EX-10.18
149
v146797_ex10-18.htm
Exhibit
10.18
LEASE
OPTION AGREEMENT
&
WIND
ENERGY LEASE
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Landowner
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Crownbutte
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Lease
Option Agreement
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Page 2
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Landowner
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Crownbutte
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LEASE
OPTION AGREEMENT
This
Lease Option Agreement (“Option Agreement”) is entered into as of _____________,
20__
(the
“Effective Date”), by and between
_________________________________________________________________________________________________
(“Owner”),
and Crownbutte Wind Power, Inc., a Nevada corporation referred to herein as
(“Crownbutte”).
RECITALS:
This
Option Agreement is entered into on the basis of the following facts,
understandings, and intentions of the parties.
Owner is
the owner of certain real property located in __________________________ County,
State of ____________________________, more particularly described in Exhibit
A attached to
the Option Agreement and incorporated herein by reference (the
“Property”).
Owner
desires to grant to Crownbutte, and Crownbutte desires to obtain from Owner, an
option to lease the Property on the terms and conditions contained in this
Agreement.
In
consideration of the premises, and of other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, Owner and
Crownbutte hereby agree as follows:
ARTICLE 1 GRANT
OF OPTION
1.1 Grant
of Option. Owner hereby grants to Crownbutte the exclusive and irrevocable
right and option (the “Option”) to lease the Property on the terms and
conditions set forth in this Option Agreement and the Lease. As
consideration for the Option, Crownbutte shall pay the Owner the sum of
US$100.00 per year for each 160 acre quarter section of land contained in the
Property until the Option is exercised. Such sum shall be pro-rated
(i) according to the acreage of any parcels contained in the Property which are
not regular quarter sections, and (ii) for any partial
years. Accordingly, the payment for the entire Property for each full
year prior to exercise of the Option shall be US$__________. After the Option is
exercised, payments shall be pursuant to the Lease. Option payments
shall be made to the Owner at its address as set forth herein or at such other
address which Owner shall give Crownbutte at least thirty (30) days prior to
written notice hereunder. The Option includes the exclusive right and
option to have easements on, over, under, and across the property, in order to
evaluate, develop, construct, and operate wind-powered electrical generating
equipment, together with all ancillary easements for transmission and
access.
1.2 Term
of Option. The term of the Option (the “Option Term”) shall commence
on the Effective Date and shall terminate at 12:00 Noon CST on _________, 20__
unless theretofore exercised. Crownbutte may terminate the Option
Term, without fee, by giving at least thirty (30) days prior written notice of
termination to Owner.
1.3 Exercise
of Option. Subject to
Section 1.6, Crownbutte may exercise the Option over any portion of the
Property, or the entire Property, at Crownbutte’s sole discretion at any time
during the Option Period by signing, notarizing, and recording the Notice of
Exercise of Option in the form attached hereto as Exhibit D and incorporated
herein by this reference (the “Notice of Exercise”) in the Official Records of
Real Property for the County in which the Property is located (the “Official
Records”). Upon such recording of the Notice of Exercise, all the
easements, rights, and other provisions of the Lease shall become immediately
effective and binding upon all or such portion of the Property as may be
identified in the Notice of Exercise, and upon Owner and Crownbutte, without any
further act or action of either party. Crownbutte shall also send a
copy of the notice of Exercise to Owner; however, sending or the failure to send
such a copy shall not affect the validity of the exercise of the
Option. In addition to the foregoing, but without limiting its
effectiveness, if Crownbutte exercises the Option, then the Lease executed
herewith shall become binding and effective as of the date of exercise of the
Option. For the avoidance of doubt, if Crownbutte has assigned its rights in and
to this Option Agreement to a third party (the “Lessee”), then such Lessee may
exercise the Option in the manner set forth in this Section 1.3.
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Crownbutte
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1.4 License
to Inspect
Property. Owner
hereby grants to Crownbutte an easement and license for Crownbutte and its
employees, agents, and permittees to have access to the Property during the
Option Period for the purposes of inspection, survey, design of improvements,
tests, and other actions reasonably related to the investigation by Crownbutte
of the suitability of the Property for Crownbutte’s business purposes, including
but not limited to conducting wind and weather monitoring activities (including
the erection of anemometers), meteorological studies, and soil, environmental,
archeological, and geological studies on the Property. Crownbutte
agrees to indemnify and hold harmless Owner, its officers, agents and employees
from all liability, loss, claim, damage, cost, and expense caused by or
resulting from the exercise of Crownbutte’s or its agents’ access to the
Property. Damage caused by Crownbutte’s access to Property to growing
crops will be reimbursed according to section 1.5 below. The
foregoing indemnity provision shall survive the exercise of the Option or the
termination of this Option Agreement.
1.5 Crop
Damage. If,
during the Lease Option Term, loss of crop cultivation by the Owner results from
ingress and egress to and from the Property by the Lessee under the terms of
this Lease, such ingress and egress being outside of what the parties agree to
in developing, operating and maintaining the Wind Energy Conversion Systems and
related infrastructure, Lessee shall pay the “Crop Loss Compensation” fee to
Owner within sixty (60) days after the expiration of the Lease Year in which the
crop loss occurred. Such Crop Loss Compensation shall only be made
once and shall not be perpetual. For the sake of clarity, the other
compensation contemplated in Article 3 of the Wind Energy Lease shall be
considered adequate compensation for any permanent loss of crop cultivation as a
result of the permitted use of the Property as listed in Section 1.2 of the Wind
Energy Lease. Crop Loss Compensation resulting from the activities by Lessee
shall be based on the sum of the land area in the Property cultivated by Owner
during the three (3) years prior to the Effective Date and not cultivated as a
direct result of activities by Lessee under the terms of this Lease. Damages for
crop and pasture land loss will be calculated by the following formula: Current
Market Price x Yield Per Acre x Acres Lost = Damages. Yield will be
determined by the average of the previous three years’ yields for the
Premises. If Lessor does not have yield records available, Lessor and
Lessee shall use commonly used yield information available for the
area. This shall be a one-time lump sum payment for temporary loss
during construction or maintenance.
1.6 Obtaining
Permits. Crownbutte
may begin work to make all applications and filings with governmental and
regulatory agencies, and to conduct all other activities reasonably necessary to
obtain all permits, licenses, approvals, certificates, and other governmental or
regulatory matters which may be required to construct and operate a “wind park”
(or “wind farm”) and associated electrical, access, and other facilities, on the
Property (the “Permitting Process”). Owner will provide access to any
files and studies which Owner may have regarding the Property for use in the
Permitting Process. Crownbutte will bear all costs incurred during
the Permitting Process at its sole expense. Owner agrees to execute
any and all applications, statements, and other instruments reasonably necessary
as part of the Permitting Process. Owner hereby appoints Crownbutte as Owner’s
agent in fact to execute any and all such applications, statements, and other
instruments related to the Permitting Process in the name of Owner, if Owner is
unavailable or otherwise fails to sign the same. Crownbutte agrees to
provide to Owner copies of all permits, licenses, approvals, certificates, and
other governmental or regulatory matters, which may be obtained as part of the
Permitting Process.
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Crownbutte
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1.7 Assignment. Crownbutte
shall at all times have the right to sell, assign, encumber, and/or transfer any
or all of its rights and interests under this Option Agreement without Owner’s
consent; provided, however, that the term of any such transfer shall not extend
beyond the Option Term, and that any and all such transfers shall be expressly
made subject to all of the terms, covenants, and conditions of this Option
Agreement. No such sale, assignment, or transfer shall relieve
Crownbutte of its obligations under this Option Agreement unless Crownbutte
assigns its entire interest hereunder, in which event Crownbutte shall have no
continuing liability.
1.8 Recording
of
Memorandum. Concurrently
with the execution of this Option Agreement, the parties shall execute,
acknowledge, and record a Memorandum of Option and Lease in the form attached
hereto as Exhibit D and incorporated herein by this reference.
