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EXHIBIT 10.29
GROUND LEASE
This Ground Lease (this "LEASE") is made as of June 30, 1999 by and
between ROUGE STEEL COMPANY, a Delaware corporation (the "GROUND LESSOR") and
DEARBORN INDUSTRIAL GENERATION, L.L.C., a Michigan limited liability company
(the "GROUND LESSEE"). For purposes of this Lease, reference to "party" or
"parties" to the Lease means Ground Lessor and Ground Lessee, only. Capitalized
terms used herein have the meaning assigned to them in Appendix A to this Lease
unless otherwise defined in the text.
ARTICLE I
LEASED PREMISES
SECTION 1.01. LEASE OF LEASED PREMISES. Ground Lessor hereby demises
and leases to Ground Lessee, and Ground Lessee hereby leases from Ground Lessor,
for the Ground Lease Term, and upon and subject to the terms and conditions of
this Lease, the land described in Exhibit A attached to and made a part of this
Lease (the "LEASED PREMISES"). The Leased Premises is leased to Ground Lessee
subject to all conditions, covenants, easements and restrictions of record, and
existing Utilities Lines.
SECTION 1.02. USE OF LEASED PREMISES. Ground Lessee agrees and
covenants that the Leased Premises shall be used only for purpose of
construction and operation, (including installation, maintenance, repair,
restoration, replacement, dismantling and removal), or maintenance, repair or
replacement during periods of non-operation, of improvements comprising all or
any portion of the Project and parking lots, utility lines, access roads,
storage facilities and such other site improvements as are customary and
incidental thereto (the "SITE PROJECT IMPROVEMENTS") and, as provided in and
subject to Section 1.04, improvements comprising any portion of an Expanded
Facility and parking lots, utility lines, access roads, storage facilities and
such other site improvements as are customary and incidental thereto (the
"EXPANDED FACILITY IMPROVEMENTS"; collectively the Site Project Improvements and
the Expanded Facility Improvements are the "SITE IMPROVEMENTS").
SECTION 1.03. CONDITION OF LEASED PREMISES. Subject only to the
Insurance and Indemnification Agreement between Ground Lessor and Ground Lessee
and, the Insurance and Indemnification Agreement between Ford and Ground Lessee
as it relates to the Leased Premises, and to Ground Lessor's representation in
Section 1.032, Ground Lessee is leasing the Leased Premises in its present
physical condition. Ground
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Lessee shall rely solely upon its investigations, including those made for it by
contractors and other persons, with regard to the condition of the Leased
Premises, including its location, size, subsurface or soil condition, including
Hazardous Materials, or suitability thereof for the construction and operation
of the Project and any Expanded Facility thereon, the availability of utilities
services (electricity, gas, potable water, sanitary sewage disposal and storm
water disposal, telephone, cable and other communications interconnections);
compliance with applicable government rules or availability of government
actions necessary to enable the use of Leased Premises for operation of the
Project and Expanded Facility. The Leased Premises shall be leased, and Ground
Lessee shall accept possession of the Leased Premises on the Closing Date,
"as-is, where-is and with all faults," except as is expressly provided in the
first sentence above. Ground Lessee acknowledges that prior to its execution of
this Lease it has had the opportunity to conduct, and has conducted all such
inspections, investigations, tests, analyses, appraisals and evaluations of the
Leased Premises as Ground Lessee considers necessary or appropriate.
SECTION 1.031. INTENTIONALLY OMITTED
SECTION 1.032. EXISTING UTILITIES AND PARKING FACILITIES.
(a) The Leased Premises is leased to Ground Lessee
subject to the reservation herein by Ground Lessor of the right, for itself,
Ford and any public or quasi-public utility company providing service to the
Rouge Complex Land by means of recorded existing easements, easements listed in
Exhibit E or by existing utilities lines shown on the Existing Conditions Map
("UTILITIES LINES") situated thereon to have such Utilities Lines cross the
Leased Premises; to provide service to or for the Rouge Complex Land through
such Utilities Lines, and to come upon the Leased Premises to maintain, repair,
restore and replace (in the existing location) such Utilities Lines.
(b) Ground Lessor has provided to Ground Lessee a map of
the Leased Premises displaying all Utilities Lines within the Leased Premises
known to Ground Lessor to serve the Rouge Site and existing parking facilities
upon the Leased Premises, referred to as the "EXISTING CONDITIONS MAP,"
identified as ____________________ which Ground Lessor has caused to be prepared
to the best of knowledge of the Rouge Steel Company Plant and Engineering
Department; and it is located at the Rouge Steel Company Plant and Equipment
Engineering Department, Rouge Office Building, 3001
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Xxxxxx Road, Dearborn, Michigan.
(c) In Ground Lessee's physical development of the Leased
Premises, relocation (as necessary), protection and preservation of the
Utilities Lines to preserve their current operating capability shall be the
responsibility of Ground Lessee, at its sole risk and expense; and the work and
cost of replacement (including, but not limited to, satisfaction of Governmental
Requirements) of Ground Lessor's surface parking facilities with like-kind
facilities from the Leased Premises to the location designated on an addendum to
the Existing Conditions Map on other land owned by Ground Lessor shall be
performed and paid by Ground Lessee. After replacement of the parking
facilities, Ground Lessee shall have no further duty to incur any cost in
further reconstruction, maintenance or repair of same not occasioned by Ground
Lessee's or its contractors, agents and employees' negligence.
