HomeMy WebLinkAboutPR 23884: CONTRACT WITH VITOL BIOMETHANE OR ITS SUBSIDIARY, TO CONVERT LANDFILL GAS INTO ENERGY PR No. 23884
8/27/2024 JL
Page 1 of 3
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER
TO ENTER INTO A CONTRACT WITH VITOL
BIOMETHANE OR ITS SUBSIDIARY FOR THE
PROPERTY LEASE AND DEVELOPMENT OF A
PROJECT TO CONVERT LANDFILL GAS INTO
ENERGY.
WHEREAS,pursuant to Resolution No. 24-214, approved on May 7, 2024, City Council
authorized the City Manager to negotiate a contract with Vitol BioMethane of Houston, Texas for
the study,design and development of a project to convert landfill gas into a Landfill Gas to Energy
Project; and,
WHEREAS, a Gas to Energy Project can reduce odors and other hazards associated with
landfill gas emissions, and prevent methane from migrating into the atmosphere and contributing
to local smog and global climate change per the United States Environmental Protection Agency
website; and,
WHEREAS, methane can be captured, converted, and used as a renewable energy
resource; and,
WHEREAS, the City of Port Arthur and Vitol BioMethane have negotiated a contract,
attached hereto as Exhibit "A", for the development of the Gas to Energy Project, subject to
consideration and approval by the City Council; and
WHEREAS,this project will have no budgetary cost to the City; and,
WHEREAS,upon signing the agreement, the City will receive an advance payment of
two million dollars, one million of which is non-refundable and one million of which is
refundable from the royalties once energy production begins; and
NOW THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
PR No. 23884
8/27/2024 JL
Page 2 of 3
THAT,the facts and opinions in the preamble are true and correct; and,
THAT, the City Manager is hereby authorized to execute a contract, in substantially the
same form, attached hereto as Exhibit"A",with Vitol BioMethane or its subsidiary to develop the
project to convert landfill gas to energy.
THAT,this agreement and project will not have a budgetary cost to the City of Port Arthur.
THAT, the City will receive an advance payment of two million dollars, one million of
which is non-refundable and one million of which is refundable from the royalties once energy
production begins.
THAT, a copy of the caption of this resolution be spread upon the minutes of the City
Council.
READ, ADOPTED AND APPROVED, this day of , 2024, AD, at a
Regular Meeting of the City Council of the City of Port Arthur, Texas by the following Vote:
AYES:
Mayor:
Councilmembers:
NOES:
Thurman"Bill" Bartie
Mayor
ATTEST:
Sherri Bellard
City Secretary
PR No. 23884
8/27/2024 JL
Page 3 of 3
APPROVED AS TO FORM:
Jame M. Black
Ii\te,iim City Attorney
APPROVED Ai. DMINISTRATION:
4111K
Ronald Burton, CP71
City Manage
„,„,
ozell C. Robe EI , eng, MBA, CPM
Publi ork Di c r
APPROVED AS TO FUND AVAILABILITY:
Alkyls
Lynda(Lyn) Boswell, MA, ICMA-CM
Director of Finance
tudA,
Clifton illiams, CPPB
Purchasing Manager
EXHIBIT "A"
(Contract)
VBM Draft 8.21.24
GAS RIGHTS AGREEMENT
Between
CITY OF PORT ARTHUR, a Texas Municipal Corporation
And
[Project Company]1
Dated as of ,2024
Project Company entity to be formed before execution.
#6402v5
VBM Draft 8.21.24
GAS RIGHTS AGREEMENT
This GAS RIGHTS AGREEMENT ("Agreement") is made and dated as of
2024 ("Effective Date"), between City of Port Arthur,Texas ("Owner"), a municipal corporation
located in the State of Texas and [Project Owner], a [Delaware] limited liability company
("Developer")with principal offices at 9901 Valley Ranch Parkway East, Suite 2060, Irving, TX
75063-4870.
RECITALS
WHEREAS, Owner owns and operates the City of Port Arthur Landfill Permit No. 1815-
A, on a portion of the property located at 4732 West Highway 73, Beaumont, TX 77705, located
in Jefferson County (the "Landfill");
WHEREAS, LFG (as defined below) is produced within the Landfill as a by-product of
the decomposition of refuse;
WHEREAS,the Landfill contains(or will contain)a system of wells,pipes,and ancillary
equipment in order to collect and extract LFG from the Landfill(the"Gas Collection and Control
Systems"or"GCCS");
WHEREAS, Developer's Facilities(as defined below)will be constructed on a portion of
the real property where the Landfill is located, which real property Developer will lease from the
Owner pursuant to the Lease Agreement(as defined below).
WHEREAS, Developer desires to purchase LFG collected by the GCCS to process in the
Renewable Natural Gas Processing Facility; and
WHEREAS, Owner and Developer desire to enter into this Agreement for the sale and
purchase of LFG collected and extracted from the Landfill for processing at the Renewable Natural
Gas Processing Facility, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual agreements contained herein and
other good and valuable consideration, receipt of which is hereby acknowledged, Owner and
Developer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. When used in this Agreement, the following terms shall have
the meanings specified below:
"Affiliate" means, a Person that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the Person specified, provided that
notwithstanding anything in this Agreement to the contrary,Owner is not an Affiliate of Developer
and vice versa. For purposes of this Agreement, the direct or indirect ownership of over fifty
percent (50%) of the outstanding voting securities of an entity shall be deemed to constitute
#6402v5
control. Such other relationships as in fact results in actual control over the management, business
and affairs of an entity, shall also be deemed to constitute control.
"Agreement"means this Gas Rights Agreement, including all Schedules and Attachments
attached hereto, and any amendments hereto.
"Applicable Law"means any law(including common law),statute,act,decree,ordinance,
rule,directive(to the extent having the force of law),tariff,order,treaty,Permit,code or regulation
or any binding interpretation of any of the foregoing, as enacted, issued or promulgated by any
Governmental Authority, including all amendments, modifications, extensions, replacements or
re-enactments thereof, in each case applicable to and binding upon such Person or any of its
properties or to which such Person or any of its property is subject.
"Authorized Representative(s)" means Owner's Authorized Representative or
Developer's Authorized Representative, or both, as the context requires.
"Billing Year" means each calendar year during the Term of this Agreement, except that
(a)the first Billing Year shall commence on the Initial Delivery Date and end on the first December
31' following such date and (b) the last Billing Year shall end at the end of the Term, or if
applicable, upon the earlier termination of this Agreement.
"Books and Records"has the meaning set forth in Section 5.3(a).
"Business Day"means a Day other than a Saturday, Sunday,or other Day on which banks
in Port Arthur, Texas are authorized or required to close.
"Change in Law" means (a) any adoption, rescission or change of Applicable Law, or in
the judicial or administrative interpretation of any Applicable Law by a Governmental Authority,
that adversely impacts development and construction of Developer's Facilities; (b)the imposition
of any requirement for a new Permit;(c)if new taxes,duties,or tariffs are required to be deposited
or paid by Developer on a particular class of imports or exports which taxes,duties or tariffs were
not in existence as of the Effective Date are assessed,or if such taxes,duties or tariffs are identified
by a manufacturer of those imports or exports as the explicit basis for a price increase for materials
to which the taxes,duties or tariffs relate;or(d)the imposition of any new condition or requirement
by any Governmental Authority that adversely impacts the development and construction of
Developer's Facilities, which condition or requirement was not required as of the Commercial
Operation Date and affects the issuance, renewal or extension of any Permit. A Change in Law
shall not include(i)a change in any requirement of any Permit that arises out of any act or omission
of Developer or(ii)a Foreseeable Change in Law.
"Commercial Operation Date" means the date at which Developer's Facility begins
delivering Renewable Natural Gas to the natural gas pipeline system or to a third party.
"Condensate"means the liquid resulting from the condensation of water within LFG.
"Confidential Information"means all information disclosed by a party to the other party,
whether orally or in writing, that is designated as confidential or that reasonably should be
2
#6402v5
understood to be confidential given the nature of the information and the circumstances of
disclosure, as discussed in Section 17.15.
"Connection Point" has the meaning set forth in Section 6.10.
"Day"means each twenty-four-hour period beginning at 12:01 am in the time zone where
the Landfill is located.
"Delivery Point" means the inlet(s)to the wells comprising a part of the GCCS.
"Designated Owner Permits"means those Permits listed on Exhibit B.
"Developer's Facilities" or "Developer's Facility" means (a) all facilities that are
engineered, designed, constructed and installed on Owner's (or its Affiliates')property by and/or
for Developer, including the GCCS and Permitted Flare.
"Developer Flare Gas" is(i)Renewable Natural Gas,(ii)residual natural gas delivered to
the Developer's Facilities through the distribution pipeline to be located in the Natural Gas
Pipeline Easement, and/or (iii) gas generated from the operation and maintenance of the
Developer's Facilities that is collected by Developer and delivered for flaring at the Permitted
Flare if applicable.
"Developer Flare Gas Line" has the meaning set forth in Section 4.3(c). The Developer
Flare Gas Line will be located on the Landfill in the area described the Lease Agreement, and
connecting to the Permitted Flare(if allowed pursuant to Section 4.3(c))as shown on the Site Plan.
"Developer Guaranty" and "Developer Guarantor" has the meaning set forth in
Section 3.8.
"Developer's Permits"has the meaning set forth in Section 3.4(a).
"Developer Persons" has the meaning set forth in Section 12.1(b).
"Discharge Water Line"means the line connected at or near Developer's Facilities where
any Condensate or Leachate removed from the Landfill Gas is collected and returned to Owner.
The Discharge Water Line will be located on the Landfill in the area described in the Lease
Agreement, and connecting to the Leachate Collection System as shown on the Site Plan (as
hereinafter defined).
"Effective Date"has the meaning set forth in the preamble of this Agreement.
"Emergency Condition"means the occurrence or significant risk of imminent occurrence
of an event adversely affecting the safety of any Person or endangering any property located on
the Landfill, including the RNG Site,or any operation conducted thereon by Owner.
"Environmental Attributes" means any and all credits, benefits, emissions reductions,
offsets, incentive payments,and allowances of any kind or nature,howsoever entitled,attributable
to the environmental and renewable attributes associated with the processing or utilization of LFG
3
#6402v5
and the production and/or use of renewable natural gas or any other Products, including the
production and delivery of renewable natural gas for use as a renewable transportation fuel or for
any other purpose intended as renewable energy or for reduction of air emissions of any kind or
nature or for any other environmental benefit of any kind or nature, in each case whether now
existing or hereinafter arising. Environmental Attributes currently include, for example: (i)
renewable energy credits created as a result of generating electricity from a renewable feedstock;
(ii) any avoided emissions of pollutants to the air, soil or water such as methane (CH4) and other
greenhouse gases (GHGs) defined in 40 CFR 98.6 or that have been determined by the United
Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the
actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere;
provided that sulfur oxides(Sox),nitrogen oxides(Nox),and carbon monoxide(CO)are expressly
excluded from the definition of Environmental Attributes; (iii)the reporting rights to any of these
Environmental Attributes or avoided emissions;(iv)Renewable Identification Numbers("RINs"),
and(v) Low Carbon Fuel Standard or equivalent credits issued by any state ("LCFS").
"Environmental Law" means any Applicable Law which pertains to human health and
safety(to the extent related to the handling of,or exposure to,any Hazardous Substance),pollution
or protection of the environment or natural resources(including but not limited to soil, land surface
or subsurface strata,ambient air,surface water or groundwater),or the use,production,generation,
handling, transportation, treatment, testing, recycling, storage, disposal, discharge, release, or
cleanup of Hazardous Substances.
"EPA" means the Environmental Protection Agency, including its predecessor and
successor agencies.
"Force Majeure Event"has the meaning set forth in Section 10.1.
"Foreseeable Change in Law" means that, as of the Commercial Operation Date,
Developer possessed actual knowledge of a Change in Law.
"GAAP" means United States generally accepted accounting principles consistently
applied.
"Gas Collection and Control System"or"GCCS" has the meaning set forth in the recitals
hereto.
"Good Industry Practices"means those practices,methods,equipment, specifications and
standards of safety and performance,as the same may change from time to time,as are commonly
used by a significant portion of the landfill and renewable natural gas industry operating in the
United States and/or approved or recommended by Governmental Authorities as good, safe and
prudent engineering practices in connection with the design,construction,operation,maintenance,
repair and use of production and other equipment, facilities and improvements of landfill and
renewable natural gas facilities, including any applicable practices, methods, acts, guidelines,
standards and criteria of each Governmental Authority and all Applicable Laws.
"Governmental Authority" means any foreign, federal, state, tribal, local or other
governmental,regulatory or administrative agency,court,commission,department,board,or other
4
#6402v5
governmental subdivision, legislature,rulemaking board, court,tribunal, arbitrating body or other
governmental authority.
"Greenhouse Gas(es)" means carbon dioxide (CO2), methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or any other substances or
combination of substances that are or may become regulated or designated as Greenhouse Gases
under any federal, state, or local law or regulations, or any emission reduction registry, trading
system, or reporting or reduction program for Greenhouse Gas emission reductions that is
established, certified, maintained, or recognized by any international, governmental (including
United Nations, federal, state and local agencies) or non-governmental agency from time to time,
in each case measured in increments of one metric ton of carbon dioxide equivalent.
"Gross Revenue" means (a) the summation of the total dollar payments actually received
by Developer from the production and sale of Products minus (b) any amounts owed to any third
party in connection with Developer's efforts to monetize such Products, including, but not limited
to,marketing fees and pipeline transportation fees. Gross Revenue does not include tax credits or
revenues from the sale of any machinery, parts, or other materials, inventory, or services.
"Hazardous Substance" means any material, substance or waste that is subject to
regulation, investigation, control, or remediation under any Environmental Law, including any
material, substance or waste that is defined as a "hazardous material," "hazardous substance,"
"hazardous waste,""toxic waste"or"toxic substance."
"Indemnified Party" has the meaning set forth in Section 12.2(a).
"Indemnifying Party"has the meaning set forth in Section 12.2(a).
"Industry-Wide Disruption"means a delay in the delivery of,or unavailability of,essential
materials or labor to the Developer's Facilities as a result of a significant industry-wide economic
fluctuation or supply chain disruption beyond the control of and without the fault of Developer
that is experienced or expected to be experienced by markets providing essential materials and
equipment to the Developer's Facilities during development and construction and such economic
fluctuation or disruption adversely impacts the price, availability, and delivery timeframes of
essential materials, equipment,or labor.
"Initial Delivery Date" means the date upon which the GCCS begins collecting LFG for
processing in the Renewable Natural Gas Processing Facility, as memorialized in a writing
executed by both Parties.
"Initial Term"means that period of time described in Section 2.1.
"Landfill"has the meaning set forth in the recitals hereto.
"Leachate"means the liquid that forms in the Landfill other than Condensate.
"Leachate Collection System" shall mean the Leachate collection system operated on the
Landfill by Owner pursuant to applicable Permits.
5
#6402v5
"Lease Agreement"has the meaning set forth in Section 3.6.
"Lender"has the meaning set forth in Section 17.14.
"LFG" means the gases and their constituents, including methane, carbon dioxide and
other gases produced by the decomposition of matter within the Landfill,above the liner on top of
which the solid waste is deposited and below the cap covering the solid waste deposited at the
Landfill,as such landfill gas may exist from time to time.
"Losses"has the meaning set forth in Section 12.1(a).
"Material Change in Law or Waste"means (a) a Change in Law or(b)a material change
in the composition,or material decrease in volume, of waste at the Landfill, in each case,after the
Effective Date that renders the implementation of or the realization of the benefits to be derived
from this Agreement illegal or impossible or that makes the construction or operation of
Developer's Facilities commercially impractical or physically or commercially non-viable.
"Mechanical Completion"means the Developer's Facilities are mechanically,electrically,
and functionally installed and ready for commissioning, as certified in writing by Developer.
"MMBTU"means one million(1,000,000)British Thermal Units("BTUs").
"Notice"has the meaning set forth in Section 17.2.
"Owner Persons" has the meaning set forth in Section 12.1(a).
"Party" shall mean Owner or Developer, as applicable, and "Parties" shall mean both
Owner and Developer.
"Permit" means all approvals, rulings, certifications, judgments, decrees, consents,
waivers,exemptions,variances,franchises,orders,permits,authorizations, licenses,filings,tariffs
and rates which are required under Applicable Law to be obtained or maintained by either Party
in connection with the performance of its obligations pursuant to this Agreement.
"Permitted Flare" shall mean the flare located on the Landfill and owned and operated by
the Developer in accordance with Applicable Law.
"Person" means any individual, partnership, limited liability company, joint venture,
corporation, trust, unincorporated organization, or governmental entity or any department or
agency thereof.
"Personnel" means, with respect to a Person, the employees, officers, directors, agents,
representatives, partners, consultants, engineers, invitees, subcontractors and vendors of(a) such
Person, (b)any of its Affiliates, or(c)any of its subcontractors or vendors of any tier.
"Processing Obligation"has the meaning set forth in Section 4.1.