1.9 Nearby
Development Activities. Crownbutte shall have a first right of
refusal and option, and Owner hereby grants such an exclusive and irrevocable
first right of refusal and option, to match the terms under which any third
party seeks to enter into an agreement for wind power development of lands in
which Owner has or acquires an interest after Effective Date and which is
located within one half mile of the boundaries of the Property. Such
option and first right of refusal shall be effective as to any agreements which
would take effect during the Option Term. If Owner receives any such
third party offer to enter into an agreement, full particulars of the same shall
be delivered to Crownbutte, and Crownbutte shall have thirty (30) days within
which to notify Owner that Crownbutte elects to enter into an agreement on the
specified terms and conditions.
1.10 Option
Agreement as Interest in Real Property. The parties
intend that this Option Agreement create a valid and present interest in the
Property in favor of Crownbutte. Therefore, the Option and the rights under this
Option Agreement shall be deemed an interest in and encumbrance upon the
Property which shall run with the land and shall be binding upon the Property,
and upon Owner and its heirs, successors, assigns, and legal representatives,
and shall inure to the benefit of Crownbutte and its successors, assigns, and
legal representatives.
ARTICLE
2 GENERAL
PROVISIONS
2.1 Representations,
Warranties, and
Covenants. Owner
represents and warrants to Crownbutte that Owner owns the Property in fee
simple, subject to no liens or encumbrances except as disclosed in writing to
Owner prior to the execution of this Option Agreement. Owner further
represents and warrants to Crownbutte that Owner, and each person signing this
Option Agreement on behalf of Owner, has the full and unrestricted power and
authority to execute and deliver this Option Agreement and grant the interest
herein granted by or on behalf of Owner. All persons having any
ownership or possessory interest in the Property (including spouses) are signing
this Option Agreement. Owner also represents that upon exercise of
the Option, Owner will obtain any necessary consents and/or subordination
agreements from any and all tenants having a possessory interest in the Property
at the time the Option is exercised.
2.2 Owner’s
Duty to Inform. During the Option Term, Owner will notify Crownbutte
before (2) leasing any portion of the Property to any third
party, (b) encumbering any portion of the Property with any lien,
easement, or other encumbrance, or (c) granting any other right to or interest
in the Property. Such notification shall include the name and address
of the third party acquiring an interest in the Property, the nature of the
interest, and a copy of the instrument creating the interest. Owner
covenants and agrees that during the Option period, Owner shall not convey the
Property or any interest therein, or permit any lien or encumbrance to attach to
the Property or any interest therein, or permit any lien or encumbrance to
attach to the Property, unless the transferee or lien holder, as the case may
be, shall agree, in writing, to be bound by this Option Agreement.
2.3 Brokerage
Commissions. Each
of Crownbutte and Owner represents to the other that the representing party has
not incurred, directly or indirectly, any liability on behalf of the other party
for the payment of any real estate brokerage commission, finder’s fee, or other
compensation to any agent, broker, or finder in connection with this Option
Agreement or the lease of the Property by Crownbutte. Each of Owner
and Crownbutte shall indemnify, defend, and hold the other party harmless from
and against any claim for any brokerage commissions, finder’s fees, or other
compensation claimed to be due and owning by reason of the indemnifying party’s
activities in connection with this Option Agreement or the
Property.
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Crownbutte
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2.4 Notices. All
notices pursuant to this Option Agreement must be in writing and shall be
personally delivered or sent by United States Mail (registered or certified,
return-receipt requested) or by an overnight courier service which keeps records
of deliveries, addressed as follows or to such other address for itself to which
any party may give notice hereunder:
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OWNER:
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Crownbutte
Wind Power, Inc.
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111
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▇▇▇▇▇▇,
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Owner
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Phone:
(▇▇▇)▇▇▇-▇▇▇▇
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FAX:
(▇▇▇)▇▇▇-▇▇▇▇
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▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
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Joint
Owner
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Street
Address
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Phone
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SSN
or Fed ID#:
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2.5 Entire
Agreement. This
Option Agreement, and the attached Exhibits, constitute the entire Agreement
between the parties regarding the subject matter hereof, and supersede all other
agreements with respect thereto, whether written or oral. This Option
Agreement shall not be modified or amended except in a writing signed by both
parties or by their lawful successors in interest. This Option
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
2.6 Interpretation. Each
party and its counsel have reviewed this Option Agreement, and any rule of
construction holding that ambiguities are to be resolved against Crownbutte
shall not apply in the interpretation of this Option Agreement. The
captions in this Option Agreement are for convenience and reference only, and
shall in no way be held to explain, modify, amplify, or aid in the
interpretation, construction, or meaning of the provisions of this Option
Agreement. Unless otherwise expressly stated to the contrary, the
word “including” as used herein shall be construed in its inclusive sense, and
without limitations, whether or not words of non-limitation such as “but not
limited to” or “without limitations” are used.
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Crownbutte
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2.7 Governing
Law. This Option Agreement shall be governed by and construed
in accordance with the laws of the State in which the majority of the Property
by acreage is located.
IN WITNESS THEREOF, the
parties have executed this Agreement as of the Effective Date.
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OWNER:
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CROWNBUTTE:
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Print
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Print
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Sign
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Sign
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SSN
or Fed ID#
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Address
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City,
State, ZIP
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JOINT
OWNER:
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Print
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Sign
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SSN
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Address
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[All
owners, such as both husband and wife, must sign and be listed as Owner(s) or
Joint Owners. Marital status, and any manner in which title is held, such as in
trust or by corporation or partnership, also must be stated.]
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Crownbutte
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Notarization
of Landowner Signature(s)
STATE
OF ____________________________
)
)
COUNTY
OF ___________________________ )
On , 20 , before me, a
Notary Public in and for the said County and State, personally appeared
______________________________________________________________________ known to
me to be the person(s) whose name(s) is/are subscribed to the instrument within
as “Owner(s)”, and acknowledged to me that he/she/they executed the
same.
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WITNESS
my hand and official seal:
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Notary
Public
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Notarization
of Authorized Crownbutte Signature
STATE
OF _ )
)
COUNTY
OF _ )
On _____________________,
20___, before me, a Notary Public in and for the said County and State,
personally appeared
_________________________________________________________________________________________________
known to
me to be the person whose name is subscribed to the instrument within as an
authorized representative of Crownbutte Wind Power, Inc. and acknowledged to me
that he/she/they executed the same.
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WITNESS
my hand and official seal:
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Notary
Public
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Landowner
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Crownbutte
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Exhibit
A
Property
Description
Parcel 1
County
________________________.
State
____________________________.
Township
___________________. Range
_________________. Section _________________.
Portion
of Section:
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
Acres: _____________
more or less
Parcel 2
County
________________________.
State
____________________________.
Township
__________________. Range
_________________. Section _________________.
Portion
of Section:
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
_________________________________________________________________________________________________
Acres: _______________
more or less
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Page 9
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Crownbutte
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Memorandum
of Option and Lease
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Page
10 of 31
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Landowner
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Crownbutte
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Exhibit B
MEMORANDUM
OF OPTION AND LEASE
THIS
MEMORANDUM OF OPTION AND LEASE (“Memorandum of Option”) is made and entered into
as of ________________________,
20___, by and between
(referred
to herein as “Owner”) and Crownbutte Wind Power, Inc., a Nevada corporation
referred to herein as (“Crownbutte”).
WHEREAS:
A. On
the date hereof, the parties have entered into an Option Agreement for Easement
(the “Option Agreement”) which by its terms grants to Crownbutte an option to
acquire a wind park easement (the “Option”), and further grants to Crownbutte
present easements for wind and weather monitoring and access on and across
certain land which is more particularly described in Exhibit A attached hereto
and incorporated by this reference (the “Property”);
B. The
term of the Option is for a period beginning on the date hereof and expiring at
12:00 Noon, CST, on _________________________, 20__unless theretofore
exercised;
C. If
the Option is exercised by Crownbutte or its successors or assigns recording a
Notice of Exercise of Option in the Official Records of Real Property of the
county in which the Property is located, then Crownbutte or such successors or
assigns will have a wind-park easement for wind energy development across and
related rights over the Property for a period of forty (40) years, with possible
extensions or adjustments, as more specifically provided in the Option
agreement. Unless the period is extended, the Notice of Exercise must
be given within the term of the Option set forth above; and
D. The
parties desire to enter into this Memorandum of Option which is to be recorded
in order that third parties may have notice of the interest of Crownbutte in the
Property and of the existence of the Option to enter into a wind-park easement
covering the Property, as set forth in the Option Agreement, and of certain
easements and rights granted to Crownbutte in the Property as part of the Option
Agreement.
