EXHIBIT 10.6
 
EXECUTION VERSION
 

 
MARTOM PROPERTIES, LLC, LESSOR
GRIFFIN INDUSTRIES, INC., LESSEE
BUTLER, PENDLETON COUNTY, KENTUCKY
 
GROUND LEASE
 
THIS GROUND LEASE (this “Lease”) is entered into effective as of December 17,
2010, by and between MARTOM PROPERTIES, LLC, a Kentucky Limited Liability
Company (“Lessor”) and GRIFFIN INDUSTRIES, INC., a Kentucky corporation
(“Lessee”), as follows:
 
1.    Leased Premises.  Lessor hereby leases to Lessee the premises located in
Pendleton County, Kentucky described in Exhibit A attached hereto.  All
buildings and other improvements and fixtures located thereon as of the date
hereof and from time to time during the term of this Lease are the property of
Lessee and shall remain the property of Lessee throughout the term of this
Lease.  This Lease is a ground lease.
 
2.    Term.
 
2.1 The initial term of this Lease shall be 30 years, commencing December 17,
2010 and ending December 16, 2040.
 
2.2 Lessee shall have the option to renew this Lease for 2 additional terms of
10 years each, the first commencing upon the expiration of the initial term, the
second commencing upon the expiration of the first additional term, in each case
by giving Lessor notice of exercise of the option to renew not later than 120
days prior to the end of the immediately preceding term; provided, however, that
Lessee’s exercise of such renewal options shall not be effective to renew this
Lease if any Event of Default, as defined in Section 14.1, exists and is
continuing at the time the renewal notice is given or at the commencement of the
renewal term. The renewal terms shall be upon the same terms and conditions as
are applicable to the initial term, except that the rent shall be as set forth
in Section 3.2.
 
3.    Rent.
 
3.1 Lessee shall pay Lessor as rent during the first 60 months of the initial
term the sum of $2,500.00 per month, the first installment to be paid on or
before December 17, 2010 and the remaining 59 installments to be paid serially
on the first day of each of the following 59 months in advance.
 
3.2 The rent for each subsequent 60-month period during the initial and each
renewal term shall be the rent for the immediately preceding 60-month period,
increased by the percentage by which the Consumer Price Index (the “CPI”, as
hereinafter defined) reported for the first month of the applicable subsequent
60-month period is higher than the CPI reported for the first month of the
immediately preceding 60-month period.  The “CPI” shall mean the Consumer Price
and Index as compiled and published by the Bureau of Labor Statistics of the
United States Department of Labor (All items U.S. - CPI-W.  All cities average
(1982-1984 = 100)), or the most comparable economic statistics indicator then
being published.  If the CPI for the first month of any applicable 60-month
period has not been published by the first day of such period, Lessee shall
continue to pay the monthly rent that was in effect during the immediately prior
60-month period on a temporary basis until such CPI is published, at which time
Lessee
 

 
 

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shall pay Lessor the difference, if any, between such new rent and the monthly
rent Lessee actually paid for each month during such interim period, and Lessee
shall thereafter pay the full amount of the new monthly rent on a monthly basis.
 
4.    Use of Premises.
 
4.1 Lessee shall use and occupy the Leased Premises for the purpose of a bakery
by-products processing plant, and for associated parking, storage,
administrative uses, including historical uses made by Lessee on the Leased
Premises at Lessee’s discretion (provided Lessee shall not be required to
utilize the Leased Premises for such uses), including without limitation, land
management for hunting purposes, wildlife management, hunting, farming, company
excursions and events, and for other uses as may be desired by Lessee for the
operation of its business and for all normal purposes related thereto.  Lessee
will not use the Leased Premises for any other purpose without the prior written
consent of Lessor, although Lessee may remove any improvements on the Leased
Premises at any time and/or cease operations on the Leased Premises as Lessee
determines.
 
4.2 Lessee shall use and occupy the Leased Premises in accordance with
applicable laws, and shall not permit any use of the Leased Premises that would
(i) constitute waste or a nuisance, (ii) increase Lessor’s risk of loss or
damage to the Leased Premises, (iii) increase the premiums for insurance
maintained by Lessor on the Leased Premises over those which would apply to the
normal commercial use of the Leased Premises without paying the difference
caused by any change in use, or (iv) cause a cancellation of any policy of
casualty, public liability or other insurance on the Leased Premises by the
carrier or carriers then being used.
 
