GROUND LEASE BETWEEN THE CITY OF OAK RIDGE NORTH AND BIOFUELS POWER CORPORATION FOR GROUND GENERATION SITE
Exhibit
10.2
BETWEEN
THE
CITY
OF OAK RIDGE NORTH
AND
BIOFUELS
POWER CORPORATION
FOR
GROUND GENERATION SITE
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GROUND
LEASE AGREEMENT
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STATE
OF TEXAS
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§
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COUNTY
OF XXXXXXXXXX
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THIS
AGREEMENT, made and entered into
this
THIS
AGREEMENT, made and entered into
this 1st day of August 2007 by and between The City of Oak Ridge North,
hereinafter referred to as “Lessor”, and Biofuels Power Corporation, hereinafter
referred to as “Lessee”.
WHEREAS,
Lessee desires to lease from
Lessor and Lessor desires to lease to Lessee the real property described on
Exhibit “A” attached hereto and made a part hereof, being described as the Land,
Leased Premises, Premises, situated in Oak Ridge North, Xxxxxxxxxx County,
Texas
and
WHEREAS,
Lessee intends to construct
certain improvements on the Land, said improvements described on attached
Exhibit “B”.
NOW,
THEREFORE, subject to the terms,
provisions and conditions hereinafter set forth, and in consideration of the
covenants of payment and performance stipulated herein, Lessor does hereby
lease, demise and let unto Lessee and Lessee, subject to the terms of Paragraph
1 below, does hereby lease and rent from Lessor the real property described
above, and the parties further agree as follows:
1. Conditions. Lessee
accepts the Leased Premises in an “As-Is,” “Where-Is” condition, after debris
and vehicles are removed.
2. Term. Subject
to the terms of Paragraph 1, the primary term of this Lease shall be for a
period of forty-four (44) months, said term to commence August 1, 2007 and
terminate November 30, 2010.
3. Rental. Lessee
agrees to pay as base rental to Lessor a monthly rent of $3,500 per month,
and
which amounts shall be payable to Lessor at the address shown below for a term
of forty-four (44) months. The first monthly installment of rent
shall be due and payable on the Commencement Date and a like monthly installment
shall be due and payable on or before the 15th day of
each
succeeding calendar month thereafter. If the Commencement Date should
be a date other than the first day of a calendar month, the monthly rental
set
forth above shall be prorated to the end of that calendar month, and all
succeeding installments of rent shall be payable on or before the 15th day of
each
succeeding calendar month during the demised term.
4. Renewal
Options. Lessor hereby grants to Lessee the right and option to
extend the term of this Lease for tow (2) separate consecutive renewal terms
of
five (5) years each (the “Renewal Term” or “Renewal Terms”, as appropriate), the
Renewal Terms to begin upon the expiration of the Primary Term or prior Renewal
Term, provided that no Lessee Event of Default (as hereinafter defined in
Paragraph 13) exists at such time. All of the terms, provisions, and
covenants of this Lease shall apply to each of the Renewal Terms, except that
the rental amount be determined by parties at the time of said renewal
option. Lessee shall exercise each such option by delivering to
Lessor written notice of its election to renew no later than one hundred ninety
(190) days prior to the expiration of the Primary Term or Renewal Term, as
is
applicable. Lessee’s rights under
this Paragraph 4 shall terminate if (a) this Lease or Lessee’s right to
possession of the Premises is terminated in accordance with this Lease in
connection with the occurrence of a Lessee Event of Default, or (b) Lessee
fails
to timely exercise any of its options under this Paragraph 4, time being of
the
essence with respect to Tenant’s exercise thereof.
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5. Construction. Approval
of Plans and Specifications. Within a period of thirty (30) days
from the later of (i) the Effective Date (the date Lessor and Lessee executes
this Agreement), (ii) the date on which Lessee receives all zoning, site plan
and other similar approvals from applicable governmental authorities and Lessor,
as applicable.
Building: The
building will consist of a metal building approximately 40 feet by 60 feet
with
a concrete slab. The building will be used to house the generation
equipment for an environmental shelter and sound suppression.
