees
that Tenant will not directly or indirectly oppose or undermine or
contest Landlord Parties’ use or development of the Other
Properties. Tenant has no rights to any easement for light,
air or view which would restrict Landlord’s rights reserved
herein. Notwithstanding anything to the contrary in the
foregoing, if the exercise by Landlord of any rights reserved
herein will have a material adverse affect on the access of the
Leased Premises to public roads, then Landlord shall be obligated,
at Landlord’s expense, to provide reasonable access between
the Leased Premises and a public road.
2 .5
“ As Is” Condition of Premises . Tenant
acknowledges and agrees that, except as otherwise specifically set
forth herein, the Land is being leased to Tenant in its “AS
IS” condition, with all faults. Landlord hereby
disclaims any and all express or implied warranties as to the
condition of the Land. Without limiting the generality of the
foregoing, Landlord hereby disclaims any and all express or implied
warranties of merchantability or fitness for any particular purpose
relative to the Land or any part thereof. Tenant acknowledges and
agrees that, except as otherwise specifically set forth herein, no
representations or warranties have been made by Landlord, or by any
person, firm or agent acting or
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purporting to act on behalf of Landlord, as to
(i) the presence or absence on or under the Land of any
particular materials or substances (including, without limitation,
asbestos, hydrocarbons or hazardous or toxic substances),
(ii) the condition or repair of the Land or any portion
thereof, (iii) the value, expense of operation or income
potential of the Land or the Premises, (iv) the accuracy or
completeness of any title, survey or other third party information
provided by Landlord to Tenant relative to the Land, the Project or
the Premises, or (v) any other fact or condition which has or
might affect the Land, the Project or the Premises. Tenant agrees
that Tenant will be relying solely on Tenant’s inspections of
the Land in entering into this Lease. Tenant represents and
warrants to Landlord that Tenant has had full opportunity to
carefully (A) inspect, measure and test the Land,
(B) test the subsurface conditions and environmental
conditions at or affecting the Land, (C) examine the public
records relating to the Land, and (D) otherwise perform all
due diligence with respect to the Land and the Project.
2 .6
Obligation to Construct the Plant . Landlord has
reviewed and approved detailed plans and specifications for the
construction of the Improvements (the “Plans and
Specifications”). Tenant shall cause construction of the
Improvements to be diligently prosecuted. Tenant shall cause
the Improvements to be substantially completed and fully paid for
on or before the Required Completion Date. For purposes of the
foregoing, construction of the Improvements shall be deemed to have
been substantially completed when any and all governmental permits,
licenses, approvals and authorizations necessary for the occupancy
and operation of the Plant have been issued and the Plant is
capable of being fully operational. If Tenant fails to cause
construction of the Improvements to be substantially completed by
the Required Completion Date, Landlord shall have the rights and
remedies set forth in this Section in addition to any other
rights and remedies available under this Lease or applicable
Law:
2.6.1
Landlord shall have the right to terminate this Lease by giving
Tenant written notice thereof. If Landlord terminates this
Lease as aforesaid, then Landlord shall have the right to pursue
all available rights and remedies under applicable Law as a result
of Tenant’s breach of its obligations under this Lease.
In addition to, and without limiting the generality of the
foregoing, Tenant shall be deemed to have assigned and transferred
to Landlord all of Tenant’s right, title and interest in and
to all of the following (to the extent designated in writing by
Landlord at such time): all Project Agreements; all plan and
specifications developed with respect to or for the benefit of the
Project; all assignable permits, licenses and other governmental
approvals and consents; all assignable consents or approvals of
utility companies, sewer districts, subdivision trustees and other
quasi-governmental entities; and all assignable insurance
policies. Landlord shall not be deemed to have assumed any of
Tenant’s obligations under any of the foregoing, except and
to the extent that Landlord has expressly agreed to assume such
obligations in writing at such time. Landlord is hereby authorized
and directed by Tenant to deliver a copy of this Lease to any other
Person to confirm Tenant’s assignment to Landlord of such
rights.
2.6.2
Landlord shall have the right to specifically enforce
Tenant’s obligation to complete construction of the
Improvements. Tenant shall reimburse Landlord for all of
Landlord’s expenses incurred in connection with any action in
which Landlord prevails to specifically enforce such obligation,
including, without limitation, Landlord’s reasonable
attorneys’ fees, court costs and other customary costs of
litigation.