NOW, THEREFORE, in consideration of
payments and covenants provided in the Option Agreement to be paid and performed
by Crownbutte, Owner hereby grants to Crownbutte that certain exclusive Option
to enter into an easement agreement covering the Property on the terms and
conditions set forth in the Option Agreement, together with certain present
easements to use and enjoy the Property, all as more particularly set forth in
the Option Agreement. All of the terms, conditions, provisions, and
covenants of the Option Agreement are hereby incorporated into this Memorandum
of Option by reference as though fully set forth herein, and the Option
Agreement and this Memorandum of Option shall be deemed to constitute a single
instrument or document. Should there be any inconsistency between the
terms of this Memorandum of Option and the Option Agreement; the terms of the
Option Agreement shall prevail.
The Option evidenced by this Memorandum
of Option may be exercised by the execution and recording by Crownbutte, or its
successors, or assigns of a Notice of Exercise in the Official Records of Real
Property of the County in which the Property is located, whereupon all the
easements and rights that are the subject of the Option shall immediately become
effective and binding upon the Property and Owner,
all successive owners of the Property, and the successors and assigns of Owner,
all for the benefit of Crownbutte and its successors and assigns.
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Crownbutte
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IN WITNESS THEREOF, the
parties have executed this Agreement as of the Effective Date.
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OWNER:
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CROWNBUTTE:
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Print
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Print
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Sign
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Sign
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SSN
or Fed ID#
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Address
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City,
State, ZIP
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JOINT
OWNER:
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Print
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Sign
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SSN
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Address
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[All
owners, such as both husband and wife, must sign and be listed as Owner(s) or
Joint Owners. Marital status, and any manner in which title is held, such as in
trust or by corporation or partnership, also must be stated.]
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Landowner
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Crownbutte
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Notarization
of Landowner Signature(s)
STATE
OF ___________________________ )
)
COUNTY
OF __________________________ )
On _________________________________,
20___, before me, a Notary Public in and for the said County and State,
personally appeared
_________________________________________________________________________________________________
known to
me to be the person(s) whose name(s) is/are subscribed to the instrument within
as “Owner(s)”, and acknowledged to me that he/she/they executed the
same.
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WITNESS
my hand and official seal:
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Notary
Public
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Notarization
of Authorized Crownbutte Signature
STATE
OF _ )
)
COUNTY
OF _ )
On _____________________,
20___, before me, a Notary Public in and for the said County and State,
personally appeared
_________________________________________________________________________________________________
known to
me to be the person whose name is subscribed to the instrument within as an
authorized representative of Crownbutte Wind Power, Inc. and acknowledged to me
that he/she/they executed the same.
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WITNESS
my hand and official seal:
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Notary
Public
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Page
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Crownbutte
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Wind
Energy Lease Agreement
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Page
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Crownbutte
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Exhibit
C
LEASE
AGREEMENT
THIS
LEASE AGREEMENT (“Lease”) is dated and effective as
of _______________, 20__ and is
made by and between
______________________________________________________________________(“Owner”),
and (“Lessee”). The
form of this Lease is attached to and made a part of that certain
Lease Option
Agreement (the “Option Agreement”) dated as of ______________, 20__
by and between Owner and Crownbutte Wind Power, Inc., a Nevada corporation
referred to herein as (“Crownbutte”).
RECITALS:
Owner is
the owner of certain real property located in________________ County, State of
____________________________, more particularly described in Exhibit A attached
to the option Agreement and incorporated herein by reference (the
“Property”).
Lessee
desires to lease all or portions of the Property from the Owner, and Owner
desires to lease all or portions of the Property to Lessee, for, among other
purposes, the operation of a wind-powered electrical generating
facility.
In
consideration of the mutual covenants and obligations of the parties contained
herein, and for the good and valuable consideration, the parties agree as
follows:
ARTICLE 1 LEASE
1.1 Lease and
Easement. Effective
(the “Effective Date”) upon the recording of a Notice of Exercise of Option in
the form attached as Exhibit D to the Option Agreement (the “Notice of
Exercise”) signed by the Lessee or its predecessor, successor, or assign, (i)
Owner hereby leases the Property, as hereinabove defined and as defined in the
Notice of Exercise, to Lessee; and (ii) Owner hereby grants and conveys to
Lessee an exclusive, irrevocable easement in gross on, over, under, and across
all or such portion of the Property for the Lease Term, as hereinafter defined,
hereof for wind resource evaluation, wind energy development, energy
transmission, and related wind energy development uses, all as described in
Section 1.2 below; and (iii) Lessee hereby leases the Property from Owner, all
on the terms and conditions contained in this Lease. A description of
the Property also is attached to the executed counterpart of this Lease as
Exhibit A for ready reference.
1.2 Permitted Uses of the
Property by
Lessee. The
exclusive irrevocable easements described above shall permit Lessee and its
successors and assigns to conduct the following activities on the Property
throughout the Lease Term, as hereinafter defined:
(a) Wind Resource and Other
Evaluations. Lessee may erect, relocate, maintain,
and operate anemometers and other wind and weather monitoring equipment, steel
towers, concrete slabs, fences, and buildings to properly operate, house,
protect, and otherwise facilitate Lessee’s wind and weather monitoring
activities. Lessee shall determine, at its sole discretion, the exact
location of this equipment and related facilities. Lessee also may
fly kites and balloons, conduct other meteorological studies, and conduct soil
and geological studies on and at the Property.
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(b) Wind
Energy Conversion
Systems. Lessee
may erect, relocate, maintain, and operate wind energy conversion systems of any
type and in such quantity as Lessee determines in its sole discretion, including
without limitation wind-powered electrical generating facilities for the
conversion of wind energy into electrical energy. Lessee shall
determine, in its sole discretion, the exact location of such wind energy
conversion systems, but Lessee shall not locate, position, or place any turbine
within one thousand (1,000) feet of any occupied residence as such residence
exists on the Effective Date hereof. The term “Wind Energy Conversion
Systems” includes all equipment and improvements necessary or useful for the
conversion of wind energy into electricity, including wind turbine generators
(“Turbines”), steel towers, foundations and concrete pads, footings, guy wires,
anchors, fences, and other fixtures and facilities, maintenance, security,
office and/or guest facilities, staging areas for the assembly of equipment,
required lines and substation facilities to transfer power from the generators
to power transmission lines, energy storage devices, and other power production
equipment. All Wind Energy Conversion Systems on the Property are and
shall remain the property of Lessee, and Lessee may remove all or any portion of
them from the Property at any time. Owner shall have no ownership or
other interest in any Wind Energy Conversion Systems or other facilities
installed on the Property by Lessee.
(c) Transmission
Facilities and
Roads. Lessee
may erect, maintain, and operate such underground power transmission lines,
collection and transmission grids, power conditioning equipment, transformers,
telecommunications equipment, poles, anchors, support structures, underground
cables, substations, and interconnection facilities, and associated roads for
access and for installation and maintenance, and other related facilities,
equipment, and improvements as Lessee in its sole discretion deems to be
necessary or appropriate to transmit power and transport workers, tools,
materials, equipment, and other necessary items to, from, or across the
Property.
(d) Waiver
of Setback
Requirements. Owner
consents to Lessee’s location of Wind Energy Conversion Systems at any location
upon the Property and any adjacent properties, including at or near the Property
lines. Furthermore, in the event that any private agreements or
restrictions or any laws, rules, or ordinances of any governmental agency impose
setback requirements or otherwise restrict the location of any element of any
Wind Energy Conversion systems to be placed upon the Property or any adjacent
properties along or near property lines, Owner shall cooperate with and assist
Lessee in obtaining waivers or variances from such requirements and shall
execute all further documents evidencing Owner’s agreement to the elimination of
such setback requirements. This Section 1.2 (d) shall survive the
termination of this Agreement.
