2004-095FILE REFERENCE FORM 2004-095
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
care m¢~a~s
Amended and Restated Facility Lease -Ordinance No. 2008-087
04/15/08 ~R
ORDINANCE NO. 2004- 8t~.~~'
AN ORDINANCE AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE
A LANDFILL GAS RIGHTS AND COLLECTION FACILITY LEASE AND LICENSE
AGREEMENT BETWEEN THE CITY OF DENTON AND DTE BIOMASS ENERGY, INC.;
SAID AGREEMENT BEING FOR PROFESSIONAL SERVICES AND HIGH TECHNOLOGY
PROCUREMENT FOR THE DESIGN, DEVELOPMENT, AND OPERATION OF A LANDFILL
GAS COLLECTION FACILITY; AUTHORIZING THE EXPENDITURE OF FUNDS
THEREFORE AND PROV]I)ING AN EFFECTIVE DATE (RFP 3111).
WHEREAS, after advertising for and receiving competitive sealed proposals in accordance
with the law, City staff reviewed and rated the sealed proposals and recommends that the Landfill
Gas Rights and Collection Facility Lease and License for the design, development, and operation of a
landfill gas collection facility be awarded to DTE Biomass Energy, Inc. (the "Provider") as the
proposal offering the best final offer based on the evaluation factors contained in the request for
proposal, said agreement being attached hereto and made a part hereof as Exhibit "A" (the
"Agreement"); and
WHEREAS, the Agreement calls for a high technology' procurement of equipment and
professional services of a highly technical nature; and
WHEREAS, the City Council finds that the Provider's proposal as set forth in the Agreement
is the proposal offering the best final offer based on the evaluation factors contained in the request
for proposal
WHEREAS, the Provider is qualified on the basis of its demonstrated competence and
qualifications to perform the proposed professional services; and
WHEREAS, the amount being charged for professional services under the Agreement are
fair and reasonable and are consistent with and not higher than the recommended practices and fees
published by the professional associations applicable to the Provider's profession and such fees do
not exceed the maximum provided by law; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference as if fully set forth herein.
SECTION 2. The Agreement is hereby approved and the City Manager, or his designee is
hereby authorized to enter into the Agreement on behalf of the City.
SECTION 3. The City Manager is authorized to expend funds as required by the Agreement.
SECTION 4.
approval.
PASSED AND APPROVED this the ~'~-d~day of ("~~-'
EULINE BROCK MAYOR
This ordinance shall become effective immediately upon its passage and
,2004.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROk~ED AS TO LEGAL FO :
HERBERT L. PROUTY, CITY ATTORNEY
LANDFILL AND DIGESTER GAS RIGHTS AND COLLECTION FACILITY LEASE
This Landfill Gas and Digester Gas Rights and Collection Facility Lease
("Lease") is dated as of April ] , 2004 by and between the City of Denton, Texas, a
home rule municipal corporation ("Owner" or "Lessor") and DTE Biomass Energy, Inc.,
a Michigan corporation ("DTE" or "Lessee").
Whereas, Lessor owns and operates the City of Denton Sanitary Landfill located
in the City of Denton, Texas at 1527 S. Mayhill Road (the "Landfill") and the City of
Denton Water Reclamation Plant located in the City of Denton at 1100 S. Mayhill Road
(the "Water Reclamation Plant Property"), and;
Whereas, pursuant to a Request for Proposal by the City of Denton entitled RFSP
#3111 - Professional Services Contract for Design and Development of a Biodiesel
Production Facility, DTE and Biodiesel Industries, Inc. made a Proposal dated November
13, 2003, a copy of which is on file in the Offices of the Denton City Engineer (the
"Proposal"), and;
Whereas, the Lessor and Lessee desire to enter into this Lease to set forth the
terms and conditions of the leasing of Landfill and Digester Gas Rights and a Landfill
Gas Collection System to be constructed by Lessor to collect landfill gas for a proposed
landfill and digester gas to energy project, and;
Whereas, this Lease provides, among other things, for the construction by Lessor
of a Preliminary Gas Collection System sufficient in scope to supply the City's Biodiesel
Production Facility ("BP Facility") with all the Landfill Gas required to operate the BP
Facility and to provide for a Preliminary Gas Collection System sufficient in scope to
allow DTE to do a feasibility study to determine whether or not Landfill Gas and
Digester Gas can be extracted and sold in Commercial Quantities, and;
Whereas, if Landfill Gas and Digester Gas can be sold in Commercial Quantities
to a Customer, Lessor agrees to construct an expanded Gas Collection System by Lessor
sufficient in scope and size to permit the consummation of a Landfill Gas and Digester
Gas Project.