6
#6402v5
"Products"means Environmental Attributes,Renewable Natural Gas,and diesel,naphtha,
wax and other hydrocarbon products produced(directly or indirectly)by Purchaser(or its Affiliate)
from the Recovered Landfill Gas.
"Qualified Appraiser"has the meaning set forth in Section 14.1(c).
"Recovered Landfill Gas"means Landfill Gas that has entered the GCCS.
"Renewable Natural Gas" means the conditioned and purified LFG that is produced by
Developer's Facilities.
"Renewable Natural Gas Processing Facility" means the landfill gas and processing
facility constructed by Developer or an Affiliate of Developer, as contractor.
"Renewal Term"means that period of time described in Section 2.1.
"Representatives" means a Party's Affiliates, employees, officers, directors, partners,
shareholders, members, investors, potential investors, lenders, agents, attorneys, accountants and
advisors.
"RNG Site" means that portion of the real property located on the Landfill that is shown
and designated as the RNG Site on Exhibit C attached hereto (and more particularly legally
described on Exhibit C-1), but excluding any improvements or personal property located thereon.
"Royalty Payments"has the meaning set forth in Section 5.1.
"Site Plan" means the project site plan identifying Developer's proposed locations for the
Developer Flare Gas Line,the Discharge Water Line,and the Developer's Facilities.
"Taxes"means:
(a) any taxes, customs, duties, charges, fees, levies, penalties or other
assessments imposed by any federal, state, local or foreign taxing authority, including, but not
limited to, income, gross receipts, windfall profit, severance, real and personal property,
production, sales, use, license, excise, franchise, net worth, employment, occupation, payroll,
withholding, social security, alternative or add-on minimum, ad valorem, transfer, stamp, or
environmental tax, or any other tax,custom,duty,fee(including any franchise fee or similar fee),
levy or other like assessment or charge of any kind whatsoever,together with any interest,penalty,
addition to tax, or additional amount attributable thereto; and
(b) any liability for the payment of amounts with respect to payment of a type
described in clause (a), including as a result of being a member of an affiliated, consolidated,
combined or unitary group, as a result of succeeding to such liability as a result of merger,
conversion or asset transfer or as a result of any obligation under any tax sharing arrangement or
tax indemnity agreement.
"Term"means that period of time described in Section 2.1.
7
#6402v5
"Testing Period" means that period of time described in Section 5.1(c).
Section 1.2 Construction of Certain Terms and Phrases.
(a) All exhibits, annexes, and schedules attached to this Agreement are
incorporated herein by this reference and made a part hereof for all purposes. References
to sections, exhibits, annexes and schedules are, unless otherwise indicated, references to
sections, exhibits, annexes and schedules to this Agreement. References to a section shall
mean the referenced section and all sub-sections thereof;
(b) As used in this Agreement and in any certificate or other documents made
or delivered pursuant hereto or thereto, financial and accounting terms not defined in this
Agreement or in any such certificate or other document,and financial and accounting terms
partly defined in this Agreement or in any such certificate or other document to the extent
not defined,will have the respective meanings given to them under GAAP. To the extent
that the definitions of financial and accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms under
GAAP, the definitions contained in this Agreement or in any such certificate or other
document will control;
(c) The words "hereof', "herein", "hereunder", and words of similar import
when used in this Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement. Section references contained in this Agreement are
references to Sections in this Agreement unless otherwise specified. The terms"includes"
or"including"will mean"including without limitation;"
(d) The definitions contained in this Agreement are applicable to the singular,
as well as the plural forms of such terms and to the masculine, as well as to the feminine
and neuter genders of such terms;
(e) Unless the context otherwise requires, the capitalized terms used in this
Agreement shall have the definitions set forth in this Article I;
(f) Any term not defined in this Article I or elsewhere in this Agreement
(including an amendment or exhibit) that is used in this Agreement, shall have its plain
meaning in common English usage provided that words and abbreviations having well-
known meaning in the United States LFG production industry shall have those meanings;
(g) Any agreement or instrument defined or referred to herein or in any
instrument or certificate delivered in connection herewith means (unless otherwise
indicated herein) such agreement or instrument as from time to time amended, amended
and restated, modified or supplemented and includes (in the case of agreements or
instruments)references to all attachments thereto and instruments incorporated therein;
(h) Reference to a Governmental Authority shall include an entity succeeding
to its functions;
8
#6402v5
(i) All documents required to be provided under this Agreement shall be in
English;
(j) References to any statute,code or statutory provision are to be construed as
a reference to the same as it exists as of the Effective Date, and includes references to all
bylaws, instruments,orders and regulations for the time being made thereunder or deriving
validity therefrom unless the context otherwise requires; and
(k) All monetary amounts contained in this Agreement refer to the currency of
the United States.
ARTICLE II
TERM
Section 2.1 Term. The term of this Agreement shall commence on the Effective Date
and last twenty(20)years from the Commercial Operation Date,unless terminated earlier pursuant
to the terms of this Agreement(the"Initial Term").Thereafter,this Agreement shall automatically
be extended for a successive ten(10)year period so long as the Developer is not in default under
section 9.1 hereof. Thereafter,this Agreement shall automatically be extended for successive five
(5) year periods (any such five (5)year or ten (10)year period, a"Renewal Term"), unless either
Party provides written notice of its intent not to renew at least one hundred eighty(180)days prior
to the end of the then-current Term. The Initial Term and all Renewal Terms, if any, are
collectively referred to herein as the "Term". Notwithstanding the above, Developer shall have
the right to terminate this Agreement in the event(a)the Lease Agreement is not executed within
ninety (90) Days following the Effective Date, (b) upon one hundred eighty (180) Days notice if
Developer, in its sole discretion, determines that the continued operation of the Developer's
Facilities is not commercially feasible,(c)immediately upon the condemnation by eminent domain
of the Landfill or the RNG Site sufficient to substantially interfere with the operation of
Developer's Facilities, (d) immediately upon Developer's reasonable determination that
Developer is not able,notwithstanding its reasonable efforts to obtain the necessary permits or the
necessary rights-of-way from the Developer's Facilities to the point of interconnect with the
pipeline transporting the Products, or (e) immediately upon Developer's determination that,
notwithstanding its reasonable efforts, it cannot obtain financing on terms acceptable to the
Developer in its sole discretion.
ARTICLE III
CONSTRUCTION,TESTING AND START-UP OBLIGATIONS
Section 3.1 Cooperation Regarding Construction, Testing and Start-Up Obligations.
The Parties shall cooperate in good faith with each other in connection with the construction,
testing and startup tasks required to perform the Parties' obligations hereunder.
Section 3.2 Design, Construction and Operation of Developer's Facilities. Developer
(or its Affiliate) shall design and build Developer's Facilities in accordance with the provisions of
this Article III. During the Term, Developer shall operate(or cause the operation of)Developer's
Facilities in compliance with all Applicable Laws.
9
#6402v5
Section 3.2.1 Construction of Developer's Facilities.
(a) Developer shall have the right to construct the Developer's Facilities in the
locations to be designated on the Site Plan approved by Owner. Owner shall grant
Developer an easement for the delivery of utilities including electrical power and/or natural
gas to any Developer's Facilities, which shall include an easement for a natural gas
distribution pipeline in the area to be designated on the Site Plan approved by Owner in
accordance with the Lease Agreement(the"Natural Gas Pipeline Easement").
(b) Construction debris, trash, or other material generated by Developer, or its
contractors and their employees,agents and representatives,shall be properly managed and
disposed of by Developer,at Developer's cost.
(c) Developer shall comply in all material respects with Good Industry
Practices and all Applicable Laws relating to the construction, installation, alteration,
maintenance, repair, restoration and replacement of the Developer's Facilities and shall
obtain, at no cost to Owner, appropriate Permits for such activities.
Section 3.2.2 Staging Area. Developer and Owner agree that Developer shall be
permitted to use, as a staging area,the portion of the Landfill in the location described on the Site
Plan ("Staging Area"). Beginning on the Effective Date, and continuing through the date that is
ninety (90)days following the Commercial Operation Date, Developer may use the Staging Area
for storage and staging of all materials and equipment used by Developer for construction or
installation of any Developer's Facilities. In the event that the Staging Area becomes unusable
due to circumstances beyond Developer's control, Owner shall provide an equivalent area for
Developer's use at no additional cost.
Section 3.3 Post Commencement Operator Rights and Obligations.
(a) Owner and Developer acknowledge and agree that Owner may demand,
upon reasonable prior written notice to Developer, that Developer relocate, at Owner's sole cost
and expense,any lines,pole, facility or easement granted herein if deemed necessary or desirable
for Owner's business operations so long as such relocation does not interfere with the operation of
Developer's Facilities.
(b) The rights and obligations of Owner and Developer in respect of the
easements granted hereby, including, but not limited to, the Natural Gas Pipeline Easement, the
Developer Flare Gas Line and the Discharge Water Line, shall be further detailed in a separate
easement agreement in the form of Exhibit F, which easement agreement shall be filed and
recorded at Developer's expense in the appropriate filing office.
(c) Notwithstanding anything to the contrary provided for herein, all of
Developer's rights granted under this Section 3.3 are subject to the conditions and restrictions of
this Agreement, subject to all conditions, restrictions,easements, covenants and encumbrances of
record as of the Effective Date and as added after the Effective Date pursuant to this Section 3.3(c),
and further, shall terminate upon the expiration of the Term. Owner and Developer agree further
that promptly upon the expiration of the Term, Owner and Developer shall mutually execute and
deliver a termination and release of all such easement agreements, in a form suitable for recording
10
#6402v5
in the real estate records for the county in which the Landfill is located,stating that such easements
are terminated and released as to the Landfill.
Section 3.4 Permits.
(a) Developer Permits. Except for any Designated Owner Permits as set forth
in Exhibit B, Developer shall, at its sole cost take all steps reasonably necessary to obtain
and maintain in effect all Permits required in connection with the performance of its
obligations hereunder(collectively, "Developer's Permits").
(b) Cooperation Regarding Permits. Upon request, Owner shall reasonably
assist Developer in connection with obtaining any Developer's Permits with all of Owner's
reasonably incurred costs properly documented and related to obtaining such Developer's
Permits (including, without limitation, Owner's reasonable legal fees and expenses)to be
borne by Developer; Owner shall cooperate with and assist Developer in obtaining any
Permit; provided that Developer shall reimburse Owner for any reasonable out-of-pocket
costs incurred by Owner in connection with such assistance.
Section 3.5 Compliance with Laws. During the Term, Developer and Owner shall
comply with all Applicable Laws in the performance of their obligations under this Agreement
and, with respect to Owner,the operation of the Landfill.
Section 3.6 Lease Agreement. Promptly following the Effective Date,the Parties shall
negotiate in good faith a site lease reasonably acceptable to each Party that sets forth Developer's
rights with respect to the RNG Site (the "Lease Agreement"), a form of which is attached hereto
as Exhibit H,it being understood that Developer shall have leasehold rights to the RNG Site during
the Term pursuant to the Lease Agreement in addition to the easements over the Landfill
contemplated by this Agreement.
Section 3.7 Commercial Operation Date Certificate. No later than thirty (30) days
before the anticipated Commercial Operation Date of Developer's Facilities, Developer shall
provide written notice of the same to Owner. On or as soon as reasonably practicable after the
Commercial Operation Date, Developer shall present to Owner a certificate in the form of
Exhibit A signed by an officer of Developer certifying to the achievement of commercial operation
of the Developer's Facilities.
Section 3.8 Developer Initial Payment and Guaranty. Within thirty(30)Days following
the Effective Date,Developer shall(i)make an initial payment of two million dollars($2,000,000)
to Owner and (ii) deliver to Owner a parent company guaranty, issued by Developer Guarantor
and substantially in the form of Exhibit G (the "Developer Guaranty"). In the event Developer
fails to make any payments when due pursuant to the terms of this Agreement,Owner may enforce
such payment obligations against Developer Guarantor. Developer shall cause Developer
Guarantor to maintain the Developer Guaranty in full force and effect at all times during the Term.
11
#6402v5
ARTICLE IV
LFG PROCESSING OBLIGATIONS
Section 4.1 LFG Processing Obligations. Upon the Initial Delivery Date, Owner shall
make available to Developer at the Delivery Point all LFG from the Landfill,and Developer shall
use commercially reasonable efforts to process all LFG provided to Developer at the Delivery
Point up to one hundred percent (100%) of the design capacity of Developer's Facilities (the
"Processing Obligation") and as increased or upgraded from time to time.
Section 4.2 Excused Interruption of LFG Purchase. If Developer fails to process LFG
(a) due to a Force Majeure Event; (b) due to an act or omission of Owner in violation of this
Agreement, or (c) due to planned or unplanned maintenance and/or outages at the Developer's
Facilities,then Developer's interruption of its Processing Obligations shall be excused. Any such
interruption in the processing of LFG or reduction in quantity of LFG processed shall be
discontinued as soon as reasonably practicable.
Section 4.3 Diversion of LFG Not Accepted by Developer.
(a) Owner and Developer acknowledge and agree that Developer must either
process all Recovered Landfill Gas into Products or divert such Recovered Landfill Gas
from the Connection Point for destruction in the Permitted Flare in accordance with all
Applicable Laws,Permits, Good Industry Practices and this Agreement.
(b) Any Developer Flare Gas must be destroyed through combustion in (i)the
Permitted Flare if applicable, or(ii) in a flare or other method that is agreed to in advance
by the Parties, and in accordance with all Applicable Laws, Permits, Good Industry
Practices and this Agreement.
(c) Developer's delivery of Developer Flare Gas to the Permitted Flare shall
occur by means of a below-grade pipeline approved by the Owner(the "Developer Flare
Gas Line") to be located and installed by the Developer on the Landfill in the area to be
designated on the Site Plan approved by Owner and connecting to the Permitted Flare
shown on the Site Plan.
Section 4.4 Title to Landfill Gas and Environmental Attributes.
(a) Warranty of Title. Owner represents and warrants that it will have good
title to all LFG delivered hereunder,and all LFG and Environmental Attributes(and/or the
rights to the same) shall be delivered free and clear of all liens and encumbrances.
(b) Transfer of Title. Title to, control, and possession of LFG and
Environmental Attributes (and/or the rights to the same) sold and purchased hereunder
shall transfer to the Developer at the Delivery Point. Owner assumes full responsibility
and liability for and shall repay and make whole Developer and any Affiliate of Developer
and any such Affiliate's and Developer's directors, officers, partners, members,
shareholders, employees or agents, for any and all Losses resulting from and/or caused by
the LFG before the Delivery Point, except to the extent resulting from Developer's
negligence,willful misconduct,violation of Applicable Law,or fraud. Developer assumes
12
#6402v5
full responsibility and liability for and shall indemnify, and hold harmless Owner and any
Affiliate of Owner and any such Affiliate's and Owner's directors, officers, partners,
shareholders, employees or agents, from and against any and all Losses resulting from
and/or caused by the LFG after the Delivery Point,except Losses arising from any liquids
or Hazardous Substance contained in or otherwise transferred with the LFG delivered by
Owner to Developer and to the extent resulting from Owner's negligence, willful
misconduct,violation of Applicable Law or fraud. The obligations outlined in this Section
4.4(b)shall survive the termination or expiration of this Agreement.
ARTICLE V
PAYMENT
Section 5.1 Payments. As Owner's sole compensation for the sale of LFG to Developer
pursuant to this Agreement, Developer shall pay to Owner(pursuant to Section 5.2 and subject to
Section 12.3)a monthly royalty payment as follows (the"Royalty Payments"):
(a) The initial monthly Royalty Payment shall be equal to 12.5% of Gross
Revenues, provided that the Royalty Payment shall be subject to a deduction of 7.5% of
Gross Revenue, which shall be for Developer's account, and which deduction shall
continue until a total of one million dollars ($1,000,000) has been deducted from the
Royalty Payments otherwise due to Owner.;
(b) The Royalty Payment for the first full calendar month that occurs five (5)
years after the Commercial Operation Date shall increase by 2.5%of Gross Revenues(i.e.,
to a total of 15.0%of Gross Revenues) if and only if the volume of municipal solid waste
received by the Landfill in the five (5) full calendar years beginning in the year in which
the Commercial Operation Date occurs exceeds by at least 2.5%the amount of municipal
solid waste received by the Landfill in the five (5) calendar years preceding the calendar
year in which the Commercial Operation Date occurs; and
(c) Thereafter, beginning on the first day of the first full calendar month that
occurs after the ten(10)year anniversary of the Commercial Operation Date and every five
(5) years thereafter for the Term of the Agreement,the Royalty Payment shall increase by
2.5%of Gross Revenues if and only if the volume of municipal solid waste received by the
Landfill in the five (5) full calendar years prior to such potential increase (such five- (5-)
year period,the"Testing Period")exceeds by at least 2.5%the amount of municipal solid
waste received by the Landfill in the five (5) full calendar years prior to such Testing
Period.
Section 5.2 Billing and Payment.
