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East Tract Ground Lease Agreement

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Exhibit 10.1






EAST TRACT GROUND LEASE AGREEMENT



BETWEEN



EDWARD J. STELLA, JR.



LANDLORD



AND



ATLANTIC GREEN POWER CORPORATION



TENANT















*NOTE: Certain portions of this exhibit have been omitted based upon a request for confidential treatment. The non-public information has been filed separately with the Securities and Exchange Commission.














TABLE OF CONTENTS





Page


ARTICLE 1 - DEMISE, PREMISES, TERM, RENT 1
1.1. Demise and Premises 1
1.2. Term 2
1.3. Rent and Payments. 2
1.4. Additional Rent 3
1.5. Net Lease 4
1.6. Subdivision 4
ARTICLE 2 - USE 4
ARTICLE 3 - TAXES, UTILITIES AND ASSESSMENTS 4
ARTICLE 4 - ARTICLE - ALTERATIONS AND IMPROVEMENTS 5
ARTICLE 5 - SURRENDER AT EXPIRATION 5
ARTICLE 6 - INSURANCE 5
6.1. Casualty and Liability Insurance 5
6.2. Insurers 5
6.3. Insureds 6
6.4. Notice of Cancellation 6
ARTICLE 7 - PERFORMANCE OF TENANT'S COVENANTS 6
ARTICLE 8 - REPAIRS AND MAINTENANCE 6
8.1. Repairs to Premises 6
8.2. Waste 7
8.3. Tenant's Property 7
ARTICLE 9 - COMPLIANCE WITH LAWS AND ORDINANCES 7
9.1. Compliance with Laws 7
9.2. Compliance with Insurance Requirements 7
ARTICLE 10 - REGULATORY APPROVALS 7
ARTICLE 11 - INDEMNIFICATION 8
ARTICLE 12 - REPRESENTATIONS AND WARRANTIES 8
12.1. Landlord's Representation 8
12.2. Tenant's Representations 9
ARTICLE 13 - DEFAULT BY TENANT 9
13.1. Event of Default 9
13.2. Landlord's Remedies for Tenant's Default 9
13.3. Remedies Not Exclusive 11
13.4. Waiver of Performance 11
ARTICLE 14 - CONDEMNATION 11
ARTICLE 15 - NOTICES 12
ARTICLE 16 - QUIET ENJOYMENT 13
ARTICLE 17 - SUBORDINATION AND ATTORNMENT 13
ARTICLE 18 - ASSIGNMENT AND SUBLETTING 13








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ARTICLE 19 - MISCELLANEOUS PROVISIONS 14
19.1. Integration; Entire Agreement 14
19.2. Severability 14
19.3. Headings 14
19.4. Successors and Assigns 14
19.5. Time of the Essence 14
19.6. Governing Law 14
19.7. Recordation 14
19.8. Counterparts 14
19.9. Brokers 15
ARTICLE 20 - PURCHASE OPTION AND RIGHT OF FIRST REFUSAL 15
20.1. Purchase Option 15
20.2. Right of First Refusal 15




EXHIBIT A - Description of East Tract Stella Property and Premises







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EAST TRACT GROUND LEASE AGREEMENT



THIS EAST TRACT GROUND LEASE AGREEMENT (the " Lease ") made and executed as of this 6th day of August, 2010 (the " Effective Date "), by and between EDWARD J. STELLA, JR., an individual (" Landlord "), and ATLANTIC GREEN POWER CORPORATION, a New Jersey corporation (" Tenant ").



W I T N E S S E T H:



WHEREAS, Landlord is the owner of certain land located in Upper Pittsgrove Township, Salem County, New Jersey identified on the Upper Pittsgrove Municipal Tax Map as Block 40, Lot 26 and Block 55, Lot 16, known as the East Tract, as more particularly described on Exhibit "A" attached hereto and made a part hereof (hereinafter, the "East Tract Stella Property ");



WHEREAS, Landlord leased to Tenant and Tenant leased from Landlord a portion of the Stella Property consisting of up to approximately 700 acres, subject to adjustment (the " Original Premises "), in accordance with the terms and conditions of a Ground Lease Agreement, dated November 30, 2009 (the " Original Lease Agreement ");



WHEREAS, since the time the Original Lease Agreement was negotiated and made effective, new facts and circumstances have developed and have been learned about development of the System and conditions of the Regulatory Approvals;



WHEREAS, Landlord now desires to lease to Tenant and Tenant desires to lease from Landlord a portion of the East Tract Stella Property as described on Exhibit A (the " Premises "), in accordance with the terms and conditions and for the purposes herein set forth;



WHEREAS, Landlord and Tenant wish to amend and restate the terms of the Original Lease in the form of this East Tract Lease and a separate West Tract Lease;



WHEREAS, Landlord shall continue to own, free of this Lease, that portion of the East Tract Stella Property that is not part of the Premises (the " Excluded Property ") which is cross-hatched on Exhibit "A".



NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:







ARTICLE 1 - DEMISE, PREMISES, TERM, RENT



1.1. Demise and Premises . Landlord does hereby demise and let unto Tenant, and Tenant does lease and take from Landlord, the Premises, for the term and upon the covenants, terms and conditions hereinafter set forth. The Excluded Property shall not be part of the Premises. The parties acknowledge and agree that the Premises are inclusive of any buffer areas, areas used for utilities servicing the System (hereinafter defined) wetlands, transition areas, and/or setbacks imposed in connection with the approvals for the System and that all such areas, and/or s etbacks are a part of the Premises.







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1.2. Term . (a) This Lease shall be effective from November 30, 2009, the Effective Date of the Original Lease Agreement. The initial Term of the Lease shall run for a period of twenty-five (25) years commencing on the first day of the calendar month following the Rent Commencement Date (defined in Section 1.3(a)), subject to the renewal options described below.



(b) Provided Tenant is not in default of any of the terms of the Lease, beyond any applicable notice and cure periods, Tenant is hereby granted the option to extend the Term beyond the original twenty-five (25) years for four (4) additional successive periods of five (5) years each on the same terms and conditions as contained in this Lease. The options shall be deemed automatically exercised without any action on Tenant's behalf unless Tenant shall provide Landlord notice of termination of this Lease no later than one (1) year prior to the end of the initial Term or the extended Term period then ending.



1.3. Rent and Payments .



(a) The base rent (" Base Rent ") for the Term, shall be as follows: Based on 130 acres at [ ]* per year, paid on a monthly basis, phased-in as each ten (10) acre increment of the Premises begins producing electricity. Base Rent shall be phased in on a pro-rata basis as any portion of the Premises for which solar panels are approved (a " Panel Area ") begins producing electricity. Base Rent shall be payable in accordance with a formu la the numerator of which shall be ten (10), the denominator shall be 90 (representing the number of total acres in all Panel Areas), the result of which is multiplied by [ ].* Tenant shall provide written notice to Landlord as to the number of acres (but always in at least ten (10) acre increments) for which construction is completed and electricity is being generated (each, a " Production Notice "). The date of the first Production Notice is the ? Rent Commencement Date ." If the Rent Commencement Date occurs on a day other than the beginning of a calendar month, the Base Rent for such partial month shall be prorated. Notwithstanding the above, Tenant shall be obligated to pay Base Rent on the entirety of the Premise s no later than three (3) years following November 30, 2009, regardless of the status of construction, status of Regulatory Approvals and/or generation of electricity. If any installment of Base Rent due under this Lease is not paid within ten (10) days of the time and place and in the manner specified, Landlord, in addition to other available remedies, shall be entitled to receive a large charge fee of five percent (5%) of such payment, which Landlord and Tenant agree are liquidated damages (and not a penalty) for costs incurred by Landlord as a result of such late payment. The parties acknowledge and agree that the Premises may not in fact be 130 acres, but have agreed that Base Rent will be ultimately paid on a total of 130 acres, even though the acreage of the Premises as depicted on Exhibit A may be different.



(b) Tenant shall pay to Landlord the following sums:



(i) [ ]* to be paid immediately following issuance of Upper Pittsgrove construction permits to construct any portion of the System on any portion of the Premises (the " Construction Permits ") and the sending for recording the Deed of Easement between Landlord and the Township of Upper Pittsgrove restricting the use and development of East Tract Stella Property, consisting of approximately 174 acres and which is a condition of a Regulatory Approval (the " Deed of Easement "), which Deed of Easement Landlord shall execute and deliver to Tenant no later than immediately prior to issuance of the Construction Permits;







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(ii) [ ]* to be paid upon recording of the Deed of Easement; and



(iii) [ ]* per megawatt of power generated by the System on the Premises, as each megawatt comes on line and is generating electricity, up to an amount of [ ]* regardless of the amount of power ultimately generated by the System, provided however that the total amount of [ ],* in accordance with subsections (b)(i), (ii) and (iii) shall be paid to Landlord no lat er than nine (9) months from the date of issuance of the Construction Permits.



The payment obligations described in (i) ? (iii) are collectively defined as " Other Payments ". It is intended that Landlord receive a total of [ ]* under this subsection as payment for the Deed of Easement regardless of the amount of panels approved or ultimately erected and/or the quantity of electricity generated by the System. If the Other Payments due hereunder are not paid within ten (10) days of the time and at the place and in the manner specified, then Landlord, in addition to other available remedies, shall be entitled to receive a large charge fee of five percent (5%) of such payment, which Landlord and Tenant agree are liquidated damages (and not a penalty) for costs incurred by Landlord as a result of such late payment.



