Agreement For Easements

AGREEMENT FOR EASEMENTS AND INTERCONNECTIONS


This Easement Agreement ("EASEMENT AGREEMENT") is made and entered into as of the 31st day of May, 2000 by and among ROUGE STEEL COMPANY, a Delaware corporation, the address of which is 3001 Miller Road, Dearborn, Michigan 48121 ("ROUGE"), FORD MOTOR COMPANY, a Delaware corporation, the address of which is The American Road, Dearborn, Michigan 48121 ("FORD"), DOUBLE EAGLE STEEL COATING COMPANY, a partnership, the address of which is 3000 Miller Road, Dearborn, Michigan 48121 ("DOUBLE EAGLE") (ROUGE, FORD and DOUBLE EAGLE are collectively referred to herein as "GRANTORS," and each is a "GRANTOR") and DEARBORN INDUSTRIAL GENERATION, L.L.C., a Michigan limited liability company ("GRANTEE").


RECITALS:


A. ROUGE and FORD each own certain property situated in the City of Dearborn, Michigan, within the land known as the ROUGE COMPLEX LAND.


B. DOUBLE EAGLE is the owner of that portion of the Rouge Complex Land described in Exhibit B attached hereto (the "DOUBLE EAGLE LAND").


C. GRANTEE is the Ground Lessee of that portion of the Rouge Complex Land described in Exhibit C attached hereto (the "LEASED PREMISES").


D. GRANTEE has covenanted and agreed to build and install upon the Leased Premises a certain Project and Expanded Facility for the generation and distribution of electricity, steam and treated water and to process blast furnace gas produced by ROUGE, and to sell that portion of such electricity, steam and treated water produced by the Project to ROUGE, FORD and DOUBLE EAGLE pursuant to certain Purchase and Sales Agreements entered into between ROUGE and GRANTEE, FORD and GRANTEE and/or DOUBLE EAGLE and GRANTEE.


E. GRANTORS have each agreed to provide, as part of the transactions contemplated by the Purchase and Sales Agreements, such easements upon and with respect to the Rouge Complex Land as are necessary, appropriate or useful for the existence and operation of the Project and the Expanded Facility and the achievement of their Operational Purposes.


F. GRANTORS and GRANTEE desire to set forth the terms of their agreements relative to the easements, support services and interconnections for the benefit of the parties hereto.


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In consideration of the agreements herein set forth, the parties to this Easement Agreement hereby agree as follows:


ARTICLE I
DEFINITIONS


All capitalized terms used herein (including those in the foregoing Recitals) not otherwise defined herein shall have the meaning specified in Appendix A annexed hereto. The following terms shall have the definitions set forth below when used herein:


A. "OPERATIONAL PURPOSES" shall mean the ability of the Project to perform the functions for which it was specifically designed and constructed, including, but not limited to, furnishing electricity, steam and treated water to ROUGE, FORD, and DOUBLE EAGLE and processing blast furnace gas from Rouge, all in accordance with the terms of the Purchase and Sales Agreements.


B. "EASEMENTS" shall mean, collectively, the access easements, the construction easements, the utility easements, the supply line easements as such are defined in this Easement Agreement.


ARTICLE II
ACCESS TO ROUGE COMPLEX LAND
AND DOUBLE EAGLE LAND


SECTION 2.1. FROM PROJECT TO LAND PARCELS. To carry out the rights and obligations of GRANTEE under the Purchase and Sales Agreements, GRANTEE shall construct and install, or cause to be constructed and installed, at its sole cost, risk and responsibility, the CONNECTING FACILITIES. GRANTEE shall obtain all necessary easements, rights of way, permits, licenses, authorizations and approvals necessary therefor over, across, under and in all OFF-SITE PROPERTY within the paths and areas shown in Exhibit D to this Easement Agreement, to those Easement Areas upon the Rouge Complex Land and Double Eagle Land shown in Exhibit E. GRANTORS shall have the right not more often than annually to request an updated Exhibit D from GRANTEE showing the location of all Off-Site Property paths and areas.


SECTION 2.2. ACCESS TO EASEMENT AREAS. GRANTEE shall have the right to enter the Easement Areas to construct and install, maintain, repair, replace, inspect and operate the Easement Facilities installed within the Easement Areas to carry out or avail itself of the rights and benefits of the Easements to perform the Purchase and Sales Agreements and to meet the Operational Purposes of the Project. Such right to enter the Easement Areas shall include being given reasonable access to the Easement Areas, including appropriate staging and laydown areas to enable the GRANTEE to carry out its work with respect to the Easement Facilities from time


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to time, upon reasonable advance notice to GRANTORS by GRANTEE, and GRANTORS shall not interfere with GRANTEE's right to such reasonable access at all times. GRANTEE's entry upon the Easement Areas, and all work performed by or for GRANTEE in the construction, installation, maintenance, repair, replacement, alteration, inspection, operation and/or removal of the Easement Facilities or Connecting Facilities, shall be at such times and in such manner as will not cause any unapproved interruption of, or materially interfere with, the operations of GRANTORS, and shall be subject to such further conditions as may be contained in any of the Companion Agreements and in other written agreements between the GRANTOR parties and GRANTEE from time to time. GRANTORS will not unreasonably withhold their approval of a limited number of pre-approved interruptions.


