2014-020ORDINANCE NO. 2014 -020
AN ORDINANCE APPROVING A LEASE AGREEMENT TO BE EXECUTED BY THE
CITY MANAGER, BY AND BETWEEN THE CITY OF DENTON, TEXAS AND
AMERICAN BIOSOURCE, LLC, A TEXAS DOMESTIC LIMITED LIABILITY COMPANY,
FOR A CERTAIN APPROXIMATE 1.004 ACRE TRACT OF LAND SITUATED IN THE
GIDEON WALKER SURVEY, ABSTRACT NUMBER 1330, IN THE CITY OF DENTON,
DENTON COUNTY, TEXAS, LOCATED IN THE VICINITY OF 1527 MAYHILL ROAD,
DENTON, DENTON COUNTY, TEXAS; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City and American Biosource, LLC, a Texas Domestic Limited Liability
Company ( "American ") have completed their negotiations which have culminated in the
proposed Lease Agreement which is attached hereto as Exhibit "A;" and
WHEREAS, on °��: �, 201 this item was presented to the Public Utilities
Board, and the Board recommended approval of the same; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. The recitations and statements contained in the Preamble hereto are
incorporated herewith by reference for all purposes, and made a part of this ordinance.
SECTION 2. The City Manager or his designee is hereby authorized to execute the
"Lease Agreement" by and between the City of Denton, Texas and American Biosource, LLC, a
Texas Domestic Limited Liability Corporation; which Lease Agreement is attached hereto as and
is incorporated herewith by reference as Exhibit "A," in substantially the form of the "Lease
Agreement" which is attached hereto and made a part of this ordinance for all purposes.
SECTION 3. The City Manager is authorized to make any expenditures and to perform
such duties as are set forth in the Lease Agreement.
SECTION 4.
This ordinance shall become effective immediately upon its passage and
approval.
��.._.. Y ;;;m , 2014.
11 PASSED AND APPROVED this the day of -. w
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
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By: ...................
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STATE OF TEXAS
COUNTY OF DENTON
LEASE AGREEMENT
This Lease Agreement (hereafter the "Lease Agreement ") is made and entered into
effective as of the Effective Date, as set forth below, by and between THE CITY OF DENTON,
TEXAS (hereinafter sometimes referred to as "LESSOR" and /or "the City "), a Texas municipal
corporation and a home -rule City, and AMERICAN BIOSOURCE, LLC, a Texas Domestic
Limited Liability Company ( "LESSEE ").
WHEREAS, LESSOR owns the City's Solid Waste Services Site (the "Site "), located in
the vicinity of 1527 Mayhill Road, City of Denton, Denton County, Texas and operates a landfill
on the Site (the "Landfill "); and
WHEREAS, the City desires to lease to LESSEE two tracts of land totaling
approximately 1.004 acres of land located within the Site, which real property is more
specifically set forth and described, by metes and bounds on Exhibit "Al" and "A2" (hereinafter
the "Leased Premises "); and
WHEREAS, LESSEE desires to lease the Leased Premises from the City for purposes of
operating its waste grease recycling and rendering business and for the purpose of locate its
waste oil collection vehicles, and optionally, a mobile office on the Leased Premises; and
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
agreements herein contained, and for $10.00 other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, LESSOR and LESSEE, intending to be
legally bound, do hereby AGREE as follows:
ARTICLE 1
PREMISES
1.1 Leased Premises.
LESSOR hereby leases and lets unto LESSEE, and LESSEE hereby leases and lets from
LESSOR the Leased Premises, which are two (2) certain tracts or parcels of real property
totaling approximately 1.004 acres, more or less; Tract Al being a 0.514 acre tract of land and
Tract A2 being a 0.490 acre tract of land, located at the Site, City of Denton, Denton County,
Texas, as is more particularly described by metes and bounds attached hereto as Exhibits "Al"
and "A2" and also as depicted by the field notes attached hereto as Exhibit `B 1" and B2," al
four of which exhibits are attached hereto and incorporated by reference herein.
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1.2 Use of Premises.
The Leased Premises are to be occupied and used by LESSEE solely for the operation of
its waste grease recycling and rendering business, to maintain and store its waste oil collection
vehicles, and to maintain a mobile office. LESSEE may operate a Bio- Diesel Plant ( "Plant ") on
the Leased Premises. In the event LESSEE for any reason desires hereafter to substantially
modify and /or substantially change its use of any of the Leased Premises, the nature and terms of
such modification and change must be approved in writing by LESSOR and this Lease
Agreement must be amended in writing to authorize the same.
1.3 Lessee Construction on Lease Premises.
LESSEE shall have the right to construct improvements on the Leased Premises and this
right shall continue in effect throughout the term of this Lease Agreement. LESSEE will, as a
consideration for LESSOR's obligations set forth herein and this Lease Agreement, construct, at
LESSEE's sole cost, any structure on the Leased Premises that is related to its business.