Access: Gated
access will be available from Xxxxx Xxxx to the south, the fire line that runs
along the rear of the shopping center to the north, and an access gate that
will
allow a thoroughfare from the lot lying to the west of the Biofuels Power
site.
Land
and
Pad Site: The land located within the Biofuels Power site will be
graded to better manage the sheet flow which crosses the street. All
grading will be done with consideration of the neighbors and other tenants
in
and around the complex. (See photos in Exhibit “C”.)
Drainage: The
City of Oak Ridge North has agreed to improve the drainage on Xxxxx Xxxx to
relieve some of the source of the runoff and sheet flow which negatively affects
the Biofuels Power site and the rear access to the Xxxxxxxx Road Shopping
Center.
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6.
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Liability
Insurance.
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a. Lessee
shall maintain so called “all risk” fire and extended coverage insurance
(including vandalism and malicious mischief insurance, and flood insurance)
on
the Improvements, with a limit of or in an amount not less than eighty percent
(80%) of the replacement value thereof, less the cost of excavations,
foundation, footings and underground tanks, conduits, pipes, pilings and other
underground items. Payments for losses shall be made solely to
Lessee.
b. Lessee
shall also insure against property damage and public liability
c. Tenant
shall subscribe to the workers’ compensation law in the state in which the
Premises are located and shall each maintain (at its sole cost and expense)
workers’ compensation and employers’ liability insurance covering all of its
employees as required of a subscriber to the relevant statutes in the state
in
which the Premises are located, in the amount of not less than FIVE HUNDRED
THOUSAND DOLLARS ($500,000) per disease, and in the amount of not less than
FIVE
HUNDRED THOUSAND DOLLARS ($500,000) per disease aggregate.
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7. Rights
of Leasehold Mortgagee. Lessee, during the term of this Lease,
shall not mortgage or otherwise encumber its leasehold estate or interest in
any
improvement hereafter situated upon the Land.
8. Maintenance
and Repair. Lessee shall maintain and keep the Lease Premises in
good order, repair and condition, at Lessee’s own cost and
expense. Lessee further agrees to keep the Leased Premises
continually in a neat, orderly, sanitary and respectable condition, free from
any environmental contamination.
9. Equipment,
Fixtures and Signs. Lessee shall have the right to erect,
install, maintain and operate on the Leased Premises such equipment, trade
and
business fixtures, and other personal property as Lessee may deem necessary
or
appropriate. Any such installations shall not materially injure or
deface the Improvements. Lessee shall repair, at its sole cost and
expense, any damage to the Leased Premises resulting from the removal of such
personal property.
10. Lessee’s
Property. All merchandise, equipment, property and vehicles in or
about the Leased Premises, shall be at Lessee’s sole risk, and Lessee does
hereby no and forever release Lessor from any and all claims or damages unless
caused by Lessor’s gross negligence.
11. Utilities. Lessee
shall pay all charges incurred for the use of utility services at the Leased
Premises including, without limitation, gas, electricity, water, sanitary sewer,
storm sewer, cable television, and telephone, impact, tap or connection fees
associated with sewer and/or water service.
12. Damage
by Casualty. If during the term hereof the Leased Premises or any
part thereof shall suffer damages for fire, explosion, providential means or
other casualty this Agreement shall not be terminated thereby but shall remain
in full force and effect without regard of the extent of such
damage.
13. Default.
a. Each
of the following events shall be a “Lessee Event of Default” under this
Lease:
i. Lessee
shall fail to pay any installment of rent hereby reserved or any other charges
which are due hereunder as and when the same shall become due and shall not
cure
such default within seven (7) days after written notice thereof is given by
Lessor to Lessee;
ii. Lessee
shall fail to comply with any term, provision or covenant of this Lease, other
than the payment of rent or any other charges which are due hereunder, and
shall
not cure such failure within thirty (30) days after written notice thereof
is
given by Lessor to Lessee (provided that if such default cannot reasonably
be
cured within thirty (30) days, then Lessee shall have an additional reasonable
period of time (not to exceed ninety (90) days) within which to cure such
default);
iii. Lessee
shall be adjudged insolvent, make a transfer in fraud of creditors or make
an
assignment for the benefit of creditors;
iv. Lessee
shall file a petition under any section or chapter of the Bankruptcy Reform
Act
of 1978, as amended, or under any similar law or statute of the United States
or
any state thereof, or Lessee shall be adjudged bankrupt or insolvent in
proceedings filed against Lessee thereunder, or
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v. A
receiver or trustee shall be appointed for all or substantially all of the
assets of Lessee or Guarantor and Lessee or Guarantor shall not have had such
appointment discharged within thirty (30) days after Lessee receives written
notices of such appointment.