(e) Meeting
with
Owner. Prior
to the construction of wind Energy Conversion Systems, access roads, and other
allowed uses as provided in Section 1.2 (a) through (d) above, Lessee will use
reasonable efforts to meet with Owner to discuss the proposed locations of any
turbines and/or access roads on the Property (“Proposed
Locations”). Lessee agrees to listen to, and give due consideration
to, Owner’s comments and/or concerns with regard to the Proposed Locations, and
Lessee shall use reasonable efforts to address such comments and/or concerns,
provided that doing so will not increase the cost to Lessee of designing,
constructing, or operating the Wind Energy Conversion Systems, or decrease the
amount of wind captured for conversion purposes; and provided further that
Lessee shall retain sole discretion as to the Proposed Locations and as to all
final location of Turbines, access roads, and other facilities.
1.3 Access
Easement. As of the
Effective Date, Owner also hereby grants to Lessee a non-exclusive easement in
gross on, over, and across any and all access routes to and from the Property
for purposes of ingress and egress to and from the Property for the duration of
the Lease Term. The easements and other rights granted by Owner in
this lease are easements in gross and are personal to Lessee for the benefit of
Lessee, its successors and assigns, as owner of such easements. The
easements and other rights granted by Owner in this Lease are independent of any
lands or estates or interest in lands. There is no outside real
property benefit for the easements granted in this Lease. As between
the Property and other tracts of property on which Lessee may locate Turbines,
no tract is considered dominant or servient to the other.
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1.4 No
Obstruction of Wind. Any obstruction by Owner, during the Lease Term, to
the free flow of the wind is prohibited throughout the entire area of the
Property, which shall consist of horizontally three hundred and sixty degrees
(360°) from any point where any Turbine is or may be located at any time or from
time to time (each such location referred to as a “Site”), and for a distance
from each Site to the boundaries of the Property, together vertically through
all space located above the surface of the Property, that is, one hundred eighty
degrees (180°) or such greater number or numbers of degrees as may be necessary
to extend from each point on and along a line drawn along the surface from each
point along the exterior boundary of the Property through each Site to each
point, and on and along such line to the opposite exterior boundary of Property,
provided, however, that trees, structures, and improvements located on the
Property as of the Effective Date shall be allowed to remain, and Owner shall be
allowed to use the Property in accordance with the terms set forth in Section
6.2 of this Lease. Crownbutte will provide written waivers of the
foregoing requirements of this Section 1.4 as appropriate and
feasible.
1.5 No
Obligation to Operate
Turbines. Nothing in
this Lease or otherwise shall be construed as requiring Lessee to install or
operate Turbines or any other Wind Energy Conversion Systems, or to conduct any
other business, or to use the Property.
ARTICLE 2 LEASE
TERM
2.1 Lease
Term. This
lease shall be effective throughout a term (the “Lease Term”) which commences on
the Effective date and ends on date which is four hundred and eighty (480)
months following the Effective Date, unless extended or terminated as provided
in this Lease. If an agreement to sell electrical power generated
from the Property is in effect on the date which otherwise would be the
termination of the Lease Term, the Lease Term shall be extended until such
agreement shall terminate. If the Effective Date is not the first day
of a calendar month, then the Lease Term shall begin and may end with partial
calendar months. As soon as the Effective Date and the initial Lease
Term have been determined, Owner and Lessee shall execute a memorandum setting
forth such dates, but failure to do so shall have no effect
hereunder.
The first “Lease Year” shall commence
on the Effective Date and end at midnight on the following December
31. Each successive “Lease Year” shall commence at 12:01 AM on
January 1 following the expiration of the previous “Lease Year” and shall end at
midnight on the following December 31. The final “Lease Year” shall end on the
expiration of the Lease Term. All times are located at the
Property.
2.2 Right
to
Terminate. Lessee
shall have the right to terminate this Lease as to all or any part of the
Property, at any time and from time to time, upon at least thirty (30) days
prior written notice to Owner without any additional liability to
Owner. Owner shall have the right to terminate this Lease as of any
date which is the end of a Lease Year and is more than three years after the
Effective Date, by giving at least thirty (30) days prior written notice to
Crownbutte, but only if no Turbines or Wind Energy Conversion Systems have been
erected on any part of the Property.
ARTICLE 3 RENT
3.1 Annual
Rent. Within
sixty (60) days after the expiration of each Lease Year, Lessee shall pay the
Owner rent (“Annual Rent”) calculated as set forth below. Such Annual
Rent shall be paid to owner at its address for notice as set forth
herein.
(a) A
Unit Payment of Two Thousand Five Hundred Dollars (US$2,500.00) per year for
each Turbine erected by Lessee on the Property, with such unit payment for each
such Turbine multiplied by a fraction, the denominator of which is 365 and the
numerator of which is the lesser of the number of days in such a Lease Year, or,
if such Turbine was commissioned during such Lease Year, the number of days in
such Lease Year following such commissioning.
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(b) The
Unit Payment for each turbine as stated in (a) above will increase by two
percent (2%) annually after the wind-powered electrical generating facility has
been operating for a period of twelve (12) consecutive months.
(c) In
addition to the Unit Payment, the land Owner shall receive One Thousand Dollars
(US$1000.00) per name-plate megawatt (MW) capacity (Capacity Payment) or portion
thereof for each turbine installed on the Property, with such Capacity Payment
multiplied by a fraction as indicated in the formula in (a) above.
(d) The
name-plate capacity payment as stated in (c) above will increase by two percent
(2%) annually after the wind-powered electrical generating facility has been
operating for a period of twelve (12) consecutive months.
(e) In
the event that more than one Turbine is erected by the Lessee on a single Land
Owner’s Property, the date of commissioning of the first turbine to be
commissioned shall be used to determine the Annual Rent for all of the turbines
erected on the Property.
(f) Unit
Payments and Capacity Payments (Total Annual Rent) shall be made by Lessee to
the Property Owner simultaneously.
(g) Minor
Improvements. In the event that Lessee will not construct any
Turbines on the Premises but will use the Premises for installation of
underground or overhead electrical and/or communication cabling or lines and/or
access roads ("Minor Improvements"), promptly upon Lessee’s request, Lessor
shall grant to Lessee a perpetual easement (“Minor Improvements Easement”) for
the installation, construction, operation, maintenance, replacement, relocation
and removal of such Minor Improvements. Lessee shall pay to Lessor a
lump sum amount within thirty (30) days after the Commercial Operation Date in
the amount equal to Two Dollars ($2.00) per foot of the length of any
underground Minor Improvement and three Dollars ($3.00) per foot of length of
any overhead Minor Improvements on the Premises. Any Minor
Improvement Easement shall contain all of the rights and privileges for
Improvements as are set forth in this Lease; shall include rights of ingress to
and egress from the Minor Improvements for the purposes described in the Minor
Improvements Easement by means of existing roads and lanes or otherwise by such
route or routes as Lessee may construct from time to time; shall be terminable
by Lessee as set forth in this Lease but shall not be terminable by Lessor under
any circumstances; Lessee shall have the right to assign or convey all or any
portion of any Minor Improvement Easement to any person or entity on an
exclusive or non-exclusive basis; and any Minor Improvement Easement shall run
with the Premises and inure to the benefit of and be binding upon Lessor and
Lessee or any designee of Lessee, and their respective transferees, successors
and assigns, and all persons claiming under them.
(h) If
no improvements are constructed on owner’s property within one year of exercise
of the Option to Lease, Lessor shall pay to owner an annual rental payment of
$___________ to continue the Lease in force. If Lessor fails to pay
any annual rent payment, this Lease shall automatically terminate. If
Lessee begins receiving rental payments under Paragraphs 3.1(a), (c), or (f),
then this annual rental payment shall cease.