Throughout the term of this Lease Agreement and any extension thereof, LESSEE shall have the
right to alter, modify, remodel and demolish any improvements LESSEE has constructed on the
Leased Premises. LESSEE agrees to provide to LESSOR a complete set of plans and
specifications detailing each improvement which LESSEE proposes to construct on the Leased
Premises prior to commencing any construction. The plans and specifications will be reviewed
by LESSOR only for compliance with the municipal code of Denton, Texas as well as any
applicable environmental laws and /or regulations that are applicable to the LESSEE's operations.
LESSOR's Solid Waste Division must approve, within twenty (20) days, or must provide
LESSEE a written statement advising why the construction plans are not approved. Such
approval by the Solid Waste Division will not be unreasonably withheld or delayed. Provided
however, the Solid Waste Division's approval does not apply to any other approval required
from the City's Planning Department, Permitting or Building Permit Departments, or other City
departments. No approval of LESSOR shall be required with respect to any modifications or
alterations or remodeling of the interior of any of the improvements. All real property
improvements or fixtures constructed or placed on the Leased Premises by LESSEE shall remain
the property of LESSEE during the term of this Lease Agreement and any renewal or extension
thereof. For real property fixtures, they shall revert to LESSOR, upon the termination of this
Lease. The LESSEE is under a duty to promptly, within thirty (30) days following the date of
expiration of the term of this Lease Agreement, or any extension thereof, to remove any and all
personal property improvements installed or constructed or placed by LESSEE within or upon
the Leased Premises, by LESSEE with no damage to the Leased Premises. LESSEE agrees to
surrender the premises to LESSOR in broom -clean condition. The LESSEE covenants to
LESSOR that upon termination of this Lease the subject real property shall be free and clear of
any and all materials or waste that LESSEE abandons on the subject real property. Once the
premises have been surrendered by LESSEE, and once both Phase I and Phase lI Environmental
Studies, referenced below in Paragraph 1.5, have been conducted on the Leased Premises and
provided to the LESSOR, then LESSOR shall determine within twenty (20) days the disposition
of the $7,200 security deposit which LESSEE shall pay to LESSOR before taking possession of
the above - described Leased Premises at the beginning of this Lease. LESSOR shall advise
LESSEE in writing at its address, as shown herein, of any deductions made regarding any
damages suffered by the LESSOR by reason of LESSEE'S default regarding LESSEE'S
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covenant to surrender the leased premises in broom -clean condition, or by LESSEE'S failure to
remove any personal property from the Leased Premises, or to remedy any environmental
problems raised by the Environmental Studies.
1.4 Easements.
LESSOR shall provide to LESSEE, when reasonably required by LESSEE in the conduct
of its business on the Leased Premises, but in no event later than completion of construction, at
no additional consideration, non - exclusive rights -of -way or easements that it has the right to
grant over, across and through the Leased Premises; ingress and egress onto the Leased Premises
which are necessary for the operation of LESSEE's facilities on the Leased Premises as follows:
(a) For connection of water and sanitary sewer facilities to the boundary of the
Leased Premises;
(b) For connection of telephone, electric and gas lines, as approved by the appropriate
utility companies, to those installed at or upon the Leased Premises; and
(c) For connection of or reasonable access to on -site streets and /or roads for vehicular
traffic, only to roads immediately adjacent to or near the Leased Premises.
All rights -of -way or easements granted by LESSOR or to be granted shall be located in
such a way as to not unreasonably interfere with the orderly utilization of the LESSOR'S
Landfill operations.
1.5 Environmental Assessments Required by Lessor — Phase I and Phase II.
Preliminarily, LESSOR shall arrange a Phase I Environmental Study which will assess
whether there are any known environmental hazards regarding the Leased Premises. This Phase
I study is for the protection of LESSOR and LESSEE in determining the environmental
condition and status of the Leased Premises at the time of the commencement of this Lease.
LESSOR shall select the firm which will conduct the Phase I study. LESSOR shall pay for one -
half of the study. LESSEE shall pay for one -half of the study. LESSOR and LESSEE shall each
receive a copy of the Phase I final report.
Then, both a Phase I and Phase II final Environmental Study ( "Studies ") shall be
conducted on the Leased Premises upon the termination of the Lease Agreement, by LESSEE's
licensed professional consultant, with the cost of the Phase I study to be paid one -half by
LESSOR and one -half by LESSEE; and the cost for the Phase II, if it is necessary, to be paid for
solely by LESSEE. The final Phase I and Phase II (if necessary) Environmental Studies shall
commence no later than fifteen (15) days following the termination date of this Lease
Agreement. LESSEE agrees to provide LESSOR with exact copies of all such studies within
five (5) days following LESSEE'S receipt of such Studies. The parties agree that the LESSEE
shall be solely and exclusively responsible for the satisfactory cleanup of any environmental
contamination disclosed by the final Studies.
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1.6 Signs.
LESSEE shall be entitled to erect, install, and maintain on the Leased Premises
identification and advertising signs appropriate to its business; provided, however, that all such
signs at all times shall be subject to the prior written approval of LESSOR as to location, size,
shape, color and content. Said approval is conditioned upon the signs meeting the requirements
of the applicable City ordinances of the City of Denton, Texas.