2.6.3
Landlord shall have the right to perform Tenant’s obligations
under this Lease and to be reimbursed by Tenant for all of
Landlord’s expenses incurred in performing such obligations
upon demand. If Tenant fails to pay any such expenses on
demand, then interest shall accrue on the amounts owed at the
Default Interest Rate together with all of Landlord’s costs
of enforcing such obligation, including, without limitation,
reasonable attorneys’ fees, court costs and other customary
expenses of litigation. If Landlord exercises its rights
under this Section 2.6.3 , then the parties agree that
Tenant shall be deemed to have granted to Landlord the exclusive
right (as Tenant’s agent and under
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Tenant’s power of attorney hereby
granted) to exercise all of Tenant’s rights to and under each
of the following (to the extent designated in writing by Landlord
at such time): all Project Agreements; all plan and
specifications developed with respect to or for the benefit of the
Project; all assignable permits, licenses and other governmental
approvals and consents; all assignable consents or approvals of
utility companies, sewer districts, subdivision trustees and other
quasi-governmental entities; and all assignable insurance
policies. Landlord shall not be deemed to have assumed any of
Tenant’s obligations under any of the foregoing, except and
to the extent that Landlord expressly agrees to in writing at such
time. Landlord is hereby authorized and directed by Tenant to
deliver a copy of this Lease to any other Person to confirm
Landlord’s right to exercise such rights on behalf of
Tenant.
2.6.4
Landlord shall execute and deliver upon request of Tenant any
instruments which may be required by any public or quasi-public
authority for the purpose of obtaining any and all governmental
licenses, permits, approvals and authorizations necessary for the
construction, alteration, and installation of the Improvements and
any equipment required in connection therewith. Landlord
hereby constitutes and appoints Tenant as Landlord’s
attorney-in-fact to execute such instruments for and on behalf of
Landlord in the event Landlord fails to promptly execute and
deliver any such instrument, provided that such instruments shall
not impose any obligations or liabilities on Landlord.
ARTICLE III - LEASE TERM
3 .1
Lease Term . The Lease Term shall commence on the
Effective Date and shall terminate on the Lease Term Expiration
Date, unless terminated prior to such date in accordance with the
provisions of this Lease.
3 .2
Extension of Lease Term . Tenant may elect to extend
the Lease Term for four (4) additional terms of five
(5) years each upon the terms, covenants, conditions,
conditional limitations, and agreements herein contained, in
accordance with and subject to the following conditions:
3.2.1
Each extension of the Lease Term shall be for a period of five
(5) years commencing on the date of termination of the
original Lease Term or then current extended Lease Term and
expiring on the fifth anniversary of the date of commencement of
such extension period. The Lease Term may be extended a
maximum of four (4) times so that the final termination date
of this Lease, in any event, shall be no later than
September 1, 2056.
3.2.2
The election to extend shall be exercised, if at all, at least
ninety (90) days prior to the date of commencement of the extension
period so elected. The election to extend shall be exercised
only by written notice to Landlord, which notice shall be executed
and acknowledged by Tenant in form proper for recording.
During each extended term, all of the terms and conditions of this
Lease shall continue in full force and effect, except that the
annual Base Rent for each extended term shall be payable in the
amounts and at the times set forth in Section 3.2.3
below.
3.2.3
The Base Rent for each extended term shall be annual rental at the
rate of $1.00 per year, payable on January 1 of each year of
the extended term, without set-off or abatement. The notice
of election to extend the Lease Term given in accordance with the
provisions of this Section shall automatically extend the
Lease Term for the extended term without further writing.
However, either party, upon request of the other, will execute and
acknowledge, in form proper for recording, an instrument confirming
said extension, which shall have been properly elected by
Tenant.
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3.2.4
All references in this Lease to the “Lease Term”, or to
the “term” hereof, shall be deemed to include the
original Lease Term of thirty (30) years and each extended term
thereof elected pursuant to the provisions of this Section.
3.2.5
The notice of election to extend the Lease Term given in accordance
with the provisions of this Section shall have no effect, and
the extension period shall not become effective, if Landlord has
delivered to Tenant a written notice of default under the terms of
this Lease at the time the notice is given or immediately prior to
the Lease Term Expiration Date, and neither Tenant nor the holder
of any Leasehold Mortgage has cured, or taken steps to cure, such
default within the time permitted under this Lease.
3.2.6
A termination of this Lease pursuant to Article XIII
hereof, or any other provision hereof, or pursuant to present or
future law, shall extinguish all extension periods theretofore
elected and all rights of election of extension periods not
theretofore exercised.