b. Upon
the occurrence of any Lessee Event of Default, Lessor shall have the option
to
pursue any one or more of the following remedies without any notice or demand
whatsoever:
i. Terminate
this Lease, in which event Lessee shall immediately surrender the Premises
to
Lessor, and if Lessee fails to do so, Lessor may, without prejudiceto any other
remedy which it may have for possession or arrearages in rent, enter upon and
take possession of the Premises and expel or remove Lessee and any other person
who may be occupying the Premises, or any part thereof, by force if necessary,
without being liable to prosecution or for any claim for damages (including
specifically any liability or duty under Section 93.002 of the Texas Property
Code, which is specifically superseded hereby); 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 including without limitation, accrued rent and
interest thereon pursuant to this Lease, the reasonable cost of recovering
the
Premises and the reasonable costs of reletting the Premises (including, without
limitation, advertising costs, brokerage fees, leasing commissions, reasonable
attorneys’ fees and reasonable refurbishing costs), whether through inability to
relet the Premises on satisfactory terms or otherwise;
ii. Enter
upon and take possession of the Premises (without terminating the Lease) and
expel or remove Lessee and other persons who may be occupying the Premises,
or
any part thereof, by force if necessary, without being liable to prosecution
or
for any claim for damages (including specifically any liability or duty under
Section 93.002 of the Texas Property Code, which is specifically superseded
hereby), and relet the Premises, as Lessee’s agent, and receive the rent
therefore; and Lessee agrees to pay Lessor on demand any deficiency that may
arise by reason of such reletting. Lessee hereby waives any right to
claim damages for such re-entry and repossession, including any rights granted
to Lessee by Chapter 93 of the Texas Property Code. In the event of a
termination of Lessee’s possession of the Premises under this Paragraph 13(b)
and notwithstanding anything in Section 93.002 of the Texas Property Code to
the
contrary, Lessor shall have no obligation whatsoever to tender to Lessee a
key
for new locks installed in the Premises and Lessee shall have no further right
to possession of the Premises. The provisions contained in the
preceding sentence shall override and control any inconsistent conflicting
provisions of Section 93.002 of the Texas Property Code. In the event
Lessor shall elect so to relet, then rent received by Lessor from such reletting
shall be applied first, to the payment of any indebtedness other than rent
due
hereunder from Lessee to Lessor (in such order as Lessor shall designate),
second, to the payment of any cost of such reletting,
including, without limitation, reasonable refurbishing costs, reasonable
attorneys’ fees, advertising costs, brokerage fees and leasing commissions, and
third, to the payment of rent due and unpaid hereunder (in such order as Lessor
shall designate). Lessor shall not be responsible or liable for any
failure, and Lessee hereby waives any obligation on the part of Lessor, to
relet
the Premises or any part thereof or to collect any rent due upon any such
reletting. No re-entry or taking of possession of the Premises by
Lessor pursuant to this paragraph shall be construed as an election on Lessor’s
part to terminate this Lease unless a written notice of such
termination is given to Lessee pursuant to paragraph and, notwithstanding any
such reletting without termination, Lessor may at any time thereafter elect
to
terminate this Lease for such previous breach. If Lessor relets the
Premises (it being understood and agreed that Lessor shall have no obligation
whatsoever to relet the Premises), either before or after the termination of
this Lease, for a rental greater than the rent provided in this Lease, then
for
that portion of the Premises that is subject to such new lease, all such excess
rentals shall be and remain the exclusive property of Lessor, and Lessee shall
not be, at any time, entitled to recover said excess rental;
or
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iii. Enter
upon the Premises, without being liable to prosecution of for any claim for
damages, and do whatever Lessee is obligated to do under the terms of this
Lease; and the Lessee agrees to reimburse Lessor on demand for any reasonable
and necessary expenses which Lessor may incur in thus effecting compliance
with
Lessee’s obligations hereunder. No repossession of or re-entering
upon the Premises or any part thereof pursuant to this Paragraph 13(b) or
otherwise and no reletting of the Premises or any part thereof pursuant to
this
Paragraph 13(b) shall relieve Lessee or any Guarantor of its liabilities and
obligations hereunder, all of which shall survive such repossession or
re-entering. Pursuant of any of the foregoing remedies shall not
preclude pursuit of any of the other remedies herein provided or any other
remedies provided by law, nor shall pursuit of any remedy herein provided
constitute a forfeiture or waiver of any rent due to Lessor hereunder or of
any
damage accruing to Lessor by reason of the violation of any of the terms,
provisions and covenants herein contained. Forbearance by Lessor to
enforce one or more of the remedies herein provided upon the occurrence of
a
Lessee Event of Default shall not be deemed or construed to constitute a waiver
of such default.