(a) Within forty-five (45) days after the end of each month, Developer shall
provide the Owner with a statement detailing the Gross Revenues and royalty owed to
Owner. The statement shall also include: (i) records of readings from the meter between
Developer's Facilities and the applicable natural gas pipeline; (ii)revenue statements from
the sale of Products; (iii) any permitted reductions in the Gross Revenue (e.g., marketing
fees and pipeline transportation fees)used to calculate the Royalty Payment, including the
13
#6402v5
basis for such reduction;and(iv)such additional information as the Owner may reasonably
require to confirm the amount of the Royalty Payment.
(b) The first partial month following the Commercial Operation Date shall be
combined with the first full month following the Commercial Operation Date,such that all
statements subsequent to the first statement will cover a period beginning on the first day
of each month and ending on the last day of each month.
(c) Subject to permitted withholdings pursuant to Section 12.3 and/or late
payment interest pursuant to Section 5.3, Developer shall pay to Owner all amounts owed
to Owner within forty-five (45) Days after Owner's receipt of the statement.".
Notwithstanding the foregoing, Owner acknowledges that for a period of time that does
not begin until after Commercial Operations Date,expected to be approximately 90 to 120
days, the EPA will run tests to verify that Landfill Gas qualifies for Environmental
Attributes (pathway validation). Until such pathway validation occurs, Developer may
store Renewable Natural Gas rather than selling Renewable Natural Gas.
Section 5.3 Late Payment. Any payment not timely made by Developer under this
Agreement shall accrue late interest at the lesser of(a) one percent (1%) per month, and (b) the
highest rate permitted by law from the date due until such amounts are paid.
Section 5.4 Audit; Errors in Billing.
(a) Developer shall keep such records and books of account in accordance with
generally accepted accounting principles and practices in the natural gas industry, with
such variations as may be reasonably required to enable Owner to reasonably determine
the Royalty Payments. Owner shall keep such records and books of account in accordance
with generally accepted accounting principles and practices in the landfill industry as may
be reasonably required to enable Developer to determine that Owner is in compliance with
its duties and obligations under and pursuant to this Agreement. Developer and Owner and
their respective representatives shall have the right to audit,to examine,and to make copies
of all financial and related records of Developer or Owner,as applicable,(in whatever form
they may be kept,whether written,electronic,or other)directly relating to this Agreement,
upon reasonable advance written notice (which notice shall state the specific purpose of
such requested audit) and during normal business hours, solely for the purposes of
verifying Royalty Payments due under this Agreement, as much as one time per calendar
year; provided, however, such audit shall only cover a time-frame going back to the
immediately preceding three (3) calendar years. Each Party may exclude from such audit
any records which are not pertinent to the stated purpose of the requested audit and any
books and records of their respective Affiliates. Operator and the Landfill Owner shall, at
all times during the Term, and for a period of three (3) years after termination of this
Agreement for any reason, maintain such records, together with supporting or underlying
documents and materials.
(b) If either Party hereto shall find after the date of any payment hereunder that
there has been an overcharge or undercharge, the Party finding the error shall promptly
notify the other Party in writing up until January 31 Pt of the calendar year following the
14
#6402v5
date of the billing error. In such case, a Party owing an amount to the other Party due to
the error shall pay the amount owed no later than thirty(30)Days after the Parties agree in
good faith on the error and related amount owed.
ARTICLE VI
OPERATIONS AND MAINTENANCE
Section 6.1 Access to RNG Site. Developer and its employees,representatives,agents,
invitees, and independent contractors shall have, and Owner hereby grants to Developer and its
employees, representatives, agents, invitees, and independent contractors,access to the RNG Site
on a twenty-four (24) hour per day, seven (7) day per week basis. In connection with the access
granted hereby and subject to the other terms and conditions hereof,Developer shall have the right
to use access and facility roads on the Landfill in the locations described on the Site Plan.
Section 6.2 Owner Operations.
(a) At all times during the Term, Owner and its Affiliates shall have the right
to operate or use the Landfill as Owner and its Affiliates deem necessary or desirable for
any reason in Owner's reasonable judgment provided that Owner does so in a manner that
would not unreasonably interfere with the operation of the Developer's Facilities.
(b) Developer's operation of the Developer's Facilities shall not unreasonably
interfere with Owner's and its Affiliates' operations at the Landfill. To the extent that it is
commercially reasonable,and not in conflict with the operation of the Landfill,Owner shall
operate the Landfill in such a manner as to maximize the production of the LFG.
(c) All activities and operations of Owner in connection with the Landfill will
be in compliance in all material respects with the requirements of all applicable
Environmental Laws. Owner shall obtain all licenses and Permits under Environmental
Laws necessary for its operations in connection with the Landfill and Owner is and shall
remain in compliance in all material respects with all terms and conditions of such licenses
and Permits.
Section 6.3 Developer Operations.
(a) Developer shall operate, maintain, repair, and replace the equipment,
systems and facilities located at the RNG Site, at no cost to Owner, in compliance with all
Applicable Laws, Permits, Good Industry Practices, and the provisions of Section 3.5.
(b) Developer shall not be required to obtain the prior written approval of
Owner for the operation, maintenance or repair of the Developer's Facilities. Developer
will provide advance notice to Owner of any replacement, or other repair or modification
of the Developer's Facilities that requires any amendment or modification of any Permit(s),
or that interferes with Landfill operations. All repairs, maintenance and replacements to
the GCCS shall be the obligation of Developer.
(c) Developer shall perform its duties and obligations required of it to comply
with the requirements set forth in Exhibit D attached hereto.
15
#6402v5
(d) With respect to any Recovered Landfill Gas or Developer Flare Gas,
Developer has legal responsibility for the control, management and containment of such
Recovered Landfill Gas or Developer Flare Gas(but excluding any Condensate, Leachate
or other liquids contained in or delivered with such Recovered Landfill Gas or Developer
Flare Gas), at the RNG Site,whether related to leaks from the Developer Flare Gas Line,
the GCCS, the Developer's Facilities, or surface emission, including the legal
responsibility with respect to the control,management and containment of such Recovered
Landfill Gas or Developer Flare Gas (but excluding any Condensate, Leachate or other
liquids contained in or delivered with such Recovered Landfill Gas or Developer Flare
Gas), arising under all applicable Environmental Laws, including any monitoring or
remediation obligations relating to such Developer Flare Gas, Recovered Landfill Gas, or
surface emission resulting therefrom. Developer shall perform the duties and obligations
required of it to comply with the requirements set forth herein. Owner is responsible for
any and all leaks or emissions originating from the Landfill itself,including any monitoring
or remediation obligations relating thereto.
(e) All activities and operations of Developer in connection with the Landfill
will be in compliance in all material respects with the requirements of all applicable
Environmental Laws. Developer shall obtain all licenses and Permits under Environmental
Laws necessary for its operations in connection with the RNG Site and Developer is and
shall remain in compliance in all material respects with all terms and conditions of such
licenses and Permits.
Section 6.4 Regulatory Reporting and Compliance. Developer and Owner shall each
comply with their respective obligations and reporting obligations as set forth in Exhibit D attached
hereto. Developer and Owner shall collaborate and reasonably cooperate with respect to their
respective obligations and reporting requirements, including sharing necessary data and
information and providing access to their respective facilities as reasonably required for such
compliance.
Section 6.5 Designated Owner Permits.
(a) The Parties acknowledge and agree that (i) the Designated Owner Permits
are issued to and held by Owner primarily for the benefit of the Landfill and Owner, (ii)
the Designated Owner Permits are essential to the lawful operation of the Landfill (and
related facilities) by Owner, and (iii) to the extent permissible under Applicable Law, the
Owner is allowing Developer to utilize and benefit from the Designated Owner Permits to
lawfully operate the Developer's Facilities pursuant to the terms and conditions of this
Agreement and in accordance with this Agreement.
(b) Owner shall allow Developer to utilize and benefit from the air permit
related to air emissions from the Landfill to allow Developer to destroy Developer Flare
Gas in the Permitted Flare under the air permit held by Owner.
(c) Owner agrees to (i) give Developer as much notice as reasonably possible
of modifications, amendments, or changes to the Designated Owner Permits that Owner
knows or reasonably should know may impact or affect the Developer's Facilities,and(ii)
16
#6402v5
cooperate in a commercially reasonable manner with Developer to help ensure the
Developer's Facilities can continue to lawfully operate after said modifications,
amendments, or changes to the Designated Owner Permits are approved by the issuing
governmental agency.
(d) If Developer needs to amend or modify any of the Designated Owner
Permits to continue its operation of the Developer's Facilities, and such amendment or
modification would not materially and adversely impact Owner's use of such Designated
Owner Permit,then upon request of Developer(or Operator),Owner will use commercially
reasonable efforts to help obtain any such amendment or modification to the Designated
Owner Permit with all costs related to obtaining such amendment or modification
(including,without limitation, Owner's reasonable legal fees and expenses)to be borne by
Developer.
(f) Except to the extent covered by the Designated Owner Permits, Developer
shall obtain, at no cost to Owner, all Permits required under Applicable Laws relating to
the construction, maintenance, operation, repair, restoration of the RNG Site, alteration,
decommissioning, removal, and/or replacement of the Developer's Facilities under this
Agreement, including Permits required for wastewater discharge and detention or
discharge of stormwater.
Section 6.6 Emergency. Operator shall provide a written plan for addressing any
Emergency Condition at the RNG Site, which plan shall provide for commercially reasonable
procedures, consistent with Applicable Laws and Permits and Good Industry Practices, for
addressing any Emergency Condition in the event that employees or representatives of Developer
are not present at the RNG Site or if Developer is otherwise unable to timely cure the Emergency
Condition, including by providing Owner,or agents or representatives authorized by Owner,with
the right to enter the RNG Site, at its own risk, in order to implement actions to immediately
mitigate the extent of any Emergency Condition and to prevent or mitigate any danger to the safety
of individuals or the Landfill (other than the RNG Site) or Owner's operations thereon. If
Developer becomes aware of any Emergency Condition on the Landfill(excluding the RNG Site),
Developer shall notify the appointed Owner representative, the City Manager or his designee, of
such Emergency Condition. If Developer cannot reach the appointed Owner representative,then
Developer shall attempt to contact via phone, email, and/or text messaging the following Owner
Personnel in the following order: Director of Disposal Operations, the Environmental Protection
Manager,and the Landfill Engineer. Owner's representative shall provide the contact information
for those individuals to Developer.
Section 6.7 Scheduled Outages. The Parties shall coordinate their scheduled outages
and each Party shall provide written Notice to the other Party of a scheduled outage at least seven
(7) Days in advance of the planned commencement of the outage when possible or otherwise at
the earliest possible time before the outage commences.
Section 6.8 Disclaimer of Warranty as to LFG Quality. EXCEPT AS PROVIDED IN
SECTION 8.3 BELOW,OWNER MAKES NO WARRANTIES WITH RESPECT TO THE
LFG, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
17
#6402v5
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE,OR ANY WARRANTY AS TO THE COMPOSITION OF THE LFG.
Section 6.9 Condensate and Leachate Disposal. .Owner agrees to accept into its
Leachate Collection System,to the extent commercially feasible without modification to the same,
all Condensate and Leachate delivered by Developer. In the event additional handling,processing
or disposal charges are incurred as a result of the presence of Developer's Condensate and/or
Leachate in the Landfill Leachate, Developer shall be responsible for such increased costs.
Section 6.10 Meters. At no cost to Owner, Developer shall, at its own expense, install
metering devices at (i) the point of interconnection between the GCCS and the balance of
Developer's Facilities.(the "Connection Point") and (ii) the point of interconnections between
Developer's Facilities and the natural gas pipeline into which Developer is delivering Renewable
Natural Gas and shall operate, calibrate, and maintain (or cause the operation, calibration and
maintenance of) the metering devices in accurate working order. The metering devices shall
measure the volume and heating value of the LFG passing through the Connection Point and the
volume and heating value of the Renewable Natural Gas delivered by Developer to the natural gas
pipeline. Owner shall have access to the metering equipment at all reasonable times and shall be
provided with any electronic meter readings on a continuous basis.
(a) Meter Tests. At Developer's expense, Developer shall keep its metering
equipment accurate and in good working order, making such periodic tests as Developer
deems necessary, but at least once during each Billing Year. Developer's meters shall be
maintained and calibrated in accordance with the manufacturer's specifications at least
once during each Billing Year. Developer shall give Owner reasonable advance Notice of
any meter test or calibration so that Owner may have its representatives present. Owner
may request a special test of the metering equipment at any time upon prior written notice to
Developer of a reasonable basis for such request. The expense of such special test shall be
paid by Owner if the equipment is found to be inaccurate by less than the manufacturer's
stated accuracy. If,upon any test,the equipment is found to have failed to achieve at least the
metering standards guaranteed by the manufacturer then Developer shall reimburse Owner
for the reasonable and documented cost of the meter test,and meter readings shall be corrected
for a period extending back to the date on which such inaccuracy first occurred, if that date
can be reasonably determined. If that date cannot be reasonably determined,corrections shall
be made for the time period agreed upon by the Parties.
(b) Meter Out of Service. If Developer's metering equipment is out of service
or out of repair so that the amount of LFG delivered cannot be determined or corrected,the
Parties shall estimate the amount of LFG delivered during any period when the metering
equipment is out of service or out of repair based on deliveries under similar conditions
during earlier periods when the metering equipment was registering properly.
Notwithstanding the above, if Owner installs metering equipment reasonably acceptable to
Developer and tests, repairs and maintains such metering equipment in a manner that is
comparable to the manner in which Developer repairs and maintains its metering
equipment,then Owner's metering equipment shall be used to measure the quantity of LFG
delivered during periods when Developer's metering equipment is out of service.
18
#6402v5
Section 6.11 Liens. Developer shall not permit the Landfill to become permanently
subject to any mechanics', laborers' or materialmen's liens on account of labor or materials
furnished to Developer or claimed to have been furnished to Developer in connection with work
of any character performed or claimed to have been performed on the Landfill by or at the direction
of Developer. If any such liens are filed against the Landfill,then Developer shall cause the same
to be promptly discharged of record or post a bond in respect of such lien. If Developer shall fail
to so discharge or bond around any such lien within thirty (30) days of the filing thereof, then
Owner may do so, and all amounts paid by Owner, including, all costs, expenses and attorneys'
fees, shall be payable by Developer to Owner upon Owner's written notice to Developer
accompanied by reasonable supporting documentation of such costs and expenses.
ARTICLE VII
TAXES
Section 7.1 Taxes. Owner shall pay or cause to be paid all Taxes and assessments
imposed on Owner with respect to the sale of LFG and the ownership of the Landfill and related
facilities. Developer shall pay or cause to be paid all Taxes and assessments imposed upon
Developer with respect to the purchase of LFG and the ownership of Developer's Facilities and
all taxes that Developer is required to pay pursuant to the Lease Agreement.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.1 Developer Representations and Warranties. Developer represents and
warrants to the Owner that the following statements are true and correct as of the Effective Date:
(a) Developer is a limited liability company, duly formed, validly existing and
in good standing under the laws of the State of Delaware and has all requisite power and
authority to own, lease, and operate its business as currently conducted in the State of
Texas,with full legal right,power and authority to enter into and to perform its obligations
hereunder.
(b) Developer has full power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby, and this Agreement
constitutes the legal, valid and binding agreement of Developer, enforceable against
Developer in accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
(c) No approval,authorization,order,consent,declaration,registration or filing
with any Governmental Authority is required for the valid execution and delivery of this
Agreement by Developer,except such as have been duly obtained or made. Developer has
all the rights required to enter into this Agreement and perform its obligations hereunder
without the consent of any third party that has not been obtained and is in effect as of the
date hereof.
19
#6402v5
(d) Neither the execution, delivery and performance of this Agreement nor the
consummation by Developer of the transactions contemplated hereby will(i)conflict with
or result in any breach of any provision of the organizational documents of Developer, or
(ii)conflict with,result in any violation or breach of,constitute a default under,require any
notice or consent under, result in the creation of any lien on Developer's assets, or create
any right of termination, under the conditions or provisions of any note, bond, mortgage,
indenture, material agreement or other instrument or obligation to which Developer is a
party.
(e) Developer is not involved in any suit, action or proceeding with, and has
not received any notice, complaint or other request for information from, any
Governmental Authority or other Person, with respect to any actual or alleged
environmental claims that, if adversely determined, would be reasonably likely,
individually or in the aggregate, to have a material adverse effect on Developer or Owner
or on the ability of Developer to construct or operate the Developer's Facilities,and,to the
knowledge of Developer, there are no threatened actions, suits, proceedings or
investigations with respect to any such environmental claims, nor any basis therefore.
Section 8.2 Owner Representations and Warranties. Owner represents and warrants to
the Developer that the following statements are true and correct as of the Effective Date:
(a) There are no pending or, to Owner's knowledge, threatened claims,
disputes, governmental investigations, suits, actions (including non judicial real or
personal property foreclosure actions), arbitrations, legal, administrative or other
proceedings of any nature, domestic or foreign, criminal or civil,at law or in equity, by or
against Owner that challenge the enforceability of this Agreement or the ability of Owner
to consummate the transactions contemplated hereby.
(b) Owner is a home-rule municipal corporation,duly formed,validly existing,
and in good standing under the laws of the State of Texas and has all requisite power and
authority to own,lease,and operate its business as currently conducted in the State of Texas
with full legal right, power, and authority to enter into and to perform its obligations
hereunder.