1.7 Lien Claims.
LESSEE hereby covenants to unconditionally indemnify LESSOR from and against, and
hold LESSOR harmless from any and all lien claims of any nature whatsoever arising out of or
in any manner connected with the construction, installation, erection, maintenance, repair,
occupancy, use and /or operation of any improvements, facilities and /or equipment of LESSEE or
any third person on or about the Leased Premises by or at the direction of or with the permission
of LESSEE; and LESSEE further agrees that it shall, in the event any such liens are fled,
forthwith effect their removal and /or satisfaction. Provided, however, LESSEE shall have the
right, at its sole cost and expense, and after having given LESSOR prior written notice of its
intent to do so, to promptly contest by appropriate legal proceedings diligently conducted in
good faith, the amount, validity or application, in whole or in part, of any such lien or liens,
provided (i) such proceedings shall suspend the collection of such lien(s); (ii) neither the Leased
Premises nor any rent therefor, nor any portion of same, would be in danger of attachment,
forfeiture, loss or similar consequence; and (iii) that LESSEE shall first furnish security to the
City's reasonable satisfaction to bond said lien or liens off of the Leased Premises.
1.8 Inspection and /or Repair of Leased Premises.
LESSEE shall at all times maintain the Leased Premises including all improvements
thereon in good condition. LESSEE shall be responsible for all maintenance, repair and
replacement of the Leased Premises and all improvements thereon except for repairs or
replacements caused by the acts or negligence of LESSOR, its agents or employees.
1.9 Warranty.
LESSOR represents and warrants that it owns the Leased Premises and that LESSOR is
fully authorized to enter into this Lease Agreement with LESSEE. In addition, LESSOR
represents and warrants that it has not granted any mortgages or pledges of the tract of real
property leased hereunder. It is understood and agreed that any mortgage, pledge, or other
encumbrance of the property leased hereunder shall be subordinate to this Lease Agreement and
that any such mortgage, pledge, or other encumbrance shall contain specific provisions providing
that all of LESSEE's improvements or appurtenances on the property leased hereunder, as well
as any products or other contents in or on said improvements or appurtenances, are excluded
from such mortgage, pledge or encumbrance, and that LESSEE hereunder retains the right to
remove any and all such improvements or appurtenances, as well as any products or other
contents in or on said improvements or appurtenances, in accordance with the terms of this Lease
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Agreement, and that in the unlikely event of a foreclosure, LESSEE shall have the right to
continue to occupy the Leased Premises pursuant to the terms of this Lease Agreement so long as
LESSEE is not in default hereunder.
ARTICLE 2
LEASE TERM
2.1 Primary Term.
The Primary Term of this Lease Agreement shall be for a term of five (5) years from and
after the Effective Date of this Lease Agreement, unless sooner terminated as provided for
herein. The "Effective Date" of this Lease Agreement shall be the date on which LESSOR
executes this Lease Agreement and has obtained an ordinance of the City Council approving
same.
2.2 Renewal Terms.
Provided that LESSEE is not in default under this Lease Agreement; and provided that
this Lease Agreement is otherwise in full force and effect, this Lease Agreement may be
extended for two (2) additional terms of five (5) years each. The decision to extend the Lease
Agreement must be a mutual decision made by both LESSOR and LESSEE. Negotiations to
extend this Lease Agreement are to begin approximately one (1) year before the end of the
Primary Term or the First Renewal Term (as the case may be) of this Lease Agreement, provided
that the Lease Agreement is not in default at the time negotiations for extension are entered into
and at any time prior to the date of renewal..
2.3 Assignment of Lease Agreement
LESSEE shall not assign, sublet, mortgage or pledge this Lease Agreement or any
interest herein or in the Leased Premises or any part thereof, nor shall any assignment, sublease
or transfer of whatever kind of any interest of LESSEE herein by operation of law or by reason
of LESSEE's bankruptcy become effective, without the prior written consent of LESSOR, which
consent shall not be unreasonably withheld; provided however, that the City's refusal to give the
City's consent to a potential assignee who is not as creditworthy as LESSEE, shall be deemed to
be reasonable. Notwithstanding the foregoing, LESSEE shall have the right to assign this Lease
Agreement or sublet the Lease Premises to an entity that is controlled by, or under common
control with LESSEE, provided that LESSEE remains fully and primarily liable for all of its
obligations under this Lease Agreement.
ARTICLE 3
RENTALS
3.1 Monthly Rental.
The Monthly Rental for the Leased Premises shall be ONE THOUSAND TWO
HUNDRED DOLLARS ($1,200) per month for the first five (5) years of the Lease Term. For
purposes of this Lease Agreement the "Certificate of Occupancy Date" is the date upon which
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LESSOR issues the building occupancy permit. The first monthly rental payment due from
LESSEE to LESSOR, is payable at the offices of LESSOR as set forth in Article 6.2
hereinbelow, on or before the first day of the second month following the issuance of a
certificate of occupancy. No rental is being collected for only the first month following the
issuance of the certificate of occupancy, as a concession, to allow LESSEE an opportunity to
move -in and make -ready the Leased Premises, considering the condition of the Leased Premises
as left by the previous tenant. Monthly rental is payable in advance, with equal payments of
rental to be made on the first day of each month thereafter throughout the term of the Lease.
