LEASE FOR MINERAL RIGHTS
MATERIAL LICENSE
----------------
THIS AGREEMENT is made as of the 18th day of June, 1996, by and between
PORTION OMITTED - CONFIDENTIAL TREATMENT hereinafter called "Licensor," and
INDUSTRIAL FABRICATIONS AND REPAIR, INC., a Tennessee corporation, hereinafter
called "Licensee".
WITNESSETH:
I . LICENSEE. Licensor hereby permits Licensee, subject to the provisions
hereof. to enter upon all of PORTION OMITTED - CONFIDENTIAL TREATMENT
hereinafter referred to as "Premises," in the County PORTION OMITTED
CONFIDENTIAL TREATMENT, State of PORTION OMITTED - CONFIDENTIAL TREATMENT for
the sole purpose of excavating and removing therefrom PORTION OMITTED -
CONFIDENTIAL TREATMENT hereinafter referred to as "Material," which is found
actually on the surface and for no other purpose.
1.1 During the term of this License as set forth in Section 2 hereof,
Licensee shall have the exclusive right to excavate and remove the Material from
the Premises, except for such exclusive right, Licensee's right to use the
Premises is nonexclusive, and Licensor and its nominees shall have the right to
enter and use the Premises for any purpose that will not unreasonably interfere
with the rights granted to Licensee under this License.
1.2 Licensee shall furnish Licensor with photographs of the Premises (i)
prior to excavating and removing therefrom any Material, and (ii) upon
expiration of this Agreement.
1.3 Licensee agrees not to create or permit the existence of any open pits
or shafts on the Premises.
1.4 This License is revocable by Licensor as provided in Section 2 hereof
Licensee agrees that Licensor shall not be estoppel to revoke this License,
notwithstanding any expenditure, regardless of amount, that may be incurred by
Licensee with respect to the Premises. Licensee further agrees that Licensee
shall not contest Licensor's right to revoke this License.
2. TERM. The term of this License shall be for five (5) years, commencing
on June 15, 1996 and ending on June 14, 2001 (the "Initial Term"), unless sooner
terminated as provided herein.
2.1 Provided (i) Licensee is not in default under the terms of this
License either at the time this option is exercised or at the commencement of
the Extension Term (as hereinafter defined), and (ii) Licensor has not given
more than two (2) notices of default in any twelve (12) month period of
nonpayment of monetary obligations, Licensee may elect to extend the term of
this License for one (1) additional five (5) year term, commencing June 1, 2001
(the "Extension Term') by delivering to Licensor at least one hundred twenty
(120) day before the end of the Initial Term a written notice of such election.
The Extension Term shall be subject to all the terms and conditions of this
License, except that the minimum and actual royalties for Material removed from
the Premises during the Extension Term shall be subject to increase pursuant to
Section 3.4 below.
3. ROYALTY. Licensee agrees to pay to the Licensor at File PORTION OMITTED
CONFIDENTIAL TREATMENT the sum Thirty Thousand Dollars ($30,000.00) per annum,
payable in advance as minimum royalty, which shall be credited as payment on
account of the actual royalties to be paid by Licensee to Licensor hereunder for
the amount of Material removed from the above-described Premises. Licensee
agrees to pay to Licensor actual royalties for Material removed from the
Premises at the rate of Thirty Dollars ($30.00) per ton.
3.1 After all the minimum royalty, payment for the term hereof has been
credited against the actual royalties due and payable to Licensor hereunder,
Licensee shall thereafter pay to Licensor, within twenty (20) days after the
expiration of each and every calendar month during the period this agreement
remains in effect, any and all additional, actual royalties due and payable to
Licensor hereunder at the rates hereinabove provided for.
3.2 Licensee shall furnish to Licensor not later than the twentieth (20)
day of each calendar month, during the period this agreement remains in effect,
a statement in writing, in the form attached hereto as Exhibit "A," setting
forth the weight or volume of Material removed from the Premises. The statement
shall be accompanied by copies of sale receipts or weight certificates for all
Material removed, together with a draft, payable to Licensor, for the proper
amount of royalty due Licensor. If no Material is removed, a statement to that
effect shall be furnished to Licensor.
3.3 Licensee shall keep a complete and true account and record of Material
removed from the Premises. Licensee shall permit authorized representatives of
Licensor to examine such accounts and records from time to time.