Ground Lessee shall provide notice to Ground Lessor not less
than ten (10) business days in advance of any proposed relocation or protective
actions concerning Utilities Lines, accompanied with plans for installation of
such relocated lines or for protection of Utilities Lines. All plans and all
work for any relocation of or protective actions concerning Utilities Lines
shall be subject to the prior written approval of Ground Lessor which shall not
be unreasonably withheld or delayed. The approval of Ground Lessor shall not be
withheld if (i) adequate provision, in the reasonable judgment of Ground Lessor,
is made for no interruption or diminishment of service provided by Utilities
Lines as a result of construction of any Site Improvements or by reason of
relocation or protective action, except for such tie-in and cut-over procedures,
including scheduling, which provide conditions reasonably acceptable to Ground
Lessor; (ii) there is no increase of risk of disruption of service or burden of
maintenance, repair and replacement of such Utilities Lines reasonably
foreseeable as a result of relocation or protective action or by construction of
Site Improvements; and (iii) in the case of relocation of Utilities Lines, the
materials, systems and design and the construction processes for relocation are
of at least equal quality and usefulness to that of the relocated line. Provided
that the notice of request for approval is also provided to Ground Lessor's Vice
President of Operations, in addition to the parties identified in Section 12.01
hereof, Ground Lessor's failure to respond to Ground Lessee's notice of request
for approval within ten (10) days following receipt of the request shall be
deemed consent to the action proposed in the request.
If Ground Lessor during periods of construction desires to
upgrade the service provided by Utilities Lines (by means of enlargement or
supplemental systems to
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increase functionality) at the time of work being performed for relocation or
protective action with respect to Utilities Lines by Ground Lessee, Ground
Lessor shall pay to Ground Lessee the incremental cost of such upgrade over the
work to be performed otherwise satisfying the conditions of this Section 1.032.
If the upgrade work would result in a delay in Ground Lessee's construction
schedule, then Ground Lessee shall not be required to perform such upgrade work,
unless Ground Lessor agrees to pay Ground Lessee for the additional costs
required to keep the construction on schedule. Payment of such costs shall be
made within thirty (30) days of receipt by Ground Lessor of invoices therefor.
All work by or for Ground Lessee shall be performed in accordance with approved
plans therefor. Ground Lessor shall have a right to inspect prosecution of any
work in connection with relocation or protection of Utilities Lines in
coordination with the work being performed.
(d) In accordance with the Insurance and Indemnity
Agreement, Ground Lessee shall only be responsible for all actual or direct
damages resulting and all remedial actions required, if in the prosecution of
any work or activities upon the Leased Premises, or reasonably foreseeable as a
consequence thereof, Ground Lessee adversely affects the current operating
capability of Utilities Lines, any Utilities Lines relocated by Ground Lessee or
protected by Ground Lessee as required under subparagraph (c) above, and any new
utility lines installed in accordance with Section 1.033. Ground Lessor shall be
responsible for, and bear the cost of, maintenance, repair and replacement for
all Utilities Lines upon the Leased Premises not otherwise the responsibility of
Ground Lessee under this paragraph.
(e) Ground Lessor and Ground Lessee further agree that,
in the event either of them so requests, the pathway of all Utilities Lines
shall be surveyed and described in easement documents suitable for recording
subjecting the Leased Premises to easements for Utilities Lines as a matter of
public record, to the extent that such easements are not so described and
defined as a matter of public record as of the Closing Date. In such event, the
party requesting the survey shall be responsible for its cost.
SECTION 1.033. NEW UTILITIES LINES. Ground Lessor reserves the
right to come upon that portion of the Leased Premises located within 20 feet of
a property line not designated in a site plan prepared by Ground Lessee for Site
Improvements and attached to this Lease as Exhibit B (the "SITE PLAN") to
install, maintain, repair, restore and replace new utilities lines to cross the
Leased Premises when doing so, in the reasonable judgment of Ground Lessor,
provides the most practicable means of service to be provided by such new
utilities lines, as long as the location of such new utilities lines
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will not interfere with the use of the Leased Premises for the purpose of
construction and operation of Site Improvements in the areas designated therefor
on the Site Plan. Notwithstanding the foregoing, prior to commencement of any
work upon the Leased Premises for the installation of new utilities lines by
Ground Lessor, Ground Lessor shall give Ground Lessee not less than ten (10)
days notice in advance of such work. If Ground Lessee provides Ground Lessor
with notice of its objection to Ground Lessor's planned installation of new
utilities lines prior to commencement of such installation, then the parties
shall meet in an attempt to satisfy Ground Lessee's objections. If such meeting
does not satisfy Ground Lessee's objections, then Ground Lessee and Ground
Lessor shall utilize the dispute resolution procedures in Article XV, which
shall take in to account Ground Lessee's current and proposed uses for the
Leased Premises and available alternatives to Ground Lessor. If Ground Lessee
grants, or the invoking of the dispute resolution procedures results in,
permission to Ground Lessor for the installation of new utilities lines then
Ground Lessee shall be responsible for any future relocation or modification
that is deemed necessary by Ground Lessee.