3.2 Monthly Rental Prior to the Issuance of the Certificate of Occupancy.
LESSOR and LESSEE agree that from the Effective Date of this Lease to the date of
issuance of the certificate of occupancy by the City, the rent shall be 50% of the Monthly Rental
rate set forth above in Article 3.1 for the real property described in this Lease. LESSOR and
LESSEE agree that but for the one month's free rent of $1,200, as set forth in 3.1. above,
occurring after issuance of the Certificate of Occupancy, that the provisions of this Article shall
apply and be 50% of the Monthly Rental rate. Further, the monthly rental for purposes of this
Lease Agreement shall be prorated and is payable on the date that the first Monthly Rental
payment is due.
3.3 Permitted Uses by Lessee Prior to Certificate of Occupancy Issuance.
LESSOR understands that LESSEE, once this Lease Agreement is Effective, shall have
the right to take whatever steps are necessary and appropriate in order to bring the Plant
equipment back up and operational. LESSOR understands that once the Plant equipment is
operational and all necessary licensing, in order for LESSEE to operate a Bio- Diesel Plant, has
been obtained, then LESSEE shall be entitled to run the first one - hundred batches of biofuels as
a test phase.
3.4 Monthly Rental for Lease Renewal Option Period(s).
LESSOR and LESSEE agree that the rental amount is also subject however, to the terms
of Rental Adjustment (indexing) that is reserved in this Article 3.3. The rental rate set forth
hereinabove is for purposes of the Lease and shall be defined as the "Initial Base Rental
Payment." Such Initial Base Rental Payment will be the rental due under the Lease for years one
(1) through five (5) of the initial five year (5) year term of the Lease (the "Primary Term ").
On the first day of the first term of Lease Renewal, ( "First Renewal Term ") the Monthly
Rental to be paid by LESSEE to LESSOR under the Lease Agreement shall be subject to
adjustment based upon adjustments in the Consumer Price Index, as hereinafter defined. The
Monthly Rental of $1,200 established in Article 3.1 above, shall be adjusted upward, downward,
or unchanged at the expiration of the five -year Primary Lease Term to conform to that certain
United States Bureau of Labor Statistics "Producer Price Index" now known as Series ID#
PCU531210531210602. That index is named: Real estate brokerage, nonresidential property
leases including land leases. Its base date is December, 2009. The starting date, for purposes of
this Rental Adjustment is January 1, 2019. The adjustment of rental at the commencement of the
beginning of year six (6), the beginning of the First Renewal Term of the Lease Agreement will
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be accomplished by multiplying the initial base rental payment by a fraction, the numerator of
which shall be such index as of the most recent date published prior to the date of adjustment and
the denominator of which shall be the most recently published index as of the Commencement
Date. The adjustment for each subsequent five (5) year Lease Renewal ( "Second Renewal
Term ") period will be calculated in a similar manner; except that rather than using the initial base
rental payment as the base rentals from which adjustments will be made, the rental figure for the
then current year will be substituted for such initial base rental payment. Provided however, in
no five (5) year period subsequent to the Effective Date of this Lease Agreement (i.e. the First
Renewal Term and the Second Renewal Term), may the rental be increased or decreased more
than twenty -five percent (25 %) of the rental applicable during the five (5) year period
immediately preceding the five (5) year period for which an adjustment is to be made. If the
index above referred to shall be discontinued, the parties hereto shall attempt to agree upon a
substitute index or formula. In the event of dispute between the parties as to the amount of any
adjustment, the rates shall be established through the dispute resolution procedures.
3.5 Taxes.
LESSEE agrees to pay all sales and /or use taxes and any and all ad valorem assessments
and /or taxes which may be legally exacted, made, and charged upon and /or levied and /or
assessed against LESSEE's property on the Leased Premises, before the same shall become
delinquent; provided, however, LESSEE shall have the right, at its sole cost and expense and
after having given LESSOR prior written notice of its intention to do so, to contest by
appropriate legal proceedings diligently conducted in good faith, the validity, amount or
application, in whole or in part, of such taxes, levies and /or assessments provided (i) such
proceedings will suspend the collection of the tax, levy, or assessment; and (ii) the Lease
Premises, nor any rent therefrom, nor any portion of it is in danger of seizure, forfeiture, sale,
loss or similar consequences.
3.6 Late Charges on Rentals.
If any installment of rental due from LESSEE is not received by LESSOR within twenty
(20) days of the date upon which it is due, without any notice or demand for payment to LESSEE
being necessary, LESSEE will pay to LESSOR the additional sum of Fifty Dollars ($50.00) as a
late charge for each late payment. The late charge represents the reasonable time and efforts of
City staff expended in order to enforce and collect the rental obligation. Acceptance of any late
charge shall not constitute a waiver of LESSEE's default with respect to the overdue amount, nor
prevent LESSOR from exercising any other rights and remedies available to LESSOR.