Now, therefore, in consideration of the mutual covenants and agreements set forth
herein, Lessor and Lessee agree as follows:
1. Definitions
1.1 "BTU/cf'shall mean British Thermal Units per cubic feet and is defined as a
unit of energy equal to the heat needed to raise the temperature of one pound of water
from sixty (60) degrees Fahrenheit to sixty-one (61) degrees Fahrenheit at a constant
pressure of one standard atmosphere. The BTU equivalent on a dry basis at 14.65 psia
may be obtained by multiplying the BTU so measured by the factor 1.012.
1.2 "Collection System or Gas Collection System" means the network of recovery
wells and interconnecting pipes together with attendant valves, pumps, monitoring
devices and other extraction related equipment installed for the purpose of extracting and
recovering Landfill Gas, including a blower sufficient to deliver the Landfill Gas to a
flare, a condensate recovery system, a flare, gas meter, including any expansions thereof,
including expansions to the Preliminary Gas Collection System to sell Landfill Gas to a
Customer.
1.3 "Commercial Quantities" shall mean volumes of Landfill and Digester Gas for
sale deemed by Lessee to be sufficient in amount for the Project to be economically
viable. Recovery and sale of Landfill Gas and Digester Gas in average monthly volumes
of more than 1000 SCFM and more than a heating value of 450 BTU/CF is
presumptively deemed to be Commemial Quantities.
1.4 "Customer" shall mean any suitable Landfill Gas and Digester Gas Purchaser
within a reasonable distance of the Landfill.
1.5 "Digester Gas" shall mean methane, carbon dioxide and other constituent
products produced by the anaerobic decomposition of waste water and sludge at the
sewage treatment plant adjacent to the Landfill.
1.6 "Delivery Point" shall be at a meter near a flare with blower on the Landfill.
1.7 "Gross Revenues" shall mean the total receipts from sales of Landfill and
Digester Gas to Customer.
1.8 "Expanded Gas Collection System" means that portion of the Gas Collection
System built or to be built in addition to the Preliminary Gas Collection System.
1.9 "Feasibility Study" shall mean a study performed by Lessee as soon as
practicable after the Effective Date to determine whether or not Landfill or Digester Gas
can be sold in Commercial Quantities. In no event shall such study be completed later
than 2 years from the Effective Date minus the reasonable time necessary to complete
construction of the Gas Collection System.
1.10 "Landfill Gas" shall mean methane, carbon dioxide and other constituent
products produced by the anaerobic decomposition of refuse material within the Landfill.
It is personal property and does not include oil, gas, or other mineral interests in real
property.
1.11 MMBTU shall mean one million BTUs.
1.12 "Preliminary Gas Collection System" shall mean that portion of the Collection
System built by the City of Denton in support of Biodiesel Production.
1.13 "Project" shall mean all activities and efforts associated with the recovery and
sale of Landfill Gas and Digester Gas and their delivery to a Customer.
1.14 "Project Schedule" shall mean the proposed schedule attached hereto as Exhibit
"A" and made a part hereof by reference.
1.15 "SCFM" shall mean standard cubic feet of Landfill Gas and Digester Gas per
minute, measured at sixty degrees Fahrenheit (60 degrees F.) and at a pressure of fourteen
and seventy- three one hundredths (14.73) pounds per square inch absolute (psia).
2. Term
This Lease shall become effective on the Effective Date and shall continue for a term
of twenty (20) years.