SECTION 2.3. OBLIGATION OF GRANTEE WITH RESPECT TO EASEMENT FACILITIES AND AREAS. GRANTEE shall be and remain responsible for (i) the construction and installation of all Easement Facilities in accordance with approved plans therefor and such approval shall not be unreasonably withheld by GRANTORS; (ii) the continuing maintenance, repair, replacement, restoration, operation and protection of the Easement Facilities and the Easement Areas in good condition sufficient to serve the purposes for which the Easements have been granted, in compliance with Governmental Requirements, and in a condition which does not pose a threat to the safety of persons, property, operations and product on the Rouge Complex Land, and (iii) except as specifically provided for otherwise herein, the continuing maintenance in effect of any and all licenses, permits, authorizations and approvals necessary for the use and operation of the Easement Areas, and the Easement Facilities and for the carrying out of the Purchase and Sales Agreements and the meeting of the Operational Purposes of the Project, including but not limited to accessways over Off-Site Property, the Connecting Facilities and the Easement Facilities. In all cases, except where in the reasonable judgment of any of the GRANTORS conditions within an Easement Area pose an imminent threat to persons, property, operations or product within the Rouge Complex Land, GRANTEE shall be given notice of GRANTEE's failure to comply with its obligations under this Section 2.3, and given an opportunity to promptly cure such failure reasonable under the circumstances. In the case of GRANTEE's failure to cure the non-compliance with the obligations under this Section 2.3 after notice and opportunity to cure required under the circumstances, then after notification to GRANTEE by any means practicable, GRANTORS or any of them may undertake and carry out any maintenance or other actions it reasonably deems necessary to place, keep and maintain the Easement Areas and Easement Facilities in the condition required by this Section 2.3, and GRANTEE shall reimburse such GRANTOR(s) for the cost thereof promptly upon demand.


ARTICLE III
CIRCULATING WATER EASEMENT


SECTION 3.1. CIRCULATING WATER EASEMENT. For the purpose of providing circulating water, ROUGE and FORD hereby grant to GRANTEE, its successors and assigns, without limitation except as herein provided and without charge, a nonexclusive easement and right of way upon,


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over, under, across and within the path and area described in Exhibit E (the "CIRCULATING WATER EASEMENT AREA") for (a) the purpose of obtaining Circulating Water for use in the Project and in that portion of the Expanded Facility identified in Section 1.04(a) of the Lease, from the Point of Interconnection on the Powerhouse Land, with the Point of Interconnection being specifically located at TP-01 as described in the Interconnection Matrix which is attached hereto as Exhibit A and incorporated herein by this reference (the "Interconnection Matrix"), through a circulating water supply system to be constructed within the Circulating Water Easement Area by GRANTEE; and (b) return of Circulating Water through a circulating water discharge system to be constructed within the Circulating Water Easement Area by GRANTEE, and connected to existing ROUGE Circulating Water discharge lines on the Rouge Complex Land (the "CIRCULATING WATER EASEMENT").


The terms and conditions of this Circulating Water Easement shall be as follows, in addition to such general terms and conditions in this Easement Agreement affecting all Easements:


SECTION 3.1.1. SUPPLY OF WATER. Circulating Water is supplied to the Rouge Complex Land by means of a tunnel from the Rouge River to a surge chamber station on the Powerhouse Land identified as TP-01 on the Interconnection Matrix . The location of the ROUGE Circulating Water supply, collection, distribution and discharge system is fully described in engineering drawings filed in the Offices of Rouge Steel Company, Rouge Office Building (3001 Miller Road, Dearborn, Michigan). The agreement of the GRANTORS regarding availability and discharge of Circulating Water is contained in Section 4.05 of the Electricity Sales Agreement as modified by the terms of this Easement Agreement.


The Circulating Water Easement is subject to all of the terms and conditions of that certain agreement dated May 14, 1929 and amended by Agreement dated February 19, 1935 between FORD and the City of Detroit, a copy of which is attached hereto as Exhibit F (the "CITY WATER SUPPLY AGREEMENT"). ROUGE and FORD agree not to terminate the City Water Supply Agreement during the existence of this Easement Agreement.