Prior to maintenance, repair, restoration and replacement of
new utilities lines, in the normal course, when supply of services provided by
new utilities lines is not interrupted or diminished, Ground Lessor shall give
Ground Lessee ten (10) days notice of need to come upon the Leased Premises.
SECTION 1.034 NOTICE PRIOR TO ENTRY.
In the normal course, when supply of services provided by Utilities
Lines is not interrupted or diminished, Ground Lessor shall give Ground Lessee
ten (10) days notice of need to come upon the Leased Premises. In cases where
Ground Lessor or other beneficiary of the services provided by Utilities Lines
or new utility lines believes in its reasonable business judgment that supply of
services is at risk by reason of the condition of any of the Utilities Lines or
new utility lines, Ground Lessor shall give as much advance notice of need for
repair as it considers reasonable under prevailing circumstances. In the case of
an emergency situation, in the reasonable business judgment of Ground Lessor or
other beneficiary of the service provided by the Utilities Lines or new utility
lines, no advance notice is required. Any entry upon the Leased Premises as
described above shall be at such times and in such manner as will not interfere
or interrupt the operations of Ground Lessee, and shall be subject to such
further conditions as may be contained in any of the Companion Agreements.
SECTION 1.04. EXPANSION UPON LEASED PREMISES.
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(a) In addition to the Project, Ground Lessee may install
upon the Leased Premises an additional gas turbine generator and ancillary
equipment (including heat recovery steam generator) with a nominal net capacity
of approximately 160 MW.
(b) In addition to the right conferred under subparagraph
(a) of this Section 1.04, subject to Ground Lessee's obtaining the prior written
approval of Ground Lessor, which shall not be unreasonably withheld, Ground
Lessee may further expand the electricity and/or steam producing capacity of the
Project and construct and install additional improvements therefor. In
connection with approval of such expansion, due consideration shall be given,
among other things, to any potential adverse effect (i) upon the Operative
Documents and the rights and obligations of the parties thereunder and (ii) upon
the ability of Ford and ROUGE to operate or expand the Rouge Complex in
accordance with Governmental Requirements and in a manner compatible with normal
business operations being conducted upon the Rouge Complex Land.
(c) Any improvements constructed upon the Leased Premises
which constitute an addition to, or serve an expansion of, the Project are
referred to as the "EXPANDED FACILITY IMPROVEMENTS," and that portion of the
improvements is referred to as the "EXPANDED FACILITY."
SECTION 1.05. TITLE TO SITE IMPROVEMENTS. The parties acknowledge that
title to the Site Improvements is and shall remain in Ground Lessee and shall
not become part of the Leased Premises whether or not the Site Improvements or
any of it becomes affixed to real property or permanently rests upon any real
property or any improvement thereon. It is the intention of the parties that
title to the Leased Premises is to remain separate from title to the Site
Improvements throughout the Term and thereafter except as expressly provided in
this Lease.
SECTION 1.06. DAMAGE, DESTRUCTION OR CONDEMNATION. This section shall
apply in the event that all or any portion of the Project or the Project Site is
condemned, appropriated, damaged or destroyed. To the extent that it is feasible
for the Ground Lessee and further subject to the requirements and direction of
Ground Lessee's project finance lenders, it will use all reasonable efforts,
including the use of insurance proceeds, to replace any portion of the Project
which has been damaged, destroyed or condemned. To the extent that it is not
feasible to replace any portion of the Project, the parties will enter into
negotiations to amend the Lease, if appropriate.
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ARTICLE II
TERM
SECTION 2.01. Intentionally Left Blank
SECTION 2.02. INITIAL TERM. The Initial Term of this Ground Lease shall
commence at 12 midnight of the Closing Date and end at 11:59 p.m. on December
31, 2030, unless earlier terminated as provided herein.
SECTION 2.03. EXTENDED TERM. If this Lease has not been earlier
terminated, at the end of the Initial Term, the Term of this Lease shall be
automatically extended on the same terms and conditions as contained in this
Lease except as expressly provided otherwise, for a term coterminous with the
term of an Electricity Sales Agreement, Steam Sales Agreement or Blast Furnace
Gas Purchase Agreement then in effect between Ground Lessor and Ground Lessee or
between any other entity located within the Rouge Complex and Ground Lessee,
whichever is of longer duration, subject to further extension by extension of
the term of any Electricity Sales Agreement, Steam Sales Agreement and Blast
Furnace Gas Purchase Agreement. The Electricity Sales Agreements, Steam Sales
Agreements and Blast Furnace Gas Purchase Agreement in existence at the end of
the Initial Term, and all subsequent amendments thereto shall be attached to
this Lease from time to time as evidence of agreement for extension of the Lease
Term.