3. Rights Granted to Lessee
Subject to the provisions of this Lease, Lessor hereby grants to Lessee the following:
3.1 Landfill and Digester Gas. The exclusive fight to explore for, extract, collect,
process, use, sell and deliver all Landfill Gas in the Landfill and Digester Gas fi.om the
City's Wastewater Treatment Plant, except that Landfill Gas which is required for the
Biodiesel Production Facility. This fight is subordinate to Lessor's fight to use the
Landfill for landfill purposes and its fight to use the Water Reclamation Plant Property
for water reclamation purposes. However, Lessor agrees to cooperate with Lessee in all
reasonable manners necessary to carry out Lessee's fights under this Lease.
3.2 Gas Collection System. The exclusive fight to use and operate a Gas Collection
System at the Landfill other than that which is required for the BP Facility, subject to the
Lessor's fights set forth in Section 3.1. Such fight and related activities encompasses the
fight to conduct all activities necessary and incidental to the operation and maintenance
of a Gas Collection System, which includes the fight, but not the obligation, to install
underground gas transmission pipes, operate associated gas collection equipment, and
other related equipment. The cost of additional well drilling to comply with
environmental laws or to enhance Landfill Gas collection will be bom by the Lessor. The
cost of operation and maintenance of the Gas Collection Facility, and related pipeline, if
any, to the Customer shall be bom by Lessee provided that: (1) the Landfill Gas and
Digester Gas volumes and quality produced by the Landfill and Wastewater Treatment
Plant meet the standard of Commercial Quantities as defined in Paragraph 1.3, and; (2)
The Gas Collection System is suitable for use by both the BP Facility and the Customer.
Failure to complete the entire Gas Collection System, as designed by the Lessee, over and
above the Gas Collection System portion required for the BP Facility, within two years
aRer Lessee's determination that Landfill Gas and Digester Gas can be economically
recovered as provided in Section 8 is cause for termination by the Lessee. Failure to
complete that portion of the Gas Collection System portion required for the BP Facility,
within six months of the Effective Date of this Lease is also cause for termination by the
Lessee.
3.3 Plant Site. Lessor shall make available to Lessee, a mutually acceptable site of
approximately two hundred feet (200 ti.) by three hundred feet (300 fi.) in size to
accommodate the construction and operation of the gas processing plant and related
facilities for $1.00 per year and other good and valuable consideration. Lessee shall have
the right of free ingress and egress at all times to and from such site for itself and its
customers, provided that such ingress and egress is consistent with appropriate security
measures imposed by Lessor and is subordinate to Lessor's use of the Landfill for landfill
purposes. Lessor and Lessee shall in good faith mutually agree on a suitable location or
locations for such access that does not interfere with Lessor's Landfill operations.
4. Payments To Lessor
4.1 Royalty/Lease Payment. Lessee agrees to pay Lessor twelve and one-half percent
(12.5%) of Gross Revenues from the sale of Landfill Gas and Digester Gas to all
Customers exclusive of any applicable taxes to the Project provided that Landfill Gas and
Digester Gas volumes and quality conform with the definition of Commercial Quantities
found in Paragraph 1.3 hereof. Landfill Gas provided to the BP Facility is not subject to
royalty payments.
These royalty/lease payments shall be paid each calendar quarter to Lessor on or before
the last day of the month following the close of the calendar quarter (the "End of the
Quarter") with the first payment being due and payable at the End of the Quarter
immediately after the Gas Collection System and gas processing plant become
operational. Along with such payments Lessee shall provide documentation to Lessor
evidencing all Gross Revenues and deductions for taxes. Lessor shall have the fight at all
reasonable times to audit the records of Lessee to determine that the royalty/lease
payments have been properly computed.
4.2 Contingent Lease Payments. Lessee represents that the sale of Landfill Gas from
the Landfill does not currently entitle Lessee to claim Internal Revenue Code Section 29
Production Tax Credits. In the event Congress enacts Production Tax Credits, entitling
Lessee to claim such credits or benefits, Lessee agrees to pay Lessor a further additional
Lease payment equal to twenty (20%) percent of the value of those new tax credits or
benefits.