ARTICLE 4 TAXES,
DEBT SERVICE, PERMITS, INDEMNIFICATION
4.1 Taxes
Paid by
Lessee. Lessee
shall pay timely all real and personal property taxes for the Property
attributable to the value of improvements on the Property owned by, or under the
control of, Lessee, which improvements may include the Turbines, Wind Energy
Conversion Systems, interconnection systems, monitoring or maintenance facility,
and any other equipment owned by Lessee and located on the
Property. Lessee also will pay when due all charges for gas, water,
electricity, telephone services, and other utilities used by Lessee on the
Property. Lessee shall not be liable for any other type of taxes or
assessments levied or assessed against the Property, or for any increases in
taxes resulting from a reassessment of the Property due to a change in
ownership.
4.2 Taxes
Paid by
Owner. Owner
shall timely pay all real and personal property taxes for the Property which are
not attributable to the improvements on the Property owned by, or under the
control of, Lessee. If Owner fails timely to pay any such taxes,
Lessee may (but need not) pay such taxes on behalf of and as agent for Owner,
and deduct the amount of such payments from the next payments of Total Annual
Rent due from Lessee to Owner.
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4.3 Refunds
or Abatements. The parties agree to fully cooperate to obtain any available
tax refunds or tax abatements with respect to the Property.
4.4 Owner
Debt
Service. If
any amounts become payable by Owner for debt service or similar matters with
respect to the Property, and Owner fails timely to pay such amounts, resulting
in a possibility that the interest of Owner in the Property may be foreclosed or
sold, then Lessee may (but need not) pay such amounts on behalf of and as agent
for Owner, and deduct the amount of such payments from the next payments of
Annual Rent due from Lessee to Owner.
4.5 Obtaining
Permits. Lessee will work to make all
applications and filings with governmental and regulatory agencies, and to
conduct all other activities reasonably necessary to obtain all permits,
licenses, approvals, certificates, and other governmental or regulatory matters
which may be required to construct and operate a wind farm, and associated
electrical, access, and other facilities, on the Property (the “Permitting
Process”). Owner will provide access to any files and studies which
Owner may have regarding the Property for use in the Permitting
Process. Lessee will bear at its sole expense all costs incurred
during the Permitting Process. Owner agrees (i) to execute any and all
applications, statements, and other instruments reasonably necessary as part of
the Permitting Process, and (ii) not to oppose any activities conducted as part
of the Permitting Process. Owner hereby appoints Lessee as Owner’s
agent in fact to execute any and all such applications, statements, and other
instruments in the name of the Owner, if Owner is unavailable or otherwise fails
to sign the same. Lessee agrees to provide to Owner copies of all
permits, licenses, approvals, certificates, and other governmental or regulatory
matters, which may be obtained as part of the Permitting Process.
4.6 Indemnification. Each
party to this Lease (the “Indemnifying Party”) agrees to indemnify, defend, and
hold harmless other party to this Lease and such other party’s mortgages,
officers, employees, and agents (the “Indemnified Party”) against any and all
losses, damages (including consequential damages) claims, expenses, and other
liabilities, including, without limitations, reasonable attorneys’ fees,
resulting from or arising out of (i) any negligent act or negligent failure to
act on the part of the Indemnifying Party or anyone else engaged in doing work
for the Indemnifying Party, or (ii) and breach of this Lease by the Indemnifying
Party. The foregoing indemnifications shall survey the expiration of
the Lease Term and the termination of this Lease. The foregoing
indemnifications shall not apply to losses, damages, claims, expenses, and other
liabilities caused by any negligent or deliberate act or omission on the part of
the Indemnified Party.
ARTICLE 5 LESSEE
REPRESENTATIONS, WARRANTIES, AND COVENANTS
5.1 Insurance. Lessee
shall maintain commercial general liability insurance, insuring Lessee against
loss caused by Lessee’s use of the Property under this Lease, in an amount no
less than one million dollars (US$1,000,000.00) of combined single-limit
coverage, and shall provide certificates of this insurance coverage to the Owner
upon Owner’s written request.
5.2 Requirements
of Governmental
Agencies. Lessee
shall comply in all material respects with all varied laws applicable to the
wind power facilities erected on the Property, but shall have the right, in its
sole discretion and at its sole expense, in its name or in the Owner’s name, to
contest the validity or applicability of any law, ordinance, order, rule, or
regulation of any governmental agency or entity. Lessee shall control any such
contest, and Owner shall cooperate with Lessee in every reasonable way in such
contest, at no out-of-pocket expense to the Owner.
5.3 Mechanics’
Liens. Lessee shall
not permit any mechanics’ liens to be filed against the premises as a result of
the Lessee’s use of the Property pursuant to this Lease. If Lessee
wishes to contest any such lien, Lessee shall, within sixty (60) days after it
receives notice for the lien, provide a bond or other security as the Owner may
reasonably request, or remove such lien from the Property pursuant to applicable
law.
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5.4 Hazardous
Materials. As used in this Lease,
the term “Hazardous Materials” means petroleum, asbestos, polychlorinated
biphenyls, radioactive materials, radon gas, or any chemical, material, or
substance defined as, or included in the definition of, “Hazardous Substances”,
“Hazardous Waste”, “Hazardous Materials”, “Extremely Hazardous Waste”,
“Restricted Hazardous Waste”, or “Toxic Substances”, or words to that effect,
under any applicable laws, including, but not limited to, all Environmental
Laws. As used in this Lease, the term “Environmental Laws” means all
statutes, ordinances, orders, rules, and regulations of all federal, state, or
local governmental agencies relating to the use, generation, manufacture,
installation, handling, release, discharge, storage, or disposal of Hazardous
Materials, including but not limited to, the Federal Water Pollution Act, as
amended (33 U.S.C. para. 6901 et seq.), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. para.
9601 et seq.), and the Hazardous Materials Transportation Act, as amended (49
U.S.C. para. 1801 et seq.). If the Lessee places, disposes, or
releases any Hazardous Material in or onto the Property, and such placement,
disposal, or release results in the contamination of the Property, then the
Lessee shall remediate such Hazardous Materials to the extent ordered to do so
by any governmental authority with jurisdiction.
5.5 Crop
Damage. If, during the Lease Term, loss of
crop cultivation by the Owner results from ingress and egress to and from the
Property by the Lessee under the terms of this Lease, such ingress and egress
being outside of what the parties agree to in developing, operating and
maintaining the Wind Energy Conversion Systems and related infrastructure,
Lessee shall pay the “Crop Loss Compensation” fee to Owner within sixty (60)
days after the expiration of the Lease Year in which the crop loss
occurred. Such Crop Loss Compensation shall only be made once and
shall not be perpetual. For the sake of clarity, the other
compensation contemplated in Article 3 of this Agreement shall be considered
adequate compensation for any permanent loss of crop cultivation as a result of
the permitted use of the Property as listed in Section 1.2 of this Agreement.
Crop Loss Compensation resulting from the activities by Lessee shall be based on
the sum of the land area in the Property cultivated by Owner during the three
(3) years prior to the Effective Date and not cultivated as a direct result of
activities by Lessee under the terms of this Lease. Damages for crop and pasture
land loss will be calculated by the following formula: Current Market Price x
Yield Per Acre x Acres Lost = Damages. Yield will be determined by
the average of the previous three years’ yields for the Premises. If
Lessor does not have yield records available, Lessor and Lessee shall use
commonly used yield information available for the area. This shall be
a one time lump sum payment for temporary loss during construction or
maintenance.
5.6 CRP
Lands. If Lessor is a party to a Conservation Reserve Program
contract (“CRP Contract”) with the U.S. Department of Agriculture pursuant to 7
C.F.R. Part 1410, Lessor shall provide Lessee with a true and complete copy of
such CRP Contract, together with all amendments and modifications, and if
applicable, Lessee shall reimburse Lessor for (a) any rental payments, or
portion thereof, Lessor would have received from the U.S. Department of
Agriculture but for the construction of the Improvements on the Premises and (b)
the penalties and interest, if any (including for any past payments received by
Lessor that must be repaid by Lessor), assessed by, the U.S. Department of
Agriculture as a result of the construction of the Improvements on the
Premises. Lessor shall cooperate with Lessee in completing and
submitting documents to obtain any exemptions allowed under the Conservation
Reserve Program for the use of Improvements on the Premises covered by a CRP
Contact. This shall be a one-time lump sum payment for temporary loss
during construction.