3.7 No Additional Fees.
There shall be no additional fees or assessments made by LESSOR for LESSEE's use or
occupancy of the Lease Premises except for the Additional Rental payable by LESSEE to
LESSOR pursuant to the terms of Article 3.8 herein. Provided however, LESSEE shall remain
solely responsible for any impact fee, connection fee, tap fee, building fees, permits fees, any
State regulatory fees, or any other municipal fees charged by the City of Denton, Texas that are
applicable to the Leased Premises; and shall timely pay same.
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3.8 Additional Rental.
LESSEE shall pay to LESSOR a payment of Additional Rental on a quarterly basis
during the Primary Term of this Lease Agreement and any renewal thereof. The Additional
Rental is based upon LESSEE'S sale of any biofuel sold by LESSEE to any third -party. The
amount of the Additional Rental shall be $0.0085 per gallon sold. The Additional Rental shall be
accounted for and determined by a Quarterly Report of Production and Sales (the "Quarterly
Report"). The Quarters shall be: January 1 through March 31; April 1 through June 30; July 1
through September 30; and October 1 through December 31. The Quarterly Report shall be
prepared by LESSEE and shall be delivered to LESSOR no later than the twentieth (20th) day of
the month next following the quarter of each report (i.e. April 20 for the quarter beginning
January 1 and ending March 31). The Quarterly Report shall state at a minimum, for that
quarter, the following information: Number of days that the Plant was operational; the total
production of biofuels in gallons; the total amount of biofuels sold to third - parties stated in
gallons; the breakdown in gallons of the types of biofuel and any other fuel produced at the
Leased Premises,
3.9 Late Charge for Late Filing of Quarterly Report of Production and Sales.
If the Quarterly Report is not received by LESSOR from LESSEE within twenty (20)
days of the date such report is due, then LESSEE, without any notice or demand for payment to
LESSEE being necessary, LESSEE shall pay to LESSOR the additional sum of TWENTY FIVE
DOLLARS ($25.00) as a late filing penalty for each late Quarterly Report. This charge
represents the reasonable time and efforts of City staff expended in order to enforce the
Additional Rental obligation of LESSEE and the City's ability to determine what amount of
Additional Rent is due and owing under Article 3.8 above.
3.10 Requirement of Lessee's Maintenance of Detailed Accurate Financial Records.
LESSEE is obligated to maintain full and detailed adequate accurate financial and tax
accounting records at all times during the Term of this Lease Agreement and any extension
thereof. LESSEE shall allow LESSOR reasonable access to all such records upon five (5) days
written request.
ARTICLE 4
OPERATIONS
4.1 Pollution Control.
LESSEE agrees that it shall use its commercially reasonable best efforts to comply with
all applicable federal, state and local laws, regulations and the common law, as they may exist
currently, or as they may be amended in the future, pertaining to protection of the environment or
human health and safety at the Leased Premises and /or in the vicinity of any of its operations or
activities that may be permitted hereunder.
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4.2 Compliance with Environmental Laws and Indemnification.
During the Term and any renewal of this Lease Agreement, LESSEE shall fully comply
with all applicable federal, state and local laws, regulations and the common law, as they may
exist currently or as they may be amended in the future, pertaining to protection of the
environment or human health and safety at the leased premises.
LESSOR warrants and represents that at the commencement of this Lease Agreement,
that to the best of its knowledge and belief there is no Hazardous Substance (as defined
hereinbelow) including any petroleum, petroleum product, or other types of hydrocarbons in or
on the Leased Premises in contravention of any federal, state or local laws, regulations or the
common law pertaining to protection of the environment or human health and safety.
Notwithstanding any provision in this Lease Agreement to the contrary, it is expressly
understood and agreed that the LESSOR hereby agrees to indemnify to the extent provided by
applicable law, defend and hold harmless the LESSEE, only to the extent permitted by applicable
law, its officers, employees, contractors, agents, customers, licensees, invitees and /or visitors and
any other person for or on whose behalf LESSOR is liable, harmless from and against any and all
claims, obligations, liabilities, costs, expenses (including attorney's fees), losses, suits, fines,
penalties or demands, made or sought by or on behalf of any person, firms, corporation or
government authority whomsoever, based upon or arising out of any obligation, liability, loss,
damage or expense, of whatever nature or kind, contingent or otherwise, known or unknown,
incurred under or imposed by any provision of federal, state or local law or regulation, or
common law, pertaining to protection of the environment or human health and safety in or on the
Leased Premises.
Notwithstanding any other provision in this Lease Agreement to the contrary, it is
expressly understood and agreed that the LESSOR does not assume or agree to be responsible
for, and LESSEE hereby agrees to indemnify, defend and hold LESSOR, its officers, employees,
contractors, agents, customers, licensees, invitees and /or visitors and any other person for or on
whose behalf LESSOR is liable, harmless from and against any and all claims, obligations,
liabilities, costs, expenses (including attorney's fees), losses, suits, fines, penalties, or demands,
made or sought by or on behalf of any person, firm, corporation or government authority
whomsoever, based upon or arising out of the handling, storage or disposal of Hazardous
Substances by LESSEE, LESSEE's agent or anyone on or about the Leased Premises by or at the
direction of LESSEE or with the permission of LESSEE during the term of this Lease
Agreement.