4.3 Upon the termination of this Lease, Lessee will peacefully and quietly
surrender possession of the Leased Premises to Lessor and deliver the Leased
Premises, together with all improvements, fixtures and appurtenances, except
trade fixtures and equipment removed by Lessee pursuant to Section 5.2, in as
good order and condition as when entered upon, except for ordinary wear and tear
from normal use and damage by fire or other casualty not caused by Lessee, and
natural obsolescence.
 
4.4 Lessee shall comply promptly with all laws, ordinances, regulations, and
orders of all governmental authorities, including, without limitation, those
relating to protection of health and the environment and to the treatment,
storage, disposal and discharge of hazardous substances and solid waste (as
those terms are defined in the applicable laws, rules, regulations and orders),
and the requirements of any insurance company or insurance inspection bureau
that are applicable to the Leased Premises or to Lessee’s use thereof.
 
5.    Alterations and Liens.
 
5.1 Lessee shall have the right to make any alterations, additions or
improvements to the Leased Premises as deemed necessary or desirable by Lessee
for the use of the Leased Premises as permitted in Section 4 without the prior
written consent of Lessor, provided, however, that (i) Lessee shall give not
less than 20 days prior written notice to Lessor of the alterations, additions
or improvements to be made, and shall allow Lessor the opportunity to file a
notice of non-responsibility for the construction thereof.  In addition, Lessee
shall
 

 
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obtain builder’s risk insurance for any such construction for the benefit of
Lessee and Lessor.  Lessee shall obtain waivers of liens from all contractors
upon completion of construction.  Upon termination of this Lease, all additions,
alterations or improvements (excluding property which Lessee has the right to
remove under Section 5.2) shall become and be Lessor’s property without any
obligation of Lessor to compensate or otherwise credit Lessee
therefor.  Notwithstanding the foregoing, Lessee shall have the right to
demolish any improvements located on the Leased Premises that Lessee deems are
not necessary for Lessee’s business operations from time to time, without any
obligation of Lessee to compensate or otherwise credit Lessor therefor.  Unless
agreed otherwise in writing between the parties, all such alterations, additions
and improvements located on the Leased Premises from time to time are and shall
remain the property of Lessee for all purposes hereunder during the term of the
Lease.
 
5.2 Lessee shall have the right to install in and on the Leased Premises any
trade fixtures, equipment and temporary or nonstructural partitions and
facilities which Lessee deems necessary or desirable for the use of the Leased
Premises as permitted in Section 4 and to remove the same from time to time
during the term of this Lease.  If Lessee fails to remove any of its trade
fixtures or equipment within 30 days following the expiration or termination of
this Lease, Lessee will be deemed to have conveyed such items to Lessor without
any obligation of Lessor for compensation or credit to Lessee for the value
thereof; provided, however, that if Lessor elects to remove such items from the
Leased Premises within such 30-day period, Lessee shall be responsible and shall
promptly pay or reimburse Lessor for the cost of such removal and for all costs
of repairing any damage to the Leased Premises caused by such removal.  Upon the
termination of this Lease, Lessee will also remove any partitions or other
facilities installed by Lessee in the Leased Premises which Lessor requests
Lessee to remove.  Such removals by Lessee shall be solely at the expense of
Lessee and shall be done in a manner reasonably satisfactory to Lessor, and
Lessee shall be responsible and promptly pay or reimburse Lessor for all costs
of repairing any damage to the Leased Premises caused by such removals.
 
5.3 Lessee shall, at its expense, remove any liens filed against the Leased
Premises or Lessee’s interest therein in connection with alterations, additions,
repairs, maintenance, improvements or other actions by Lessee or with respect to
any obligation or liability of Lessee, before the date upon which any such lien
would be foreclosable under law.  Lessee may contest any such lien by lawful
procedures provided that Lessee shall pay, or cause the removal by bond or
otherwise, as permitted by applicable law, such lien before the date upon which
any such lien would be foreclosable under law.  In the event Lessee fails to
remove any such lien, Lessor, in addition to its remedies under Section 14, may
at its sole discretion, remove such lien by paying such amount thereof or by
taking such other actions as may be necessary to release such lien, and Lessee
shall reimburse Lessor for all costs and expenses incurred by Lessor to remove
such lien promptly upon demand by Lessor.
 
6.    Utilities.  Lessee shall pay when due all charges for gas, electricity and
other power, water, sewage, waste removal, telephone and all other utility
services used or consumed by Lessee in connection with its use of the Leased
Premises.
 