5.7 Noxious
Weeds. Lessee shall be responsible for the control
of noxious weeds and Bull Thistle not native to the leased area and growing
within twenty-five (25) feet of any or all wind turbines, junction boxes,
transformers, and any other equipment, as well as all service and access roads
installed by the Lessee. Within seventy-two (72) hours after being
notified by the Owner that vegetation which is listed on the Noxious Weed and Bull Thistle
List of the State Department of Agriculture is present as described
above, Lessee shall physically remove or treat such vegetation with an
appropriate herbicide.
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ARTICLE 6
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OWNER
REPRESENTATIONS, WARRANTIES, AND
COVENANTS
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Owner promises, represents, and
warrants to Lessee as follows:
6.1 Title to
Property. Owner
owns the entire Property in fee simple, subject to no liens or encumbrances
except as disclosed in writing to Lessee or its predecessor in a title report or
other document delivered to Lessee or its predecessor on or prior to the
execution of the Option Agreement by Owner. Owner and each person
signing the Option Agreement on behalf of Owner have the full und unrestricted
power and authority to execute and deliver the entire Option agreement,
including this Lease, and to grant the easements and rights herein
granted. All persons having any ownership or possessory interest in
the Property (excluding tenants) have signed the Option Agreement and the
execution copies of this Lease. Owner shall cooperate with Lessee to
obtain a non-disturbance agreement from each holder of a lien with respect to
all or part of the Property (recorded or unrecorded) which provides that such
lien-holder shall not disturb the Lessee’s possession or rights under this Lease
or terminate this Lease so long as the Owner is not entitled to terminate this
Lease under its terms.
6.2 No ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇
long as Lessee is not in default under this Agreement, Lessee shall have the
quiet use and enjoyment of the Property in accordance with the terms of this
Lease without any suit, trouble, or interference of any kind by Owner or any
party claiming though Owner. Owner may use the Property for
agricultural purposes. Owner will not use Property for any use or
take any other action which interferes with or is incompatible with lessee’s use
of Property, or which in any way interferes with wind flow across the
Property. Owner may replace, rebuild, or reconstruct any improvements
in existence on the Property on the Effective Date in the same or substantially
the same form as such improvement existed on the Effective Date, and Owner may
build, construct, or locate new improvement(s) on the Property, provided that
any such improvement(s) will not (i) interfere with the wind flow across the
Property, (ii) interfere with or obstruct Lessee’s operations on the Property,
or (iii) impede or obstruct Lessee’s access to the Property. In no
event during the Lease Term shall Owner construct, build, or locate, or allow
parties other than Lessee or its successors or assigns to construct, build, or
locate, any Wind Conversion Systems, Wind Turbines, or similar projects on the
Property.
Owner may construct fences on the
Property provided Owner includes gated access for Lessee and its employees and
agents. Any fence Owner may construct on the Property must be
sufficient distance from all Turbine sites and roads to permit construction and
maintenance by Lessee of roads, turbines, and any related
equipment. In this regard, Owner acknowledges that Lessee will be
moving large construction machinery and heavy equipment, including but not
limited to earth movers and cranes, onto the Property and must have sufficient
access and areas to turn around. Lessee reserves the right to remove
any fence not in compliance with the above criteria which obstructs or
interferes with Lessee’s operations hereunder.
Owner will not sell, transfer, assign,
or encumber the Property, or grant any license, easement, lease, or other right
with respect to the Property, which could interfere with Lessee’s
operations. Lessee shall have the right (but no obligations) to
remedy any such interference by any appropriate means, and to deduct the cost
thereof from the next payments of Annual Rent due from Lessee to
Owner.
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6.3 Hazardous
Materials. As of the
Effective date, there are no Hazardous Materials, abandoned ▇▇▇▇▇, solid waste
disposal sites, or underground storage tanks located on the Property; the
Property is not in violation of any Environmental Law; and the Property is not
subject to, and the Owner has no notice of, any judicial or administrative
action, investigation, or order under any Environmental Law with respect to the
Property. Owner has done nothing to contaminate the Property with
Hazardous Materials. If Owner breaches any warranty or representation
set forth in this Section 6.3, or if a release of Hazardous Materials is caused
or permitted by Owner or its agents, employees, or contractors, and results in
contamination of the Property, then Owner shall indemnify, defend, protect, and
hold Lessee, and Lessee’s employees, agents, partners, members, officers, and
directors, harmless from and against any claims, actions, suits, proceedings,
losses, costs, damages, liabilities (including, without limitation, sums paid in
settlement of claims), deficiencies, fines, penalties, and expenses (including,
without limitation, reasonable attorneys’ fees and consultants’ fees,
investigation and laboratory fees, court costs, and litigation expenses) which
arise during or after the Lease Term as a result of such breach of
contamination. This indemnity shall include, without limitations, and
the Owner shall pay all costs and expenses relating to, any claim, action, suit
or proceedings for personal injury (including sickness, disease, or death),
property damage, nuisance, pollution, contamination, spill, or other effect on
the environment; and any investigation, monitoring, repair, clean-up, treatment
or detoxification of the Property; and the preparation and implementation of any
closure plan, redemption plan, or other required action in connection with the
Property.
ARTICLE 7 ASSIGNMENT;
LICENSES
7.1 Assignment and Subletting;
Easements and Licenses. Lessee may assign all or part of
Lessee’s interest in this Lease, the Wind Energy Conversion Systems, the
Property, and/or the easements and rights created by this Lease, or sublet all
or any part of the same, at any time and from time to time, without obtaining
the consent of the Owner. Without limiting the generality of the
foregoing, a foreclosure and sale by a lender pursuant to Article 9 below shall
be permitted assignment. In the event of an assignment of Lessee’s
entire interest in this Lease, Lessee shall be released of all further liability
under this Lease. If Lessee shall have subleased all or portion of
the Property or the Wind Energy Conversion Systems, no such sublease shall be
affected by a cancellation or termination of this Lease, and Owner shall
recognize the rights of the Sub-Lessee thereunder, provided only that such a
Sub-Lessee attorn to Owner upon its request. Owner shall enter into a
non-disturbance and attornment agreement, in form and substance reasonably
acceptable to Lessee, upon the request of the Sub-Lessee under any
sublease. Lessee also shall have the right to grant easements,
licenses, or similar rights (however denominated) with respect to the Property,
the Wind Energy Conversion Systems, and/or the easements and rights created by
this Lease, at any time and from time to time, to one or more persons or
entities, without obtaining the consent of the Owner.
7.2 Nearby Development
Activities. Lessee shall have a first right of refusal and
option, and Owner hereby grants such an exclusive and irrevocable first right of
refusal and option, to match the terms under which any third party seeks to
enter into a lease for wind power development of lands in which Owner has or
acquires an interest after Effective Date and which is located within one half
mile of the boundaries of the Property. Such option and first right
of refusal shall be effective as to any agreements which would take effect
during the Option Term. If Owner receives any such third party offer
to enter into an agreement, full particulars of the same shall be delivered to
Lessee, and Lessee shall have thirty (30) days within which to notify Owner that
Lessee elects to enter into an agreement on the specified terms and
conditions.
ARTICLE 8 LEASEHOLD
FINANCING; CONDEMNATION
8.1 Right to
Encumber. Lessee
may, at any time and from time to time, mortgage, pledge, hypothecate, or
alienate to any entity (herein, a “Lender”) all or any part of Lessee’s interest
in, to, and under this Lease, the Wind Energy Conversion systems, the Property,
and/or the easements and rights created in this Lease, without consent of
Owner. A Lender or its assigns may enforce such lien and acquire
title to the leasehold estate in any lawful way, and upon lawful foreclosure of
such lien, after giving effect to the cure periods set forth herein, the Lender
may take possession of and operate the Wind Energy Conversion Systems and the
Property, performing all obligations performable by the Lessee. Upon
foreclosure of such lien by power of sale, judicial foreclosure, or acquisition
of the leasehold estate by deed in lieu of foreclosure, the Lender may, upon
notice to Owner, sell and assign the leasehold estate. The Lender
and/or person or entity acquiring the leasehold estate shall be liable to
perform the obligations imposed on Lessee by this Lease only to the extent
arising during the period during which such person or entity has ownership of
the leasehold estate, or possession of the Wind Energy Conversion Systems, or
the Property.