For purposes of this Lease Agreement, the term "Hazardous Substance" or "Hazardous
Substances" means that term as defined in Section 9601(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. ( "CERCLA "), but it also includes the term "Regulated Substance" as
defined in Section 6991(2), and the term "Hazardous Waste" as defined in Section 6903(5), of
the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901, et
seq. ( "RCRA "), including all regulations issued pursuant to any of the above statutes, as well as
any other contaminant, oil, petroleum, petroleum product or byproduct, radioactive material or
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byproduct and any unsafe, noxious, toxic or hazardous substance or similar material regulated as
a hazardous substance under any applicable state, federal or local law, and any other applicable
environmental, land use or similar act, statute or regulation existing as of the date of this Lease
Agreement or thereafter.
The indemnifications provided by this Article shall specifically and reciprocally cover,
without limitation, costs incurred in connection with any investigation of site conditions or any
cleanup, remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision or other third party.
The foregoing environmental indemnity provisions provided in this Article 4.2 shall
survive for a period of five (5) years after the expiration or termination of this Lease Agreement
and any renewals hereof.
4.3 Compliance with Laws and Regulations.
LESSEE's exercise of such rights and /or privileges as may be extended it hereunder shall
at all times be in full compliance with all applicable laws, rules, and regulations, including safety
regulations, of the City of Denton, Texas, the State of Texas, the United States, and other
governmental authorities now or hereafter having jurisdiction thereof and /or any of their duly
empowered agencies and /or instrumentalities. A copy of all building permits, licenses, and
similar authorizing documents will be promptly provided to the LESSOR.
4.4 Lessee Insurance.
For the term of this Lease Agreement and any renewal thereof, LESSEE will maintain, at
its own expense, the following insurance coverage:
(a) Workers' Compensation providing statutory benefits, and Employers' Liability
coverage with minimum limits of $1,000,000 per each occurrence; and
(b) Comprehensive General Liability insurance coverage with minimum limits of
$2,000,000 per occurrence, combined single limit, for bodily injury and property
damage. Coverage shall include contractual liability; and
(c) Automobile liability insurance coverage with minimum limits of $1,000,000 per
occurrence, combined single limit; and
(d) Casualty property insurance on any LESSEE - constructed facilities on Site in an
appropriate amount reasonably determined by the agreement of LESSEE and
LESSOR, which amount shall take into account the construction costs of the
LESSEE's facilities and other relevant factors.
LESSEE shall provide LESSOR with a certificate evidencing the insurance required
hereunder together with written evidence of premium payment. All such policies of insurance
shall require that LESSOR and LESSEE be given at least thirty (30) days prior written notice of
any modification, termination and /or cancellation of coverage. The insurance policies described
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in (b) and (c) above shall name LESSOR as an additional insured party. All insurance policies
belonging to LESSEE shall be issued through companies that shall have a minimum A.M. Best
Company rating of "A -" in addition to a minimum financial size category of "VI" or "VII," or
alternatively, a Standard and Poor's rating of "BBB" or better.
4.5 Lessee's Provision of Discounted Fuel to Lessor.
LESSOR agrees to accept from LESSEE during the Term of this Lease Agreement,
subject to LESSEE'S Plant being licensed and operational, deliveries of biofuel which have been
ordered by LESSOR, which deliveries shall be provided to City at a discounted rate of two (2 %)
to two - and -a -half (2.5 %) percent below than the then current market rate for such biofuel.
LESSEE shall certify to LESSOR the market rate of such fuel at the time of each such delivery
of fuel to the City. LESSOR and LESSEE may re- negotiate this discount should market
conditions change, but LESSOR shall be guaranteed at least a two (2 %) discount on biofuel by
LESSEE at all times.
4.6 Termination.
This Lease Agreement shall terminate pursuant upon the expiration of its Term, or
extension of Term (if applicable), or upon the mutual written agreement of LESSOR and
LESSEE. Upon termination, LESSEE shall be entitled to remove all of its personal property
from the building(s) and any equipment, which is not characterized as a real property fixture, that
LESSEE has installed in the building, and shall thereafter promptly quit and surrender the
Leased Premises to LESSOR in broom -clean condition. LESSEE shall additionally remove all
feedstock, recyclables and recycling materials, by- products, end - products, and chemical supplies
from the Leased Premises, and shall thereafter quit and surrender the Leased Premises to
LESSOR; subject to the provisions of Article 1.3 hereinabove.