3 .3
Reversion . On the Termination Date, the parties agree
that the following shall be deemed to have occurred without the
necessity of any further action other than as expressly provided
below:
3.3.1
The Premises shall become the sole property of the then owner of
fee simple title to the Land, free and clear of all rights of
Tenant and any person claiming by, through, or under Tenant, but
subject only to the Permitted Exceptions;
3.3.2
All rights of Tenant with respect to the Premises (including,
without limitation, any right of possession) shall be deemed to
have terminated, and Landlord shall be entitled to possession of
the Premises;
3.3.3
Tenant shall be deemed to have assigned to Landlord and Landlord
shall be deemed to have assumed, effective as of the Termination
Date all assignable licenses, permits, warranties, and guarantees
then in effect and which are desirable with respect to the
ownership or operation of the Premises; and
3.3.4
The parties shall apportion all taxes, utility charges, and other
expenses of operating the Premises as of the Termination Date.
ARTICLE IV - RENT, TAXES AND
UTILITIES
4 .1
Base Rent .
4.1.1
Within a reasonable period
after the Rental Commencement Date and at any time thereafter upon
the request of either party, and without either party receiving
consideration therefor, the parties shall execute, acknowledge and
deliver duplicate original recordable counterparts of a Rental
Commencement Date declaration, specifying the Rental Commencement
Date.
4.1.2
As used in this Lease,
“ Base Rent ” means:
(a)
during all such times as
the Tenant hereunder is Biofuels Company of America, LLC, the sum
of One Dollar ($1.00) per annum, payable on the Rent Commencement
Date and on each anniversary of the Rent Commencement Date during
each year of the Lease Term;
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(b)
in the event that
Leasehold Lender delivers written notice to Landlord that Leasehold
Lender has notified Tenant that Tenant has defaulted in its
obligations under the Leasehold Mortgage, the sum of One Dollar
($1.00) per annum during the one (1) year period following the
delivery of such notice, payable on each anniversary of the Rent
Commencement Date during each year of the Lease Term;
(c)
except as set forth in
Section 4.1.2(b) hereof, during all such times as
the Tenant hereunder is Leasehold Lender or an entity controlled by
Leasehold Lender and the Plant is not being operated, the sum of
Six Thousand Dollars ($6,000.00) per annum, payable in equal
monthly installments in advance and without demand on the first day
of each and every calendar month throughout the Lease Term;
provided that Base Rent payable with respect to any partial
calendar month during the Lease Term shall be prorated based on the
number of days of the Lease Term in such month; and
(d)
except as set forth in
Section 4.1.2(c) hereof, during all such times as
the Tenant hereunder is any person or entity other than Biofuels
Company of America, LLC (a “ Successor Tenant
”), the fair market rent for the Land, determined and payable
as follows:
(i)
If Landlord and Successor
Tenant agree on the fair market rent for the Land, they shall
immediately execute an amendment to this Lease stating the annual
Base Rent for the remainder of the Lease Term. In the event
that Landlord and Successor Tenant are unable to agree upon the
amount of the fair market rent for the Land, either party shall
have the right to cause the fair market rent for the Land to be
determined by appraisal in accordance with the procedures set forth
herein. Either party may exercise such right by delivering
written notice thereof to the other party (a “ Rent
Appraisal Notice ”), which Rent Appraisal Notice shall
designate Qualified Appraiser who has been appointed by the party
delivering such notice. The party to whom the Rent Appraisal
Notice was delivered shall then have the right to appoint an
additional Qualified Appraiser by delivering written notice thereof
to the other party within ten (10) days following the delivery
of the Rent Appraisal Notice. If the party to whom the Rent
Appraisal Notice was delivered does not appoint a Qualified
Appraiser within such ten (10) day period, the single
appraiser appointed shall be the sole appraiser and shall determine
the yearly fair market rent for the Land.
(ii)
If both Qualified
Appraisers are appointed by the parties as aforesaid, they shall
jointly select a third Qualified Appraiser within twenty (20) days
following the delivery of the Rent Appraisal Notice. If they
are unable to agree on the third appraiser, either of the parties
to this Lease, by giving ten (10) days’ notice to the
other party, can file a petition with the American Arbitration
Association solely for the purpose of selecting a third appraiser
who meets the aforesaid qualifications.
(iii)
Each party shall bear the cost of the appraiser that it appointed
and one-half of the cost of the third appraiser and of the cost of
the appointment of the third appraiser by the American Arbitration
Association, if any. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity for
either party.