3.4 In the event Licensee exercises its option to extend the term of this
License in accordance with the provisions of Section 2.1 hereof, Licensor may
increase the minimum and actual royalties payable during the Extension Period
as provided herein. Licensor may give Licensee notice of an intended revision in
the minimum and actual royalties (the "Revision Notice") at any time after
Licensor's receipt of Licence's notice of election to extend the Initial Term of
this agreement. Licensor shall endeavor, but shall not be obligated, to deliver
the Revision Notice at least thirty (30) days prior to the commencement of the
Extension Term. Licensee shall give written notice of its acceptance or
rejection of the revised royalties within twenty (20) days of its receipt of the
Revision Notice. If Licensee fails to give such written notice in a timely
manner, Licensee shall be conclusively deemed to have accepted the revised
royalties as set forth in the Revision Notice. If Licensee gives timely written
notice of its rejection of the proposed revised royalties, Licensor and Licensee
shall have thirty (30) days within which to attempt to agree on the revised
royalties for the Extension Term and the parties shall meet and confer as
reasonably necessary. If the parties are able to agree on the revised royalties,
the revised royalties shall take effect on the first (St.) day of the Extension
Term, regardless of the date on which such agreement is reached. If the parties
are unable to agree within said thirty (30) day period, this License shall
automatically terminate and neither party shall have any further rights or
obligations hereunder except for obligations, of indemnity or otherwise, arising
out of any act, omission, or event occurring prior to the termination of this
License. In no event shall the minimum royalty payable for the Extension Term be
less than the minimum royalty amount payable for the Initial Term.
4. EXPENSES OF LICENSEE. Licensee shall pay, in addition to royalty, the
costs and expenses listed below:
4.1 TERM. Licensee shall pay, before they become delinquent, all charges,
fees, taxes and assessments imposed on the Premises by reason of Licensee's
activities or any improvement or personal property located on the Premises by or
on behalf Licensee, and any and all production or severance taxes computed or
based ,upon production or removal by Licensee of earth, rock and gravel from the
Premises. Licensor may pay such charges, fees, taxes or assessments, and any
penalties and interest thereon, and such payments will be repaid by Licensee on
demand.
4.2 Licensee shall pay, in addition to all other charges hereunder, any
privilege, sales, gross income or other tax (other than tax on net income)
imposed on Licensee or measured by amounts to be paid by Licensee hereunder.
4.3 UTILITIES. Licensee agrees to pay all water service charges and water
standby charges on, or assessed against, the Premises as a result of Licensee's
exercise of this License. Licensee agrees to pay for all utilities installed at
Licensee's request and for all utility services furnished to Licensee on the
Premises.
4.4 OTHER EXPENSES. In addition to the taxes and utilities is described
above, and unless otherwise specified herein, Licensee shall bear the sole risk
and pay all costs and expenses of whatever kind and nature which arise from this
License, including, without limitation, expenses to, reconstruct, alter, repair
and maintain any improvements or personal property located on the Promises by or
on behalf of Licensee.
4.5 INTEREST. Licensee agrees to pay to Licensor interest at the rate of
ten percent (I 0%) per annum (based on a 360-day year), or at the highest rate
permitted by law, whatever is lower, upon any and all amounts whatsoever due to,
Licensor under this License, from the date payment of each such amount is due
and owing to Licensor or from tile date of each breach by Licensee of an
obligation hereunder, as the case may be, unless such payment is tendered or
paid to Licensor within thirty (30) days after the date a payment is due and
owing hereunder to Licensor or the date of such breach, as the case may be.
4.6 REIMBURSEMENT. If Licensor shall have made payments on behalf of
Licensee for any costs or expenses incurred herein, Licensee shall reimburse
Licensor within ten (10) days from the date amounts for such costs or expenses
were incurred. Licensor shall have a lien on any other Licensee-owned property
on Licensors property as security for repayment of said amounts and as security
for the royalties due to Licensor hereunder.
5 USE..
5.1 QUALIFICATIONS ON USE. Licensee shall neither use nor permit any use
of the Premises for any purpose other than that set forth in Section I hereof.
5.2 Licensor represents and warrants to Licensee that Licensor has full
rights and authority to grant this License. This License is subject to all
easements, leases, liens, conditions, restrictions, encumbrances and claims of
title which may affect the Premises. Licensee acknowledges that there may be
subterranean facilities on the Premises, notwithstanding the absence of markers,
monuments or maps indicating their existence. Licensee accepts the Premises
(including, without limitation, Licensor-owned improvements, if any) in their
present condition and without any representation or warranty by Licensor as to
the condition of such Premises or improvements, and Licensor shall not be
responsible for any defect or change of conditions in the Premises or such
improvements, any damage occurring thereto or for the existence of any violation
of any municipal, county, state or federal law, order, rule, regulation or
ordinance.
5.3 Licensee, at its expense, shall arrange for the filing of any map
required under any subdivision map act and of any environmental impact report
required by any governmental body having jurisdiction in the matter.
5.4 Licensee shall, at its expense, comply with any reclamation
requirements imposed by governmental agencies having authority to do so. If any
governmental body seeks to impose any conditions on approval of Licensee's use
of the Premises, Licensor may terminate this License forthwith if any such
condition will affect any other property of Licensor or will affect the Premises
after this License is no longer in effect.