c. Each
of the following events shall be a “Lessor Event of Default” under this
Lease:
i. Lessor
shall fail or refuse to pay any sum of money payable hereunder when due, and
the
failure or refusal continues for thirty (30) days after written notice thereof
is given by Lessee to Lessor; or
ii. Lessor
shall fail or refuse to comply with any term, provision, or covenant of this
Lease, other than provisions for the payment of money, and does not cure the
failure or refusal within thirty (30) days after
written notice thereof is given by Lessee to Lessor (provided that is such
default cannot reasonably be cured within thirty (30) days, then Lessor as
the
case may be, shall have an additional reasonable period of time within which
to
cure such default).
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d. Upon
the occurrence of any Lessor Event of Default, Lessee shall have the option
to
pursue any one or more of the following remedies without any notice or demand
whatsoever:
i. Cure
the Lessor Event of Default and in connection therewith pay or incur reasonable
expenses. Notwithstanding the foregoing, Lessee shall not have such
right to cure a Lessor Event of Default set forth in Paragraph 13(c)(ii) in
the
event Lessor or their mortgagee takes action to cure such default within the
cure period therein provided, but is unable, by reason of the nature of the
work
involved, to cure the same within such period, provided Lessor or their
mortgagee (whoever commences such work) continues such work thereafter
diligently and without unnecessary delays. Additionally, Lessee shall
have the right to remedy any default of an emergency nature, in the event Lessor
or their morrgagee fails to commence to cure any default creating an emergency
situation promptly upon being given notice which is reasonable under the
circumstances, and Lessee shall have the right to remedy such a default without
notice (if the giving of notice is not reasonably practicable) in the event
of
an emergency. All sums so expended or obligations incurred by Lessee
in connection with the foregoing, shall be paid by Lessor to Lessee within
five
(5) days after demand.
Pursuant
to any of the foregoing remedies shall not preclude pursuit of any of the other
remedies provided by law, nor shall pursuit of any remedy herein provided
constitute a forfeiture or waiver of any damage accruing to Lessee by xxxxx
of
the violation of any of the terms, provisions, and covenants herein
contained. Forbearance by Lessee to enforce one or more of the
remedies herein provided upon the occurrence of a Lessor Event of Default shall
not be deemed or construed to constitute a waiver of such default.
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14.
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Assignment
of Subletting.
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a. Tenant
shall not assign this Lease or sublet the whole or any part of the Premises
without the prior written consent of Landlord, which consent Landlord shall
not
unreasonably withhold, condition or delay, provided (i) no Tenant Event of
Default (hereinafter defined) has occurred and is continuing at the time of
the
request for consent to the assignment or sublease, (ii) the use to be made
of
the Premises by the assignee or subtenant shall be permitted by
Paragraph hereof, (iii) the assignee or subtenant shall assume in
writing the performance of all of the terms, provisions and covenants of this
Lease on the part of Tenant to be kept and performed, and (iv) shall deliver
to
Landlord within fifteen (15) days (or as soon thereafter as is reasonably
practicable) after the assignment or subletting an executed duplicate of such
agreement, together with a duly executed assumption agreement. Any
such assignment or subletting shall be otherwise
subject to and upon all of the terms, provisions and covenants of this
Lease.