SECTION 2.04. POST-TERMINATION TERM. Subject to and in accordance with
the Purchase Option Agreement, if Ground Lessee desires to continue to operate
the Site Improvements, Ground Lessor and Ground Lessee shall meet sixty (60)
days prior to the end of the expiring Initial or Extended Term to negotiate a
mutually agreeable land use or purchase agreement for the Leased Premises. In
the event the parties cannot negotiate a mutually agreeable arrangement prior to
the expiration of the relevant Term, then Ground Lessee shall have the option to
exercise its rights under the Purchase Option Agreement or to extend the term of
this Lease, for one Post-Termination Term of five (5) years from the ending of
the Term.
ARTICLE III
RENT
SECTION 3.01. INITIAL AND EXTENDED TERMS. During the Initial and
Extended Terms of this Lease, for so long during such Terms as the Leased
Premises is used exclusively in compliance with Section 1.02, or during any
portion of the Initial or Extended Terms that the Leased Premises is used other
than exclusively in compliance
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with Section 1.02 ("OTHER USE") with the prior consent of the Ground Lessor,
which it may grant or withhold in its sole discretion, Ground Lessee shall pay
annually, in advance, on or before January 1 of each full calendar year and on
the Closing Date for the first year if the Closing Date occurs after January 1,
the sum of One Dollar ($1.00) as Fixed Rent for the Leased Premises.
SECTION 3.02. FAIR MARKET RENT. During any portion of the Initial or
Extended Terms that the Leased Premises is used for an Other Use without prior
consent of the Ground Lessor, and during any Post-Termination Term, the Fixed
Rent shall be the Fair Market Rental Value for the Leased Premises determined
pursuant to the appraisal procedure of the Purchase Option Agreement. The annual
Fixed Rent so determined shall be adjusted annually by the increase or decrease
in the U.S. Department of Labor Consumer Price Index ("CPI") for all Urban
Consumers for Detroit, Michigan from the base period which shall be the date on
which the applicable Other Use or Post-Termination term began and for every
successive 12 month period and Fixed Rent under this Section 3.02 shall be
payable in installments monthly, in advance, commencing as of the first day of
the unconsented to Other Use or of the Post-Termination Term, as the case may be
and continuing on the same day of each month thereafter. Nothing in this Article
III shall imply permission for, or be construed to permit a change of, use of
the Leased Premises from that use described in Section 1.02.
SECTION 3.03. NET RENT; ADDITIONAL RENT. The Fixed Rent payable under
Sections 3.01 and 3.02 shall be net to Ground Lessor. In addition to the Fixed
Rent, Ground Lessee shall pay as Additional Rent all Charges asserted with
respect to Ground Lessee's use of the Leased Premises, before any delinquency,
but subject to the right to contest as provided in Section 7.03; and all other
Additional Rent as defined in Appendix A.
ARTICLE IV
EASEMENTS AND RIGHTS OF WAY
SECTION 4.01. EASEMENTS. Ground Lessor hereby confirms its grant to
Ground Lessee of the easements, licenses, rights of way and rights upon the
property of Ground Lessor described and as set forth in the Easement Agreement
attached as Exhibit C to this Lease (collectively, the "EASEMENTS"), the terms
and provisions of which are incorporated into this Lease by reference.
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SECTION 4.02. OMITTED
SECTION 4.03. RIGHTS OF WAY. Ground Lessee shall be responsible for
acquiring, all rights of way (collectively, the "RIGHTS OF WAY") across, over
and in Off Site Property, including but not limited to public rights of way
(e.g. Xxxxxx Road), that Ground Lessee may require for operation of the Site
Improvements. No agreement for a grant of a Right of Way shall impose a burden
upon the Leased Premises without the prior written consent of Ground Lessor,
which shall not be unreasonably withheld or delayed. Any burden imposed shall be
a Charge.
ARTICLE V
LIENS
SECTION 5.01. NO LIENS.
(a) Ground Lessee covenants and agrees that it will keep or cause
to be kept the Leased Premises free and clear of Liens other than Permitted
Liens which shall, however, be subordinate to this Lease. On the final
determination of the validity or amount of any such Permitted Lien as to which
Ground Lessee has the right to contest, Ground Lessee shall promptly pay the
amount of the Lien with all costs and charges payable in connection therewith,
and shall cause the Lien to be released or judgment satisfied at Ground Lessee's
expense. If any Lien placed on the Leased Premises ripens into final judgment,
Ground Lessor may, at its option, pay any such final judgment and any money so
paid by Ground Lessor shall be reimbursed to Ground Lessor by Ground Lessee
within thirty (30) days after receipt of a statement or documented demand
therefor. Prior to the payment of such final judgment, Ground Lessor shall give
Ground Lessee notice, and Ground Lessee shall have an opportunity to pay such
final judgment during a period of 120 days following notice unless the interest
of Ground Lessor as to any portion of the Project and the Leased Premises is
threatened by nonpayment of the judgment.