5.5 Licensee shall not (1) explore for, mine, extract or remove any
minerals of any kind or character including without limitation oil, natural gas,
hydrocarbon substances, geothermal steam, brines or minerals in solution, except
Material (2) commit any waste thereon, (3) remove any earth or soil, (4)
destroy, cut or remove any timber, trees or firewood standing or lying thereon,
or (5) permit others to commit any of said acts. Licensee shall not do or suffer
to be done in or upon said Premises any act or thing which is or may be a
nuisance. Licensee shall not use or permit others to use the Premises for any
unlawful or immoral purposes.
5.6 The Premises shall not be used for displaying signs and notices.
5.7 MAINTENANCE AND REPAIR. Licensee shall, at its expense and to the
satisfaction of Licensor, keep and maintain the Premises, and any other
improvements in good order and repair and in a neat and safe condition, and
promptly make all repairs and replacements that may become necessary to the
Premises or improvements or appurtenances thereto, whether structural or
nonstructural, ordinary or extraordinary. If Licensee shall fail to perform its
obligations under this Section 5.7, Licensor may take action to so keep and
maintain the Premises mid any improvements or appurtenances thereto, and
Licensee shall reimburse Licensor pursuant to Section 4.6 of this License.
5.8 CONSTRUCTION, ALTERATIONS AND LIENS.. License shall not repair
(except for emergency repair), construct, reconstruct or alter any improvements
or install any fixtures on the Premises or improvements without Licensor's prior
written consent.
5.9 Licensor has the right to post notices of non responsibility upon
the Premises, and to otherwise notify, actually or constructively, any entity or
persons supplying services or materials to the Premises that Licensor is not
responsible for the cost thereof. Licensee covenants and agrees to hold Licensor
and the Premises harmless from any mechanic's or materialmen's liens claimed by
any person, firm or corporation employed by or on behalf of Licensee. In the
event of the filing of any such lien, Licensee shall cause such lien to be
released within five (5) days after Licensor's written notice to do so. Licensee
shall indemnify and defend Licensor against all liability, cost and expense
(including attorney's fees) incurred by Licensor as a result of any such lien.
5.10. DAMAGE. If any damage is caused to land, or to crops, grass, trees,
livestock, improvements, or other property on the Premises, Licensee agrees to
promptly repair or pay the full replacement value of such damaged property
(regardless of amortization) to Licensor, at Licensor's discretion.
6. INDEMNIFICATION AND INSURANCE.
6.1 GENERAL. Licensee agrees to release, hold harmless, indemnify and
defend (with counsel approved by Licensor) Licensor from and against all
liability, cost and expense (including, without limitation, attorneys' fees, in
addition to costs of suit and judgment) for loss of or damage to any property or
loss of the use thereof or for injury to or death of any person when arising or
resulting from
(a) Licensee's breach of any provision of this License, or
(b) the use of the Premises or improvements by Licensee, its
agents, employees, or any third party (other than agent, employee or invitee of
Licensor),
whether or not caused or contributed to by the negligence, active or passive or
otherwise, of Licensor, its employees, agents, invitees or any other person.
6.2 ENVIRONMENTAL IMPAIRMENT. Licensee shall, at its expense, comply
with all applicable laws, regulations, rules and orders, regardless of when they
become or became effective, including, without limitation, those relating to
health, safety, noise, environmental protection, reclamation, waste disposal,
and water and air quality and furnish satisfactory evidence of such compliance
to Licensor upon request.
6.3 Should any discharge, leakage, spillage, emission, or pollution of
any type occur upon or from the Premises due to Licensee's use and occupancy
thereof, Licensee, at its expense, shall be obligated to clean all the property
affected thereby, whether owned or controlled by Licensor or any third person,
to the satisfaction of Licensor (insofar as the property owned or controlled by
Licensor is concerned) and any governmental body having jurisdiction there over.
6.4 Licensee agrees to indemnify, hold harmless and defend (with counsel
approved by Licensor) Licensor against all liability, cost and expense
(including, without limitation, attorneys' fees) incurred by Licensor as a
result of Licensee's breach of this section, or as a result of any discharge,
leakage, spillage, emission or pollution due to Licensee's use and occupancy,
regardless of whether such liability, cost or expense arises during or after
this License is in effect, unless such liability, cost or expense is proximately
caused solely by the active negligence of Licensor.
6.5 "Licensor" . The term "Licensor", as used in this Section 6,
includes Licensor, its subsidiaries and affiliates, and the successors and
assigns of any of them. Licensee shall pay all amounts due Licensor under this
Section 6 within ten (10) days after any such amounts become due.
6.6 INSURANCE. Licensee shall maintain insurance as required by the
Insurance Rider, attached to this License as Exhibit "B".