7.    Maintenance and Repairs.
 
7.1 Lessee, at its expense, shall maintain all interior and exterior structural
and non-structural parts and areas of the Leased Premises in good repair and in
operating condition
 

 
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as needed or desired by Lessee for its business, and shall make all necessary
structural and nonstructural repairs and replacements thereto, including,
without limitation, all roofs, walls, foundations, partitions and windows, all
electrical, heating, ventilating, air conditioning, plumbing and other
facilities, systems and equipment which are now or hereafter in, on or part of
any buildings and other improvements now or hereafter located on the Leased
Premises and all grounds, driveways, parking areas and other exterior parts and
areas of the Leased Premises.  Lessee shall take such action as is necessary to
protect the Leased Premises from damage or premature wear, tear or depreciation
caused by its activities so that the Leased Premises shall function normally
throughout their normal useful lives.
 
7.2 In the event Lessee fails to make any repairs or to perform any maintenance
required under Section 7.1 within 30 days after Lessor gives Lessee notice
requesting the same, Lessor, in addition to its remedies under Section 14, may,
at its sole discretion, make such repairs and perform such maintenance for
Lessee’s account and at Lessee’s expense, and Lessee shall reimburse Lessor for
any and all costs and expenses incurred by Lessor in making such repairs and
performing such maintenance promptly upon demand by Lessor.
 
7.3           Notwithstanding the foregoing, Lessee may, at its option, at any
time demolish and/or remove any and all improvements located on the Leased
Premises as desired by Lessee for the operation of its business.
 
8.    Real Estate Taxes and Assessments.  Lessee shall reimburse Lessor for or,
at Lessor’s option, pay directly all real estate taxes, assessments and other
governmental charges applicable to the Leased Premises during the initial term
and, if renewed, the renewal term of this Lease.
 
9.    Damage or Destruction of Premises.  In the event any building or other
improvement on the Leased Premises is destroyed or damaged by fire, explosion or
other casualty, except damage or destruction caused by Lessor, Lessee will, at
its expense, make such repairs or replacements and do such rebuilding as are
necessary to restore the Leased Premises to their former condition and complete
such restoration with reasonable diligence; provided, however, that Lessee may,
in Lessee’s sole discretion, also elect not to replace any improvements so
damaged, and in such event shall remove the debris from the Leased Premises and
restore the land.
 
10.    Insurance.
 
10.1 Lessee, at its expense, will maintain (i) commercial general liability
insurance insuring Lessee and Lessor against liability for injuries to person or
property arising out of the occupancy or control of the Leased Premises with
minimum limits of $1,000,000 per occurrence; and (ii) standard “all risk”
insurance on the Leased Premises insuring Lessor and Lessee as their interests
appear and Lessee’s improvements, together with trade fixtures, equipment,
inventory and all other personal property of Lessee (“Lessee’s Contents”) in an
amount equal to not less than 100% of the replacement cost of the Lessee’s
improvements and Lessee’s Contents.
 

 
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10.2 All policies of insurance required to be maintained by Lessee pursuant to
Section 10.1 shall (i) be issued by insurers licensed to issue such policies in
the State of Kentucky and reasonably acceptable to Lessor, (ii) in the case of
liability insurance, be rated at least A by Best’s Key Rating Guide for Property
Liability; and (iii) provide that they may not be cancelled or materially
altered without 10 days prior written notice to Lessor.  Prior to occupying the
Leased Premises, upon each renewal of insurance and upon Lessor’s reasonable
request from time to time, Lessee will furnish Lessor with certificates of such
insurance and receipts or other proof of payment of the premiums thereon.
 
10.3 Lessor will not be liable to Lessee for business interruption or any
similar loss or damage occurring on the Leased Premises unless caused by the
gross negligence or willful misconduct of Lessor.
 
10.4 Except as limited in the next sentence, Lessor and Lessee each hereby
waives all rights that each of them has or may have under all policies of
insurance maintained by each of them covering any part of the Leased Premises or
the contents therein, including Lessee’s Contents, to subrogate the insurer to
the rights of the insured party to recover from the other party by reason of the
payment by the insurer of the insured party’s claim.  Lessor and Lessee will
each obtain and maintain throughout the term of the Lease a waiver of such
subrogation rights in all such policies of insurance; provided, however, that
such waiver of subrogation will not be required of either party with respect to
any policy of insurance if such waiver (i) is prohibited under the terms of such
policy or (ii) can only be obtained upon payment of an additional premium or
upon other conditions and the party to be benefited by such waiver declines to
pay such additional premium or to fulfill such other conditions at the
benefiting party’s expense.  In the event such waiver of subrogation cannot be
obtained, the party not able to obtain such waiver shall promptly notify the
other party of such event.
 