5. Lessee's Obligations
Lessee agrees to:
(a) Conduct a Feasibility Study to confirm that Landfill Gas and Digester Gas are
available in Commercial Quantities.
(b) Provided Commercial Quantities are available, design, operate and maintain the
Gas Collection System. Lessor shall have to right to monitor Lessee's
performance of such. Nothing in this Lease shall be construed as Lessee
assuming any of those obligations imposed by law upon Lessor as owner of the
Landfill, including compliance with environmental laws, unless such obligations
are caused by Lessee or are expressly assumed by Lessee.
6. Lessor's Obligations
Lessor agrees to:
(a) cooperate in the construction, development and operation of its Landfill, Wastewater
Treatment Plant and the Collection System so as to maximize the production of Landfill
Gas and Digester Gas and the transportation of Landfill Gas and Digester Gas to the
Delivery Point; (b) not unreasonably interfere with the Lessee's operation of the Project
or cause the disruption or destruction of the biological decomposition of refuse material
within the Landfill; (c) prevent any of its independent contractors from committing such
interference, disruption, or destruction; (d) promptly repair all cracks, fissures, erosion or
physical changes in, of, or to, the interim and final covers at the Landfill which have an
adverse material effect on the production of Landfill Gas; (e) cooperate in the
construction, development, operation and maintenance of the Project and the Collection
System at the Landfill; (f) comply with all applicable federal, state, county, municipal
and local laws, statutes, rules, regulations, ordinances, codes, restrictions, requirements,
obligations and permitting requirements relating to the management and operation of the
Landfill, including all environmental laws pertaining to the Collection System, provided
such laws are specifically imposed upon Lessor and have not been imposed upon Lessee
or expressly assigned and accepted by Lessee and; (g) approve in a timely manner all
Project design plans, specifications, and requisite construction activities which involve
Lessor's property. (h) construct the pipeline from the Waste Water Treatment plant to the
Landfill flare and construct the entire Gas Collection System as designed by Lessee
following the conclusion ora favorable Feasibility Study by Lessee.
7. Emission Credits
To the extent Pollution Control Emission Credits are available to the Project, the
value of such Emission Credits, if any, shall belong to Lessee.
8. Special Right to Terminate
Within two years after the Effective Date of this Lease, Lessee, at its sole expense,
shall conduct a Feasibility Study as it deems appropriate in order to determine whether
Landfill Gas and Digester Gas can be economically recovered from the Landfill and
Wastewater Treatment Plant in Commercial Quantities and whether such Commercial
Quantities can be economically delivered to a Customer. In the event that Lessee's
Feasibility Study establishes, in its sole judgment, that the Landfill Gas from the Landfill
and Digester Gas from the Wastewater Treatment Plant are not suitable for the economic
recovery and processing in Commercial Quantities for the Customer, Lessee shall give
written notice to Lessor of such judgment. Thereafter, all rights of Lessee under this
Lease shall terminate without further liability on the part of either party to the other
hereunder.
9. Construction and Maintenance of Facilities
9.1. Lessee shall not be responsible for the construction, operation and maintenance
of the BP Facility. Such construction, operation and maintenance being under separate
agreement between the Lessor and Biodiesel Industries, Inc.
9.2. Lessee shall be responsible for the design, operation, and maintenance of the Gas
Collection System and the construction of the pipeline from the Delivery Point to the
Customer at its expense, following the conclusion of a favorable Feasibility Study.
9.3. Lessor shall be responsible for the construction of the Preliminary Gas Collection
System and, assuming the conclusion of a favorable Feasibility Study by Lessee, shall
also be responsible for constructing the Expanded Gas Collection System, related
infi'astmcture lying within the Landfill property boundaries and the pipeline from the
Waste Water Treatment Plant to the landfill flare, at its expense.