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b. No
assignment or subletting or collection of rent from the assignee or subtenant
shall be deemed to constitute a novation or in any way release Tenant from
further performance of its obligations under this Lease, and Tenant shall
continue to be liable under this Lease for the balance of the Primary Term
and
any Renewal Term with the same force and effect as if no such assignment had
been made.
15. Warranty. Lessor
warrants that it has full right to execute and to perform this Agreement and
to
grant the estate demised and that Lessee, upon payment of the requirements
and
performance of the terms, conditions, covenants and agreements contained in
the
Lease, shall peacefully and quietly have, hold and enjoy the Leased Premises
during the full term of this Agreement and any extension or renewal thereof,
without interruption by Lessor or any person or persons lawfully or equitably
claiming by, through, or under Lessor.
16. Compliance
with the Law. Lessee shall, at its sole cost and expense,
throughout the original term of the Lease or any renewal thereof, comply with
all governmental laws, ordinances and regulations applicable to the use of
the
Lease Premises including, without limitation, environmental laws and
regulations, the Americans with Disabilities Act of 1990, and all rules, orders
and regulations of the National Board of Fire Underwriters or Sublessor’s fire
insurance rating organization or other bodies exercising similar functions
in
connection with the prevention of fire or the correction of hazardous
conditions, which apply to the Leased Premises.
Lessee
covenants and agrees that it will not use or allow the Lease Premises to be
used
for the storage, use, treatment or disposal of any “hazardous substance” as
defined under either the Comprehensive Environmental Response, Compensation
and
Liability Act of 1980, the Resource Conservation and Recover Act of 1976, the
Superfund Amendments and Reauthorization Act of 1986, the Occupational Safety
and Health Act, and any amendments thereto. Lessee’s agreements under
this paragraph 16 shall survive termination of this Lease. Lessee
shall, at its sole cost and expense, perform any “clean up” which may be
required by any governmental or quasi-governmental agency and indemnify Lessor
and Lessor’s mortgagee from any damage, loss or injury.
17. Time
of the Essence. It is mutually agreed that time is of the essence
of this Agreement and that all times herein provided shall be strictly adhered
to.
18. Non-Disturbance. Provided
Lessee is given a non-disturbance agreement by a future mortgagee or new
lienholder, Lessee will agree to expressly subordinate its rights as Lessee
hereunder to such mortgagee or lienholder. So long as Lessee is not
in default hereunder, should such mortgage be foreclosed, this Agreement shall
not be affected and a purchaser at such foreclosure sale shall recognize
Lessee’s right to continue to occupy the Leased Premises and to exercise and
enjoy all rights granted hereunder.
19. Waiver
of Subrogation. Anything in this Agreement to the contrary
notwithstanding, Lessor and Lessee each hereby waives any and all rights of
recovery, claim, action or cause of action against the other, its agents,
officers, or employees for any loess or damage to or loss of any part of the
land or any improvements thereto, or for damage to or loss of any personal
property of such party therein, by reason of fire, the elements,
or any other perils to the extent against which such matters are insured under
the terms of the standard fire and extended coverage insurance policies, which
either Lessee or Lessor may at his option elect to obtain, regardless of cause
or origin, and each party hereto covenants that to the extent permitted by
the
laws and insurance regulations of the State of Texas, without penalty or extra
premium charge on account thereof, no insurer shall hold any right of
subrogation against such other party, but only to the extent that such waiver
would not have the effect of invalidating any insurance coverage of Lessor
or
Lessee.
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20. Condemnation
and Loss or Damage. Lessor agrees that if 25% or more of the
Lease Premises shall be taken or condemned (or sold in lieu thereof) for any
public purpose to such an extent as to render the Leased Premises untenantable,
this Agreement shall, at Lessee’s option, forthwith cease and terminate upon
written notification from Lessee to Lessor. All proceeds from any
taking or condemnation (or sale in lieu thereof) of the Leased Premises shall
belong to and be paid to Lessor.