4.7 Events of Default.
The following shall be "Events of Default" under this Lease Agreement and the terms "Event of
Default" or "Default" shall mean whenever they are used in this Lease Agreement, any one or
more of the following events:
(a) The insolvency, assignment for the benefit of creditors, adjudication as a bankrupt
of LESSEE or the appointment of a receiver for substantially all of the LESSEE's
property and /or LESSEE's interest in this Lease Agreement; or
(b) The issuance of execution against LESSEE's interest in this Lease Agreement or
any legal process which by operation of law would cause LESSEE's interest in this Lease
Agreement to pass to any person other than LESSEE or its successor assignee or
sublessee; or
(c) The failure or refusal of LESSEE to pay or cause to be paid any lease rental
payment, charge and /or assessment hereunder or any installment thereof when due and
the continuance of such failure for a period of twenty (20) days after written notice
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thereof has been sent by LESSOR to LESSEE at the address shown herein for LESSEE;
or
(d) The failure or refusal of LESSEE and /or LESSOR to perform any agreement,
covenant, condition, obligation and /or undertaking herein contained or required by
operation of law and /or to observe or comply with any of the terms provisions or
conditions of this Lease Agreement, and the continuance of such for a period of thirty
(30) days after written notice thereof has been sent by LESSOR to LESSEE at the
address shown herein for LESSEE; or
(e) The failure of LESSEE and /or LESSOR in the observance or performance of any
material term, obligation or covenant required to be performed by LESSEE and /or
LESSOR under this Lease Agreement or by operation of law, and the continuance of
such for a period of thirty (30) days after written notice thereof has been sent by LESSOR
to LESEE at the address shown herein for LESSEE.
4.8 Holding Over.
If LESSEE shall, with or without the consent of LESSOR, hold over after the expiration
or sooner termination of the term of this Lease Agreement, the resulting tenancy shall, unless
otherwise mutually agreed upon in writing, shall be on a month -to -month basis only. During
such month -to -month tenancy, LESSEE shall pay to LESSOR the same rentals, plus an
additional payment of holdover rent of twenty (20) percent, per month, of the then applicable
rent, payable monthly along with its other rental payments due hereunder, as set forth herein,
unless a different rate(s) shall be agreed upon, and LESSEE shall be bound by all of the
provisions of this Lease Agreement insofar as they may be pertinent. LESSOR shall have the
right, after the expiration of the term and /or extension to provide LESSEE with a 30 -day notice
letter notifying LESSEE that the holdover tenancy will end thirty (30) days thereafter and that
LESSEE must therefore, vacate the Leased Premises.
4.9 Waiver of Breach of Default -- Cumulative Remedies.
Waiver by any party of any breach or Default of this Lease Agreement shall not be
deemed a waiver of similar or other breaches or Defaults, nor shall the failure of any party to
take action by reason of any such breach or Default deprive such party of the right to take action
at any time while such breach or Default continues. The rights and remedies created by this
Lease Agreement shall be cumulative and nonexclusive of those to which the parties may be
entitled pursuant to law. Right of exercise of all such rights and remedies is hereby reserved.
The use and availability of one remedy shall not be taken to exclude or waive the right to use of
another. In order to entitle any party to exercise any remedy reserved to it in this Lease
Agreement, it shall not be necessary to give any notice, other than such notice as is herein
expressly required.
5.1 Quiet Enjoyment.
ARTICLE 5
MISCELLANEOUS
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LESSOR covenants that during the term of this Lease Agreement and for so long as
LESSEE shall make timely payment of rentals due hereunder, and LESSEE shall perform all
covenants on its part to be performed, LESSEE shall and may peaceably and quietly have, hold
and enjoy the Leased Premises.
In the event of bankruptcy, insolvency, assignment for benefit of creditors, or foreclosure
of any mortgage or other encumbrances, by entry or by sale, LESSEE, if it is not then in default,
shall peaceably hold and enjoy the Leased Premises for the remainder of the unexpired term of
the Lease Agreement upon the same terms, covenants, and conditions as in this Lease
Agreement.
5.2 Notices.
All notices and other communications required or permitted to be given by any provision
of this Agreement shall be in writing and mailed (certified or registered mail, postage prepaid,
return receipt requested) or sent by hand or overnight courier, and such notices shall also be sent
by facsimile transmission (with acknowledgment received), charges prepaid and addressed to the
intended recipient as follows, or to such other address or number as may be specified from time
to time by like notice to the Parties. A courtesy copy of such notice or other communication
shall also be sent electronically via e-mail to the e-mail addresses provided in the contact
information below; provided, however, that such e-mail copies will not constitute Notice as
defined in this Section 5.2:
(a) If to the City:
City of Denton, Texas
215 East McKinney Street
Denton, TX 76201
Attention: City Manager
Facsimile: 940 - 349 -8596
With a copy to:
City of Denton, Texas
1527 South Mayhill Road
Denton, TX 76208
Attention: General Manager of Solid Waste Services
Telephone: 940 - 349 -8044
Email: Vance. Kemlergcityofdenton.com
(b) If to Lessee:
American BioSource, LLC
Walter Dobson, President
624 West University Drive, Suite 359
Denton, Texas 76201
Telephone: (214) 280 -0112
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Email: WaltergAmericanBio.So „urce.,com
Any Party may from time to time specify a different address for notices by like notice to
the other Party. All notices and other communications given in accordance with the provisions
of this Lease Agreement shall be effective upon receipt of the same.
5.3 Substitution of Performance by Lessor.
If LESSEE shall fail to do anything required to be done by it under the terms of this
Lease Agreement, except to pay rent and other charges, LESSOR may, after thirty (30) days
written notice to LESSEE, at LESSOR's sole option, do such act or thing on behalf of LESSEE,
and upon notification of the cost thereof to LESSOR, LESSEE shall promptly pay to LESSOR
the amount of that cost. In case of emergency, LESSOR may perform, but is not obligated to
perform, any act or do anything reasonably necessary on behalf of LESSEE and upon
notification of the cost thereof to LESSEE, LESSEE shall pay said cost to LESSOR within thirty
(30) days from the date of LESSOR'S written claim to LESSEE.