(c) Owner has full power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby, and this Agreement constitutes
the legal,valid and binding agreement of Owner,enforceable against Owner in accordance
with its terms,except as enforcement may be limited by applicable bankruptcy,insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights generally and
by general principles of equity(regardless of whether considered in a proceeding in equity
or at law).
(d) No material approval,authorization,order,consent,declaration,registration
or filing with any Governmental Authority is required for the valid execution and delivery
of this Agreement by Owner,except such as have been duly obtained or made. Owner has
all the rights required to enter into this Agreement and perform its obligations hereunder
20
#6402v5
without the consent of any third party that has not been obtained and is in effect as of the
date hereof.
(e) Neither the execution,delivery and performance of this Agreement nor the
consummation by Owner of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the organizational documents of Owner, or (ii)
conflict with, result in any violation or breach of, constitute a default under, require any
notice or consent under, result in the creation of any lien on Owner's assets, or create any
right of termination, under the conditions or provisions of any note, bond, mortgage,
indenture, material agreement or other instrument or obligation to which Owner is a party.
(f) To the knowledge of Owner, no Hazardous Substances have been or are
currently placed, used, stored, treated, manufactured, disposed of, released, discharged,
spilled or emitted in,under or about, or are emanating from, the Landfill,the RNG Site or
any part thereof, and there have been no violations of Environmental Law at the Landfill.
Owner is not a"potentially responsible party" in connection with or at the Landfill under
CERCLA and that it is entitled to either the CERCLA "innocent purchaser" defense, the
CERCLA "bona fide prospective purchaser" or the CERCLA "contiguous landowner"
exemption in connection with or at the Landfill or RNG Site. Owner has not received any
notice of any orders issued or threatened or investigations conducted, taken or threatened
pursuant to any Environmental Law relating to or with respect to the Landfill; and Owner
has no knowledge of any circumstances or events that have any reasonable prospect of
resulting in any claim, action, or other proceeding with respect to Hazardous Substances
or in an order or investigation under or pursuant to any Environmental Law relating to or
with respect to the Landfill or RNG Site.
Section 8.3 Owner Covenants. Owner shall use commercially reasonable efforts to
cause the Landfill to maintain a volume and quality of waste, including municipal solid waste and
construction and demolition waste,consistent with past practices; Owner will notify Developer as
soon as practicable if a material change in such volume or quality is reasonably expected to occur.
Section 8.4 Covenants of Both Parties. Each Party covenants to the other that during
the Term of this Agreement it will:
(a) comply in all material respects at all times with all Applicable Laws
necessary for its performance under this Agreement; and
(b) give all required Notices, and procure, maintain, and comply with, in all
material respects, all applicable Permits necessary for the performance of its obligations
under this Agreement, and pay all charges and fees in connection therewith.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1 Events of Default. The following occurrences shall constitute events of
default under this Agreement:
21
#6402v5
(a) By a Party,if such Party fails to make when due any payment required under
this Agreement,and such failure is not cured within thirty(30)Days after receipt of Notice
from the other Party of such failure;
(b) Except for an event of default otherwise described in Section 9.1,by a Party,
if such Party fails to perform any material covenant or obligation set forth in this
Agreement, which is not remedied within sixty (60) Days after receipt of Notice from the
other Party of such failure, which Notice sets forth in reasonable detail the nature of the
failure;provided however, that if the failure is not reasonably capable of being cured within
the sixty (60) Day cure period specified above, but is curable, the Party that has failed to
perform will have such additional time as is reasonably necessary to cure the failure (but
in no event longer than one hundred eighty (180) Days), so long as such Party promptly
commences and diligently pursues the cure;provided,further,that an event of default shall
occur immediately to the extent any such failure cannot be cured;
(c) By a Party if any representation or warranty made by such Party in this
Agreement shall have been false in any material respect when made unless such Party cures
the misrepresentation or breach of warranty within thirty(30)Days after discovery by such
Party or receipt of Notice from the other Party of the misrepresentation or breach of
warranty;
(d) By a Party, if such Party (i) admits in writing its inability to pay its debts
generally as they become due, (ii) files a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other Applicable Laws of the United
States of America or any State, district or territory thereof, (iii) makes an assignment for
the benefit of its creditors, (iv) consents to the appointment of a receiver of the whole or
any substantial part of its assets; (v)has a petition in bankruptcy filed against it, and such
petition is not dismissed within sixty (60) Days after the filing thereof, (vi) a court of
competent jurisdiction enters an order,judgment, or decree appointing a receiver of the
whole or any substantial part of its assets,and such order,judgment or decree is not vacated
or set aside or stayed within sixty (60) Days from the date of entry thereof, or(vii) under
the provisions of any other law for the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the whole or any substantial part of its assets
and such custody or control is not terminated or stayed within sixty (60) Days from the
date of assumption of such custody or control;
(e) By a Party, if such Party at any time fails to perform or observe any of its
material obligations under this Agreement;
(f) By a Party, if such Party defaults under and causes the termination of the
Lease Agreement;or
(g) By Developer, if Developer abandons the Developer's Facilities or
construction of the same and/or the RNG Site, in each case, for a period of thirty (30) or
more days (excluding any Force Majeure Events, scheduled outages and unscheduled
outages,whether for maintenance or otherwise).
22
#6402v5
Section 9.2 Remedies.
(a) The defaulting Party shall have thirty(30)Days after receipt of notice from
the non-defaulting Party in the case of a monetary default, sixty (60) Days after receipt of
such notice in the case of a non-monetary default in which to cure such failure or
inaccuracy; provided however, that if the non-monetary failure is not reasonably capable
of being cured within the sixty (60) Day cure period specified above, but is curable, the
defaulting Party will have such additional time as is reasonably necessary to cure the failure
(but in no event longer than an additional one hundred eighty (180) Days), so long as the
defaulting Party promptly commences and diligently pursues the cure; provided, further,
that a default shall occur immediately to the extent any such failure cannot be cured.
(b) Upon the occurrence of,and during the continuation of,an event of default
that is not cured during any applicable cure period and for which this Agreement does not
provide a specific or sole remedy,the non-defaulting Party may terminate this Agreement
by Notice to the other Party, designating the date of termination and delivered to the
defaulting Party no less than thirty (30) Days before such termination date. Upon the
occurrence of an event of default, the non-defaulting Party may, in addition to the
termination right described above and without regard to whether the non-defaulting Party
terminates this Agreement, pursue all available remedies at law or in equity, subject to
Section 9.3 and Owner shall be permitted to enforce or draw on the Developer Guaranty.
(c) The termination right pursuant to this Section 9.2 is in addition to any other
termination rights provided elsewhere in this Agreement.
Section 9.3 Limitation on Damages.
(a) PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION OF
LIABILITY SHALL NOT APPLY TO (I) ACTS OF WILLFUL MISCONDUCT OR
FRAUD, (II) WILLFUL VIOLATIONS OF APPLICABLE LAW, (II)ANY AMOUNTS
RECEIVED BY SUCH PARTY PURSUANT TO INSURANCE POLICIES REQUIRED
TO BE MAINTAINED BY SUCH PARTY PURSUANT TO THIS AGREEMENT,THE
LEASE AGREEMENT, OR OTHERWISE APPLICABLE TO THE DEVELOPER'S
FACILITIES OR THE LANDFILL, BUT LIMITED TO THE PROCEEDS ACTUALLY
RECEIVED, (III) INDEMNITY OBLIGATIONS FOR THIRD PARTY CLAIMS SET
FORTH IN THIS AGREEMENT, OR (IV) ROYALTY PAYMENTS WITHHELD BY
DEVELOPER PURSUANT TO SECTION 12.3FOR THIRD PARTY CLAIMS SET
FORTH IN THIS AGREEMENT.
(b) PROVIDED, HOWEVER, THE FOREGOING SHALL NOT BE
CONSTRUED AS LIMITING (I) AN OBLIGATION OF A PARTY TO INDEMNIFY,
DEFEND AND HOLD HARMLESS THE OTHER PARTY AGAINST CLAIMS
ASSERTED BY THIRD PARTIES INCLUDING, BUT NOT LIMITED TO, THIRD
PARTY CLAIMS FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES; OR (II) DEVELOPER'S RIGHT TO WITHHOLD
ROYALTY PAYMENTS PURSUANT TO SECTION 12.3."
23
#6402v5
(c) "Double Recovery; Proper Assertion of Claims. Notwithstanding the fact
that a Party may have the right to seek indemnification, or in the case of Developer,
withhold Royalty Payments under or with respect to more than one provision of this
Agreement or any other agreement entered into in connection herewith, in respect of any
fact,event,condition or circumstance,neither Party shall be entitled to recover the amount
of any losses suffered by such Party more than once under all such agreements in respect
of such fact,event,condition or circumstance,and an Indemnifying Party shall not be liable
for indemnification to the extent the Indemnified Party has otherwise been fully monetarily
compensated for such losses by insurance; further, each Party hereby agrees to bring any
claims for indemnification or losses under the agreement most closely related to the events
giving rise to such claim for indemnification or loss."
ARTICLE X
FORCE MAJEURE, CHANGE IN LAW AND INDUSTRY WIDE DISRUPTION
Section 10.1 Definition. As used in this Agreement any acts,events,or occurrences that
are unforeseeable and not caused by the negligence or willful misconduct of the affected Party or
any of its Personnel and are beyond the reasonable control of such Party or any of its Personnel
may be considered "Force Majeure Events." Force Majeure Events include, but shall not be
limited to: a failure or interruption of performance due to an act of God; earthquakes; unusually
severe weather conditions; unusually severe drought; blight; famine; quarantine; COVID-19; the
Ukraine Conflict;the inability to secure labor, supplies or materials;blockade;governmental acts,
the delay or inability to obtain Permits despite due diligence in seeking such Permits,court orders
or injunctions; war (declared or undeclared); insurrection or civil strife; sabotage; terrorism;
endemic,pandemic; explosions;and equipment failures.
Section 10.2 Excused Performance. A Party shall be excused from performance and
shall not be considered to be in default with respect to any obligation hereunder, except the
obligation to make payments previously due in a timely manner for liabilities actually incurred, if
and to the extent that its failure of, or delay in, performance is caused by a Force Majeure Event;
a Change in Law or an Industry-Wide Disruption; except that a Party is not excused as a result of
such occurrence from any obligations of such Party that arose before the occurrence causing the
suspension of performance. To be entitled to the foregoing relief, the Party claiming excuse by
reason of a Force Majeure Event must:
(a) give the other Party Notice as soon as reasonably practical, which Notice
shall describe the particulars of the Force Majeure Event.
(b) suspend performance only to the extent and for the duration that is
reasonably required by the Force Majeure Event;
(c) use commercially reasonable efforts to overcome or mitigate the effects of
such occurrence; and
(d) promptly resume performance hereunder when such Party can resume
performance of its obligations under this Agreement, and shall give the other Party Notice
to that effect.
24
#6402v5
Section 10.3 Settlement of Strikes. Nothing in this Article X shall be construed to require
the settlement of any strike, walkout, lockout or other labor dispute on terms which, in the sole
judgment of the Party involved in the dispute,are contrary to such Parry's interest. It is understood
and agreed that the settlement of strikes, walkouts, lockouts, or other labor disputes shall be
entirely within the discretion of the Party experiencing such action.
Section 10.4 Burden of Proof. If the Parties are unable in good faith to agree that a Force
Majeure Event has occurred, the Party claiming a Force Majeure Event shall have the burden of
proof as to whether such event constitutes a Force Majeure Event and is responsible for a failure
or delay of the performance of its obligations.
Section 10.5 Excused Terminations. The occurrence of any of the following events shall
entitle Developer to terminate this Agreement upon written notice to Owner: (a) the Lease
Agreement is not executed within ninety (90) Days following the Effective Date, (b) upon one
hundred eighty (180) Days' notice if Developer, in its sole discretion, determines that the
continued operation of the Developer's Facilities is not commercially feasible, (c) immediately
upon the condemnation by eminent domain of the Landfill or the RNG Site sufficient to
substantially interfere with the operation of Developer's Facilities, or (d) immediately upon
Developer's reasonable determination that Developer is not able, notwithstanding its reasonable
efforts to obtain the necessary permits or the necessary rights-of-way from the Developer's
Facilities to the point of interconnect with the pipeline transporting the Products.
ARTICLE XI
MATERIAL CHANGE IN LAW OR WASTE
In the event of a Material Change in Law or Waste,the Parties shall,to the extent necessary
and possible, cooperate in good faith to reform this Agreement to ensure compliance and
conformity with such Material Change in Law or Waste and to restore or retain the Parties' original
respective intended benefits and burdens under this Agreement; if the Parties are unable to come
to a mutually acceptable arrangement,Developer may terminate this Agreement upon one hundred
eighty(180)Days written notice to Owner(which notice may be revoked by Developer in its sole
discretion prior to the expiration of such one hundred eighty (180) Day period).
ARTICLE XII
INDEMNITY AND INSURANCE
Section 12.1 Indemnification.
(a) Developer shall indemnify, hold harmless and, subject to Section 12.2,
defend Owner and its Affiliates and their respective stockholders, partners, members,
managers,directors,officers,employees,agents, invitees and independent contractors,and
their respective successors and assigns ("Owner Persons"), from and against any and all
costs, claims, liabilities, penalties, fines, damages, expenses, causes of action, suits, or
judgments, including, reasonable attorneys' fees and all court costs and experts' fees
(collectively, "Losses"), actually incurred or paid by an Owner Person to third parties for
injury to such persons or damage to property or any proceeding by a Governmental
Authority)to the extent caused by or arising from:
25
#6402v5
(i) any breach by Developer of the representations and
warranties set forth herein or in the performance of the duties and obligations of Developer under
this Agreement or the Lease Agreement;
(ii) Developer's use, occupancy, conduct, operation, alteration,
maintenance, repair, replacement, or management of Developer's Facilities or the Landfill in
violation of Applicable Laws;
(iii) any willful misconduct or negligent or grossly negligent act
or omission of Developer or its Affiliate, representative or agent;
(iv) any Hazardous Substance contamination, or other
environmental condition, including clean-up actions or remediation work resulting therefrom, at
the Landfill, introduced by Developer or its Affiliate, representative or agent that was not
otherwise in, on, or under the Landfill or the RNG Site, or contained in the LFG delivered at the
Delivery Point(including any liquids delivered with such LFG); or
(v) any and all claims, directly or indirectly arising out of or
related to,Developer's processing of the LFG into Renewable Natural Gas,and any and all claims
arising in connection with damage to property,including without limitation damage to Developer's
Facilities or the Landfill, or injury of or death to persons resulting from the presence of any
component within the Renewable Natural Gas produced by Developer's Facilities.
(b) To the extent permitted by Section 12.3,Owner shall repay and make whole
Developer and its Affiliates and their respective stockholders, partners, members,
managers,directors,officers,employees,agents, invitees and independent contractors,and
their respective successors and assigns ("Developer Persons"), for any and all Losses
actually incurred or paid by a Developer Person (including in connection with the claims
of third parties for injury to persons or damage to property or any proceeding by a
Governmental Authority)to the extent caused by or arising from:
(i) any breach by Owner of the representations and warranties
set forth herein or in the performance of the duties and obligations of Owner under this Agreement
or the Lease Agreement;
(ii) Owner's use, occupancy, conduct, operation, alteration,
maintenance,repair,replacement,or management of the Landfill in violation of Applicable Laws;
(iii) any willful misconduct or negligent or grossly negligent act
or omission of Owner or its Affiliate,representative or agent;
(iv) any Hazardous Substance contamination or other
environmental condition, including clean-up actions or remediation work resulting therefrom, at
the RNG Site, whether now known or hereafter discovered, caused by Owner or its Affiliate,
representative or agent; or
(v) any and all claims, directly or indirectly arising out of or
related to, any Hazardous Substances contained in or delivered with the LFG delivered to
26
#6402v5
Developer under this Agreement, and any and all claims arising in connection with damage to
property, including without limitation damage to Developer's Facilities or the Landfill, or injury
of or death to persons resulting from the presence of any liquids in the LFG delivered to the
Delivery Point, and the handling of any Condensate and/or Leachate by Developer.
Section 12.2 Notice and Defense of Claims.
(a) Whenever a claim shall arise for indemnification hereunder or upon
learning of facts which a Person believes may give rise to a claim for indemnification under
Section 12.1, such Person (the "Indemnified Party") shall give prompt written Notice to
the Person responsible for such indemnification (the "Indemnifying Party") of the claim
for indemnification and the facts,in reasonable detail,constituting the basis for such claim;
provided that failure of an Indemnified Party to give prompt written Notice of any claim
shall not release, waive or otherwise affect an Indemnifying Party's obligations with
respect thereto except to the extent that the Indemnifying Party is materially and adversely
affected in its ability to defend against such claim or is otherwise materially prejudiced
thereby.