(b) Ground Lessor covenants and agrees that it will keep or cause
to be kept the Leased Premises free and clear of Liens other than Permitted
Liens which shall, however, be subordinate to this Lease. On the final
determination of the validity or amount of any such Permitted Lien as to which
Ground Lessor has the right to contest, Ground Lessor shall promptly pay the
amount of the Lien with all costs and charges payable in
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connection therewith, and shall cause the Lien to be released or judgment
satisfied at Ground Lessor's expense. If any Lien placed on the Leased Premises
ripens into final judgment, Ground Lessee may, at its option, pay any such final
judgment and any money so paid by Ground Lessee shall be reimbursed to Ground
Lessee by Ground Lessor within thirty (30) days after receipt of a statement or
documented demand therefor. Prior to the payment of such final judgment, Ground
Lessee shall give Ground Lessor notice, and Ground Lessor shall have an
opportunity to pay such final judgment during a period of 120 days following
notice unless the interest of Ground Lessee as to any portion of the Project and
the Leased Premises is threatened by nonpayment of the judgment.
SECTION 5.02. SEPARATE PARCEL. Ground Lessee shall apply for and with
due diligence and Commercially Reasonable Efforts, and with the reasonable
cooperation of Ground Lessor, process an application for a separate tax parcel
identification number for the Leased Premises, including no other real property,
for purposes of real estate taxation and assessment; and shall likewise process
such application as is required by, and in accordance with, the Michigan Land
Division Act and applicable ordinances. Ground Lessee shall use Commercially
Reasonable Efforts to obtain a property tax abatement and otherwise minimize the
amount of property tax payable on the Project and the Leased Premises. Ground
Lessor shall provide reasonable assistance to Ground Lessee in seeking to obtain
such abatement and favorable assessment.
ARTICLE VI
INSURANCE
SECTION 6.01. Ground Lessee shall maintain or cause to be maintained in
effect, insurance policies with respect to the Leased Premises and the Project
as required in the Insurance and Indemnity Agreement.
ARTICLE VII
COVENANTS OF GROUND LESSEE; DEFAULT
SECTION 7.01. COVENANTS. Ground Lessee hereby covenants and agrees as
follows:
(a) In good faith and with due diligence, to pursue, or cause to
be pursued, other than for reasons of force majeure as defined in the
turnkey agreement for the
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engineering, procurement and construction of the Project), the
construction and installation upon the Leased Premises, the Off Site
Property and the Easement Areas all improvements, equipment, facilities
comprising the Project, in operating condition and to commence
operation of the Project to perform the function of the Project in the
capacities, quantities and quality required under the Purchase and
Sales Agreements by the Commencement Date or by such later date as
close in time to the Commencement Date as good faith pursuit will
allow.
(b) To comply, in the development, construction, operation,
maintenance, repair and replacement of the Project and the Expanded
Facility and in its use of the Leased Premises and the Easement Areas
and Rights of Way, with all Government Rules, and Government
Requirements, unless compliance is the responsibility of Ground Lessor
or Ford under any Companion Agreement.
(c) To observe and comply materially with the terms of all
covenants, conditions, restrictions and easements affecting or
appurtenant to the Leased Premises, as may be described in the
documents listed in Section 1.032(a), or created upon and after the
Closing Date as contemplated by this Lease or by the Easement
Agreement, unless compliance is the responsibility of Ground Lessor or
Ford under any Companion Agreement.
(d) To perform and observe this Lease in accordance with its
terms.
(e) To perform the covenants and agreements of Ground Lessee under
the Companion Agreements so as to avoid an event of default thereunder,
but subject to all cure provisions afforded thereby and to the dispute
resolution processes (including arbitration) provided therein.
(f) Ground Lessee agrees that during its use and occupancy of the
Leased Premises it will promptly deliver to Ground Lessor notice of the
discovery of any environmental condition which, in the reasonable
opinion of Ground Lessee's environmental counsel, requires reporting or
notification to a governmental agency or which would trigger an
obligation of Ground Lessor under any of the Environmental Laws. The
terms of this paragraph shall not preclude Ground Lessee from
delivering prior notice to its project finance lenders or to comply
with any Government Requirements.
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SECTION 7.02. DEFAULT.
(a) The failure of Ground Lessee to perform any of its covenants
and agreements under the Lease shall constitute a ("LEASE FAILURE"). If any
Lease Failure continues for a period of one hundred twenty (120) days after
notice from Ground Lessor to Ground Lessee (the "CURE PERIOD") as extended as
provided in (b) of this Section 7.02, the Lease Failure shall become an "EVENT
OF DEFAULT," entitling Ground Lessor to exercise such remedies as it may have at
law or in equity subject to the express provisions of this Lease, subject only
to Ground Lessor's obligation to give notice to a Mortgagee and Mortgagee's
right to cure under Section 10.03.
(b) In the case of a Lease Failure under Section 7.01(b), (c), (d)
or (e) that cannot be remedied with the exercise of due diligence within the
Cure Period, if Ground Lessee has during the Cure Period commenced a course of
action adequate to remedy the Lease Failure and thereafter prosecutes such
course of action with all due diligence and continuity to the reasonable
satisfaction of Ground Lessor,
Ground Lessor agrees to extend the Cure Period for such reasonable time as may
be reasonably necessary to achieve cure of the Lease Failure (the "EXTENDED CURE
PERIOD"), provided that in no event shall such extension of right to cure
prejudice or otherwise adversely affect or have the potential to adversely
affect the interests of Ground Lessor in the Leased Premises or the Project, or
subject Ground Lessor to Charges or Claims, or place Ground Lessor in violation
of Governmental Rules; and against all of the foregoing, Ground Lessee shall
indemnify and hold Ground Lessor harmless as provided in the Insurance and
Indemnity Agreement. Ground Lessor shall provide notice of intent to end the
Extended Cure Period, and as the circumstances permit, Ground Lessee shall have
a period not less than five (5) or more than thirty (30) days (as specified in
the notice of intent) to conclude cure of the Lease Failure prior to the Lease
Failure becoming an Event of Default as above provided.