(iv)
Within thirty (30) days after the selection of the third appraiser,
a majority of the appraisers shall determine the yearly fair market
rent for the land. If a majority of the appraisers are unable
to agree on such yearly fair market rent within said period of
time, the three appraisals shall be added together; their total
shall be divided by three; and the resulting quotient shall be the
yearly fair market rent for the Land. If, however, the lowest
appraisal and/or the highest appraisal is more than ten percent
(10%) lower and/or higher than the middle appraisal such lowest
appraisal and/or highest appraisal shall be disregarded. If
only one appraisal is disregarded, the remaining two appraisals
shall be added together and their total divided by two; and the
resulting quotient shall be the yearly fair
9
market rent for the Land. If both the
lowest appraisal and the highest appraisal are disregarded, the
middle appraisal shall be the yearly fair market rent for the
Land. Notwithstanding any provision to the contrary contained
herein, in no event shall the yearly fair market rent for the Land
be less than $6,000.00 or more than $100,000.00; provided that both
such amounts shall hereafter increase by the same percentage as the
percentage increase, if any, in the Consumer Price Index from
November 2006 to the month in which the Rent Appraisal Notice
is delivered. For purposes of this Agreement, the term
“Consumer Price Index” means the Consumer Price
Index-All Urban Consumers, U.S. All Items (1982-84=100) as
published by the United States Department of Labor, Bureau of Labor
Statistics. In the event that the United States Department of
Labor, Bureau of Labor Statistics discontinues the publication of
the present Consumer Price Index, the index to be used for
computing increases in Base Rent will be such index as may be
published by any other United States government bureau or
department to replace the present Consumer Price Index.
(v)
The Base Rent for the Land, determined as aforesaid, shall be
payable in equal monthly installments in advance and without demand
on the first day of each and every calendar month throughout the
Lease Term; provided that, beginning on March 1 of the year
following the first full calendar year after the Base Rent for the
Land has been so determined, the amount of the Base Rent shall be
increased by the same percentage as the percentage increase, if
any, in the Consumer Price Index for the previous calendar
year. Base Rent payable with respect to any partial calendar
month during the Lease Term shall be prorated based on the number
of days of the Lease Term in such month.
(vi)
Notwithstanding any provision to the contrary contained herein, the
obligation to pay Base Rent hereunder shall be waived during the
period that the yearly fair market rent is being determined
hereunder. However, within thirty (30) days following such
determination, Successor Tenant shall be obligated to pay to
Landlord the amount of the Base Rent with respect to such period in
order to bring current the payment of Base Rent.
4.1.3
The term “
Rent ” means Base Rent and all other sums payable by
Tenant to Landlord pursuant to the provisions of this
Lease.
4.1.4
Tenant promises and agrees
to pay to the order of Landlord, at the address of Landlord set
forth in Section 21.4 hereof (or at such other address
in as Landlord from time to time designates in writing to Tenant),
in lawful currency of the United States of America, all Rent
without demand, deduction, abatement or set-off.
4 .2
Taxes; Utilities; Net Lease .
4.2.1
From and after the Rental Commencement Date, Tenant shall pay or
cause to be paid, without abatement, deduction or offset, all real
and personal property taxes, general and special assessments, and
all other charges, assessments, and taxes of every description
(other than municipal, state and federal income, inheritance,
estate succession, transfer or gift taxes of Landlord), levied on
or assessed against the Premises or any part thereof;
Tenant’s personal property located on or in the Premises; and
Tenant’s leasehold estate in the Land. Tenant shall make all
such payments directly to the appropriate charging or taxing
authority before any fine, interest, or penalty shall become due or
be imposed by operation of law for nonpayment; provided ,
however , that if the law expressly permits the payment of
any or all of the above items in installments (whether or not
interest accrues on the unpaid balance), Tenant may, at
Tenant’s election, utilize the permitted installment method,
but shall pay each installment with any interest before delinquency
and before any fine or penalty shall become due or be imposed by
operation of law for nonpayment. All payments of taxes or
assessments or both, including
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permitted installment payments, shall be
prorated between Landlord and Tenant for the year in which the
Rental Commencement Date occurs and for the year in which the
Termination Date occurs.
4.2.2
Tenant shall furnish to
Landlord, upon written request by Landlord, receipts or other
appropriate evidence establishing payment of any tax, assessment or
charge for which Tenant is responsible hereunder. In the
event of Tenant’s failure to make any tax payment required by
this Section 4.2 , if any such tax payment is not made
by Tenant within fifteen (15) days after Tenant’s receipt of
written notice from Landlord that Landlord intends to make such
payment, Landlord may (but is not obligated to) pay all such
amounts. Any sums expended by Landlord in making such tax
payments shall be repaid by Tenant, together with interest thereon
at the Default Interest Rate from the time of payment by Landlord
until fully paid by Tenant, immediately upon written demand
therefor by Landlord.