(b) The obligations and liabilities of an Indemnifying Party to an Indemnified
Party under this Article XII with respect to claims resulting from the assertion of liability
by those not party to this Agreement (including claims of Governmental Authorities for
penalties, fines and assessments) shall be subject to the following conditions:
(i) The Indemnified Party shall give prompt written Notice to
the Indemnifying Party of the nature of the assertion of Losses by a third party and the amount
thereof to the extent known; provided that failure of an Indemnified Party to give prompt written
Notice of any claim shall not release, waive or otherwise affect an Indemnifying Party's
obligations with respect thereto except to the extent that the Indemnifying Party is adversely
affected in its ability to defend against such claim or is otherwise prejudiced thereby.
(ii) The Indemnifying Party shall be entitled to participate in or,
at its option, assume the defense, appeal or settlement of such claim. Such defense, appeal or
settlement shall be conducted through counsel selected by the Indemnifying Party. The
Indemnifying Party shall not be entitled to assume control of such defense and shall pay the
reasonable fees and expenses of one counsel retained by the Indemnified Party if(A)the claim for
indemnification relates to or arises in connection with any criminal proceeding,action,indictment,
allegation or investigation;(B)the Indemnified Party reasonably believes an adverse determination
with respect to the claim or giving rise to such claim for indemnification would be detrimental to
or injure the Indemnified Party's reputation or future business prospects; (C) the claim seeks an
injunction or equitable relief against the Indemnified Party; or (D) upon petition by the
Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to
vigorously prosecute or defend such claim.
(iii) In any claim initiated by a third party and defended by the
Indemnifying Party (A) the Indemnified Party shall have the right to be represented by advisory
counsel and accountants at its own expense,(B)the Indemnifying Party shall keep the Indemnified
Party fully informed as to the status of such claim at all stages thereof, whether or not the
27
#6402v5
Indemnified Party is represented by its own counsel, (C) the Indemnifying Party shall make
available to the Indemnified Party, and its attorneys, accountants and other representatives, all
books and records of the Indemnifying Party relating to such claim(but not any books or records
that are subject to the attorney-client privilege) and(D)the Parties shall render to each other such
assistance as may be reasonably required in order to ensure the proper and adequate defense of
such claim.
(iv) No third party claim may be compromised or settled by the
Indemnifying Party without the written consent of the Indemnified Party (which consent shall not
be unreasonably withheld,conditioned or delayed). Similarly,no third-party claim may be settled
by the Indemnified Party without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld, conditioned or delayed.
Section 12.3 Make-Whole Payment Obligations. In the event Owner incurs liability to
Developer Persons pursuant to Section 12.1(b), Owner shall only be liable to Developer Persons
to the extent of Owner's rights to receive Royalty Payments pursuant to Section 5.1, and in no
event shall Owner be liable to refund or return any previously paid Royalty Payments or other
amounts. In furtherance of the above, Owner hereby agrees that in the event Owner is required to
repay and make whole Developer Persons for Losses pursuant to Section 12.1(b), Developer has
the right to withhold Owner's monthly Royalty Payments, as repayment for such Losses, as and
when due until Developer has withheld an amount in the aggregate equal to Owner's liability under
Section 12.1(b)."
Section 12.4 Survival. Notwithstanding any other provisions in this Agreement, all
provisions of this Article XII shall survive expiration or termination of this Agreement by default
or otherwise.
Section 12.5 Insurance Requirements.
(a) Developer shall obtain, maintain and keep in force throughout the Term,
property insurance with insurers meeting the qualifications, and in amounts as set forth in
Exhibit E attached hereto. All such policies of insurance shall name Owner as an additional
insured. Developer shall deliver to Owner certificates of insurance evidencing the
coverages required by Exhibit E within thirty (30) days of the Effective Date and
periodically thereafter promptly following upon request of Owner, but no more often than
once a calendar year. The certificates of insurance shall further provide that the insurer
will notify the certificate holder and each additional insured thereunder at least ten (10)
days before any cancellation or material modification of the policy.
(b) The insurance policies maintained by Developer as provided in this
Agreement shall include an endorsement containing an express mutual waiver of any rights
of subrogation by the insurance company against Owner. The above mutual waiver of
subrogation applies whether or not there are any deductibles or self-insured retentions.
28
#6402v5
(c) Developer shall purchase or provide and maintain builder's risk insurance
or other similar coverage appropriate to such construction or installation activities and
cause Owner to be named as an additional insured.
Section 12.6 Insurable Claims. Developer's insurance coverage and the limitations
thereunder shall in no way limit the indemnity obligations set forth in this Agreement; provided
that, to the extent an insurable claim arises, the Parties agree to first pursue recovery under such
insurance coverage before seeking indemnification from the other Party. For the avoidance of
doubt, a Party's deductible under its respective insurance policies constitutes Losses for which it
may seek indemnification from the Indemnifying Party (to the extent permitted by this Article
XII).
ARTICLE XIII
ASSIGNMENT
This Agreement and all of the provisions hereof shall be binding upon and inure to the
benefit of the Parties and their respective successors and permitted assigns(including by operation
of law). Neither Party may assign this Agreement to any other person without obtaining the
advance written consent of the other,which consent shall not be unreasonably withheld,denied or
delayed, except that either Party may assign this Agreement to an Affiliate without the consent of
the other.Developer may assign its rights under this Agreement to(a)an Affiliate or(b)any lender
or other finance party of Developer, which may further assign such rights to any subsequent
assignee upon and after the exercise of its rights and valid enforcement of its remedies under a
deed of trust or other security instrument creating a lien in its favor,at law, in equity or otherwise.
Each Party may also make such an assignment without the other Party's consent to a successor to
substantially all of such Party's business,whether in a merger,sale of stock, sale of assets or other
transaction. Any purported assignment or delegation in violation of this Section shall be null and
void.
ARTICLE XIV
OPTION TO PURCHASE
Section 14.1 Option to Purchase.
(a) Developer hereby grants to Owner the exclusive option (the "Option") to
purchase all of the Developer's Facilities upon the termination of this Agreement for
Developer's default. Prior to removal of the Developer's Facilities or any component
thereof, Developer shall provide Owner with written notice of its intent to remove the
Developer's Facilities,at which time,Owner shall have a period of thirty(30)days to notify
Developer of its intent to purchase said equipment. The purchase price for any said
equipment shall be the Fair Market Value (as defined below) of the equipment at the time
as determined by mutual agreement of the Parties or, if the Parties are unable to agree
within 30 days of Owner's exercise of its Option, Fair Market Value shall be determined
in accordance with Section 14.1(b) below. For purposes herein, the term "Fair Market
Value" means the cash price at which such equipment would change hands between a
willing buyer and a willing Owner, neither being under any compulsion to buy or to sell,
and both having reasonable knowledge of the relevant facts.
29
#6402v5
(b) If the Parties are unable to agree on the Fair Market Value of the equipment,
as set forth in Section 14.1(a) above, the Parties shall mutually appoint a Qualified
Appraiser(as defined below)to determine the Fair Market Value of such equipment,which
shall be binding on the Parties. The Parties shall split the costs and expenses of such
Qualified Appraiser equally between themselves.
(c) If Developer accepts the Fair Market Value of the Developer's Facilities
(whether from Owner or as determined by such Qualified Appraiser) the Parties shall
promptly execute and deliver a customary purchase and sale agreement reasonably
satisfactory to the Parties in all material respects providing for the purchase and sale of
such equipment free and clear of all liens,judgements and taxes (unless otherwise agreed
to by the Parties). For purposes herein,the term"Qualified Appraiser"means a nationally
recognized third-party appraiser reasonably acceptable to Owner and Developer which
shall (i) be qualified to appraise landfill and renewable natural gas facilities, and
experienced in such businesses in the general geographic region of the relevant
Developer's Facilities, and (ii) not be associated with either Owner or Developer or any
Affiliate of either of them.
ARTICLE XV
REMOVAL OF DEVELOPER'S FACILITIES
Section 15.1 Removal and Restoration Obligations. Unless the Parties agree in writing
to an alternative arrangement, following the expiration or earlier termination of this Agreement,
(a) Developer shall, at Developer's sole cost and expense, at the end of the Term, (i) remove the
Developer's Facilities and all personal property of Developer(other than the GCCS)from the RNG
Site; (ii) remove or cap any of Developer's facilities that are located under the surface of the
Landfill (other than the GCCS); (iii)restore the condition of the Landfill, including the RNG Site,
to the condition it existed on the Effective Date, ordinary wear and tear excepted; and (b)
Developer shall, at its sole cost and expense (i) deliver possession of the Landfill, including the
RNG Site,to Owner, free and clear of all liens suffered as a result of Developer's use and control
of the RNG Site; (ii) upon Owner's request, execute and deliver any such instrument of transfer,
conveyance or release necessary to confirm the vesting of such rights in Owner; and (iii) execute
a recordable memorandum of termination evidencing the termination of any recorded agreements
related to this Agreement or this Agreement.
ARTICLE XVI
CASUALTY AND CONDEMNATION
Section 16.1 Casualty. Each Party shall give prompt written notice to the other Party of
any casualty to each Party's facilities. Each Party shall give prompt written notice to the other
Party of any casualty to the Landfill or any portion thereof, or to the GCCS, the Permitted Flare,
or the Leachate Collection System. Each Party shall use commercially reasonable efforts to restore
the Party's facilities as soon as reasonably practicable under the circumstances. Each Party shall
provide the other Party with its plans for the restoration of its facilities as soon as reasonably
practicable following such casualty.
30
#6402v5
Section 16.2 Condemnation. If, at any time during the Term, the Landfill, the Landfill,
the Developer's Facilities, or any part thereof or interest therein, shall be taken or damaged by
reason of any public improvement or condemnation proceeding,or in any other manner,or should
Developer or Owner receive any notice or other information regarding such proceeding,the Party
receiving such notice or other information shall give prompt written notice thereof to the other
Party. Owner and Developer agree to request the courts in such condemnation proceeding to make
separate awards to Owner and Developer. If, for any reason,the courts are unwilling or unable to
make separate awards, Owner and Developer shall agree that the one award shall be equitably
apportioned to reflect each Party's respective interests and, absent such agreement. shall agree to
appoint a third-party appraiser to make such allocation. Each of Developer and Owner shall be
entitled at its option to commence, appear in and prosecute in its own name any action or
proceedings.
ARTICLE XVII
MISCELLANEOUS
Section 17.1 No Partnership. Nothing contained in this Agreement shall be construed to
create any association, trust, partnership, or joint venture or impose a trust or partnership duty,
obligation, or liability or an agency relationship on, or with regard to, either Party.
Section 17.2 Notices. All notices, reports, certifications, or other documentation, and
other communications hereunder shall be in writing and shall be deemed given when received if
delivered personally or by facsimile transmission with completed transmission acknowledgment
or by electronic mail,or when delivered if mailed by overnight delivery via a nationally recognized
courier or registered or certified first class mail (return receipt requested),postage prepaid, to the
recipient Party at its below address (or at such other address or facsimile number for a Party as
shall be specified by like notice (each a"Notice");provided,however,that notices of a change of
address shall be effective only upon receipt thereof and that any notice provided by electronic mail
will be followed promptly by another form of notice consistent with this Section 17.2 and will be
effective when such follow-up notice is deemed effective):
If to Developer: 9901 Valley Ranch Parkway East, Suite 2060
Irving,Texas 75063-4870
mln@vitolbiomethane.com
with a copy to: Vitol Green Gas LLC
c/o General Counsel
2925 Richmond Ave., 11`h Floor
Houston, Texas 77098
legalhouston@vito1.com
If to Owner: City of Port Arthur, Texas
444 4th Street
Port Arthur, Texas 77640
Attn: City Manager Ronald Burton, CPM
31
#6402v5
with a copy to: City of Port Arthur,Texas
444 4th Street
Port Arthur,Texas 77640
Attn: City Attorney,
with a copy to: City of Port Arthur, Texas
444 4th Street
Port Arthur, Texas 77640
Attn: City Engineer Hani Tohme
and:
City of Port Arthur, Texas •
444 4th Street
Port Arthur, Texas 77640
Attn: Public Works Director Flozelle Roberts
Each Party may designate a different address for notices by Notice given as provided
above.
Section 17.3 Governing Law, Jurisdiction, Venue. This Agreement shall be governed
by, and construed in accordance with,the Laws of the State of Texas (without giving effect to its
choice of Laws principles). For purposes of any action arising out of or in connection with this
Agreement or any transaction contemplated hereby, each Party hereto (a) irrevocably submits to
the exclusive jurisdiction and venue of any state or federal court located within Harris County,
State of Texas (or in any court in which appeal from such courts may be taken), (b) agrees that
service of any process, summons, notice or document by U.S. registered mail to such Party's
respective address set forth above shall be effective service of process for any action with respect
to any matters to which it has submitted to jurisdiction in this Section 17.3, (c) waives and
covenants not to assert or plead, by way of motion, as a defense or otherwise, in any such action,
any claim that it is not subject personally to the jurisdiction of such court,that the action is brought
in an inconvenient forum, that the venue of the action is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court, and hereby agrees not to challenge
such jurisdiction or venue by reason of any offsets or counterclaims in any such action, and (d)
waives any bond, surety or other security that might be required of any other Party with respect
thereto. Each Party hereto agrees that a final judgment in any such action shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
Laws or in equity.
Section 17.4 Dispute Resolution. Except as provided in Article XII, in the event a
dispute, controversy or claim (a "Dispute") arises hereunder, including any claim whether in
contract, tort(including negligence), strict product liability or otherwise, the aggrieved Party will
promptly provide written notification of the Dispute to the other Party within thirty(30)days after
such dispute arises. Thereafter,a meeting shall be held promptly between the Parties,attended by
representatives of the Parties with decision-making authority regarding the Dispute,to attempt in
good faith to negotiate a resolution of the Dispute ("Party Representative Negotiations"). If the
Parties are not successful in resolving a Dispute through Party Representative Negotiations within
twenty-one (21) days of such meeting, then, subject to the limitations on remedies set forth in
32
#6402v5
Section 9.2, either Party may seek to enforce its rights under this Agreement in a court of
competent jurisdiction pursuant to Section 17.3.
Section 17.5 Counterparts. This Agreement may be executed in two or more
counterparts,each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Signatures delivered by facsimile, portable document format or
other electronic means (including services such as DocuSign) will be considered original
signatures,and each Party shall thereafter promptly deliver original signatures to the other Party.
Section 17.6 Waiver of Compliance; Consents. Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation, covenant, agreement
or condition herein may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but any such waiver of such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to,any
subsequent failure to comply therewith.
Section 17.7 No Third Party Beneficiaries. Except as otherwise specified herein, (a)
nothing in this Agreement nor any action taken hereunder shall be construed to create any duty,
liability or standard of care to any Person that is not a Party, (b) no Person that is not a Party shall
have any rights or interest, direct or indirect, in this Agreement or the services to be provided
hereunder and (c) this Agreement is intended solely for the benefit of the Parties, and the Parties
expressly disclaim any intent to create any rights in any third party as a third-party beneficiary to
this Agreement or the services to be provided hereunder.
Section 17.8 Interpretation. The article, section and schedule headings contained in this
Agreement are solely for the purpose of reference,are not part of the agreement of the Parties and
shall not in any way affect the meaning or interpretation of this Agreement.
Section 17.9 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy,all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party.
Section 17.10 Entire Agreement. This Agreement combined with the Lease Agreement,
including the recitals hereto and all schedules, attachments or exhibits attached hereto,constitutes
the entire agreement between the Parties concerning the subject matter hereof, which supersedes
all previous written and oral negotiations, commitments,proposals and writings. This Agreement
may be amended modified or supplemented only by written agreement of Developer and Owner.
To the extent that there is any conflict between the provisions of the body of this Agreement and
the provisions of any schedule, attachment or exhibit attached hereto,the body of this Agreement
shall control.
Section 17.11 Construction of Agreement. The terms and provisions of this Agreement
represent the results of negotiations between Developer and Owner, each of which has been
represented by counsel of its own choosing, and neither of which has acted under duress or
compulsion,whether legal, economic or otherwise. Accordingly,the terms and provisions of this
33
#6402v5
Agreement shall be interpreted and construed in accordance with their usual and customary
meanings, and Developer and Owner hereby waive the application in connection with the
interpretation and construction of this Agreement of any rule of law to the effect that ambiguous
or conflicting terms or provisions contained in this Agreement shall be interpreted or construed
against the Party whose attorney prepared the executed draft or any earlier draft of this Agreement.
Section 17.12 Further Assurances. Each Party agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate,carry out and perform all of the terms,provisions,and conditions of this
Agreement and the transactions contemplated by this Agreement.
Section 17.13 Emergency Contact. Each Party shall make available by phone twenty-four
(24) hours per Day, seven (7) Days per week, an individual or individuals whom the other Party
may contact in the event of an emergency or any other situation requiring immediate
communication between the Parties, including, but not limited to, the need to interrupt or re-start
the flow of LFG.