3.1.2. DISCHARGE OF CIRCULATING WATER. GRANTEE shall have the right to discharge Circulating Water from the Project and that portion of the Expanded Facility identified in Section 1.04(a) of the Lease, which at the point of entry into the existing discharge lines on the Rouge Complex Land meets all permit specifications from time to time mandated for discharge into public waters: (i) through ROUGE Outfall 004B (the "Spillway"), presently permitted by the Department of Environmental Quality of the State of Michigan under the National Pollutant Discharge Elimination System pursuant to the Federal Water Pollution Control Act, as amended, and the Michigan Water Resources Act, as amended, and held by ROUGE under NPDES Permit No. MI0043524, which is attached hereto as Exhibit G; (ii) through P&UO's Outfall 006 (the "Tailrace"), presently permitted by the Department of Environmental Quality of the State of Michigan under the National Pollutant Discharge Elimination System pursuant to the Federal Water Pollution Control Act, as amended, and the Michigan Water Resources Act, as amended,


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and currently held by P&UO under NPDES Permit No. MI0050903 (such permit number to be transferred to GRANTEE by P&UO and re-issued to GRANTEE as MI0056235 and Outfall 006 to be transferred to ROUGE by P&UO and subsequently reassigned by ROUGE to one of its existing permits); and (iii) through Outfall 005 to be permitted, along with any other outfalls utilized exclusively by GRANTEE, by GRANTEE by the Department of Environmental Quality of the State of Michigan under the National Pollutant Discharge Elimination System pursuant to the Federal Water Pollution Control Act, as amended, and the Michigan Water Resources Act, as amended, under NPDES Permit No. MI0050903 after transfer of this permit number to GRANTEE by P&UO which permit shall be re-issued to GRANTEE as MI0056235(hereinafter referred to as the "DIG Permit") and (the permits referenced in (i) through (iii) above hereinafter referred to collectively as the "Permits"). GRANTEE will also comply with reasonable operating requirements and discharge limitations of GRANTORS with respect to the integrity of the ROUGE Circulating Water system.


Without limiting the generality of the foregoing, GRANTEE: (i) will not discharge Circulating Water which would cause a violation of existing or future Permits limits or any limits contained in any other current or future permits held by FORD or ROUGE (the "Other Permits") laws, rules and regulations (whether local, state or federal) governing such discharges; (ii) will not discharge Circulating Water in excess of 173,700 gallons/minute; and (iii) at such time as the water temperature at the Circulating Water pump intake is less than 75 degrees Fahrenheit, will not discharge Circulating Water at the discharge point of the existing surge chamber that has a temperature greater than 85 degrees Fahrenheit; provided, however, that GRANTEE will not, at such time as the water temperature at the Circulating Water pump intake is equal to or greater than 75 degrees Fahrenheit, discharge Circulating Water at the discharge point of the existing surge chamber that has a temperature differential from the Circulating Water pump intake greater than 10 degrees Fahrenheit; provided FORD/ROUGE does not modify or agree to modifications of such limits without GRANTEE's prior consent, which consent shall not be unreasonably withheld. All reasonable costs incurred by GRANTORS, if any, to effect or maintain the circulating water temperature as referenced above shall be reimbursed by GRANTEE within 30 days of its receipt of GRANTORS' invoice for such costs.


GRANTEE shall provide, maintain and operate upon the Leased Premises such water treatment processes and facilities as are required to treat its Circulating Water to meet the discharge specifications of the Permits and the Other Permits, as applicable, and the operating requirements and discharge limitations of GRANTORS with respect to Circulating Water being discharged into the ROUGE Circulating Water system. GRANTEE shall at all times maintain and operate such processes and facilities in full and unimpaired operational ability, and provide monitoring and sampling at GRANTEE's discharge point(s) and control of its water quality and quantity in accordance with the Permits, the Other Permits and any future regulations or amendments, with reports maintained by GRANTEE for inspection by GRANTORS and regulatory authorities from time to time.


GRANTEE shall develop a "flow control plan", including gate modifications, to


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ensure that the discharges of its Circulating Water as contemplated in this Agreement do not cause flooding within the Rouge Complex properties, including, but not limited to, the screen house, powerhouse and the turbo blower room basement. All costs of developing and implementing the flow control plan, including all costs of equipment procurement, construction and maintenance of the equipment installed by or on behalf of GRANTEE, shall be at GRANTEE's sole cost and expense. FORD and ROUGE shall be responsible for operating the equipment needed to actualize the flow control plan and the normal operating costs attendant therewith. GRANTEE shall notify GRANTORS promptly of any release of its water not in compliance with required conditions. GRANTORS shall provide GRANTEE with copies of all relevant permit applications, renewals, modifications, monitoring reports, notifications, letters/notices of violation and all other Permit related correspondence with local, state and federal regulatory authorities relating to the Circulating Water system.


SECTION 3.1.3. GRANTORS AGREEMENT. ROUGE and FORD shall take all reasonable means to protect the Easement Facilities against damage by reason of conduct upon and within the Circulating Water Easement Area lying within the Rouge Complex Land.


SECTION 3.1.4. TERM. The term of this Circulating Water Easement Agreement shall continue until GRANTEE ceases to operate the Project pursuant to the Lease, or GRANTEE is not permitted to discharge water pursuant to the Permits or the Other Permits, whichever is the earlier to oc ...