4.2.3
Tenant shall have the
right to contest or review by legal proceedings, as permitted under
applicable Laws, any assessed valuation, real estate tax, or
assessment with respect to the Premises; and Tenant shall indemnify
Landlord against all loss, cost, damage, and expense arising in
connection with such contest. Nothing herein contained, however,
shall be construed to allow any taxes to remain unpaid for such
length of time as shall permit the Premises, or any part thereof,
to be sold or advertised for sale by any governmental authority or
shall permit a lien with respect thereto to be foreclosed. Landlord
shall, if it determines it is reasonable to do so, and if so
requested by Tenant, join in any proceeding for contest or review
of such taxes or assessments. Any amount already paid by Tenant and
subsequently recovered as the result of such contest or review
shall belong to Tenant.
4.2.4
Tenant shall contract
directly with the supplier of any utility services to the Premises,
and from and after the Effective Date, Tenant shall pay or cause to
be paid all charges for water, heat, steam, gas, electricity,
cable, telephone, trash disposal, sewer and any and all other
utilities used at the Premises throughout the Lease Term.
Subject to Section 13.3.2 , no failure or interruption
of any utility or other service being furnished to Tenant or the
Premises shall entitle Tenant to terminate this Lease or cause any
abatement of Rent.
4 .3
Security Deposit . No security deposit is required
hereunder.
4 .4
Absolute Net Rent . All Rent payable hereunder shall
be paid as “net” rent without deduction or
offset. It is the intent of the parties, except as is
otherwise provided in this Lease, that, from and after the Rental
Commencement Date, Tenant shall pay all costs, charges, insurance
premiums, taxes (other than municipal, state and federal income,
inheritance, estate succession, transfer or gift taxes of
Landlord), utilities, expenses and assessments of every kind and
nature incurred for, against, or in connection with the Premises
and the Project. Tenant acknowledges and agrees that the Land
may consist of multiple parcels of property, each of which is a
separate tax parcel. All such costs, charges, taxes,
utilities, expenses and assessments covering the Premises shall be
prorated between Landlord and Tenant as of the Rental Commencement
Date and the Termination Date, except for any expenses such as
insurance premiums which are not being assumed by or transferred
for the benefit of Landlord.
ARTICLE V - USE OF PREMISES AND COMPLIANCE
WITH LAWS AND AGREEMENTS
5 .1
Permitted and
Prohibited Uses; Generally . Use of the Premises by Tenant shall be
subject to all of the following restrictions on use:
(a) the Premises may only be used for the construction and
operation of the Plant; and (b) all use of the Premises must
comply with all applicable zoning, land use or other applicable
Laws.
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5.1.1
Notwithstanding anything
to the contrary in this Lease, Tenant acknowledges and agrees that,
from and after the Required Completion Date, its continuous
operation of the Plant and the Plant’s continuous production
of biodiesel fuel during the Lease Term is a material consideration
to Landlord in agreeing to enter into this Lease, and Tenant agrees
that if it shall fail to operate the Plant for two
(2) consecutive years or if it shall fail to cause the Plant
to produce at least ten (10) million gallons of biodiesel fuel
per year for two (2) consecutive years, then Landlord shall
have the right to terminate this Lease upon delivery of written
notice to Tenant. Notwithstanding the foregoing, in the event
Leasehold Lender delivers written notice to Landlord that Leasehold
Lender has notified Tenant that Tenant has defaulted in its
obligations under the Leasehold Mortgage and diligently proceeds
thereafter to file, prosecute and complete such foreclosure in a
commercially reasonable manner, Landlord agrees that this
obligation to continuously operate and produce in this
Section shall be tolled from the date of delivery of such
notice to Landlord until (i) the conclusion of such
foreclosure proceedings if the successor to the Tenant’s
interest hereunder pursuant to such foreclosure proceedings is any
party other than Leasehold Lender or an entity controlled by
Leasehold Lender, or (ii) the transfer of Tenant’s
interest hereunder to any other party if the successor to the
Tenant’s interest hereunder pursuant to such foreclosure
proceedings is Leasehold Lender or an entity controlled by
Leasehold Lender. Following the conclusion of the tolling
period, the two (2) year period shall recommence and be
extended by an additional three (3) months in order to give
the successor to the Tenant’s interest under the Lease
additional time in which to comply with the foregoing production
requirements. For purposes hereof, a “year”
means any period of twelve (12) consecutive months.