Section 17.14 Lender Cooperation. Owner shall cooperate with and abide by the
reasonable requests(assuming a reasonable number of requirements and requests,in the aggregate)
of the financial institutions, investors, and/or government entities that provide construction or
permanent financing or equity investment for Developer's Facilities or Developer (collectively
referred to in this Agreement as the "Lender"). Upon written Notice to Owner, Developer may
assign a collateral security interest in this Agreement to a Lender as collateral security, so long as
such collateral assignment does not materially alter this Agreement; provided that any absolute
assignment of this Agreement to a Lender shall occur only following and as the result of the
exercise by such Lender of its remedies in connection with such a default by Developer under the
applicable financing documents. Nothing in this Section 17.14, or Owner's failure to execute the
documents stated in this Section 17.14, shall relieve Developer of its payment obligations under
this Agreement.
Section 17.15 Confidentiality. Each Party ("Receiving Party") shall keep and cause its
Representatives to keep confidential,for the term of this Agreement,the Confidential Information
the other Party(the"Disclosing Party")made available to Receiving Party by Disclosing Party or
which result from either Party's performance in connection with this Agreement. Receiving Party
agrees to maintain the Disclosing Party's Confidential Information in strict confidence and may
not disclose the Confidential Information except to its Representatives who are under an obligation
to keep such information confidential. However,the above obligations of confidentiality and non-
use do not apply to information which(a) Receiving Party can demonstrate with written evidence
was known to it prior to disclosure by Disclosing Party;(b)is,or later becomes,public knowledge
without breach of this Agreement by Receiving Party; (c) Receiving Party receives from a third
party who did not receive the same directly or indirectly from Disclosing Party under obligations
of confidentiality;or(d)is developed by Receiving Party independently from information received
from Disclosing Party, as evidenced by appropriate documentation. Notwithstanding the
foregoing, Disclosing Party may disclose Confidential Information if ordered to do so by a court
or a government agency with jurisdiction over the matter, provided that Disclosing Party shall
furnish Receiving Party,if practical,notice of receipt of a request for disclosure of said information
34
#6402v5
and data in such proceeding. This Section 17.15 shall survive the expiration or early termination
of this Agreement for a period of(2)years thereafter.
[Remainder of Page Intentionally Left Blank— Signature Pages Follow]
35
#6402v5
IN WITNESS WHEREOF,each of the Parties has caused this Agreement to be executed
by a duly-Authorized Representative as of the date first written above.
OWNER:
CITY OF PORT ARTHUR
By:
Name:
Title:
DEVELOPER:
[--i
By:
Name:
Title:
Signature page to Gas Rights Agreement
#6402v5
EXHIBIT A
Commercial Operation Date Certification
Exhibit A
#6402v5
EXHIBIT B
Designated Owner Permits
Exhibit B
#6402v5
EXHIBIT C
RNG Site
EXHIBIT C-1
RNG Site—Legal Description
Exhibit C
#6402v5
EXHIBIT D
Operational &Reporting Obligations of the Parties
Each of the Parties must take all actions necessary to comply with requirements of the following
(including, but not limited to, sharing information necessary to comply with reporting
requirements):
1. 1 1
2. f 1
3. f 1
4. f 1
Exhibit D
#6402v5
EXHIBIT E
Insurance Requirements
In addition to meeting the coverage limits, each Parry's insurance coverage shall meet the
following requirements:
1.1 The Parties shall maintain:
a. Insurance Policies.
The Developer shall maintain the following minimum insurance coverage, either
by one or more policies, including in combination with an excess liability policy. Within ten(10)
days of the Effective Date, and on each annual anniversary of the Effective Date thereafter, the
Developer shall provide Certificates of Insurance to Owner evidencing the required coverage.
Except for Worker's Compensation policy(ies), all insurance shall be primary and non-
contributory,
Workers Compensation
This insurance shall protect the Developer against claims under applicable state
worker's compensation laws. The Developer shall also be protected against claims for injury,
disease, or death of employees which, for any reason, may not fall within the provisions of a
Worker's compensation law. The liability limits shall be not less than:
Worker's Compensation: Statutory
Employer's Liability: $1,000,000 each occurrence
Commercial Automobile Liability
This insurance shall protect the Developer against claims for injuries to members
of the public and damage to property of others arising from the use of motor vehicles, and shall
cover operation on or off the Developer's Site of all motor vehicles licensed for highway use,
whether they are owned,non-owned, or hired. The liability limits shall be not less than:
Bodily Injury and Property Damage CSL: $5,000,000 per accident
Commercial General Liability
This insurance shall protect the Developer against claims for damages because of
property damage or bodily injury, or death arising out of act and/or omission of the Developer or
its employees, subcontractors, agents, advisors, or consultants. Coverage shall be included for
premises, operations, completed operations and products. This insurance shall also not contain an
"insured versus insured"exclusion. The liability limits shall be not less than:
Exhibit E
#6402v5
Bodily Injury and Property Damage Combined Single Limit: $10,000,000 per
occurrence
Property(First Party)
This insurance shall be of the"all risks"type,shall be written on a replacement cost
basis, in completed value form, covering risks of damage to Developer's Facility.
Property Insurance may be in the form of an installation floater and shall provide
for Losses to be payable to the Developer and Owner as their interests may appear. The policy
shall contain a provision that in the event of payment for any loss under the coverage provided,
the insurance company shall have no rights of recovery against the Developer or Owner and its
employees (including any of its agents, advisors, or consultants).
Environmental Liability Insurance
The Developer shall procure, maintain, and keep in force at all times during the
Term, at the Developer's sole expense, Environmental Liability Insurance which includes
coverage for loss arising from sudden and accidental pollution arising out of the handling of
Hazardous Materials or Hazardous Wastes generated by Developer, and includes coverage for
bodily injury or property damage arising out of, or resulting from, the discharge, emission,
seepage, migration, dispersal, release, or escape of High-BTU Gas, Landfill Gas, arising out of
operations of Developer. The limits of Environmental Liability Insurance shall not be less than
$5,000,000 per occurrence and aggregate.
b. Notification of Cancellation/Changes.
The Developer shall endeavor to have policies of insurance in Article XII contain
a provision or endorsement that the coverage afforded will not be cancelled, materially changed,
or renewal refused until at least thirty(30)days(ten(10)days for non-payment of premium)prior
written notice has been given to the Developer and Owner.
c. Subcontractors.
The Developer shall require all material subcontractors to provide insurance as
follows. Such limits may be provided by a combination or primary and excess policies.
Worker's Compensation and Employer's Liability
Worker's Compensation: Statutory
Employer's Liability: $1,000,000 each occurrence
Commercial Automobile Liability—all owned, non owned and hired autos used
in the performance of the work
Bodily Injury and Property Damage CSL: $5,000,000 per accident
Exhibit E
#6402v5
Commercial General Liability, including operations and completed operations
coverage
Bodily Injury and Property Damage Combined Single Limit: $5,000,000 per
occurrence
Contractors Pollution Liability (unless included on the Commercial General
Liability policy)
$5,000,000 per occurrence and aggregate.
Exhibit E
#6402v5
EXHIBIT F
Easement Agreement
This easement affects Parcel Number(s):
EASEMENT
THIS EASEMENT("Agreement")is made this lday of , 2024
("Commencement Date"),from City of Port Arthur,a Texas municipal corporation,whose mailing address is 444
4th Street,Port Arthur, TX 77640 ("Grantor"), to , a
whose address is ("Grantee").The parties agree asfollows:
1. Grant. For and in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,Grantor hereby grants and conveys unto Grantee,its successors
and permitted assigns, a non-exclusive easement to construct, maintain, clear, inspect, upgrade, operate, repair, replace,
reconstruct,mark,monitor,patrol,protect(i)one pipeline and all related pipeline equipment and appurtenances,below and/or
above ground,necessary or convenient for the transportation or transmission of oil,natural gas(including,without limitation,
natural gas liquids), petroleum products, water, hydrocarbons and any other substances, and any products, derivatives,
combinations or mixtures of any of the foregoing,including but not limited to,meters,regulators,valves,launchers/receivers,
vent pipes, line markers, taps, rectifiers, alternating current mitigation, cathodic protection, including enclosures for the
aforesaid appurtenances ("Utility Facilities,"the pipeline together with such Utility Facilities are collectively referred to
herein as the "Utilities") and (ii) one below-grade pipeline for delivery of natural gas for the purpose of flaring and any
meters, regulators, valves, launchers/receivers, vent pipes, line markers, taps, rectifiers, alternating current mitigation,
cathodic protection,including enclosures for the aforesaid appurtenances("Flare Gas Line Facilities",the pipeline together
with such Flare Gas Line Facilities are collectively referred to herein as the"Flare Gas Line",and the Utility Facilities and
the Flare Gas Line Facilities are collectively referred to herein as the"Facilities",and the foregoing rights and those provided
to Grantee hereunder are collectively referred to herein as the"Easement Rights"),in,on,over,under,or through portions
of the real property situated in County,State of ,to wit:
acres, more or less, being and being part the land
described in Warranty Deed dated ,recorded as Instrument number in the
records of County ("Parcel 1").
acres, more or less, being and being part the land
described in Warranty Deed dated ,recorded as Instrument number in the
records of County ("Parcel 2," together with Parcel 1, collectively, "Grantor's
Property").
2. Subject to Lease.The rights granted herein are subject to the conditions and restrictions of that certain Lease
Agreement dated as of[the Commencement Date] [ ,2023]by and between Grantor,as lessor,and Grantee,as
lessee (as amended or supplemented from time to time, the "Lease"), which Lease concerns Grantee's development,
construction and use of the Renewable Natural Gas Processing Facility (as defined in the Lease) on other portions of
Grantor's Property.In the event of any conflict between the terms of this Agreement and the terms of the Lease,the terms of
the Lease shall prevail.
3. Easement Location.The real property subject to the Easement Rights iscomprised of:
(i) anon-exclusive easement area feet( ) in width on each side of the centerline of the
Utilities for a total of ( ) in width("Utility Easement Area")and a temporary easement
area of an additional feet( )in width on one side of the Utility Easement Area("Utility
Temporary Easement Area"),as each is more particularly described and/or depicted on Exhibit"A";and
(ii) a non-exclusive easement area feet( ) in width on each side of the centerline of the
Flare Gas Line for a total of ( ) in width ("Flare Gas Line Easement Area") and a
temporary easement area of an additional feet( )in width on one side of the Flare Gas Line
#6402v5
Easement Area("Flare Gas Line Temporary Easement Area"), as each is more particularly described and/or
depicted on Exhibit`B".
The Utility Easement Area,the Utility Temporary Easement Area,the Flare Gas Line Easement Area and the Flare
Gas Line Temporary Easement Area are collectively referred to herein as the"Easement Lands".Grantee agrees to provide
Grantor with a copy of the As-Built Survey or other similar drawings following completion of construction.
4. Use.Grantor shall not,nor shall it allow others acting by or through Grantor to construct or place any new
obstructions,buildings,improvements, impound any water,affect the lateral or subjacent support of the Facilities,or plant
any trees,or shrubs if the same will interfere with the use of the Easement Lands by Grantee(collectively,the"Prohibited
Items")on,through,under,or upon the(i)Utility Temporary Easement Area or Flare Gas Line Temporary Easement Area
until termination of the Easement Rights on the respective Utility Temporary Easement Area or Flare Gas Line Temporary
Easement Area and(ii)the Utility Easement Area or Flare Gas Line Easement Area until termination of the term of this
Easement,without the prior written consent of Grantee.Grantee shall have the right of reasonable ingress and egress over
the Easement Lands and in the areas agreed upon by Grantor and shown on Exhibits A and B attached hereto and the right
to install gates in fences and driveway culverts that cross the Utility Easement Area,all in order that the Grantee may access
the Utility Easement Area or Flare Gas Line Easement Area and exercise the Easement Rights.
5. Term. Grantee's Easement Rights pursuant to this Agreement shall commence on the Commencement
Date and shall expire upon the expiration or earlier termination of the Lease.Grantor and Grantee agree further that promptly
upon the expiration of the term of this Agreement,Grantor and Grantee shall mutually execute and deliver a termination and
release of this Agreement and all easements granted herein,in a form suitable for recording in the real estate records for the
County in which the Grantor's Property is located,stating that such easements are terminated and released as to the Grantor's
Property.
6. Depth of Cover.Grantee agrees that the underground portions of the Facilities will be constructed with at
least[forty-eight inches(48")]of soil cover.
7. Restoration and Compensation. Except as otherwise provided for herein (including, but not limited to,
Grantee's restoration obligations), Grantee has compensated Grantor for damages associated with its use of the Easement
Lands and initial installation of the Facilities(and related activities).No successor or assign of Grantor or purchaser of all or
any part of the Easement Lands shall be entitled to additional payment of such compensation already remitted to Grantor as
of the Commencement Date.
In addition to the foregoing,Grantee agrees to pay Grantor for any and all additional actual physical damages to the
Grantor's Property, including but not limited to damage: (i)to fences and(ii)occasioned by any additional installations or
construction and future reconstruction, maintenance, operation, alteration, protection, inspection, moving,replacement,
repair,orremoval of the Facilities in the Utility Easement Area or Flare Gas Line Easement Area,as applicable.Grantee shall
have the right,from time to time after the initial construction of the Facilities,to re-clear the Utility Easement Area or Flare
Gas Line Easement Area, as applicable, by removing trees and shrubs that may interfere with Grantee's use of the Utility
Easement Area or Flare Gas Line Easement Area, or the Facilities; provided,however,that Grantee shall not remove any
timber or other vegetation which is prohibited by applicable restrictions.
Grantee shall restore and repair,at its sole cost and expense,or cause to have restored and repaired,all lawns,crops,
fences and damage within the Easement Lands and any portion of the Grantor's Property disturbed by Grantee or caused by
Grantee's use of the Easement Lands, to substantially the same condition which it existed before Grantee's use of the
Easement Lands.The foregoing restoration work shall be completed as soon as reasonably practical following completion
of the activity that caused the disturbance.
8. Covenants Running with the Land; Assignment. This Agreement shall be recorded in the real property
records where the Easement Lands are located,and the terms of this Agreement shall constitute covenants running with the
land and shall be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns,
personal representatives,and heirs.
9. Notices. All notices required or permitted under this Agreement shall be given by overnight courier service,
by registered or certified mail,postage prepaid,directed to the addresses at the beginning of this Agreement or at such other
address as may be provided by such party.
10. Document Execution and Interpretation. This Agreement may be signed in counterparts and all such
counterparts shall be deemed as originals. This Agreement shall be interpreted and enforced under the laws of the state where
the Easement Lands are located. If any part,term or provision of this Agreement is,by a court of competent jurisdiction or
#6402v5
regulatory authority having jurisdiction over the Easement Lands,held to be illegal,void,or unenforceable,or to be in conflict
with the law of that jurisdiction,the validity of the remaining provisions,or portion hereof,shall not be affected,and the rights
and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular part,term or
provision to be held invalid. This Agreement together with exhibits incorporated herein by reference,if any, embodies the
whole agreement of the parties. There are no promises,terms,conditions,or obligations other than those contained herein;
and this Agreement shall supersede all previous communications, representations, or agreements, either verbal or written,
between the parties.Whenever the context of this Agreement requires,words used in the singular shall be construed to include
the plural and vice versa and pronouns designating a particular gender shall be deemed to include and designate the masculine,
feminine and neuter gender. This Agreement shall not be construed against either party in the event of an ambiguity or other
dispute as to its interpretation.Grantor and Grantee represent to one another that each has the power and authority to execute
and deliver this Agreement and to perform its respective obligations under this Agreement andthe person orpersons signing
for each party has been duly authorized by such party to do so. The paragraph headings that appear in this Agreement are for
purposes of convenience of reference only and are not in any sense to be construed as modifying the substance of the
paragraphs in which they appear.
11. Governing Law. This Agreement shall be interpreted,enforced and governed under the laws of the State of
Taros
12. Miscellaneous. Time is of the essence herein. Failure of any party hereto to insist upon the strict
performance of any provision of this Agreement shall not be construed as a waiver for the future of any such provision.A
breach of this Agreement that is not cured after sixty(60)days written notice to the breaching-party shall entitle the non-
breaching party to cancel,rescind or otherwise terminate this Agreement or the Easement Rights,along with any other rights
or remedies which such non-breaching party may have hereunder or pursuant to applicable law.Non-use of the Easement
Lands for a period of less than twelve(12)months shall not constitute abandonment of the Easement Rights or the Easement
Lands and other rights granted herein,and shall not be grounds for termination of this Agreement.No modification of this
Agreement shall be binding unless the same is in writing and signed by the parties hereto.
[Signature page follows'
#6402v5
TO HAVE AND TO HOLD the Easement Rights unto the Grantee, Grantee's successors, permitted assigns,
personal representatives,and heirs forever.
IN WITNESS WHEREOF, Grantor and Grantee have hereunto set its hand this day of
,20[ 1.
GRANTOR:
By:
STATE OF )
)SS.
COUNTY OF )
Before me, a Notary-Public, in and for said County and State, personally appeared
of , who acknowledged the execution of the
foregoing instrument on behalf of ,and who,having been duly
sworn,stated that any representations therein contained are true.
Witness my Hand and Notarial Seal this_day of ,202_
Notary Public
Printed:
County ofResidence:
My Commission Expires:
#6402v5
GRANTEE:
By:
STATE OF )
)SS.