10. Surrender.
Upon thirty (30) days notice to Lessor, Lessee may at any time or times, surrender
and terminate this Lease without liability, if (1) Lessee is prevented due to no fault of its
own to meet the milestones set forth in Exhibit A entitled Project Schedule. or (2)
Landfill Gas cannot be recovered or sold from the Landfill, in Commercial Quantities,
and Lessee thereby is relieved of all obligations except for surrendering the Gas
Collection System and gas processing plant and related facilities in good operational
condition, performing removal and restoration activities in accordance with Section 12,
and making full payment to Lessor for obligations in Section 4 of this lease.
1 i. Lessor and Lessee Rights
11.1. Landfill Use. Lessee shall be authorized to use the Landfill, upon notification to
Lessor, without cost, to the extent reasonably necessary or convenient for Lessee to carry
out its obligations hereunder. Such use is subordinate to Lessor's use of the Landfill for
Landfill purposes.
11.2. Oil, Natural Gas, Mineral Rights. This Lease shall not be deemed to grant
Lessee any rights or interests in any oil, natural gas, or other minerals located in the
Landfill real property but is only a lease of Landfill Gas and Digester Gas.
11.3. Cooperation in Obtaining Authorization. Upon request by Lessee, Lessor shall
reasonably assist Lessee in any proceedings, hearings or other procedures necessitated by
any required zoning laws, environmental impact reports, governmental permits,
authorizations and similar type requirements, related to the Project and the construction
and operation of Lessor's wells, collection system, and gas processing equipment. Upon
request, Lessee shall assist Lessor in briefing the officials of any governmental agency or
body, or any other interested party, with respect to the status of the Project.
11.4. Removal of Facilities. At Lessor's option, Lessee shall have an obligation,
within six (6) months after the expiration or termination of this Lease, to remove the
above-ground property, fixtures and improvements which Lessee has placed on or
adjacent to the Landfill and to cap any transmission gas lines at the boundary of the
Landfill. There will be no Lessee obligation to remove underground property, fixtures
and improvements which Lessee has placed underground in or adjacent to the Landfill.
Lessee hereby grants to Lessor an option to purchase any of such above-ground property,
fixtures and improvements (the "Option Improvements") at a price equal to Lessee's cost
of the Option Improvements. The cost of the Option Improvements will be established
within 90 days after the completion of any and all of the Option Improvements by written
notice fi.om Lessee to Lessor along with supporting documentation to establish such cost
(the "Option Improvements Price"). Within 90 days after the expiration or termination of
this Lease, Lessor may elect to purchase the Option Improvements, or any part thereof,
for the Option Improvements Price, or applicable price of a part thereof, by providing
Lessee written notice of the election of the option. The purchase of the Option
Improvements will be consummated within 90 days thereafter. At closing, in exchange
for the Option Improvements Price, Lessee shall deliver to Lessor a bill of sale
transferring the Option Improvements to Lessor, free and clear of all debts and liens.
Lessee grants an option only on that equipment which was installed by Lessee.
11.5. Surface Restoration. Lessee shall, upon expiration or termination of this Lease,
generally restore the surface of the Landfill affected by its operations to its condition at
the commencement of this Lease to the extent reasonably possible. Pipes on landfill
easements shall be sealed and capped at Landfill property boundary.
11.6. Return to Landfill Matter. Lessee shall, in connection with its operations on the
Landfill, have the right in its sole discretion, to return to the Landfill consistent with
Lessor's Landfill operating permits and environmental regulations any and all matter
either solid or liquid (including all condensate fi.om the Project).
12. Warranty
Lessor makes no warranty of title express or implied to the Landfill Gas and Digester
Gas. Lessor covenants to Lessee the fight of quiet enjoyment of the use of the Gas
Collection System so long as Lessee is not in default. Lessee acknowledges that the
Landfill Gas and Digester Gas is personality and not an oil, gas, or mineral interest in real
property.