5 .2
Compliance with Laws . During the Lease Term, Tenant
shall comply with (i) all present and future Laws, including
(without limitation) the ADA, relating to the Project, the
Premises, or the construction, use or operation thereof, regardless
of whether any such Law imposes the duty of compliance on Landlord
or Tenant, and all other matters of record relating to the Project,
the Premises or any part thereof or both. Tenant shall not
use, occupy or knowingly permit the Premises to be used or
occupied, nor do or knowingly permit anything to be done in or on
the Premises in a manner which would (a) violate any
certificate of occupancy or other governmental permit, license,
approval or authorization affecting the Premises,
(b) constitute a public or private nuisance or waste or
(c) be contrary to the provision of any Required Insurance
policies.
5 .3
Right to Enter . Landlord shall have the right
to enter the Premises during the normal business hours (or, in an
emergency, at any hour) to inspect the Premises. All rights of
Landlord hereunder shall be exercised in a reasonable manner, upon
reasonable prior notice to Tenant (except in an emergency), and so
as to minimize any interference with the permitted use of the
Premises.
5 .4
Signs . Except as provided for in the Plans and
Specifications, Tenant shall not erect or maintain any sign visible
from the exterior of the Premises without the prior written consent
of Landlord, which consent shall not be unreasonably withheld,
delayed or conditioned.
ARTICLE VI - MAINTENANCE AND
ALTERATIONS
6 .1
Maintenance of Premises . Tenant shall maintain, or
cause to be maintained, the Premises in good repair. Tenant
shall cause all trash, refuse and garbage generated by construction
or its operations of the Premises to be promptly removed from the
Premises. If Tenant fails to maintain or keep and maintain
the Premises in a first-class manner as required herein and such
failure continues for thirty (30) days after written notice from
Landlord (which notice shall not be required in the event of an
emergency), in addition to all other remedies it may have, then
Landlord may (without obligation) perform such required maintenance
and repairs, and any sums expended by Landlord in performing such
maintenance and repairs shall be repaid by Tenant to Landlord,
together with interest thereon at the Default Interest
12
Rate from the time of payment by Landlord until
fully paid by Tenant. Landlord shall not be obligated to
maintain or make repairs of any kind upon the Premises, or upon any
equipment, facilities or fixtures contained therein.
6 .2
Major Alterations . Without the prior written consent
of Landlord in each instance, which consent shall not be
unreasonably withheld, delayed or conditioned, Tenant shall not
commence, or cause to be constructed, any Major Alterations.
If Tenant commences work on a Minor Alteration and, during the
course thereof, any one or more of the conditions to the same
constituting a Minor Alteration ceases to be satisfied, then Tenant
shall immediately stop all work thereon and shall obtain
Landlord’s prior written approval thereof, which approval
shall not be unreasonably withheld, delayed or conditioned, prior
to performing any further work.
6 .3
Alterations Generally .
6.3.1
Tenant shall cause all work in connection with any Alteration to
satisfy all of the following requirements: (a) such work
shall be performed in a good and workmanlike manner with new
materials; (b) Tenant shall pay, or cause to be paid, all
costs of such Alteration as and when due and in a manner to prevent
the filing of any mechanic’s liens or claims of liens;
(c) such work shall be performed in compliance with all
applicable Laws, including without limitation, the ADA; and
(d) the contractor and each subcontractor providing labor,
material or services with respect thereto shall provide insurance
which satisfies Landlord’s then-current insurance
requirements for contractors.
6.3.2
Tenant shall pay, discharge and cause the release of any and all
mechanic’s, materialman’s or other like liens against
the Premises in accordance with Article 7 of this
Lease.
6.3.3
Upon completion of any Alterations, Tenant, at Tenant’s
expense, shall obtain certificates of final approval of such
Alterations required by any governmental or quasi-governmental
authority, or, if not required, a completion certificate of Tenant,
and shall furnish Landlord with copies thereof, together with
“as built” Plans and Specifications for the
Alterations.
6.3.4
If the Alteration is a
Major Alteration, any other conditions to Landlord’s approval
thereof shall be satisfied by Tenant at Tenant’s sole
expense.