21. Surrender. The
Lessee shall on the last day of term or any renewal and extension thereof,
or
upon the sooner termination of the term, peaceably and quietly surrender the
Leased Premises with any improvements to the Lessor, in good condition and
repair, reasonable wear and tear thereof excepted.
22. Holding
Over by Lessee. Should Lessee fail to vacate the Leased Premises
or any part thereof after the expiration of the Primary Term hereof, then unless
otherwise agreed in writing, such failure to vacate shall constitute and be
construed as a tenancy from month-to-month (at 150% of the monthly installment
of Base Rent for the immediately preceding calendar month) and shall otherwise
be upon the same terms and conditions as set forth in this Lease.
23. Waiver. A
waiver by Lessor or Lessee of any default or breach hereunder shall not be
construed to be a continuing waiver or such default or breach, nor as a waiver
or permission, express or implied, of any other or subsequent default or
breach.
24. Notices. Any
notice hereunder shall be sufficient if sent by registered mail to:
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LESSEE:
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Biofuels
Power Corporation
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00000
Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
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Xxx
Xxxxxxxxx, XX 00000
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LESSOR:
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The
City of Oak Ridge North
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00000
Xxxxxxxx Xxxx
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Xxx
Xxxxx Xxxxx, XX 00000
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25. Successor. The
provisions, covenants and conditions of this Lease shall bind and inure to
the
benefit of the heirs, legal representative, successors and assigns of each
of
the parties hereto.
26. Right
to Terminate. Lessor and/or Lessee, upon written notification to
Lessor, shall have the right to terminate this Ground Lease if Lessee is unable
to receive a building permit within sixty (60) days from execution of this
Ground Lease Agreement by Lessor and Lessee. If Lessee does not
notify the Lessor in writing of the termination, then this Ground Lease remains
in full force and effect.
27. Liability
of Trustee. All persons, including the Tenant under this Lease,
dealing with the Landlord in his capacity as Trustee, must look solely to the
assets and property of the Trust for the satisfaction of any claim, damages
or
liability arising out of or
resulting from the execution, performance, or non-performance by the landlord
of
its obligations under this Lease. Landlord shall have no personal
liability for the performance of failure of performance of any covenant,
agreement or obligation of the Landlord under the terms of this
Lease. Any suit or claim arising out of or resulting from this Lease,
if made, shall be instituted against Landlord solely in his representative
capacity and not in his capacity as an individual.
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EXECUTED
in duplicate originals this 1st day of August, 2007.
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LESSEE:
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/s/
Xxxxxx X. XxXxxxx
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Xxxxxx
X. XxXxxxx for
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Biofuels
Power Corporation
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LESSOR:
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/s/
Xxxx X'Xxxxxx
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Xxxx
X’Xxxxxx, Mayor
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The
City of Oak Ridge North
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ACKNOWLEDGEMENTS
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STATE
OF TEXAS
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§
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§
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COUNTY
OF XXXXXX
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§
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BEFORE
ME, the undersigned authority on
this day personally appeared Xxxxxx X. XxXxxxx known to me to be the
person whose name is subscribed above, being by me duly sworn did say that
he is
the person whose signature appears above.
TO
CERTIFY WHICH WITNESS my official
signature and seal of office this 1st day of August
2007.
| /s/ Xxxxxx Xxxxx | |
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Notary
Public in and for
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Xxxxxx
County, Texas
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My
Commission Expires: 00-0-00
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XXXXXXXXXXXXXXXX
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XXXXX
XX XXXXX
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§
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§
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XXXXXX
OF XXXXXXXXXX
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§
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BEFORE
ME, the undersigned authority on
this day personally appeared Xxxx X'Xxxxxx known to me to be the person
whose name is subscribed above, being by me duly sworn did say that he is the
person whose signature appears above.
TO
CERTIFY WHICH WITNESS my official
signature and seal of office this 1st day of August,
2007.
| /s/ Xxxxxx Xxxxx | |
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Notary
Public in and for
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Xxxxxx
County, Texas
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My
Commission Expires: Jan. 10,
2008
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