11.    Indemnity.  Except to the extent that Lessee is relieved of liability by
waiver of subrogation pursuant to Section 10.4, Lessee will indemnify and defend
Lessor and will hold Lessor harmless from and against all claims, demands and
damages for injuries to person or property and all other claims, demands, liens,
damages, fines or penalties of whatever nature or kind arising out of the use or
occupancy of the Leased Premises by or any act or omission of any of Lessee or
Lessee’s agents, employees, representatives, invitees, licensees, customers, or
anticipated trespassers in or on the Leased Premises, except for injury or
damage caused by Lessor’s, negligence or intentional act, or that of any of
Lessor’s members, agents, employees, representatives, or invitees.
 
12.    Lessor’s Right of Entry.  Lessor may enter the Leased Premises (i) at any
time upon telephonic notice to Lessee to attend to emergency conditions
involving imminent danger to person or property, (ii) upon 3 days advance
written notice for purposes related to safety or the preservation or protection
of the Leased Premises, (iii) upon 3 days advance written notice for the purpose
of inspecting the Leased Premises, to determine the compliance by Lessee with
the terms of this Lease, to exhibit the Leased Premises to prospective
purchasers, and, if Lessee has not exercised its option to renew this Lease,
during the last 4 months of the initial term, or, if Lessee has exercised its
option to renew, during the last 4 months of the renewal term of this Lease, to
exhibit the Leased Premises to prospective tenants.  Lessor shall schedule any
such visits in advance with Lessee so as to allow Lessee to accompany Lessor on
such visits, to
 

 
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minimize any disruption of Lessee’s operations, and to schedule such visits
outside operating hours as necessary and/or reasonably requested by Lessee.
 
13.    Restrictions on Assignment and Subletting. Lessee shall not assign this
Lease or sublease any part of the Leased Premises without Lessor’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed.  Except as provided herein, any assignment or sublease made without
Lessor’s prior written consent is void.  Notwithstanding Lessor’s consent
thereto, (i) no sublease or assignment shall release Lessee from any of its
obligations hereunder, and (ii) no sublessee or assignee shall have any right to
further assign its rights or sublease any part of the Leased Premises.  Any
transfer, sale or other disposition of ownership interests in Lessee or
reorganization of Lessee as a result of which Darling International Inc. no
longer has ultimate control of the Lessee, shall be deemed an assignment for
purposes of this Section 13.  Notwithstanding the foregoing, Lessee may, without
Lessor’s consent but upon not less than 30 days prior written notice to Lessor,
assign this Lease, grant possession of the Leased Premises, or sublet all or a
portion of the Leased Premises, to (i) any entity which controls, is controlled
by or is under common control with Lessee or which results from a merger or
consolidation with Lessee (each an “Affiliate”), or (ii) any entity other than
an Affiliate which acquires all or substantially all of the Lessee’s business
(an “Unrelated Purchaser”).  Upon any such assignment of this Lease to an
Affiliate, Lessee shall not be released from its obligations under this Lease
and shall remain liable hereunder.  Upon any such assignment of this Lease to an
Unrelated Purchaser, Lessee shall be released from all further liabilities and
obligations under this Lease arising from and after the date of such assignment
provided that (A) such assignee assumes in writing all of Lessee’s obligations
hereunder arising from and after the date of such assignment, (B) such assignee
has, in Lessor’s reasonable judgment, the reasonably sufficient financial
wherewithal to perform Lessee’s obligations under this Lease arising from and
after the date of such assignment, (C) Lessee cures any defaults existing under
this Lease as of the date of such assignment, and (D) if required by Lessor,
Lessor may impose a reasonable and market security deposit to be deposited by
any Unrelated Purchaser as a condition to the transfer of this Lease to an
Unrelated Purchaser.  For purposes hereof, “control” with respect to any entity
(I) means the power to direct the management and policies of such entity,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and (II) shall be present if a party has the direct or
indirect power to appoint or have elected more than 50% of the governing body of
such entity or has direct or indirect ownership of 50% or more of the voting
shares or securities of such entity.  Lessee shall not be released from
liability upon any sublease, license or grant of use to any Affiliate or
Unrelated Purchaser.  Notwithstanding anything to the contrary contained in this
Lease, Lessee shall have the right to grant deeds of trust, mortgages or other
conveyances of, or liens or encumbrances against or security interests in,
Lessee’s leasehold interest in the Leased Premises and the improvements, and, in
connection therewith, Lessor agrees to execute and deliver to the holder of any
such security instrument an agreement to provide to such holder written notice
of Lessee’s defaults under this Lease and an opportunity to cure such defaults,
provided any such holder or its designee has, in Lessor’s reasonable judgment,
the reasonably sufficient financial wherewithal to perform Lessee’s obligations
under this Lease arising from and after the date of such assignment (and
provides any security deposit reasonably required by Lessor), and cures any
defaults existing under this Lease as of the date of such assignment.
 