SECTION 7.03. PERMITTED CONTESTS. So long as no Event of Default shall
have occurred and be continuing, Ground Lessee shall have the right to contest,
at its own expense, in good faith, with due diligence and upon reasonable
grounds, the amount or validity or application, in whole or in part, of any
charges, claims or lien; provided that (i) such contest shall suspend the
execution, enforcement or collection thereof against the Leased Premises, any
part thereof or any interest therein or in this Lease, the Rent or other amount
payable hereunder; (ii) such contest shall not create any risk or impairment of
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operation or use of the Project in any material respect, and neither the Project
nor any part thereof or interest therein would be in a danger of being sold,
forfeited, lost or rendered inoperable by reason of any such contest; (iii)
neither Ground Lessee nor Ground Lessor would be subjected to the risk of any
criminal action or penalty or any material civil liability as a result of such
contest; and (iv) Ground Lessee shall have furnished such security, if any, as
may have been required in connection with such contest and as may have been
reasonably requested by Ground Lessor; and provided further that Ground Lessee
shall have delivered to Ground Lessor prior notice of any such contest. Upon the
conclusion of any contest permitted under this Section 7.03, Ground Lessee shall
promptly take such actions, including, without limitation, the payment of any
charges, claims or lien, interest, penalty or other amounts due in connection
therewith and provide evidence to Ground Lessor of the satisfaction of all
contested matters.
ARTICLE VIII
SUBORDINATION
SECTION 8.01. The lien of any mortgage or indenture hereafter placed
upon the fee title to the Leased Premises (a "FEE MORTGAGE") shall be subject
and subordinate to this Lease, the rights of Ground Lessee hereunder, to any new
Lease made pursuant to Section 10.03 of this Lease and to the leasehold estate
created hereby or thereby, and to any amendments of this Ground Lease and any
such new Lease; provided, however, that so long as any Fee Mortgage shall
constitute a lien on the fee title to the Leased Premises, no agreement
hereafter made amending this Lease, or any such new Lease, so as to (i) reduce
the amount of rent, (ii) shorten or extend the term of this Lease or any such
new Lease, or (iii) increase the obligations of Ground Lessor under this Lease
in any way, shall be binding upon the holder of any Fee Mortgage or upon the
granting of any deed given in lieu of foreclosure of any such Fee Mortgage, or
their successors and assigns, and any such holder or purchaser or grantee or
their successors and assigns shall be entitled to enforce this Lease or any such
new Lease in accordance with its terms prior to any such amendment. Any Fee
Mortgage shall contain a provision for release of the Leased Premises from the
lien of the Fee Mortgage upon consummation of Ground Lessee's purchase of the
Leased Premises pursuant to the Purchase Option Agreement.
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ARTICLE IX
LEASE TERMINATION EVENTS
SECTION 9.01. This Lease shall terminate upon the following events
("TERMINATION EVENTS"):
(a) An Event of Default.
(b) If during the Initial Term following the termination of the
Purchase and Sales Agreements, (i) Ground Lessee notifies Ground Lessor of its
intent to permanently cease operation of the Project or (ii) in fact ceases to
operate and fails to maintain the Project during periods of non-operation, and
such failure continues for a period of greater than one year.
(c) After the Initial Term, during or at the end of an Extended
Term the termination of the Electricity Sales Agreements, the Steam Sales
Agreements and the Blast Furnace Gas Purchase Agreement between Ground Lessor
and Ground Lessee or between any other third party located within the Rouge
Complex and Ground Lessee, whichever occurs latest, either (i) by expiration of
its (or their) terms or (ii) by Ground Lessee for reason of breach of such
Agreements by the party other than Ground Lessee, as provided therein.
(d) The expiration of the Term of this Lease by the ending (i) of
the Initial Term without extension as provided in Section 2.03 or (ii) of any
Extended Term without extension as provided in Section 2.03, in either case
other than by reason of an Event of Default.
(e) The expiration of the Post-Termination Term other than by
reason of an Event of Default.