ARTICLE VII - MECHANICS’
LIENS
7 .1
Tenant Caused Liens Prohibited . Except for Landlord
Caused Liens, Tenant covenants that it will not cause or permit any
lien to be filed, asserted or otherwise exist against the Premises
or any part thereof as a result of (a) nonpayment for, or
disputes with respect to, labor, material, services or equipment
furnished to the Premises or the Project, or both, for or on behalf
of Tenant, or any party acting by, through, or under Tenant or
(b) any judgment, lien or attachment against the Premises or
any part thereof caused by the wrongful acts or omissions of Tenant
or any party acting by, through, or under Tenant. If Tenant
fails to pay off and discharge any such lien, or to provide a cure
therefor as provided in Section 7.2 below, then
Landlord shall have the right, but not the obligation, to obtain
the release of such lien by paying off the amount claimed due, or
otherwise settling or compromising the amount claimed. In
such event, Tenant shall reimburse Landlord for the entire cost
thereof, on demand, together with interest on the amount paid at
the Default Interest Rate until paid. Notwithstanding
anything to the contrary in this Lease, in no event shall Landlord
be deemed to have agreed or consented to any mechanic’s lien
(or other lien for material, labor or services) against
Landlord’s interest in the Premises whether pursuant to the
provisions of this Lease, by implication or otherwise; it being
agreed that if any mechanic’s liens (or
13
other comparable liens) are claimed or arise
out of the Project, or otherwise, the same shall attach only to the
leasehold interest of Tenant in the Premises and not to
Landlord’s fee simple interest therein.
7 .2
Tenant’s Limited Cure Right . If (a) any
lien of any nature, including but not limited to liens of the
nature described in Section 7.1 above, is filed against
the Premises or any part thereof or is asserted against Landlord,
and (b) Tenant in good faith disputes the claimant’s
right to such lien, then Tenant shall have the right to contest the
filing of such lien without the same constituting a Default if
Tenant causes all of the following conditions to be satisfied with
respect to such lien at all times until the same is fully released
and discharged as a lien or potential lien against the Premises,
any part thereof or Landlord:
7.2.1
Tenant gives Landlord notice of the claim of such lien within ten
(10) days after Tenant’s receipt of any written claim or
notice of filing of such lien together with the basis for
Tenant’s dispute thereof, and Tenant shall promptly furnish
to Landlord such other information as Landlord may request from
time to time with respect thereto;
7.2.2
Within thirty (30) days after the filing or assertion of any such
lien in the Real Estate Records (or such other governmental office
as may be appropriate for the filing of such a lien), Tenant causes
one or more of the following to occur (each at no cost or expense
to Landlord): (a) the lien claimant duly executes,
acknowledges and delivers a full waiver and release of such lien
together with such other documents as may be required under
applicable law to cause such lien to be released and discharged as
a lien against the Premises, any part thereof or Landlord;
(b) a bond is provided in accordance with applicable Law, in
the requisite amount and in form, which causes such lien to be
released and discharged as a lien against the Premises, any part
thereof or Landlord as a matter of law; (c) Landlord is
provided with a title insurance policy, or an endorsement to a
title insurance policy previously issued to Landlord, insuring
Landlord against any loss, damage or expense (including
attorneys’ fees and all other costs of defense) arising out
of such lien; and
7.2.3
Tenant causes such lien to
be diligently contested in good faith by appropriate legal
proceedings and promptly reimburses Landlord for any reasonable
cost or expense, including, without limitation, reasonable
attorneys’ fees, suffered or incurred by Landlord as a result
thereof.
7 .3
Tenant’s Indemnity . Tenant hereby agrees to
indemnify, defend (by counsel reasonably acceptable to Landlord)
and hold harmless Landlord and the Premises from and against, any
and all claims, causes of action, liens, claims of liens,
liabilities, losses, damages, judgments, settlements, demands,
penalties and expenses (including reasonable attorneys’ fees
and expenses) suffered or incurred by Landlord or the Premises as a
result of any lien or claim of lien of the nature described in
Section 7.1 above.
7 .4
Landlord Caused Liens Prohibited . Landlord covenants
that it will not cause or permit any lien to be filed, asserted of
otherwise exist against the Premises or any part thereof as a
result of (a) nonpayment for, or disputes with respect to,
labor, material, services or equipment otherwise furnished to, for
or on behalf of Landlord, or (b) any judgment, lien or
attachment against the Premises or any part thereof caused by the
wrongful acts or omissions of Landlord. If Landlord fails to
pay off and discharge any such lien, or to provide a cure therefor
as provided in Section 7.5 below, then Tenant shall
have the right, but not the obligation, to obtain the release of
such lien by paying off the amount claimed due, or otherwise
settling or compromising the amount claimed. In such event,
Landlord shall reimburse Tenant for the entire cost thereof, on
demand, together with interest on the amount paid at the Default
Interest Rate until paid.