13. Default
13.1 Default by Lessee. In the event that Lessor concludes that Lessee's operations,
excluding the provisions of the Project Schedule, are at any time not being conducted in
material compliance with the provisions of this Lease, or fails to actively and diligently
pursue or operate the facilities under this Lease, Lessor shall notify Lessee in writing of
the facts relied upon as constituting a default hereunder, and Lessee, if in default, shall
have ninety (90) days after receipt of such notice in which to complete or substantially
complete compliance with such provisions. Lessor shall have the right to terminate this
Lease upon written notice to Lessee if Lessee fails to complete or substantially complete
such compliance efforts within the ninety (90) day period, unless such failure is excused
by the provisions of Section 16 hereof. If compliance within ninety (90) days is not
reasonably possible and Lessee has commenced and is diligently pursuing suer
compliance efforts, Lessee may be allowed additional time to complete compliance, not
to exceed an additional ninety (90) days, but only if written notice of an extension is
given to Lessor within the first ninety (90) day period. Notwithstanding anything
contained herein to the contrary, upon termination of this Lease, due to a default by
Lessee the Gas Collection System shall revert back to Lessor in good operating condition
at no cost to the Lessor and the Landfill Gas rights shall be surrendered to Lessor.
13.2 Default by Lessor. In the event that Lessee concludes that Lessor at any time is
failing to perform or observe any of the provisions of this Lease required to be performed
or observed by Lessor, Lessee shall notify Lessor in writing of the facts relied upon as
constituting a default hereunder, and Lessor, if in default, shall have ninety (90) days
after receipt of such notice in which to complete or substantially complete compliance
with such provisions. Lessee shall have the right to terminate this Lease upon written
notice to Lessor if Lessor fails to complete or substantially complete such compliance
efforts within the ninety (90) day period, unless such failure is excused by the provisions
of Section 17 hereof. If compliance with ninety (90) days is not reasonably possible and
Lessor has commenced and is diligently pursuing such compliance efforts, Lessor may be
allowed additional time to complete compliance, not to exceed an additional ninety (90)
days, but only if written notice of an extension is given to Lessee within the first ninety
(90) day period.
14. Indemnification
14.1 Lessor shall defend, indemnify and hold Lessee harmless from and against any
and all claims, demands, actions, proceedings, liability or losses, of whatsoever nature
(including reasonable attorney's fees) for injury or death to person(s) or for damage or
loss to property arising out of or caused by Lessor's operations or activities in connection
with the Landfill, or any contiguous or non-adjacent property under Lessor's control
except to the extent such injury, damage or loss is caused by the wrongful acts or
negligence of Lessee.
14.2 Lessee shall defend, indemnify and hold Lessor harmless from and against any
and all claims, demands, actions, proceedings, liability or losses, of whatsoever nature
(including reasonable attorney's fees) for injury or death to person(s) or for damage or
loss to property arising out of or caused by Lessee's operations or activities in connection
with the Project or any contiguous or non-adjacent property under Lessee's control
except to the extent such injury, damage or loss is caused by the wrongful acts or
negligence of Lessor.
14.3 The Lessor and the Lessee agree that in any action based on an allegation of joint
negligence on the part of the Lessor and the Lessee that each party shall only be
responsible for that portion or percentage of any damages awarded which is directly
attributable to the negligence of that party.
14.4 The Lessor and the Lessee must provide the other prompt and timely notice of
any event covered which, in any way, directly, indirectly, contingently or otherwise,
affects or might affect the other. The Lessor may compromise and defend the same to the
extent of its own interests.
15. Insurance
Lessee shall, during the term of this Lease, maintain adequate insurance coverage as
follows:
In General. All policies of insurance provided shall be issued by insurance
companies qualified to do business in the State of Texas and either (1) listed on
the U.S. Department of the Treasury's Listing of Approved Sureties (Depa~hnent
Circular 570) (as amended), or (2) having a current rating of "A-" or better in the
most current available A.M. Best Co., Inc.'s, Best's Insurance Reports, Property
and Casualty Edition. Except in the case of workers' compensation insurance,
Lessor shall be included as an additional named insured on all insurance policies.
Lessee shall cause copies of certificates of insurance to be furnished to Lessor
concurrently with or prior to conducting construction-related site inspections,
surveys, etc. associated with this Lease. The certificates shall name Lessor as the
certificate holder and as an additional named insured (except in the ease of
workers' compensation insurance). If requested, Lessee shall also cause copies of
the insurance policies required by this Lease to be provided to Lessor.