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8.2 Covenants for Lenders’
Benefit. Should Lessee mortgage any of its
interest as provided in Section 8.1 above, Lessee and Owner expressly agree
between themselves and for the benefit of any Lenders as follows:
(a) They
will not modify or change this Lease without the prior written consent of the
Lenders, which consent shall not be unreasonably withheld or
delayed.
(b) The
Lenders shall have the right to do any act or thing required to be performed by
Lessee under this Lease, and any such act or thing performed by a Lender shall
be as effective to prevent a default under this Lease and/or a forfeiture of any
of Lessee’s rights under this Lease as if done by Lessee itself.
(c) No
default, which requires the giving of notice to Lessee, shall be effective
unless a like notice is given to all Lenders. If Owner shall become
entitled to terminate this Lease due to an uncured default by Lessee, Owner will
not terminate this Lease unless it has first given written notice of such
uncured default and of its intent to terminate this Lease to each Lender and has
given each Lender at least thirty (30) days to cure the default to prevent such
termination of this Lease. Furthermore, if within such thirty (30)
day period, a Lender notifies Owner that it intends to foreclose on Lessee’s
interest or otherwise take possession of Lessee’s interest under this Lease in
order to cure the default, Owner shall not terminate this Lease and shall permit
such Lender a sufficient period of time as may be necessary for such Lender,
with the exercise of due diligence, to foreclose or acquire Lessee’s interest
under this Lease and to perform or cause to be performed all of the covenants
and agreements to be performed and observed by Lessee. Upon the sale
or other transfer of any interest in the easements and rights granted hereunder
by any Lender, such Lender shall have no further duties or obligations
hereunder.
(d) In
case of the termination of this Lease as a result of any default or the
bankruptcy, insolvency, or appointment of a receiver in bankruptcy for Lessee,
Owner shall give prompt notice to the Lenders. Owner shall, upon
written request of the first priority Lender made within forty (40) days after
notice to such Lender, enter into a new easement agreement with such Lender, or
its designee, within twenty (20) days after the receipt of such
request. Such new easement agreement shall be effective as of the
date of the termination of this Lease by reason of default by Lessee, upon the
same terms, covenants, conditions, and agreements as contained in this
Lease. Upon the execution of any such new easement agreement, the
Lender shall (i) pay Owner any amounts which are due Owner from Lessee, (ii) pay
Owner any and all amounts which would have been due under this Lease (had this
Lease not been terminated) from the date of the termination of this Lease to the
date of the new easement agreement, and (iii) agree in writing to perform or
cause to be performed all of the other covenants and agreements set forth in
this Lease to be performed by lessee to the extent that Lessee failed to perform
the same prior to the execution and delivery of the new easement
agreement.
8.3 Condemnation. Should
title or possession of all the Property be taken in condemnation proceedings by
a government agency or governmental body under the exercise of the right of
eminent domain, or should a partial taking render the remaining portion of the
Property wholly unsuitable for Lessee’s use, then this Lease shall terminate
upon the vesting of title or taking of possession. All payments made
on account of any taking by eminent domain shall be allocated such that (i)
Lessee receives any award made for the reasonable removal and relocation costs
of any removable property that Lessee has the right to remove, and for the loss
and damage to any such property that Lessee elects or is required not to remove,
and for the loss of use of the Property and the Wind Energy Conversion Systems
by Lessee, and (ii) Owner receives any award made for the reasonable value of
Property apart from the Wind Energy Conversion Systems. Lessee and
Owner each shall have the right to participate in any related settlement
proceedings.
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ARTICLE 9 DEFAULT;
TERMINATION
9.1 Defaults. Each
of the following events shall constitute an event of default by the respective
parties, and subject to Section 8.2 above, shall permit the non-defaulting party
to terminate this Lease and/or pursue all other appropriate
remedies:
(a) The
failure or omission by either party to pay amounts required to be paid hereunder
when due, and such failure or omission has continued for thirty (30) days after
written notice from the other party.
(b) The
failure or omission by either party to observe, keep, or perform any of the
other terms, agreements, or conditions set forth in this Lease, and such failure
or omission has continued for thirty (30) days (or such longer period required
to cure such failure or omission, not to exceed one hundred eighty (180) days,
if such failure or omission cannot reasonably be cured with a thirty (30) day
period) after written notice from the other party.
(c) A
party files for protection or liquidation under the bankruptcy laws of the
United States or any other jurisdiction, or has an involuntary petition in
bankruptcy or a request for the appointment of a receiver filed against it, and
such involuntary petition or request is not dismissed within sixty (60) days
after filing.
9.2 Surrender of
Property. On
the termination of the Lease Term, Lessee shall (i) upon written request by
Owner, execute and record a quitclaim deed of Lessee’s right title to and
interest in the Property, and (ii) peaceably and quietly leave, surrender, and
return the Property to Owner. Lessee agrees and hereby covenants to
dismantle and remove all equipment, improvements, fixtures, and other property
owned or installed by Lessee or its affiliates on the Property (provided that
all footings and foundations shall be removed to a depth of four (4) feet below
the surface of the ground and covered with soil) within one year from the date
of any such termination. In addition to any other remedies available
to Owner, should Lessee fail to remove such property within one year from the
date of termination of the Lease Term, any and all such property remaining on
the Property beyond such one year removal period shall be deemed abandoned to
Owner, and Lessee hereby agrees to relinquish any and all rights to such
property.
ARTICLE 10 MISCELLANEOUS
10.1 Force
Majeure. If performance of this Lease or of any
obligation hereunder is prevented or substantially restricted or interfered with
by reason of an event of “Force Majeure” (as defined below), the affected party,
upon giving notice to the other party, shall be excused from such performance to
the extent of and for the duration of such prevention, restriction, or
interference. The affected party shall use its reasonable efforts to
avoid or remove such cause of nonperformance and shall continue to perform as
soon as such causes are removed. “Force Majeure” means fire,
earthquake, flood, tornado, natural disaster, or other Acts of God; strikes,
lock-outs, or labor disputes; inability to secure materials; war, civil strife,
or other violence; any law, order, proclamation, regulation, ordinance, action,
demand, or requirement of any government agency, or utility; or any other act or
condition beyond the reasonable control of a party.
10.2 Confidentiality. Owner
shall maintain in the strictest confidence, for the sole benefit of Lessee, all
information pertaining to Lessee’s site design, product design, methods of
operation, methods of construction, and power production of the Wind Energy
Conversion Systems. Operator authorizes Owner to provide copies of the
Agreement and additional information and disclose the terms thereof to owner’s
family, attorney, accountant, financial advisor and any existing or prospective
mortgagee, lessee, or purchaser, so long as they likewise agree not to provide
copies of the agreement or additional information or disclose the terms thereof
to any unauthorized person or entity. A breach of this provision will
cause damages to the operator, for which you shall be responsible.
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10.3 Lease as Interest in Real
Property. The
parties intend that this Lease create a valid and present interest in the
Property in favor of Lessee. Therefore, this Lease and the rights
under this Lease shall be deemed an interest in and encumbrance upon the
Property which shall run with the land and shall be binding upon the Property,
and upon Owner and its heirs, successors, assigns, and legal representatives,
and shall inure to the benefit of Lessee and its successors, assigns, and legal
representatives.
10.4 Proof of Ownership.
After execution of the
Lease Option Agreement, Crownbutte will update the
original abstract in order to verify clear land title and ownership
information. Crownbutte guarantees the safe return of the original
abstract(s) to the landowner when title verification and updating has been
completed. Crownbutte will pay the routine costs of verifying and updating
the abstract(s). If the original abstract for any parcel is not available,
the land title company must reconstruct (“rebuild”) the abstract. The cost
of this rebuilding will be divided evenly between Crownbutte and the landowner,
each paying fifty per cent (50%) of the total. If the landowner chooses,
his share of the cost of the new abstract can be deducted from the first annual
rental payment to be made by Crownbutte to the landowner.