COUNTY OF )
Before me, a Notary-Public, in and for said County and State, personally appeared
of , who acknowledged the execution of the
foregoing instrument on behalf of ,and who,having been duly
sworn,stated that any representations therein contained are true.
Witness my Hand and Notarial Seal this day of ,202 .
Notary Public
Printed:
County ofResidence:
My Commission Expires:
#6402v5
EXHIBIT"A"
[TO BE ATTACHED]
[Exhibit should include locations of temporary easement and ingress and egress points]
#6402v5
EXHIBIT"B"
[TO BE ATTACHED]
[Exhibit should include locations of temporary easement and ingress and egress points
Exhibit F
#6402v5
EXHIBIT G
Developer Guaranty
GUARANTEE
This Guarantee dated as of [9], 2024 (this `Guarantee'), is made by Vitol BioMethane
LLC, a Delaware limited liability company, whose principal address is at 9901 Valley Ranch
Parkway East, Suite 2060, Irving, TX 75063-4870 (`Guarantor'), in favor of the City of Port
Arthur, Texas(`Counterparty'),whose principal office is at 444 4th Street, Port Arthur,
Texas 77640 (`Counterparty'),each a'Party' and together the 'Parties'.
1. GUARANTEED OBLIGATIONS. As used herein,the term`Guaranteed Obligations'
means all payment and performance obligations of [PROJECT COMPANY], whose principal
address is at 9901 Valley Ranch Parkway East, Suite 2060, Irving, TX 75063-4870 (`Owing
Company') arising out of that certain Gas Rights Agreement between the Counterparty and the
Owing Company, dated as of[DATE] (the `Guaranteed Contract').
2. GUARANTEE. Guarantor, irrevocably and unconditionally guarantees to Counterparty
the punctual payment when due (subject to any applicable grace period) of all Guaranteed
Obligations. Guarantor shall make payment of any Guaranteed Obligations which are not paid
when due within five (5) business days (being any day, other,than a Saturday, Sunday or public
holiday, on which banks in The Netherlands and Houston,Texas, are open for business generally
(a`Business Day'))of a written demand by Counterparty,including a statement indicating in what
respect Owing Company is in breach of the payment of the Guaranteed Obligations under the
Guaranteed Contracts; provided, however, that (a) notwithstanding any other provision of this
Guarantee, Guarantor's aggregate liability under this Guarantee for Guaranteed Obligations is
limited to [•]US Dollars(US$[!])(the'Maximum Aggregate Liability')and(b)Guarantor shall
have liability under this Guarantee for direct damages only. Except to the extent the same
constitute Guaranteed Obligations owed under the Guaranteed Contracts that are recoverable from
Guarantor under this Guarantee, in no event shall Guarantor be liable under this Guarantee for
consequential, incidental, punitive, exemplary, special or indirect damages, lost profits or
revenues,whether owed by statute, in tort or contract,by indemnity provision or otherwise. This
Guarantee is a guarantee of payment and not of collection. Guarantor agrees that Counterparty
may resort to Guarantor for payment of any of the Guaranteed Obligations whether or not
Counterparty shall have resorted to any collateral,proceeded against Owing Company or any other
obligor principally or secondarily obligated for the Guaranteed Obligations, or claimed payment
from any person or in any bankruptcy or other proceeding with respect to any Guaranteed
Obligations. In the event that any payment by Owing Company to Counterparty in respect of any
Guaranteed Obligations is rescinded or must otherwise be returned for any reason whatsoever,
Guarantor shall remain liable under this Guarantee with respect to such Guaranteed Obligations as
if such payment had not been made. Upon payment of any of the Guaranteed Obligations by
Guarantor, Guarantor shall be subrogated to the rights of Counterparty against Owing Company
with respect to such Guaranteed Obligations; provided that until all Guaranteed Obligations have
been irrevocably paid in full, Guarantor shall not take any action to enforce Guarantor's
subrogation rights.
Exhibit G
#6402v5
3. WAIVER OF DEFENSES; CERTAIN CHANGES; ENFORCEMENT. Except as set
forth herein, Guarantor's obligations under this Guarantee are unconditional, irrespective of any
law, regulation or order of any jurisdiction affecting the term of any Guaranteed Obligation or of
Counterparty's rights with respect thereto or any other act,omission,matter or event which might
otherwise constitute a legal or equitable defense of Guarantor to its guarantee of the Guaranteed
Obligations; provided, however, that (a) Guarantor may assert defenses which Owing Company
may have to payment of any Guaranteed Obligations under the terms of the Guaranteed Contracts,
including the right of setoff to the extent not prohibited under the Guaranteed Contracts, but
expressly excluding any defenses arising from the bankruptcy or insolvency of Owing Company,
and (b) Guarantor may set-off against any payment owing under this Guarantee any amounts
owing by Counterparty to Guarantor. Guarantor agrees that Counterparty may at any time and
from time to time, either before or after the maturity thereof,without notice to or further consent
of Guarantor,amend,supplement or otherwise modify any Guaranteed Contract,exchange,impair
or release any other guaranty or collateral for the Guaranteed Obligations or make any agreement
with Owing Company or any other person liable with respect to the Guaranteed Contracts for the
extension, renewal,payment, compromise,discharge or release of the Guaranteed Obligations, in
each case without in any way impairing this Guarantee.No failure on the part of Counterparty to
exercise,and no delay in exercising,any right,remedy or power under this Guarantee shall operate
as a waiver of this Guarantee, nor shall any single or partial exercise by Counterparty of any right,
remedy or power under this Guarantee preclude any other or future exercise of any right,remedy
or power.
4. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants at the
time of execution of this Guarantee that: (a) this Guarantee is the legal, valid, binding and
enforceable obligation of Guarantor, subject to the effect of any bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally, and to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law), (b) it has full organizational power to execute and perform this Guarantee and
has all the necessary consents, authorizations and approvals to do so; and (c) the execution and
performance of this Guarantee by Guarantor has been duly authorized by all necessary corporate
action and does not contravene any statute, regulation or rule of any governmental authority or
under any provision of Guarantor's constitutional documents.
5. SERVICE OF NOTICES. Any notice or other communication to be given or served
under or in connection with this Guarantee shall be in writing and to the Party due to receive the
notice at the following addresses:
in the case of Guarantor, at its registered office referenced in the preamble above or e-
mail: notices@vitol.com, marked for the attention of The Credit Manager; and
in the case of Counterparty,at its registered office referenced in the preamble above or e-
mail: [.], marked for the attention of[.],
or in either case at such other address or e-mail address as may previously by notice given in
accordance with this clause have been specified by that Party. A notice is deemed to be given or
served if delivered by hand or by courier,at the time it is left at the address of the reelpien1, If
sent by post(whether ordinary first class,airmail, special delivery or recorded delivery), upon
Exhibit G
#6402v5
receipt, or if sent by e-mail, at the time it was sent, subject to the immediately following
sentence. In the case of a notice delivered by any method received(i)after 5:30 p.m. at the
location of delivery on a Business Day,or(ii)on a day which is not a Business Day, the date of
delivery shall be deemed to be the next following Business Day.
6. TERMINATION. This Guarantee may be terminated by Guarantor upon a prior written
notice to Counterparty of not less than ten(10)days,provided, however,that this Guarantee shall
remain in full force and effect with respect to Guaranteed Obligations arising under the Guaranteed
Contracts prior to the effective date of such termination.
7. ASSIGNMENT; THIRD PARTIES. Neither Guarantor nor Counterparty may assign its
rights or obligations under this Guarantee to any other person(except by operation of law)without
the prior written consent of the other;provided, however, that Counterparty may (i) collaterally
assign this Guarantee to any one or more persons or organizations providing financing to
Counterparty (or such person's or organization's agent) who satisfies Guarantor's internal
compliance requirements, as consistently and reasonably applied by Guarantor and(ii)assign this
Guarantee to any assignee of Counterparty in connection with any permitted assignment by
Counterparty of the Guaranteed Contracts, in each case upon not less than fourteen (14) days'
advance written notice to Guarantor.Guarantor and Counterparty acknowledge and agree that this
Guarantee is made and entered into for the sole protection and legal benefits of Guarantor and
Counterparty and their respective permitted successors and assigns, and no other person or entity
of any type shall be a direct or indirect legal beneficiary of,or have any direct or indirect cause of
action or claim in connection with this Guarantee.
8. GOVERNING LAW; JURISDICTION. This Guarantee will be governed by and
construed in accordance with the laws of the State of New York. With respect to any suit, action
or proceedings relating to any dispute arising out of, relating to, or in connection with this
Guarantee (`Proceedings'), each Party irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York and the United States District Court located in the Borough of
Manhattan in New York City,waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court,waives any claim that such Proceedings have
been brought in an inconvenient forum,and further waives the right to object,with respect to such
Proceedings, that such court does not have any jurisdiction over such Party. EACH PARTY
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY SUIT,ACTION OR PROCEEDING RELATING TO THIS GUARANTEE.
VITOL BIOMETHANE LLC
By:
Name:
Title:
Exhibit G
#6402v5
PA Draft 8.21.24
EXHIBIT H
Form of Ground Lease
#6402v5
SITE LEASE AGREEMENT
between
CITY OF PORT ARTHUR,
a Texas municipal corporation
And
r 1
Dated as of [
5
#6402v5
TABLE OF CONTENTS
1. DEFINITIONS 1
2. PROPERTY DESCRIPTION 1
3. TERM 2
4. LESSOR WARRANTIES 2
5. LESSEE WARRANTIES 2
6. RENT 3
7. USE, IMPROVEMENTS AND EQUIPMENT 3
8. TAXES AND ASSESSMENTS 4
9. WASTE PRODUCTS 5
10. PERMITS 5
11. CASUALTY 5
12. CONDEMNATION 5
13. DEFAULT 5
14. PROHIBITION AGAINST LESSEE CREATING LIENS AGAINST SITE 6
15. INSURANCE REQUIREMENT 6
16. WAIVERS 6
17. NOTICES 6
18. ENTIRE AGREEMENT 7
19. GOVERNING LAW AND VENUE 7
20. ASSIGNMENT 7
21. OWNERSHIP OF FACILITIES 8
22. BINDING EFFECT 8
23. BROKERAGE 8
24. HAZARDOUS SUBSTANCES 8
25. GENERAL PROVISIONS 9
26. DISPUTE RESOLUTION 9
EXHIBIT A SITE DESCRIPTION
vi
Site Lease Agreement
#6402v5
SITE LEASE AGREEMENT
THIS SITE LEASE AGREEMENT (this "Site Lease Agreement") is made and entered
into this [ ] of [ ] ("Effective Date") by and between City of Port Arthur, a
municipal corporation located in the State of Texas with offices located at 444 4th Street, Port
Arthur, Texas 77640 ("Lessor"), and [ ], a [ ] with
principal offices located at [ ] ("Lessee"). Lessee and Lessor may be
referred to individually as a"Party"or collectively as the"Parties".
RECITALS
WHEREAS, Lessor owns the City of Port Arthur Landfill, Permit No. 1815-A (the
"Landfill"), located at 4732 West Highway 73, Beaumont,TX 77705.
WHEREAS,LFG is produced within the Landfill as a by-product of biomass and it is the
intent of the Parties to utilize beneficially the LFG at the Landfill; and
WHEREAS, Lessee is in the business of designing, building, and operating landfill gas
processing facilities, which facilities can reclaim and convert landfill gas to a recyclable and
marketable product; and Lessee desires to construct, improve, modify, and operate reclamation
gas facilities at the Landfill to reclaim and process landfill gas for sale;
NOW THEREFORE, in consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt of which is hereby acknowledged, Lessor and
Lessee agree as follows:
ARTICLE XVIII DEFINITIONS.
All capitalized terms used in this Site Lease Agreement shall have the meaning set forth
herein, or as defined in the Gas Rights Agreement by and between Lessor and Lessee executed
contemporaneously herewith, and which is incorporated herein by reference. In the event that
there is a contradiction between the two documents, the definitions set forth in the Gas Rights
Agreement shall be controlling.
ARTICLE XIX PROPERTY DESCRIPTION.
Section 19.1 Lessor is the owner of real property located at 4732 West Highway
73,Beaumont,TX 77705 ,which includes the Landfill. The area subject to this lease(the"Site"),
is within that property, and is more particularly described and depicted in Exhibit A (Site
Description)attached hereto and incorporated herein by reference.
Section 19.2 Lessor, in consideration of the rents and faithful performance of the
covenants set forth herein to be paid and performed by Lessee,does hereby demise and lease unto
Lessee the Site for the sole purpose of constructing, owning, operating, repairing, maintaining,
replacing and expanding Lessee's facilities, which shall consist of Developer's Facilities related
facilities for processing and utilizing LFG purchased from Lessor as more fully described in the
Gas Rights Agreement.
1
Site Lease Agreement
#6402v5
T
Section 19.3 The Site is leased to Lessee in"as-is where-is"condition and Lessor
shall have no obligation to make any improvements to the Site before or during the Term (as
defined below) of this Site Lease Agreement. Lessor does not warrant or guarantee that the Site
does now, or ever will, meet the requirements of Lessee to fulfill Lessee's obligations under the
Gas Rights Agreement.
ARTICLE XX TERM.
Section 20.1 The Term of this Site Lease Agreement shall commence on the
Effective Date and shall continue in effect for as long as the Gas Rights Agreement remains in
effect. This Site Lease Agreement shall terminate upon the expiration or termination, for any
reason,of the Gas Rights Agreement and shall be renewed or extended to the same extent that the
Gas Rights Agreement is renewed or extended(the"Term").
Section 20.2 On the date set forth in any termination notice issued to Lessee by
Lessor, either under this Site Lease Agreement or the Gas Rights Agreement, all rights, title and
interest of Lessee in the Site shall terminate at the discretion of Lessor, except that Lessee shall
not relinquish any rights to Developer's Facilities contained therein.
ARTICLE XXI LESSOR WARRANTIES. Lessor represents and warrants that:
Section 21.1 Lessor owns the Site in fee simple and has the rights of access
thereto and has the full right to make and perform this Site Lease Agreement;
Section 21.2 Lessee shall lawfully and peaceably hold,occupy and enjoy the Site
during the Term hereof so long as Lessee pays the rents and observes and keeps the covenants of
this Site Lease Agreement on its part to be kept, and as long as Lessee makes all payments due
and complies with the terms of the Gas Rights Agreement, and the Gas Rights Agreement is still
in full force and effect;
Section 21.3 Lessor has full power and authority to execute, deliver and perform
its obligations under this Site Lease Agreement;
Section 21.4 The execution, delivery and performance of this Site Lease
Agreement by Lessor have been duly and validly authorized by all necessary action on the part of
Lessor: and
Section 21.5 The execution and delivery of this Site Lease Agreement by Lessor
and the performance of the terms, covenants and conditions contained herein are permitted under
all agreements to which the Lessor is a party, or by which the Site is bound, including any and all
leases, mortgages and financing agreements, and will not violate the ordinances of Lessor, or any
order of a court or arbitrator, and will not conflict with and will not constitute a material breach
of,or default under,the provisions of any material contract by which Lessor is bound.
ARTICLE XXII LESSEE WARRANTIES. Lessee represents and warrants that:
2
Site Lease Agreement
#6402v5
Section 22.1 Lessee is duly qualified to do business and is in good standing in the
State of Delaware and is qualified to do business in the State of Texas;
Section 22.2 Lessee has full power and authority to execute, deliver and perform
its obligations under this Site Lease Agreement;
Section 22.3 The execution, delivery and performance of this Site Lease
Agreement by Lessee have been duly and validly authorized by all necessary action on the part of
Lessee; and
Section 22.4 The execution and delivery of this Site Lease Agreement by Lessee
. and the performance of the terms, covenants and conditions contained herein will not violate the
articles of incorporation or by-laws of Lessee, or any order of a court or arbitrator, and will not
conflict with and will not constitute a material breach of, or default under, the provisions of any
material contract by which Lessee is bound.
ARTICLE XXIII RENT. Lessor acknowledges payment in advance of rent for the Term
of this Site Lease Agreement, including any extensions thereof, in the sum of One Dollar($1.00).
ARTICLE XXIV USE,IMPROVEMENTS AND EQUIPMENT.
Section 24.1 Contemporaneously with the execution of this Site Lease
Agreement, Lessor and Lessee have entered into a Gas Rights Agreement, whereby Lessor has
agreed to sell, and Lessee has agreed to purchase LFG which is produced as a byproduct of the
decomposition of biomass within the Landfill. The Site may be used by Lessee for those purposes
consistent with the construction, operation and maintenance of LFG processing facilities,
transportation of LFG, and use of LFG at the Site, including but not limited to the construction,
operation and maintenance of Developer's Facilities. Lessee shall have the right to enter the Site
at any time for the purpose of making appropriate engineerjngJnspection_s of the Site and other
reasonably necessary inspections of the Site for constructing the LFG transportation, processing
and use facilities. Lessee has the right at its sole cost to erect,maintain,alter,remodel,reconstruct,
rebuild,replace,renew and operate on the Site the LFG transportation,processing and use facilities
(including energy generation facilities), a condensate pipeline, communications facilities, utility
lines,transmission lines,Lessee's modular data processing equipment and facilities and supporting
equipment and structures thereto, as Lessee deems necessary, in Lessee's reasonable judgment,
for Lessee's conduct of its operations upon the Site (collectively,the "Improvements").
