LEASE

LEASE

        THIS LEASE, made this 24th day of November, 2003, by and between the PORT OF TACOMA , a Washington port district, as Lessor, and DARLING INTERNATIONAL INC , as Lessee,

      WITNESSETH:

    1.        Premises:     Lessor leases to the Lessee, and Lessee rents from Lessor, subject to the conditions herein set forth, those certain premises in Tacoma, Washington, consisting of 3.01 acres at 2041 Marc Street, Tacoma, Washington. Such premises are delineated on Exhibit “A” attached.

     2.         Term:     The term of this Lease shall commence October 1, 2003 and shall terminate on September 30, 2018.

        Both parties acknowledge that this Lease is subject to early termination rights by either party and this Lease may not run its full term or be extended beyond the base term of this Lease.

        The Lessor may terminate this Lease at any time for noncompliance of environmental provisions including odor emissions in violation of air quality standards or that cause adverse impact to the community or nearby businesses. See Paragraph 16 Environmental Inspection and Audit.

        The Lessor may terminate this Lease upon three (3) years’ prior written notice to Lessee provided that Lessor needs the premises to support Lessor’s operations and/or development.

        The Lessee may terminate this Lease upon three (3) years’ prior written notice to Lessor provided that Lessee experiences significant changes in economic circumstances or relocation opportunities.

    3.        Rent:      Lessee agrees to pay, and Lessor agrees to accept, initial rental in the amount of $7,500.00 per month for the Premises. Such rental shall be payable monthly in advance. Lessee is required to pay to Lessor all leasehold excise taxes as now or hereafter assessed, currently assessed at 12.84 percent of taxable rent.

        On each October 1st the rent shall increase by five percent (5%) over the rent paid in the preceeding year, except that on October 1, 2014 the rent shall be increased by ten percent (10%) over the rent paid in the preceeding year.

    4.        Use:      The leased Premises shall be used for operating a rendering plant, processing food byproducts into meat meal, yellow grease and tallow and processing trap grease material. Each of the finished products are sold into domestic markets or for export. No other use shall be made of the Premises except with the written consent of Lessor.

    5.        Bond:      Lessee agrees that it will, at all times during the term of this Lease, maintain in effect a bond or other security acceptable to Lessor, which shall be on file with Lessor at all such times, in the initial penalty amount of $90,000.00 (which is equal to one-year’s rental). Such bond or other security shall be conditioned to perform all of the conditions of this Lease, and the amount thereof shall be adjusted to reflect rental adjustments or other changes affecting the value or term of this Lease. Such changes shall be incorporated into such penalty amount and filed with Lessor at least thirty (30) days prior to the commencement date of the Lease change.

    6.        Maintenance:      Lessee is the owner of all buildings and other improvements on the premises and shall at all times at its sole cost and expense keep the buildings and other improvements, including security system if any, situated on the premises in good repair and condition during the term thereof.

        Lessee agrees that on termination of tenancy, all improvements placed by Lessee on the premises shall be removed by Lessee, except as otherwise agreed by Lessor pursuant to Paragraph 17 Alterations and Improvements.

        The access road, Marc Street, and utilities serving the demised premises are provided for the benefit of Lessee and Lessor assumes no responsibility for their maintenance.

    7.        Utilities:      Lessee shall be liable for, and shall pay throughout the term of this Lease, all charges for all utility services furnished to the premises, including, but not limited to, light, heat, electricity, gas, water, sewerage, garbage disposal and janitorial services. All charges for utility installation, maintenance, repair or replacement shall be for the expense of the Lessee.

    8.        Condition of Premises:      Lessee has hitherto occupied the Premises, is aware of their condition, and accepts them as they are. At the expiration or sooner termination of this Lease, Lessee shall return the Premises to the Lessor in the same condition as originally leased to the predecessor(s) of Lessee (i.e. bare ground), except as otherwise agreed by Lessor pursuant to Paragraph 17 Alterations and Improvements.

    9.        Taxes:      : The Lessee agrees to pay and save the Lessor harmless from any tax imposed on the interest of either party in the Premises during this Lease or imposed on the parties, or either of them by reason of this Lease.

    10.        Inspection and Access:      Lessee will allow Lessor or Lessor’s agent free access at all reasonable times to the Premises for the purpose of inspection, monitoring or for making repairs, additions or alterations to the Premises.

    11.        Remedies      In case of default as set forth in Paragraph 12 below, it shall be lawful for Lessor to reenter the Premises and to remove all persons therefrom. Lessee hereby covenants, promises and agrees to pay the Lessor the rents herein provided for at the times and in the manner provided for, and to be responsible for the rents and covenants herein contained or subsequently agreed upon between the parties, or their assignee, should any portion of the Premises herein involved be sublet or assigned to any third party.