(c) Tenant shall be responsible to compensate Landlord for the loss of farming contract revenue due to this Lease. Landlord shall provide to Tenant a schedule of his farming leases, including a description of the term of the lease, the rental income and the types of crops. Tenant shall advise in writing which leases should be terminated by Landlord and at which times. Tenant shall pay Landlord for the lost rents as a result of termination of each farming lease (the " Development Fee "). The Development Fee shall not exceed [  60; ]* in any year. Tenant shall only be obligated to pay Development Fees until Tenant is obligated to commence the payment of Base Rent.



(d) All Base Rent, Additional Rent and the amounts payable by Tenant to Landlord under the terms of this Lease shall be received by Landlord on or before the due date, at the office of Landlord set forth herein in Article 15 or at such other place or places as Landlord shall from time to time designate by written notice to Tenant, without notice or prior demand therefor, and without any deduction or offset of any amount for any reason whatsoever, except as provided in this Lease.



1.4. Additional Rent . All sums in addition to Base Rent which Tenant assumes or agrees to pay pursuant to this Lease shall constitute and be treated as " Additional Rent ", and, in the event of any non-payment thereof, Landlord shall have all the rights and remedies provided for herein or by law in the case of non-payment of rent or of a breach of condition. For purposes of this Lease, the term " Rent " shall includ e Base Rent and Additional Rent.







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1.5. Net Lease . Except as expressly set forth herein, it is the parties' intention that the Base Rent and Additional Rent herein specified shall be net, net, net to the Landlord in each lease year, that all costs, property taxes, rollback taxes, special taxes, maintenance costs, assessments, added assessments, utility costs, insurance costs, expenses and obligations of every kind relating to the Tenant ?s use and occupancy of the Premises which may arise during the term of this Lease shall be paid by Tenant and that Landlord shall be indemnified by Tenant against any such costs, expenses and obligations.



1.6. Subdivision . In the event that Tenant's use of the Premises or application for the Regulatory Approvals calls for a subdivision of the Premises from the East Tract Stella Property, Tenant shall cause such subdivision to be completed at its own sole cost and expense, and Landlord shall bear no costs associated with subdivision(s). In the event Landlord desires that any portion of the East Tract Stella Property be subdivided, Landlord may cause such subdivision to be completed at its sole cost and expense and Tenant shall bear no costs associated with subdivision(s). Subject to modification of the Premises as a result of the Regulatory Approvals, no subdivision may result in the amount of Premises being altered without the consent of both parties. The parties shall reasonably cooperate with one another to cause subdivision approval to be granted, if requested.



ARTICLE 2 - USE



The Premises shall be used for the development and operation of a renewable energy system and related activities, as determined by Tenant and in accordance with the Regulatory Approvals (the " System "). Landlord and his current lessees reserve the right to continue farming operations on the portions of the Premises for which Tenant is not paying Base Rent and for which no Development Fee has been paid. The parties shall cooperate for an orderly transition from farming to development activities through a written schedule. Landlord shall have the non-exclusive right of access, including ingress, egress and regress through the Premises to the East Tract Stella Property. Such access rights may not be used to interfere with T enant's operations. All components of the System and any personal property used by Tenant at the Premises are and shall be the sole and exclusive property of Tenant or its agents.



ARTICLE 3 - TAXES, UTILITIES AND ASSESSMENTS



Tenant shall use commercially reasonable efforts to be separately billed for and shall pay before any interest or penalty shall accrue thereon, all real estate taxes and assessments and special assessments (" Taxes ") and all charges for gas, electricity, telephone and communication services and other utility services and all connection fees incurred with respect to any such services used, rendered or consumed upon the Premises during the Term hereof (collectively " Impositions "). If separate tax bills are not able to be generated, the parties will cooperate, including with the municipal tax assessor, to pro-rate taxes for tax lots that include Excluded Property. Tenant shall b e responsible for the payment of all Taxes on the Premises beginning on the earlier of: (i) the Rent Commencement Date; and (ii) the date the real property taxes at the Premises are increased as a result of Tenant's development activities. Prior to that time, Landlord shall be responsible for the payment of Taxes for the Premises. Tenant shall be responsible for any Impositions in addition to being responsible for all roll-back taxes resulting from cessation of farmland assessments due to Tenant's use of the Premises regardless of the date of any new assessment resulting from Tenant ?s use. Tenant shall have sole control over the negotiation of the assessment for the Premises and the prosecution and defense of any tax appeals for the Premises.







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ARTICLE 4 - ARTICLE - ALTERATIONS AND IMPROVEMENTS



Tenant may construct, erect, install or demolish any buildings, structures or other improvements in, on or under the Premises, may make any other alterations or improvements to the Premises and may clear any trees or shrubbery and may store soil or materials on the Premises. In the event the installation of the System requires the removal of topsoil from the Premises, said to
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