 
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14.    Events of Default; Remedies.
 
14.1 Each of the following shall constitute an Event of Default under this
Lease:
 
14.1.1 the rent or any other payment due to Lessor from Lessee hereunder, or any
part thereof, remains unpaid for 10 days after written notice is received by
Lessee of such nonpayment from Lessor;
 
14.1.2 Lessee’s interest herein is taken in execution or by other process of
law;
 
14.1.3 Lessee files or has filed against it a petition seeking an order for
relief on its behalf as a debtor or seeking reorganization, any receiver or
other fiduciary is appointed for the business and property of Lessee and any
such filing or appointment is not vacated within 120 days after filing;
 
14.1.4 Lessee makes an assignment for the benefit of Lessee’s creditors;
 
14.1.5 Lessee abandons the Leased Premises; or
 
14.1.6 Lessee fails to cure any other default in the performance or fulfillment
of the terms and conditions hereof within 30 days after Lessor gives Lessee
notice of such default; provided Lessee shall have a reasonable amount of time
to cure such default beyond such 30 days if Lessee commences to cure such
default within such 30-day period and thereafter proceed with reasonable
diligence and in good faith to cure such default.
 
14.2 Upon the occurrence of an Event of Default, Lessor may (i) re-enter and
repossess the Leased Premises and, without terminating this Lease, relet the
Leased Premises or any part of it for the account of Lessor or Lessee and apply
any rent collected by Lessor to amounts owed by Lessee to Lessor hereunder; or
(ii) terminate this Lease by giving notice of termination to Lessee and re-enter
and repossess the Leased Premises, such termination effective upon the giving of
notice.  In addition to any remedy granted to Lessor pursuant to this Section
14.2, Lessee shall remain liable to Lessor for all damages and injuries suffered
by Lessor as a result of such Event of Default.
 
14.3 Upon termination of this Lease, Lessee shall have no legal or equitable
interest in this Lease or the Leased Premises and shall immediately peacefully
and quietly surrender possession of the Leased Premises and remove its personal
property as provided in Sections 4.3 and 5.2.
 
14.4 In addition to the rights provided in Section 14.2, if either party fails
to make any payment of rent (as to Lessee) or any other amount due hereunder
within 10 days after receipt of demand therefor, the nonpaying party shall pay
interest on such amount at a rate equal to 3% per annum in excess of the prime
interest rate in effect from time to time as reported in the Wall Street
Journal, or the maximum lawful rate, whichever is less, until paid in full.
 
14.5 If Lessor breaches any covenant to be performed by it under this Lease,
Lessee, after notice to and demand upon Lessor, without waiving or releasing any
obligation
 

 
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hereunder, and in addition to all other remedies available at law to Lessee, may
(but shall be under no obligation at any time thereafter to) make such payment
or perform such act for the account and at the expense of Lessor.
 
15.    INTENTIONALLY DELETED.
 
16.    Waiver.  No waiver of any breach of any provision of this Lease shall be
construed to be a waiver of any succeeding breach of the same provision or a
waiver of any prior or subsequent breach of any other provision of this Lease,
and the acceptance of rent or other payment by Lessor or Lessee with knowledge
of a breach by the other party of any provision hereof shall not be deemed a
waiver of such breach.
 
17.    Hold Over.  If Lessee should hold over in possession after the expiration
of the initial lease term or, if renewed, after the expiration of the renewal
term, such holding over shall not extend the term or renew the Lease, but,
without impairing Lessor’s remedies, shall constitute a tenancy at will upon the
same terms and conditions as are set forth hereunder until terminated by Lessor
at any time by giving Lessee 30 days prior notice of termination or by Lessee at
the end of any month by giving Lessor not less than 30 days prior notice of
termination.  The rent for such period of holding over shall be 150% of the rent
in effect at the expiration of the Lease term and shall be calculated on a per
diem basis for any period of less than a full month.
 
18.    Mortgages and Subordination.  Lessor shall have the right from time to
time during the term of this Lease to make new and/or additional mortgages
covering the Leased Premises, and to refinance any mortgage, each of which shall
be prior in lien to the Lease and the rights and privileges of Lessee
hereunder.  Any such mortgage shall provide that so long as there shall be no
Event of Default on the part of Lessee hereunder, no person shall have the power
to impair, modify, abrogate, or in any way adversely affect the rights of Lessee
to the full enjoyment of the entire term hereof by virtue of the existence of
said indebtedness or mortgage, by reason of being the holder or owner of said
indebtedness or any part thereof or by reason of any proceeding instituted under
or pursuant to said mortgage, including foreclosure.
 