SECTION 9.02 OMITTED
SECTION 9.03 OMITTED
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SECTION 9.04 OMITTED
SECTION 9.05 POST-TERMINATION OCCUPANCY. All occupancy of the Leased
Premises by or on behalf of Ground Lessee and activity (or inactivity) of and on
behalf of Ground Lessee upon the Leased Premises following a termination of this
Lease shall be governed by and subject to the terms and conditions of this
Lease, which shall survive termination for the purposes of governing
post-termination activity (or inactivity) upon or occupancy of the Leased
Premises as required or permitted under this Lease during such period to carry
out the rights and obligations of Ground Lessee. If there is no closing of a
sale of the Leased Premises to Ground Lessee, and if Ground Lessee fails to
remove the Site Improvements from the Leased Premises, (if such removal is
required under this Lease), within twenty-four (24) months following the earlier
of (i) the date notice is given, not more than eighteen (18) months prior to the
end of the then term which is not subject to extension under Section 2.03, by
Ground Lessor and Ford that neither Ground Lessor nor Ford will exercise the
option to purchase the Project under the Purchase Option Agreement, or (ii) the
date upon which Ground Lessor and/or Ford have not exercised the option to
purchase the Project under the Purchase Option Agreement (the "REMOVAL PERIOD"),
Ground Lessor may elect either (i) to elect to treat all or any portion of the
Site Improvements as conveyed to it without further consideration or (ii) to
cause removal of all or such portions thereof as Ground Lessor desires, at the
expense and risk of Ground Lessee.
If Ground Lessee shall fail to remove the Site Improvements within the
first eighteen (18) months of the Removal Period, Ground Lessee shall, for each
succeeding month during the Removal Period in which Ground Lessee has failed to
remove the Site Improvements, pay a monthly fee for delayed delivery of
possession of the Leased Premises to Ground Lessor equal to 1.5 times the
monthly installment of Fair Market Rental Value (if determined) plus Additional
Rent, or if market rental value has not been determined, an amount which is
annually ten percent (10%) of the Fair Market Sales Value of the Leased
Premises, plus Additional Rent.
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ARTICLE X
ASSIGNMENT, MORTGAGING, SUBLEASE
SECTION 10.01. ASSIGNMENT. This Lease may be assigned by Ground Lessee,
or any assignee of Ground Lessee, without the consent of Ground Lessor on one or
more occasions to any assignee permitted under the Companion Agreements,
provided there shall be delivered to Ground Lessor (i) a duplicate original of
the instrument or instruments of transfer of this Ground Lease in recordable
form, containing the name and address of the transferee thereof, and (ii) an
instrument of assumption by such transferee of all Ground Lessee's obligations
under this Lease. Upon such assignment of this Ground Lease and compliance with
the conditions referred to in the foregoing sentence, the assignor shall be
released from the performance of all the obligations on the part of Ground
Lessee thereafter to be performed hereunder except any unperformed obligations
which shall have matured prior to such assignment. No other assignment shall be
permitted except as provided in Section 10.02 below.
SECTION 10.01.1 SUBLEASE. Notwithstanding the foregoing, if
required for regulatory purposes in order to make electricity sales prior to
June 1, 2000, Ground Lessee may sublease all or a portion of the Leased Premises
to an affiliated company for a period not to extend beyond June 1, 2000.
SECTION 10.02. MORTGAGE. Without the prior consent of Ground
Lessor, Ground Lessee shall have the right to mortgage the leasehold estate
hereby created to secure indebtedness of Ground Lessee for financing of the Site
Improvements, and to grant a security assignment of this Lease and the Operating
Agreements and Companion Agreements in connection with such financing, for the
benefit of the Lender; and Ground Lessee is authorized to execute and deliver an
instrument constituting a lien on Ground Lessee's interest in this Lease,
including without limitation a Trust Indenture or any other mortgage, deed of
trust or indenture of mortgage and deed of trust (a "MORTGAGE"). Ground Lessee
shall give Ground Lessor notice of any Mortgage.
SECTION 10.03. MORTGAGEE'S RIGHT TO CURE LEASE FAILURES OR EVENTS OF
DEFAULT.
(a) Ground Lessor shall provide, at the same time Ground Lessor
gives notice of a Lease Failure to Ground Lessee, notice of such Lease Failure
to each holder of a Mortgage (each holder of a Mortgage is a "MORTGAGEE"), the
identity and address of which for purposes of notice Ground Lessor shall have
been advised by notice given by
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Ground Lessee pursuant to this Lease prior to the occurrence of a Lease Failure
or Event of Default. Ground Lessor shall negotiate and execute such consent to
assignment or other documents which shall define the terms and procedure for
Mortgagee's right to cure Lease Failures or Events of Default on behalf of
Ground Lessee.
SECTION 10.04. GROUND LESSEE'S RIGHT TO CURE
If Ground Lessor at any time fails to perform any act required of it
under this Lease or to pay any amount required to be paid by it which becomes a
Charge upon the Leased premises, then Ground Lessee may upon thirty (30) days
written notice, and without waiving or releasing Ground Lessor from any such
obligation, pay such amount or perform any act on Ground Lessor's part to be
performed under this Lease. All sums paid or reasonable costs and expenses
incurred by Ground Lessee shall be paid to Ground Lessee by Ground Lessor within
thirty (30) days of demand.
SECTION 10.05 COOPERATION FOR FINANCING
Ground Lessor agrees to cooperate with Ground Lessee in the negotiation
and execution of such amendments or additions to this Lease as lenders may
reasonably request.