10.5 Surrender of Unused
Premises. Lessee agrees that it shall, within ninety (90) days
after Lessor’s request at any time following the second anniversary of the
Commercial Operation Date (as defined below), terminate this Lease as to any
part of the Premises which at that time is not utilized for wind energy
development, including, without limitation, access, suitable setbacks and upwind
windshed protection, as reasonably determined by
Lessee. Notwithstanding the foregoing, however, the parties agree
that such surrender of unused portions of the Premises shall not thereby limit
or affect Lessee’s exclusive right to the free flow of wind across the Premises
for wind energy purposes.
10.6 Memorandum of
Lease. A Memorandum of Option and Lease and the Notice of
Exercise, already having been filed of record with respect to the Option
Agreement, shall remain in full force and effect. If requested by
Lessee, Owner and the Lessee shall execute in recordable form, and Lessee shall
record in the official records or land records of the county in which the
Property is located, a memorandum of this Lease satisfactory in form and
substance to Lessee. Owner consents to the recordation of the
interest of any Lender and/or any assignee of Tenant’s interest in this
Lease.
10.7 Tax
Credit If,
under applicable law, Lessee or its successors or assigns become ineligible for
any tax credit, benefit, or incentive for alternative energy established by any
local, state, or federal government, then, at the Lessee’s option, Owner and
Lessee shall amend this Lease or replace it with a different instrument so as to
convert the Lessee’s interest in the Property to a substantially similar
interest that makes the Lessee eligible for such tax credit, benefit, or
incentive.
10.8 Estoppel
Certificates. From
time to time, each party, within fifteen (15) days after written request from
the other party, shall execute and deliver an estoppel certificate certifying as
to the Status of this Lease and each party’s performance
thereunder.
10.9 Notices. All
notices pursuant to this Lease must be in writing and shall be personally
delivered or sent by United States Mail (registered or certified, return-receipt
requested) or by an overnight courier service which keeps records of deliveries,
addressed as follows or to such other address for itself as to which any party
may give notice hereunder:
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OWNER:
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Crownbutte
Wind Power, Inc.
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111
– ▇▇▇
▇▇▇ ▇▇
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▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
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Owner
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Phone:
(▇▇▇)▇▇▇-▇▇▇▇
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FAX:
(▇▇▇)▇▇▇-▇▇▇▇
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▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
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Joint
Owner
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Street
Address
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Phone
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SSN
or Fed ID#:
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10.9 Entire
Agreement. This
Lease and Option Agreement, and the attached exhibits, constitute the entire
agreement between the parties regarding the subject matter hereof, and supersede
all other agreements with respect thereto, whether written or
oral. This Option agreement shall not be modified or amended except
in a writing signed by both parties or their lawful successors in
interest. This Option Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 Interpretation.
Each party and its counsel have reviewed this Lease, and any rule of
construction holding that ambiguities are to be resolved against the drafting
party shall not apply in the interpretation of this Lease. The
captions in this Lease are for convenience and reference only, and shall in no
way be held to explain, modify, amplify, or aid in the interpretation,
construction, or meaning of the provisions of this Lease. Should any
provision of this Lease be held, in a final and unappealable decision by a court
of competent jurisdiction, to be invalid, void, or unenforceable, the remaining
provisions hereof shall remain in full force and effect, unimpaired by the
holding. Unless otherwise expressly stated to the contrary, the word “including”
as used herein shall be construed in its inclusive sense, and without
limitations, whether or not words of non-limitation such as “but not limited to”
or “without limitations” are used.
10.11
Governing
Law. This Lease shall be governed by and construed in
accordance with the laws of the State in which the majority of the Property by
acreage is located.
[signature
page follows]
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IN WITNESS THEREOF, the
parties have executed this Agreement as of the Effective Date.
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OWNER:
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CROWNBUTTE:
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Print
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Print
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Sign
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Sign
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SSN
or Fed ID#
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Address
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City,
State, ZIP
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JOINT
OWNER:
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Print
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Sign
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SSN
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Address
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[All
owners, such as both husband and wife, must sign and be listed as Owner(s) or
Joint Owners. Marital status, and any manner in which title is held, such as in
trust or by corporation or partnership, also must be stated.]
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Notarization
of Landowner Signature(s)
STATE
OF ____________________________
)
)
COUNTY
OF ___________________________ )
On ______________________________,
20___, before me, a Notary Public in and for the said County and State,
personally appeared
_________________________________________________________________________________________________
known to
me to be the person(s) whose name(s) is/are subscribed to the instrument within
as “Owner(s)”, and acknowledged to me that he/she/they executed the
same.
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WITNESS
my hand and official seal:
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Notary
Public
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Notarization
of Authorized Crownbutte Signature
STATE
OF _ )
)
COUNTY
OF _ )
On _____________________,
20___, before me, a Notary Public in and for the said County and State,
personally appeared
_________________________________________________________________________________________________
known to
me to be the person whose name is subscribed to the instrument within as an
authorized representative of Crownbutte Wind Power, Inc. and acknowledged to me
that he/she/they executed the same.
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WITNESS
my hand and official seal:
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Notary
Public
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NOTICE
OF EXERCISE OF OPTION
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Exhibit D
NOTICE
OF EXERCISE OF OPTION
THIS
NOTICE OF EXERCISE OF OPTION (“Memorandum of Option”) is made and entered into
as of _________, 20___, by Crownbutte Wind Power, Inc., a Nevada
corporation referred to herein as (“Crownbutte”).
WHEREAS:
A. On
_______________, the parties entered into an Option Agreement for Easement (the
“Option Agreement”) which by its terms grants to Crownbutte an option to acquire
a wind-park easement (the “Option”), and further grants to Crownbutte present
easements for wind and weather monitoring and access on and across certain land
which is more particularly described in Exhibit A attached hereto and
incorporated by this reference (the “Property”);
B. The
term of the Option, still in effect as of the above date, expires at 12:00 Noon,
CST, on ,
20 ;
C. A
Memorandum of Option and Lease was recorded in the Official Records of Real
Property of the county in which the Property is located, giving Crownbutte or
its successors or assigns a right to a wind-park easement for wind energy
development across and related rights over the Property for a period of forty
(40) years, with possible extensions or adjustments, as more specifically
provided in the Option agreement; and
NOW, THEREFORE, in consideration of
payments and covenants provided in the Option Agreement to be paid and performed
by Crownbutte, Crownbutte hereby exercises that certain exclusive Option to
enter into an easement agreement covering the Property on the terms and
conditions set forth in the Option Agreement, together with certain present
easements to use and enjoy the Property, all as more particularly set forth in
the Option Agreement. All of the terms, conditions, provisions, and
covenants of the Option Agreement are hereby incorporated into this Notice of
Exercise of Option by reference as though fully set forth herein, and the Option
Agreement and this Notice of Exercise of Option shall be deemed to constitute a
single instrument or document. Should there be any inconsistency
between the terms of this Notice of Exercise of Option and the Option Agreement,
the terms of the Option Agreement ```shall
prevail.
Upon the recording by Crownbutte, or
its successors, or assigns of this Notice of Exercise in the Official Records of
Real Property of the County in which the Property is located, all the
easements and rights that are the subject of the Option shall immediately become
effective and binding upon the Property and Owner, all successive owners of the
Property, and the successors and assigns of Owner, all for the benefit of
Crownbutte and its successors and assigns.
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Crownbutte
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IN WITNESS THEREOF, the
parties have executed this Agreement as of the Effective Date.
CROWNBUTTE:
Notarization
of Authorized Crownbutte Signature
STATE
OF _ )
)
COUNTY
OF _ )
On _____________________,
20___, before me, a Notary Public in and for the said County and State,
personally appeared
_________________________________________________________________________________________________
known to
me to be the person whose name is subscribed to the instrument within as an
authorized representative of Crownbutte Wind Power, Inc. and acknowledged to me
that he/she/they executed the same.
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WITNESS
my hand and official seal:
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Notary
Public
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