Section 24.2 Lessor and Lessee intend and agree that, subject to the terms and
conditions of this Site Lease Agreement, the Improvements shall be and remain the personal
property of Lessee and shall be deemed Trade Fixtures (as defined below), to be removed by
Lessee upon the termination of and in accordance with the Gas Rights Agreement. Lessee's
construction, operation and removal of the Facility shall be in accordance and comply with all
applicable laws,including without limitation,the applicable provisions of the Texas Utilities Code,
and in particular, Section 302.0001, et seq. Upon termination of this Site Lease Agreement, title
to any Improvements situated or erected on the Site, as hereinabove allowed, and any alteration,
3
Site Lease Agreement
#6402v5
change or addition thereto, shall remain solely in title to Lessee or to a third party who holds title
for reasons related to Lessee's financing.
Section 24.3 Lessor shall have the right, upon reasonable notice and during
normal business hours, to review Lessee's operations on the Site from time to time during the
Term. Such review and approval shall create no warranties to Lessee and shall be limited to the
extent necessary to satisfy Lessor that, in Lessor's reasonable judgment,Lessee is complying with
the terms of this Site Lease Agreement and the Gas Rights Agreement, including, but not limited
to ensuring that Lessee's Improvements and operations on the Site:
Section 24.3.1 do not materially adversely affect Lessor, its agents, employees,
officers and directors or interfere with Lessor's operations of the Landfill;
Section 24.3.2 do not emit noxious odors or other emissions which violate any law
or regulation;and
Section 24.3.3 do not emit noise in violation of any law or regulation.
Section 24.4 Lessee shall comply with all applicable laws, regulations, permits,
authorizations and orders of governmental bodies at all times in its operations on the Site.
Section 24.5 Lessor shall be responsible for providing suitable road access to the
Improvements. Lessor shall also be responsible for maintaining the access road to the
Improvements and otherwise keeping them clear for access.
Section 24.6 Lessee shall construct and maintain a fence which encloses the
perimeter of the Site of a height, size, material, color and type subject to the reasonable approval
of Lessor.
Section 24.7 Lessee shall comply with all of Lessor's rules and requirements
applicable to all persons that enter the Landfill and the Site and which are made available to Lessee,
and shall cause its officers, directors, employees, agents, contractors and invitees to comply with
all such rules and regulations when crossing Lessor's property for ingress to or egress from the
Site, or when on Lessor's property for other purposes related to the transactions contemplated in
this Site Lease Agreement, and shall cause its officers, directors, employees, agents, contractors
and invitees to comply with all such rules and regulations.
ARTICLE XXV TAXES AND ASSESSMENTS. Lessor shall promptly pay all taxes
and assessments against the Site as and when they become due, including rollback taxes, except
that Lessee shall reimburse Lessor for any increase in real estate taxes and assessments, and for
any other taxes or assessments paid by Lessor which are attributable to the presence of the
Improvements on the Site as to the Lessee's occupying use of the Site. Lessor and Lessee agree
that they will cooperate, at Lessee's sole cost, to request that the Site and Improvements be
separately assessed. In the event such Improvements are not separately assessed, Lessee shall
reimburse Lessor for the amount of the increase in taxes and assessments allocable to such
Improvements. Within sixty (60) days after receipt of Lessor's statement setting out the amount
4
Site Lease Agreement
#6402v5
due,Lessee shall have the right,but not the obligation,to contest the validity of any assessment of
such taxes or assessments and/or any relevant authority's failure to separately assess the
Improvements, and Lessor shall reasonably cooperate with and assist Lessee therewith.
ARTICLE XXVI WASTE PRODUCTS. Disposal of waste and condensate from Lessee
shall be governed by Section 6.9 of the Gas Rights Agreement.
ARTICLE XXVII PERMITS. Lessee shall, at its sole cost and expense, obtain all
necessary governmental approvals, permits and authorizations required to construct, own, and
operate Developer's Facilities and for the conduct of Lessee's operations on the Site and shall
maintain such permits and authorizations in effect at all times during the Term. Lessor agrees to
cooperate with Lessee in making application for and obtaining all such governmental approvals,
and any and all other necessary approvals that may be required for Lessee's intended use of the
Site.
ARTICLE XXVIII CASUALTY. In the event the Site, or a part thereof sufficient to
substantially interfere with the business for which said Site is used, shall be damaged or destroyed
by fire or other casualty,or access to the Site is impaired by damage or destruction by fire or other
casualty, without prejudice to Lessee's rights under the Gas Rights Agreement, Lessee shall have
the right, within sixty (60) days of receipt of notice of such condemnation, to terminate this Site
Lease Agreement on thirty (30) days written notice to Lessor.
ARTICLE XXIX CONDEMNATION. In the event the Site, or a part thereof sufficient
to substantially interfere with the business for which said Site is used, shall be condemned,
appropriated or otherwise taken, or access to the Site is impaired by right of eminent domain,
without prejudice to Lessee's rights under the Gas Rights Agreement,Lessee shall have the right,
within sixty (60) days of receipt of notice of such condemnation, to terminate this Site Lease
Agreement on thirty(30)days written notice to Lessor.
ARTICLE XXX DEFAULT.
Section 30.1 If Lessee shall be in material default with respect to any of its
covenants herein contained, Lessor shall promptly notify Lessee in writing of the specifics and
circumstances of the default,and if any such default continues for thirty(30)days after such notice
to Lessee, Lessor may terminate this Site Lease Agreement if Lessee fails to cure, or commence
the cure of,any default within the thirty(30)day period immediately following receipt of Lessor's
written notice of default and,after said period, to diligently pursue the cure to completion.
Section 30.2 If Lessor shall be in material default with respect to any of its
covenants herein contained, Lessee shall promptly notify Lessor in writing of the circumstances
and specifics of any such default,and if such default continues for thirty(30)days after such notice
to Lessor,Lessee may terminate this Site Lease Agreement and the Term if Lessor fails to cure,or
commence the cure of,any default within the thirty(30)day period immediately following receipt
of Lessee's written notice of default and, after said period, to diligently pursue the cure to
completion.
5
Site Lease Agreement
#6402v5
Section 30.3 In the event that either Party waives a default by the other Party,
such waiver shall not be construed or deemed to be a continuing waiver of any subsequent breach
or default on the part of either Party.
ARTICLE XXXI PROHIBITION AGAINST LESSEE CREATING LIENS
AGAINST SITE.
Section 31.1 The Parties hereby covenant and agree that nothing in this Site Lease
Agreement shall be construed to authorize Lessee to do or fail to do any act which will in any way
encumber the title of Lessor in and to the Site, nor shall the interest or estate of the Lessor in the
Site be in any way subject to any claim by way of lien or encumbrance, whether by operation of
law or by virtue of any express or implied contract by Lessee, and any claim to or lien upon the
Site arising from any act or omission of Lessee shall accrue only against the leasehold estate of
Lessee and shall in all respects be subject and subordinate to the paramount title and rights of
Lessor in and to the Site and Improvements thereon.
Section 31.2 Lessee shall pay for all labor and materials furnished in the repair,
replacement, development of the Improvements, and except as expressly provided herein, Lessee
shall keep the Site and Lessee's possessory interest therein free and clear of any lien or
encumbrance of any kind whatsoever created by Lessee's act or omissions, including, but not
limited to, any mechanics', laborers' or material men's lien on account of labor or material
furnished to the Lessee in connection with work of any character performed or claimed to have
been performed on the Site by or at the direction or sufferance of the Lessee; provided, however,
that Lessee shall have the right to contest in good faith and with reasonable diligence the validity
of any such lien or claimed lien.
ARTICLE XXXI INSURANCE REQUIREMENT. Lessee shall maintain insurance
coverage as required under the Gas Rights Agreement.
ARTICLE XXXIII WAIVERS. One or more waivers of any covenant, condition or
agreement herein contained shall not be construed as a waiver of a further breach of the same
covenant, condition or agreement or of any other covenant, condition or agreement, and the
consent or approval by the Lessor to or of any act by the Lessee requiring the Lessor's consent or
approval shall not be deemed to waive or render unnecessary the Lessor's consent or approval to
any subsequent similar act by the Lessee.
ARTICLE XXXIV NOTICES. Notices required or permitted by this Site Lease
Agreement to be given by Lessee to Lessor shall be in writing and shall be addressed to:
City Manager With a copy to: City Attorney:
Address: 444 4th St. Address: 444 4th St.
Port Arthur,TX 77640 Port Arthur,TX 77640
Email: Email:
or such address as Lessor may from time to time designate to Lessee by notice.
6
Site Lease Agreement
#6402v5
Any notice required or permitted by this Site Lease Agreement to be given by Lessor to Lessee
shall be in writing and shall be addressed to:
[to be added] With a copy to: Vitol BioMethane
LLC
or such address as Lessee may from time to time designate to Lessor by notice.
Any such notice shall be delivered by hand or sent by overnight courier, or by certified mail,
return receipt requested and shall be deemed to have been given on the day of its receipt at the
address to which such notice is as directed regardless of any other date that may appear thereon.
ARTICLE XXXV ENTIRE AGREEMENT. This Site Lease Agreement, coupled with
the Gas Rights Agreement, contains the entire and exclusive agreement between the Parties
regarding the lease of the Site and supersedes and terminates all prior or contemporaneous
arrangements,understandings and agreements,whether oral or written. This Site Lease Agreement
may not be amended or modified, except by a writing executed by the Lessor and the Lessee. In
case of apparent conflict between this Agreement and the Gas Rights Agreement, the provisions
of the Gas Rights Agreement will take precedence.
ARTICLE XXXVI GOVERNING LAW AND VENUE. This Site.Lease Agreement
shall be governed by and interpreted in accordance with the laws of the State of Texas. In the
event any provision of this Site Lease Agreement shall be determined to be invalid or
unenforceable under applicable law such provision shall, insofar as possible, be construed or
applied in such manner as will permit enforcement of the entire Agreement; otherwise this Site
Lease Agreement shall be construed as if such provision had never been made part hereof. Lessee
and Lessor each consent to the exclusive jurisdiction of the District Court of Jefferson County or
the appropriate Federal court located in the State of Texas and agree that venue of any action under
this Agreement shall be proper only in the State of Texas and waives any objection to venue.
Lessor and Lessee also each waive personal services of process upon it.
ARTICLE XXXVII ASSIGNMENT. Lessee may not assign or otherwise transfer all or
any part of its interest in this Site Lease Agreement or in the Site, without the express written
consent of Lessor, which consent shall not be unreasonably withheld. Notwithstanding anything
to the contrary contained in this Site Lease Agreement, Lessee may assign, mortgage, pledge,
hypothecate or otherwise transfer its respective leasehold interest in this Site Lease Agreement and
its interest in the Developer's Facilities and any other trade fixtures, personal property and
equipment owned by Lessee(collectively,"Trade Fixtures")to any Affiliate of Lessee and/or any
financing entity, or agent on behalf of any financing entity,to whom Lessee:
Section 37.1 has obligations for borrowed money or in respect of guaranties
thereof;
Section 37.2 has obligations evidenced by bonds, debentures, notes or similar
instruments; or
7
Site Lease Agreement
#6402v5
Section 37.3 has obligations under or with respect to letters of credit, bankers'
acceptances and similar facilities or in respect of guaranties thereof.
ARTICLE XXXVIII OWNERSHIP OF FACILITIES. Except for Lessor's
reversionary rights herein upon the expiration or termination of this Site Lease Agreement,Lessor
shall have no ownership or other interest in any of Developer's Facilities or Trade Fixtures
constructed, erected or installed by Lessee on the Site, and Lessee may remove any or all such
Developer's Facilities or Trade Fixtures at any time. The Parties agree that all of Developer's
Facilities and Trade Fixtures constructed or installed on the Site are intended solely for the use and
benefit of Lessee in connection with its commercial activities conducted on the Site and are hereby
severed by agreement and intention of the Parties and shall remain severed from the Site, shall be
considered with respect to the interests of the Parties as the personal property of Lessee or other
party designated by Lessee, and, even though attached to or affixed to or installed upon the Site,
shall not be considered to be fixtures, improvements to, or otherwise a part of the Site and shall
not be or become subject to the lien of any mortgage or deed of trust heretofore or hereafter placed
on the Site by Lessor. Lessor hereby waives all rights, statutory or common law,or claims that it
may have in Developer's Facilities and Trade Fixtures installed on the Site by Lessee, including
any right of distraint.
ARTICLE XXXIX BINDING EFFECT. This Site Lease Agreement shall be binding
upon and inure to the benefit of the Parties hereto, and their respective legal representatives,
successors and assigns, including any public body which will succeed to or have assigned to it any
of the functions of Lessor with respect to this Site Lease Agreement. Reference to Lessor and
Lessee shall include reference to their respective successors, assigns and nominees. Other than as
provided above, neither Lessee nor Lessor may transfer or assign its obligations under this Site
Lease Agreement, other than assignment by Lessee as permitted pursuant to the Gas Rights
Agreement or as collateral for financing the Project, without the express written consent of the
other Party. Lessor agrees to use reasonable efforts to negotiate and enter into a consent and
assignment agreement with the lenders who finance the Project in form and substance customary
for such financings.
ARTICLE XL BROKERAGE. Lessor and Lessee represent that they have dealt with no
broker or agent with respect to this Site Lease Agreement or the negotiation and execution hereof.
Each Party hereby saves and holds the other Party harmless against any claims for brokerage
commissions or compensation or other claims of any kind (including reasonable attorney's fees
and costs)arising out of a breach of the foregoing representation by the first Party.
ARTICLE XLI HAZARDOUS SUBSTANCES. Lessee shall not cause or permit any
Hazardous Substance to be brought upon,kept or used in or about the Site or Developer's Facilities
by Lessee, its agents, employees, contractors or invitees, except such materials that may be
necessary for the construction,operation,maintenance or repair of Developer's Facilities pursuant
to prudent industry practices.
8
Site Lease Agreement
#6402v5
ARTICLE XLII GENERAL PROVISIONS.
Section 42.1 No remedy or election under this Site Lease Agreement shall be
deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in
equity.
Section 42.2 Title to the leasehold estate created by this Site Lease Agreement is
subject to all exceptions, easements, rights, rights-of-way, and other matters of record on the
Effective Date.
Section 42.3 Nothing in this Site Lease Agreement shall be construed to create
any association, trust, partnership, or joint venture or to impose a trust or partnership duty,
obligation, liability,or any agency relationship on, or with regard to, either Party.
Section 42.4 Following execution of this Site Lease Agreement, either Party, at
its sole expense, shall be entitled to record a Memorandum of Lease with the Jefferson County
Recorder's Office. Upon termination or expiration of this Site Lease Agreement, Lessee shall
execute and record a Termination of Lease Memorandum to release any and all leasehold interest
and provide a copy of the filing to the Lessor within ten (10)business days of said termination or
expiration.
Section 42.5 A Party will not be considered to be in breach or default of its
obligations under this Site Lease Agreement to the extent that performance of such obligations or
its efforts to cure are delayed, hindered, adversely affected or prevented due to a Force Majeure
Event(in each case, whether or not the applicable Force Majeure Event was foreseeable as of the
Effective Date).
Section 42.6 This Site Lease Agreement may be executed in two or more
counterparts, each of which shall be deemed an original,but all of which together shall constitute
one and the same instrument.Signatures delivered by facsimile,portable document format or other
electronic means(including services such as DocuSign)will be considered original signatures,and
each Party shall thereafter promptly deliver original signatures to the other Party.
ARTICLE XLIII DISPUTE RESOLUTION. In the event a dispute, controversy or
claim (a "Dispute") arises hereunder, including any claim whether in contract, tort (including
negligence),strict product liability or otherwise,the aggrieved Party will promptly provide written
notice of the Dispute to the other Party within thirty(30)days after such Dispute arises.Thereafter,
a meeting shall be held promptly between the Parties, attended by representatives of the Parties
with decision-making authority regarding the Dispute, to attempt in good faith to negotiate a
resolution of the Dispute("Party Representative Negotiations"). If the Parties are not successful
in resolving a Dispute through Party Representative Negotiations within twenty-one(21) days of
such meeting, then either Party may seek to enforce its rights under this Agreement in a court of
competent jurisdiction pursuant to Section 20.
9
Site Lease Agreement
#6402v5
IN WITNESS WHEREOF,the parties hereto have caused this Site Lease Agreement to be
executed and attested by their proper officers thereunto duly authorized and their official seals to
be hereto affixed,on the day and year set opposite the name of each of the Parties.
"LESSOR" "LESSEE"
City of Port Arthur,a F 1,a
Texas municipal corporation [ 1
By: By:
Name: Name:
10
Site Lease Agreement
#6402v5
EXHIBIT A- SITE DESCRIPTION
[TO BE INSERTED]
Exhibit H
#6402v5