5.4 Eminent Domain.
If all or a portion of the Leased Premises or all or any portion of LESSOR's other
property comprising the Leased Property shall be taken or sold in any proceeding by public
authorities, by means of condemnation, expropriation, appropriation or otherwise be acquired for
public or quasi- public purposes, there shall be an equitable abatement or refund of the rental paid
by LESSEE under Article 3.1 above from any date of award to LESSOR proportionate to the
amount taken. Nothing herein shall affect or diminish LESSEE's right to seek compensation for
any portion of the Leased Premises taken and LESSEE shall be entitled to all such compensation
for its provable loss or damage.
In the event the taking of the Leased Premises or all or a part of LESSOR's other
property comprising the Leased Premises is total, this Lease Agreement shall terminate, and
LESSEE shall be released from all obligations hereunder; except for any sums of money owed to
LESSOR at the date of termination of this lease, which amounts shall be paid to LESSOR within
thirty (30) days.
In the event the taking of the Leased Premises or LESSOR's other property comprising
the Landfill is less than total, then LESSEE shall have the option to terminate this Lease
Agreement if continuation of its operations on the Lease Premises is substantially impaired and
economically impractical.
5.5 Substitution of Performance by Lessee.
If LESSOR shall fail to do anything required to be done by it under the terms of this
Lease Agreement, LESSEE may, after sixty (60) days written notice to LESSOR, at LESSEE's
sole option, do such act or thing on behalf of LESSOR, and upon notification of the reasonable
cost thereof to LESSOR, may deduct said amount from any amount owed by LESSEE to
LESSOR. In case of emergency, LESSEE may perform any act or do anything reasonably
necessary on behalf of LESSOR and upon notification of the cost thereof to LESSOR, may
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deduct said amount from the amount of rental then owed by LESSEE to LESSOR. If no amount
is presently owed by LESSEE to LESSOR, then LESSOR shall pay such amount to LESSEE on
demand.
5.6 Recordation.
Neither LESSOR nor LESSEE shall record this Lease Agreement without the prior
written consent of the other party. LESSOR and LESSEE may execute and acknowledge a
"short form" memorandum of this Lease Agreement for recording purposes.
5.7 Entire Agreement.
This Lease Agreement embodies the entire agreement between the parties with respect to
the leasing and use of the Leased Premises. There are no representations, terms, conditions,
covenants or agreements between the parties which are not mentioned or contained herein. This
Lease Agreement shall completely and fully supersede all other prior agreements both written
and oral, between the parties pertaining to the Leased Premises. No party to any such prior
agreement hereafter will have any rights thereunder, but shall look solely to this Lease
Agreement for definition and determination of its rights, liabilities, or responsibilities relating to
the aforesaid matters set forth herein.
5.8 Captions.
The article and the subsection headings and captions contained herein are included for
convenience only and shall not be considered a part hereof or affect in any manner the
construction or interpretation of this Lease Agreement.
5.9 Severability.
The parties agree that if it should ever be held by a court of competent jurisdiction that
any one or more articles, subsections, clauses or provisions of this Lease Agreement are invalid
or ineffective for any reason, any such article, subsection, clause or provision shall be deemed
separate from the remainder of this Lease Agreement and shall not affect the validity and
enforceability of such remainder.
5.10 Successors and Assigns.
The covenants, terms, conditions and obligations set forth and contained in this Lease
Agreement shall be binding upon and inure to the benefit of LESSOR and LESSEE and their
respective successors and assigns.
5.11 Disputes and Governing Law.
This Lease Agreement shall be governed by and construed solely in accordance with the
laws of the State of Texas. Exclusive venue for any claim or cause of action under this
Agreement shall be, as the case may be, either in the District Courts of Denton County, Texas, or
the Federal District Courts of the Eastern District of Texas, Plano or Sherman Division.
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IN WITNESS WHEREOF, this Lease Agreement has been executed by the duly authorized
City Manager of LESSOR; and by the duly- authorized officer of LESSEE, in multiple
counterparts, each of which, for all purposes, shall be deemed an original and all of which shall
evidence but one agreement.
r la(I i IWNI on this," 1 clay . � :!L I .. (1q .,
"LESSOR"
THE CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
B ". �
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By
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IN WITNESS WHEREOF, this Lease Agreement has been executed by LESSEE in the
presence of the undersigned witness, in multiple copies, each of which, for all purposes, shall be
deemed an original and all of which shall evidence but one agreement.
mr,10
"LESSEE"
AMERICAN BIOSOURCE, LLC.
A Texas Limited Liability Company
._
Titled�... _`� _'J.........� _.....j...�G„ r�d�u.�c LLC
: s-.vs. .�. �-ei° .1B11e
WITNESS:
APPROVED AS TO LEGAL FORM:
ITS LEGAL COUNSEL
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Date: / Z ° Z c7 , Ze-o /