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7 .5
Limited Cure
Right . If
(a) any Landlord Caused Lien is filed, asserted or otherwise
exists against the Premises or any part thereof or is asserted
against Landlord or Tenant, and (b) Landlord in good faith
disputes the claimant’s right to such lien, then Landlord
shall have the right to contest the filing of such lien if Landlord
causes all of the following conditions to be satisfied with respect
to such lien at all times until the same is fully released and
discharged as a lien or potential lien against the Premises, any
part thereof, Landlord or Tenant :
7.5.1
Landlord gives Tenant
notice of the claim of such lien within ten (10) days after
Landlord’s receipt of any written claim or notice of filing
of such lien together with the basis for Landlord’s dispute
thereof, and Landlord shall promptly furnish to Tenant such other
information as Tenant may request from time to time with respect
thereto;
7.5.2
Within thirty (30) days
after the filing of any such lien in the Real Estate Records (or
such other governmental office as may be appropriate for the filing
of such a lien), Landlord causes one or more of the following to
occur (each at no cost or expense to Tenant): (a) the
lien claimant duly executes, acknowledges and delivers a full
waiver and release of such lien together with such other documents
as may be required under applicable law to cause such lien to be
released and discharged as a lien against the Premises, any part
thereof, Landlord or Tenant; (b) a bond is provided in
accordance with applicable Law, in the requisite amount and in
form, which causes such lien to be released and discharged as a
lien against the Premises, any part thereof, Landlord or Tenant as
a matter of law; (c) Tenant is provided with a title insurance
policy, or an endorsement to a title insurance policy previously
issued to Tenant, insuring Tenant against any loss, damage or
expense (including attorneys’ fees and all other costs of
defense) arising out of such lien; and
7.5.3
Landlord causes such lien
to be diligently contested in good faith by appropriate legal
proceedings and promptly reimburses Tenant for any cost or expense,
including, without limitation, reasonable attorneys’ fees,
suffered or incurred by Tenant, as a result thereof.
7 .6
Landlord
Indemnity .
Landlord hereby agrees to indemnify, defend (by counsel reasonably
acceptable to Tenant) and hold harmless Tenant and the Premises
from and against, any and all claims, causes of action, liens,
claims of liens, liabilities, losses, damages, judgments,
settlements, demands, penalties and expenses (including reasonable
attorneys’ fees and expenses) suffered or incurred by Tenant
or the Premises as a result of any Landlord Caused Lien or claim
thereof.
ARTICLE VIII - CONDEMNATION
8 .1
Interests of Parties on
Condemnation .
If the Premises or any part thereof is taken by condemnation as a
result of any action or proceeding in eminent domain, or is
transferred in lieu of condemnation to any authority entitled to
exercise the power of eminent domain, the interests of Landlord and
Tenant in the award or consideration for such transfer (the “
Compensation ”), and the allocation of the
Compensation and the other effects of the taking or transfer upon
this Lease, shall be as provided by this Article.
8 .2
Total Taking -
Termination .
If the entire Premises is taken or so transferred, this Lease and
all right, title and interest of Landlord and Tenant hereunder
shall cease and terminate on the date title to the Premises vests
in the condemning authority.
8 .3
Partial Taking -
Termination .
In the event of the taking or transfer of only a part of the
Premises, leaving the remainder of the Premises in such location,
or in such form, shape or reduced size as to be not suitable, in
the reasonable opinion of Tenant, for the continued feasible and
economic
15
operation thereon for use as a biodiesel
production facility, Tenant may terminate this Lease, such
termination to be effective as of the date title to the portion of
the Premises being taken is transferred to the condemning
authority, if Tenant gives Landlord written notice thereof on or
before the effectiveness of such condemnation.
8 .4
Partial Taking -
Continuation .
In the event of such taking or transfer of only a part of the
Premises and this Lease is not terminated pursuant to
Section 8.3 , this Lease shall terminate only as to the
portion of the Premises so taken or transferred as of the date
title to such portion vests in the condemning authority or the date
possession of such portion is taken by the condemning authority,
whichever occurs first, and shall continue in force and effect as
to the portion of the Premises not so taken or transferred, and the
rent and other obligations of Tenant hereunder shall be equitably
abated.
8 .5
Allocation of
Award . Any
Compensation awarded or payable because of the taking of all or any
portion of the Premises by eminent domain shall be divided as
follows in the following order of priority:
8.5.1
first, Landlord and Tenant
shall be entitled to receive their respective costs and expenses,
including, without limitation, reasonable attorney’s fees, in
connection with the taking; and
8.5.2
next, any remainder of the
Compensation shall be allocated between Landlord and Tenant based
upon the present values of their respective interests in the
Premises, taking into account Landlord’s reversionary
interest in the Premises and the number of years remaining until
the Lease Term Expiration Date.
8 .6
Voluntary
Conveyance . A
voluntary
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