Workers' Compensation Insurance. Lessee shall obtain and maintain during the
term of this Lease workers' compensation insurance as required by laws and
regulations for all of Lessee's employees employed at the Project.
Comprehensive Public Liability and Property Damage Liability Insurance.
Lessee shall secure and maintain during the term of this Lease a commercial
general public liability and property damage liability insurance policy. The policy
shall protect Lessee and Lessor from claims for damages for personal injury,
including accidental death, and from claims for property damage which may arise
from Lessee's operations under this Lease, whether any such operation be by the
Lessee or by anyone directly or indirectly employed by Lessee. The minimum
amounts of such insurance shall be not less than $1,000,000 for each occurrence,
9
and $3,000,000 general aggregate, and $2,000,000 products/completed operations
aggregate.
Automobile Public Liability Insurance. Lessee shall secure and maintain during
the term of this Lease comprehensive automobile public liability insurance with
limits not less than $1,000,000 per occurrence, covering owned, hired, and non-
owned automobiles.
Environmental Impairment Liability Insurance. Lessee shall secure and maintain
during the term of this Lease Environmental Impairment Liability insurance with
limits not less than $1,000,000 per occurrence, covering liability and cleanup
costs associated with discharges or releases of chemicals or other forms of
pollution.
Property Insurance. Lessee shall secure and maintain during the term of this
Lease Property Insurance on an All-Risk basis, providing for 100% of the
replacement cost of the Gas Collection System and associated buildings and
· equipment.
16. Force Majeure
16.1 If by reason of Force Majeure either party is unable to carry out, either in whole
or in part, its obligations herein contained, such party shall not be deemed in default
during the continuation of such inability. In this clause, "Fome Majeure" means an
exceptional event or circumstance: (a) which is beyond a party's control, (b) which
such party could not reasonably have provided against before entering into this
contract, (c) which, having arisen, such party could not reasonably have avoided or
overcome, and (d) which is not substantially attributable to the other party.
16.2 Force Majeure may include, but is not limited to, the following events or
circumstances, so long as all these conditions (a) through (d) above are satisfied: (i)
acts of God, including but not limited to, winds, hurricanes, tornadoes, fires,
epidemics, landslides, floods or earthquakes; (ii) strikes, lock-outs or other industrial
disturbances by persons other than personnel and other employees of the parties; (iii)
acts of public enemies; and (iv) military action, war, whether or not it is declared,
sabotage, riots, civil disturbances or explosions.
16.3 Lessor and Lessee agree that: (a) the non-performing party, within two weeks
after the occurrence of the Force Majeure, shall give the other party written notice
describing the particulars of the occurrence; (b) the suspension of performance shall
be of no greater scope and of no longer duration than is required by the Force
Majeure; (c) no obligations of either party which arose prior to the occurrence
causing the suspension of performance shall be excused as a result of the occurrence,
and; (d) the non-performing party shall use its best efforts to remedy with all
reasonable dispatch the cause or causes preventing it from carrying out its
10
obligations. Notwithstanding the foregoing, the other party may, at its option,
terminate this Lease after six months of any such suspension of performance.
17. Assignment
17.1 Assignment. Neither party hereto may sell, encumber, assign or transfer this
Lease or any interest it may have herein, without the express written consent of the
other party, and upon such written notice the terms, conditions and provisions of this
Lease shall extend and apply to and shall be binding upon the respective heirs,
administrators, executors, successors, assigns and delegates of said party. Upon any
such sale, assignment of transfer of a party's interest herein, the transferring party
shall be relieved of any further obligation hereunder as to the interest sold, assigned
or transferred. Notwithstanding the foregoing, either party may assign this Lease to
an affiliate at least fifty percent (50%) owned without first obtaining the other party's
consent.
17.2 Change of Ownership of Landfill. No change or division in ownership of the
Landfill or assigmnent of the amounts due hereunder shall operate to enlarge the
obligations or diminish the rights of Lessee, and no change, division or assignment of
such rights shall be binding upon Lessee until thirty (30) days after Lessee has been
furnished with the original or a certified copy of the recorded instrument evidencing
the same.