    12.        Default:      The following events shall be deemed to be events of default by Lessee under this Lease:

        Upon the occurrence of any of such events of default after the expiration of any applicable grace periods, Lessor shall have the option, without any further notice or demand, to terminate this Lease, or relet the Premises and receive the rent therefor, in which event Lessee shall immediately surrender the Premises to Lessor, and Lessee agrees to pay to Lessor on demand the amount of all loss and damage which Lessor may suffer by reason of such termination or subletting.

        A late charge of one percent (1%) per month will be added to all rent not paid on the date it is due. This charge shall be in addition to the other remedies of Lessor provided in this Lease or by law.

    13.        Hold Harmless and Endemnity:      All personal property on the Premises shall be at the sole risk of Lessee. Lessor, its employees and agents shall not be liable for any injury to or death of any person, or damage to property, sustained or alleged to have been sustained by Lessee or others as a result of any condition (including future conditions) in the Premises, or the building in which any portion of the Premises are located; or as a result of the Premises becoming out of repair, or caused by fire or by the bursting or leaking of water, gas, sewer or steam pipes, or due to the happening of any accident from whatsoever cause in and about the Premises. Lessee agrees to indemnify, defend and hold Lessor, its employees and agents harmless from any and all claims for damages suffered on or about the Premises by any person, firm or corporation except to the extent such loss or damage results from the sole negligence of the Lessor. In addition, Lessee shall, at its own expense, maintain proper liability insurance with a reputable company(ies) satisfactory to Lessor in the minimum limits of Two Million Dollars ($2,000,000) per person, Two Million Dollars ($2,000,000) per accident occurrence for bodily injuries or death, and Two Million Dollars ($2,000,000) per accident for property damage, to indemnify both Lessor and Lessee (including naming the Lessor as additional insured) against any such liability or expense. Lessee shall also maintain business auto coverage insuring all vehicles to minimum limits of One Million Dollars ($1,000,000). Lessee shall further deliver to Lessor a certificate of such insurance showing all aforementioned coverages to be in effect and providing that it will not be canceled without at least thirty (30) days prior written notification to Lessor.

    14.        Waiver of Subrogation:      If either Lessor or Lessee experience any injury, loss or damage to themselves or their respective real or personal property, and if that injury, loss or damage was then insured against under any or all of their respective insurance policies, including any extended coverage endorsements thereto, then the appropriate insurance company(ies), and not Lessor or Lessee, shall be solely liable to compensate the party(ies) who experienced the injury, loss or damage, and this shall be so regardless of whether Lessor or Lessee was responsible for such injury, loss or damage. To this end, Lessor and Lessee hereby waive any rights each may have against the other as a result of any injury, loss or damage which is then insured against by either. This waiver is effective only to the extent that the insurance company(ies) actually pay(s) for such injury, loss or damage. In addition, Lessor and Lessee agree to (1) cause their respective insurance companies to waive any right of subrogation, and (2) provide proof to the other party within thirty (30) days after the execution of this Lease that such waivers have been successfully obtained from the respective insurance companies (if such proof is not provided within this thirty (30) day period, the other party shall have the right to declare this paragraph to be ineffective). This paragraph shall be inapplicable if it would have the effect, but only to the extent that it would have the effect, of invalidating any insurance coverage of Lessor or Lessee.

    15.        Observance of Laws and Regulations:      Lessee agrees to keep the demised Premises in a clean and safe condition and to comply with all police, sanitary and safety laws, and all applicable regulations and ordinances of all governmental bodies having authority over the demised Premises or any activity conducted thereon including, but not limited to, those pertaining to storm water, process water, odor, dust emissions and noise, and to hold Lessor harmless against all costs, fees, attorneys’ fees, fines or damages which it may be caused to incur by reason of any charge that there has been a violation thereof.

    16.        Environmenetal Inspection and Audit:      Lessee acknowledges past Puget Sound Air Pollution Control Agency (PSAPCA) violations. Lessee shall allow Lessor or Lessor’s employees, agents or contractors access to the premises at any time for purposes of environmental compliance inspections. Further, Lessee acknowledges that an environmental audit was performed at the premises by Science and Engineering Analysis Corporation (SEACOR) and a report was produced and dated October 1991 suggesting various premises and management improvements designed to control odors on or about the premises. Lessee shall, at its sole expense, perform annual environmental audits designed to demonstrate full compliance with existing environmental and air quality laws and regulations. A copy of the audit reports shall be provided to the Lessor. To the extent that management practices and premises improvements are required to fully comply with environmental and air quality laws and regulations, the Lessee shall forthwith implement the necessary management practices changes and premises improvements in a timely fashion. Upon notice to Lessee by Le