19.    Condemnation.  If (i) any part of the Leased Premises is taken by or sold
under threat of condemnation or eminent domain and (ii) such taking or sale
materially and adversely impairs Lessee’s use of the Leased Premises in Lessee’s
reasonable determination, Lessee may terminate this Lease as of the date of such
taking or sale.  Lessee may make a claim for compensation or award of damages
for such taking or sale as to any of its personal property, fixtures and
improvements so taken and for its relocation.
 
20.    Signs.  Lessee may install business signs on the Leased Premises for the
purpose of identifying the Leased Premises as Lessee’s place of business and for
directional and other normal informational purposes, as permitted by applicable
law.  The installation, maintenance, repair and replacement of any such signs
shall be the responsibility of Lessee, and Lessee shall be responsible for any
damage to person or property caused by the erection, maintenance or removal of
such signs.  Upon the termination of this Lease, Lessee shall remove said signs
and repair any damage caused by such removal.
 

 
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21.    Quiet Enjoyment.  Provided there shall be no Event of Default on the part
of Lessee that has occurred and is continuing, Lessee shall peaceably and
quietly occupy the Leased Premises, during the term hereof without any
hindrance, ejection or molestation by Lessor or any other person.
 
22.    Notices.  All notices required or permitted to be given hereunder shall
be in writing and shall be deemed to have been given (i) when personally
delivered to a principal or executive officer of the party to whom such notice
is directed as provided below, (ii) when sent by electronic facsimile to the fax
number listed below, for which the transmitting party has a confirmation or
other proof of receipt by the addressee, or (iii) 1 business day after having
been delivered to a national overnight delivery service with delivery charges
prepaid, or 2 business days after having been deposited in a U.S. Mail
depository, postage prepaid, for delivery by certified mail, return, receipt
requested, and addressed as follows until such time as either party notifies the
other of a change of address:
 
Lessor:
 
Martom Properties, LLC
3264 High Ridge Road
Taylor Mill, KY 41015
Attn: Martin W. Griffin
Fax No.: 859-572-2572
 
Lessee:
 
Griffin Industries, Inc.
4221 Alexandria Pike
Cold Spring, KY 41076-1897
Attn: Legal Department
Fax No.: 859-572-2572
 
with a copy to:
 
Darling International Inc.
251 O’Connor Ridge Boulevard, Suite 300
Irving, Texas 75038
Attn: General Counsel
Fax No.: 972-717-3062
 
23.    Estoppel Certificates.  At the request of either party, or its mortgagee
or secured party, the other party will execute, acknowledge and deliver to the
requesting party a certificate in recordable form stating whether (i) this Lease
is in full force and effect; (ii) this Lease has been amended in any respect,
and in such event, attaching a copy of such amendment; and (iii) any default
exists under this Lease to the certifying party’s knowledge, and if so,
specifying the nature of such default.
 
24.    Triple Net Lease.  This Lease is a “triple net” Lease, and except as
otherwise specifically provided herein, Lessee shall (i) pay all rent and all
other payments and charges required to be made by Lessee hereunder, (ii) pay and
be responsible for all costs, expenses,
 

 
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obligations, liabilities and acts necessary to and for the proper use,
operation, maintenance, care and occupancy of the Leased Premises, and (iii)
perform all of the other obligations and fulfill all of the other covenants and
conditions stipulated to be performed and fulfilled by Lessee hereunder without
notice or demand and free from any charges, taxes, assessments, claims, damages,
expenses, deductions, set-offs, counterclaims, abatements, suspensions or
defenses of any kind.
 