ARTICLE XI
INTENTIONALLY OMITTED
ARTICLE XII
NOTICES
SECTION 12.01 All notices required to be given in writing hereunder
shall, unless the contrary is specified in this Lease, be given to the
respective Parties at the following address, or at such other addresses as the
Parties respectively may designate in writing to each other, by hand-delivery,
registered mail or overnight express courier (such as Federal Express):
If to DIG, addressed to: DIG
c/o CMS Generation Co.
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000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Vice President Operations
With a copy to: DIG
c/o CMS Generation Co.
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: General Counsel
If to ROUGE,
addressed to: Rouge Steel Company
0000 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
With a copy to: Rouge Steel Company
0000 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Any such notice shall be deemed to have been given as of the date so
delivered by hand, or in the case of a mailed or express delivered notice, when
received at the respective addresses referred to above.
ARTICLE XIII
BINDING EFFECT; SUCCESSORS AND ASSIGNS
This Lease, including all agreements, covenants, representations and
warranties, shall be binding upon, and inure to the benefit of, Ground Lessor,
Ground Lessee, and their respective successors and assigns.
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ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. PARTIAL INVALIDITY. If any term or provision of this
Lease or the application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid and unenforceable, shall not be affected
thereby and each term and provision of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
SECTION 14.02. AMENDMENT. Neither this Lease nor any of the terms
hereof may be amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which the enforcement of the
termination, amendment, supplement, waiver or modification shall be sought and
consented to by Mortgagee.
SECTION 14.03. HEADINGS; TABLE OF CONTENTS; REFERENCES. The Table of
Contents and headings of the various Articles and Sections of this Lease are for
convenience or reference only and shall not modify, define or limit any of the
terms or provisions hereof. When a reference is made in this Lease to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Lease unless otherwise indicated.
SECTION 14.04. COUNTERPARTS. This Lease may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument. It shall not be necessary for any counterpart to
bear the signatures of both parties.
SECTION 14.05. GOVERNING LAW. This Lease shall be governed by the laws
of the State of Michigan and all terms and covenants shall be interpreted in
accordance therewith.
SECTION 14.06. BENEFICIAL OWNERSHIP OF THE SITE IMPROVEMENTS. It is the
express intention of Ground Lessor and Ground Lessee that Ground Lessee shall be
the beneficial owner of the Site Improvements and property of Ground Lessee on
the Leased Premises for all purposes, subject to the provision of and Article X.
SECTION 14.07. QUIET ENJOYMENT. Ground Lessor covenants with Ground
Lessee
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that Ground Lessee shall peaceably and quietly hold and enjoy the Leased
Premises for the Term, without hindrance from Ground Lessor or persons claiming
under and through Ground Lessor, subject, however, to Ground Lessee's
performance and observance of the terms and conditions of this Lease.
ARTICLE XV
DISPUTE RESOLUTION PROCEDURES
SECTION 15.01. IF A DISPUTE ARISES
Solely in the case of disputes which arise under Articles
which explicitly require the use of the procedures outlined in this Article XV,
the following procedure shall be followed except that either party may seek
injunctive relief from a court where appropriate in order to maintain the status
quo while this procedure is being followed:
(1) Meeting - The parties shall hold a meeting promptly,
attended by persons with decision-making authority regarding the dispute, to
attempt in good faith to negotiate a resolution of the dispute; provided,
however, that no such meeting shall be deemed to vitiate or reduce the
obligations and liabilities of the parties or be deemed a waiver by a party of
any remedies to which such party will otherwise be entitled hereunder.
(2) Alternate Dispute Resolution - If, within thirty (30)
days after such meeting, the parties have not succeeded in negotiating a
resolution of the dispute, they agree to meet to select an appropriate form of
alternative dispute resolution to resolve the matter in a timely and mutually
satisfactory way.
SECTION 15.02. ARBITRATION
If the parties are not successful in negotiating a resolution
to the dispute, or can not select an appropriate form of alternative dispute
resolution within a reasonable time, or such alternative dispute resolution
fails to settle the dispute, then the parties agree to submit the dispute to
binding arbitration in accordance with the commercial rules of arbitration of
the American Arbitration Association by a sole arbitrator and to bear equally
the costs of the arbitration. Arbitration shall take place in the City of
Dearborn,
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unless otherwise agreed by the parties. The substantive and procedural
law of the State of Michigan shall apply to the proceedings. Equitable remedies
shall be available in any arbitration. Punitive damages shall not be awarded.
This section is subject to the Federal Arbitration Act, 9 USC ss. 1 et seq, and
judgment upon the award rendered by the Arbitrator, if any, may be entered by
any court having jurisdiction thereof.
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IN WITNESS WHEREOF, the undersigned have each caused this Lease to be
duly executed and delivered and their corporate seals to be hereunto affixed and
attested by their respective officers thereunto duly authorized as of the day
and year first above written.
In Presence of: ROUGE STEEL COMPANY
________________________ By:____________________________
Name: Xxxx X. Xxxxxxxxxxx
Executive Vice President
________________________ and Chief Financial Officer
Name:
DEARBORN INDUSTRIAL GENERATION,
L.L.C., a Michigan limited liability company
________________________ By:____________________________
Name:
________________________
Name:
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