7. CONDEMNATION. In the event all or any portion of the Premises shall be
taken or condemned for public use (including, conveyance of deed in lieu of or
in settlement of condemnation proceedings), this License shall be revoked on the
sooner of the order of possession or the date of the final order of condemnation
or deed. Licensor shall be entitled to all compensation and damages arising out
of such taking or condemnation or sale in lieu thereof and Licensee shall assign
to Licensor any and all compensation and damages awarded to Licensee in
connection therewith.
8. TERMINATION OR EXPIRATION.
8.1 GENERAL Termination, revocation or expiration of this License shall
not release either party from liability resulting from an event which occurred
prior to such termination, revocation or expiration.
8.2 SURRENDER OF PREMISES. Upon termination or expiration of this
License, Licensee shall discontinue the use of the Premises and, within sixty
(60) days, remove all personal property of Licensee from the Premises. Licensee
shall restore the Premises as nearly as possible to the condition in which they
existed at the commencement of the License. Property of Licensee not removed
from the Premises within sixty (60) days after the termination, revocation or
expiration of this License shall become the property of Licensor. Licensee shall
leave any quarry or excavation on the Premises in a safe condition, properly
sloped and adequately safeguarded against accident to persons and livestock.
Licensee shall restore the Premises to conform with all governmental,
conservation and reclamation requirements. Licensee agrees to reimburse Licensor
for the cost and expense incurred by Licensor in restoration of the Premises and
disposing of said property of Licensee not so removed. If Licensee fails to
surrender possession of the Premises upon termination or revocation of this
License (or expiration if Licensor does not consent to holdover), Licensor shall
have the right, to the extent permitted by law, to re-enter the Premises and
remove Licensee and any person or entity claiming through Licensee from the
Premises.
8.3 In the event Licensee shall cease to use the Premises for the purpose
specified in Section I hereof for a period of six (6) consecutive months, or
should Licensee fail or refuse to perform or comply with any of the covenants
and agreements of Licensee herein contained and such failure continues for a
period of sixty (60) days following Licensor's providing written notice thereof
to Licensee, or in the case of any assignment or transfer of this License by
operation of law, then, and in any such event, Licensor may, at its option,
terminate this License by giving fifteen (15) days' written notice of
termination to Licensee; provided, however, any waiver by Licensor of any
default shall not constitute a waiver of the right to terminate this License for
any subsequent default which may occur.
9. DEFAULT. Licensee shall be in default wider this Licensee if Licensee
fails or refuses to pay the royalties hereunder or any other amount when due or
if Licensee fails or refuses to perform any other covenant or condition.
9.1 If Licensee fails to cure a default within fifteen (15) days after
notice from Licensor to do so, Licensor shall have the right, without further
notice and in addition to any other remedies Licensor may have at law or equity,
to revoke this License forthwith and to retake possession of the Premises.
IO. NONWAIVER. Licensors failure to enforce or exercise its rights under any
term, condition or covenant of this License shall not be construed as a waiver
of such rights or such term, covenant or condition. Acceptance of royalties or
any other amounts payable hereunder shall riot be deemed a waiver of Licensor's
right to revoke this License as provided herein, regardless of when accepted.
11. ATTORNEYS' FEES. If either party takes any steps or brings an action to
compel performance of or to recover for breach of any term of this License, the
losing party shall pay reasonable attorneys' fees of the prevailing party, in
addition to the amount of judgment and costs.
12. PERSONAL NATURE OF LICENSE. This License is personal to Licensee. As such,
Licensee has no right to assign this License in whole or in part or sublicense
the Premises in whole or in part.
13. NOTICES. Any demands, notices or statements herein requested or required
to be given by one party to the other shall be in writing. Delivery of such
written notice, demand or statement shall be conclusively taken as sufficient if
and when delivered in person or deposited in the United States mail, registered
or certified, postage fully prepaid, addressed, if to Licensor, at PORTION
OMITTED CONFIDENTIAL TREATMENT and, if to Licensee, at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, XX 00000. Either party hereto may by written notice change the
address to which such demands, notices or statements may be sent. Licensor may
change by written notice the address where payments to Licensor shall be made.
14. Time is of the essence of this License.
15. ENTIRE AGREEMENT: AMENDMENT, The contents of this License are the entire
agreement between the parties, and supersede all written or oral communication
between the parties prior to its execution, all understanding and negotiations
regarding the same having been merged herein, it being their intention that this
be an integrated Agreement. This License may not be modified except by a written
agreement signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in
duplicate as of the day and year first herein written.
LICENSOR: LICENSEE:
PORTION OMITTED Industrial Fabrications and Repair, Inc.,
CONFIDENTIAL TREATMENT a Tennessee corporation
By:s/s By: s/s Xxxxxx X. Xxxx
Title: Vice President Title: President