25.    Right of First Offer; Right of First Refusal.
 
25.1 Lessee shall have a right of first offer to purchase Lessor’s interest in
the Leased Premises should Lessor decide to market or offer the Leased Premises
for sale.  Lessor shall first offer to sell the Leased Premises to Lessee at
Fair Market Value (defined below) by written notice to Lessee.  Lessee shall
have 20 days to respond by written notice if Lessee desires to acquire the
Leased Premises.  The sale shall be of the land and Lessor’s residual interest
in the improvements, free and clear of all monetary debts and obligations,
reversions, right of refusal and rights or options to purchase, with no other
encumbrances or restrictions on the land or improvements other than those in
existence as of the date of this Lease (except for any placed thereon with the
consent and approval of Lessee).  Otherwise, the purchase shall be “AS IS, WHERE
IS” by special warranty deed, with all faults and without representation as to
physical condition including without limitation environmental condition, and
subject to all matters of record.  Lessee shall pay for its own title insurance
coverage and any due diligence, real estate taxes, closing costs and other items
of expense related to the Leased Premises that are Lessee’s obligation to pay
hereunder.  “Fair Market Value” means the value of the land at the time of the
sale and Lessor’s residual interest in the improvements thereon at the time of
the expiration of this Lease.  If Lessor sends notice to Lessee of Lessor’s
election to sell the Leased Premises, Lessor shall include in such notice the
name of a person selected to act as appraiser on its behalf.  Within 10 days
after receipt of such notice, Lessee shall by notice to Lessor appoint a second
person as appraiser on its behalf.  The appraisers thus appointed, each of whom
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto) with at least 5 years’ experience in the State
of Kentucky appraising property similar to the Leased Premises, shall, within 40
days after the date of the Lessor’s original notice appointing the first
appraiser, proceed to appraise the Leased Premises to determine the Fair Market
Value thereof as of the relevant date; provided, however, that if only 1
appraiser shall have been so appointed (and Lessee shall have the right to
accept the appointment of Lessor’s appraiser for all purposes hereunder), then
the determination of such appraiser shall be final and binding upon the
parties.  If 2 appraisers are appointed and if the difference between the
amounts so determined does not exceed 5% of the greater of such amounts, then
the Fair Market Value shall be an amount equal to 50% of the sum of the amounts
so determined.  If the difference between the amounts so determined exceeds 5%
of the greater of such amounts, then such 2 appraisers shall have 20 days to
appoint a third appraiser.  If no such appraiser shall have been appointed
within such 20 days or within 90 days of the original request for a
determination of Fair Market Value, whichever is earlier, either Lessor or
Lessee may apply to any court having jurisdiction to have such appointment made
by such court.  Any appraiser appointed by the original appraisers or by such
court shall be instructed to determine the Fair Market Value or Fair Market
Rental within 30 days after appointment of such appraiser.  The determination of
the appraiser which differs most in the terms of dollar amount from the
determinations of the other 2 appraisers shall be excluded, and 50% of the sum
of the remaining 2 determinations shall be final and binding upon Lessor and
Lessee as the Fair Market Value.  This provision for
 

 
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determining by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by applicable
law.  Lessor and Lessee shall each pay the fees and expenses of the appraiser
appointed by it and each shall pay one-half of the fees and expenses of the
third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.  If Lessee fails to respond to Lessor’s first
notice within 20 days, or if Lessee rejects such offer within such 20 days, then
Lessor may proceed to offer, market and sell the Leased Premises, subject to
this Lease, to third parties.
 
25.2 Lessor may sell its interest in the Leased Premises in whole or in part
subject to this Lease; provided, however, that such right is subject to Lessor’s
grant to Lessee during the term of this Lease (including any renewals or
replacements hereof) of an exclusive right of first refusal (the “ROFR”) to
purchase the Leased Premises.  In the event Lessor receives an offer to purchase
the Leased Premises from any third party which Lessor is willing to accept,
Lessor shall first offer to Lessee the right to purchase the Leased Premises for
the same consideration and under the same terms and conditions as provided in
such offer.  Lessor shall promptly notify, in writing, Lessee of receipt of such
offer and provide Lessee a copy of all documents relating to or comprising such
offer.  Lessee shall have 30 days to review the offer.  Lessee shall notify
Lessor in writing on or before the expiration of such 30 days of Lessee’s
election to exercise its ROFR.  In the event Lessee exercises the ROFR, Lessee
and Lessor shall enter into a written agreement for the purchase of the Leased
Premises by Lessee upon the same terms and conditions contained in the
offer.  In the event Lessee fails to respond within such 30-day period to
Lessor’s notice, or if Lessee elects to refuse to exercise its ROFR with respect
to such offer in writing to Lessor, Lessor may sell the Leased Premises, subject
to the terms and conditions of this Lease, to the third party making such
offer.  A refusal or failure to exercise its ROFR with respect to any offer will
not exhaust or terminate the ROFR granted to Lessee in this Section 25.2, with
respect to other offers, whether or not the third party offer to purchase the
Leased Premises results in an actual sale of the Leased Premises or not, and any
third party purchasing the Leased Premises shall take the Leased Premises
subject to all terms and conditions of this Lease and the ROFR granted to Lessee
herein and shall submit any offers it may receive from third parties to purchase
the Leased Premises thereafter to Lessee as required in this Section 25.2.
 