18. Notices
Any notice to be given under this Lease shall be in writing and shall be deemed to
have been properly given and received (i) when delivered in person or via facsimile to the
authorized representative of the party to whom the notice is addressed, or (ii) on the date
received as indicated on the return receipt when sent by prepaid certified or registered
mail, return receipt requested, to the party to be notified at its address, as follows:
To Lessee:
Mr. Curtis T. Ranger, P.E.
President
DTE Biomass Energy, Inc.
425 South Main Street, Suite 201
Ann Arbor, Michigan 48104
Fax No. 734 668-1541
To Lessor:
Charles W. Fiedler, P.E.
Director of Engineering
City of Denton
601 E. Hickory, Suite B
Denton, TX 76205
Fax No. 940 349-8951
11
Either party may change such representative or address by written notice of said change
of representative or address given to the other party.
19. General Provisions
19.1 Successors. The provisions of this Lease shall insure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors, personal
representatives, administrators, successors and assigns.
19.2 Express Obligations. All obligations of Lessee and Lessor under this Lease are
expressly stated, and no other obligations or covenants are to be implied hereunder.
19.3 Entire Lease. This Lease is intended by the parties to constitute a complete and
exclusive expression of the agreement with respect to the subject matter hereof.
19.4 Modifications. This Lease shall not be changed or modified except by a
subsequent agreement in writing signed by both parties.
19.5 Waiver. The waiver by either party of any failure on the part of the other party
to perform in accordance with any of the terms or conditions of this Lease shall not be
construed as a waiver of any future or continuing failure, whether similar or
dissimilar thereto.
19.6 Captions. Section and paragraph captions are inserted for identification purposes
only and are not a part hereof.
19.7 Law and Venue. This Lease shall be construed under the laws of the State of
Texas and is fully performable in Denton County, Texas or the appropriate U.S.
District Court. Exclusive venue for a lawsuit enforcing the terms and conditions of
the Lease shall be a court of competent jurisdiction in Denton County, Texas.
19.8 Council Approval. This lease shall become effective upon its approval by the
Denton City Council.
12
The parties hereto have executed this Lease as of the day and year first above written.
CITY OF DENTON, TEXAS
Mmhael A Conduff ~d
City Manager
ATTEST:
Je~'/er Wa~r;
Cit~ Secretary
APPROVED AS~
BY ~ -
City Attorney
DTE BIOMASS ENERGY, INC.
Curtis T. Ranger
President
13
AKNOWLEDGEMENTS
STATE OF TEXAS §
is acknowledged before me, on this ~_~_Z"- day of
, 2004 by Michael A. Conduff, City Manager of the City of
Denton, ~ municipal corporation, on behalf of said municipal corporation.
COUNTY OF DENTON
This instrument
~, ~?z:~4% JANE E. RICHARDSON
~"'~' ".~ Notan/Public, State of Texas
ii:~..~' '~ My Commission Expires
,~I ~ ....... June 27,2005
Notary Public in and for
State of Texas
STATE OF ]~_~ §
COUNTY OF i~.~t.n~u~
This instrument was acknowledged before me on this g,t~ day of
llQm ~ ,2004 by Curtis T. Ranger, President ofDTE Biomass Energy,
a .k_.- corporation, on behalf of said corporation.
~l~otary Public in and for
State of~
No'am] Public, Was~naw Counly, ~1
My Commlsslon Expires 09/02/2007
14
Exhibi! A
PROJECT SCHEDULE
The following schedule lists several significant activities that are included within the
Project Scope. These dates represent milestone targets as described in the City of
Denton's Landfill Gas Rights and Collection Facility Lease.
Date
04/1/04
07/1/04
10/1/04
10/1/06
12/1/06
04/1/07
Activity
Execute the Landfill Gas Rights and
Collection Facility Lease
Approve preliminary wellfield and plant site design
Begin operation of Preliminary Wellfield
Execute a Landfill Gas Sales Agreement
Permit pipeline and plant site construction
Initiate commercial Landfill Gas sales