26.    General.
 
26.1 This Lease shall be governed by and construed in accordance with the laws
of the Commonwealth of Kentucky.
 
26.2 This Lease constitutes the entire agreement between the parties and
supersedes all prior written and oral negotiations and understandings.
 
26.3 The captions contained in this Lease are for reference purposes only and
shall not be used for, relate to or affect the interpretation of any provision
hereof.
 
26.4 All of Lessor’s rights and remedies hereunder are cumulative and may be
exercised separately or concurrently.
 

 
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26.5 This Lease shall be binding upon and inure to the benefit of the respective
successors and assigns of each of the parties hereto; provided, however, that no
assignment by Lessee shall vest any rights or interests in the assignee except
as provided in Section 13.
 
26.6 The parties hereto will, at the request of either party, execute a
Memorandum of Lease to be recorded at the expense of the requesting party.
 
27.    Joint Hunting Uses.  Notwithstanding the exclusive provisions of this
Lease, the Lessee agrees, subject to the terms of this Section 27, to allow the
Lessor to have limited access to the Leased Premises for hunting purposes, as
follows:
 
27.1 All hunting must be during hunting season;
 
27.2 No-one may hunt who does not have a proper license;
 
27.3 No hunting may be done within 1000 feet of the Lessee’s plant operations;
 
27.4 Lessor and Lessee, to the extent permits are limited, shall cooperate in
the sharing of permits;
 
27.5 Lessor must maintain insurance in form and amount reasonably satisfactory
to cover Lessor’s hunting uses and that of Lessor’s hunter invitees;
 
27.6 All hunting shall be scheduled in advance with Lessee to ensure, and no
hunting may be done by any person without advance scheduling and approval;
 
27.7 No hunting shall be done on any day the Leased Premises is being used for
Lessee’s company excursions or events;
 
27.8 All hunters must be identified in advance and Lessor must obtain waivers
and releases in form and substance satisfactory to Lessee;
 
27.9 All hunters must agree to abide by safety rules and hunting restrictions
promulgated by Lessee, and Lessee may bar any hunter violating any such rules
and restrictions;
 
27.10 Lessor acknowledges and agrees that Lessor shall use the Leased Premises
as permitted hereunder for hunting purposes solely at Lessor’s risk, and Lessor
shall indemnify and defend Lessee and will hold Lessee harmless from and against
all claims, demands and damages for injuries to person or property and all other
claims, demands, liens, damages, fines or penalties of whatever nature or kind
arising out of the use or occupancy of the Leased Premises by or any act or
omission of any of Lessor or Lessor’s agents, employees, representatives,
invitees, licensees, or customers in or on the Leased Premises; and
 
27.11 Notwithstanding the foregoing, Lessee may stop hunting on the Leased
Premises, for reasons in Lessee’s reasonable discretion, including without
limitation, if Lessee deems hunting interferes with its operations, poses an
unacceptable risk, or increases Lessee’s insurance.
 

 
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the date
set forth at the beginning of this Lease.
 
Witnesses:
 
 
/s/ Pamela L. Pretot                         
 
/s/ Louis F. Solimine                        
MARTOM PROPERTIES, LLC,
a Kentucky limited liability company
 
By: /s/ Martin W. Griffin                          
Name:
Title: Member
LESSOR
 
 
 
/s/ Pamela L. Pretot                         
 
/s/ Louis F. Solimine                        
GRIFFIN INDUSTRIES, INC.,
a Kentucky corporation
 
By: /s/ Robert A. Griffin                          
Name:
Title:
LESSEE

 

 

 

 
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COMMONWEALTH OF KENTUCKY )
 
COUNTY OF CAMPBELL          ) SS
 
The foregoing instrument was acknowledged by me this 14 day of December, 2010,
by Martin Griffin, a member of MARTOM PROPERTIES, LLC, a Kentucky limited
liability company, the Lessor in the foregoing Lease, on behalf of said limited
liability company.
 
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
 
/s/ Margaret Weinel______________________
Notary Public

COMMONWEALTH OF KENTUCKY )
 
COUNTY OF CAMPBELL          ) SS
 
The foregoing instrument was acknowledged by me this 14 day of December, 2010,
by Robert A. Griffin, the President & Chief Executive Officer of GRIFFIN
INDUSTRIES, INC., a Kentucky corporation, the Lessee in the foregoing Lease, on
behalf of said corporation.
 
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
 
/s/ Margaret Weinel______________________
Notary Public

 
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