OF 110 MILLION GALLONS OF ETHANOL
AND THE COMMENCEMENT OF PRODUCTION OF ETHANOL FROM PHASE ONE (OTHER THAN FOR THE
PURPOSES OF TESTING OPERATIONS) TO OCCUR ON OR BEFORE SEPTEMBER 1, 2008, AND
(II) TO CAUSE SUBSTANTIAL COMPLETION OF PHASE TWO OF THE PROJECT WITH A CAPACITY
OF AN ADDITIONAL 110 MILLION GALLONS OF ETHANOL AND THE COMMENCEMENT OF
PRODUCTION OF ETHANOL FROM PHASE TWO (OTHER THAN FOR THE PURPOSES OF TESTING
OPERATIONS) TO OCCUR ON OR BEFORE JANUARY 1, 2010.
(C)
LESSEE AGREES TO PROSECUTE WITH DUE DILIGENCE ALL LESSEE'S WORK.
THE PARTIES ACKNOWLEDGE THE CONSTRUCTION DATE IN SECTION 4.01(B) ABOVE IS
ESTABLISHED FOLLOWING CONSULTATION BY LESSEE WITH ITS CONSTRUCTION MANAGERS AND
SUPPLIERS AND ARE REASONABLE AND OBTAINABLE.
THE PARTIES FURTHER ACKNOWLEDGE
THAT THERE ARE EXTERNAL CIRCUMSTANCES AND CONDITIONS, WHICH MAY ARISE, THROUGH
NO FAULT OF LESSEE, WHICH WILL MAKE IT IMPOSSIBLE FOR LESSEE TO COMPLY WITH SUCH
CONSTRUCTION DATE.
SUCH EXTERNAL CIRCUMSTANCES AND CONDITIONS, SUCH AS THE
FAILURE OF A GOVERNMENTAL AGENCY TO ISSUE A REQUIRED PERMIT FOLLOWING TIMELY
APPLICATION, WHILE NOT RISING TO THE LEVEL OF A FORCE MAJEURE EVENT, AS
HEREAFTER DEFINED, MAY EXTEND THE TIME FOR COMPLIANCE BY LESSEE.
LESSEE SHALL
DILIGENTLY PURSUE OBTAINING PERMITS FOR PHASE ONE AND PHASE TWO.
IN THE EVENT
LESSEE BELIEVES IT WILL BE UNABLE TO OBTAIN PERMITS BY APRIL 1, 2007, BUT IN
GOOD FAITH BELIEVES THAT SUCH PERMITS MAY BE ISSUED BY JULY 1, 2007, LESSEE MAY
POSTPONE UNTIL JULY 1, 2007 SUCH APRIL 1, 2007 DATE BY WRITTEN NOTICE OF SUCH
POSTPONEMENT PROVIDED TO THE COMMISSION ON OR BEFORE APRIL 1, 2007.
LESSEE MAY
THEREAFTER, BUT PRIOR TO JULY 1, 2007, GIVE THE COMMISSION WRITTEN NOTICE OF AN
ANTICIPATED FAILURE TO COMPLY WITH THE JULY 1, 2007 DATE.
IMMEDIATELY FOLLOWING
THE WRITTEN NOTICE, LESSEE AND THE COMMISSION AGREE TO NEGOTIATE IN GOOD FAITH A
WAIVER OF THE JULY 1, 2007 DATE AND THE ESTABLISHMENT OF A NEW DATE, WHICH SHALL
BE FOR THE SHORTEST REASONABLE TIME PERIOD REQUIRED.
FAILING AGREEMENT, EITHER
LESSEE OR THE COMMISSION MAY TERMINATE THIS LEASE.
SECTION 4.02.
ALTERATIONS AND ADDITIONS.
LESSEE SHALL BE ENTITLED TO
MAKE MODIFICATIONS TO THE PROJECT PROVIDED THE MODIFICATIONS DO NOT EXPAND THE
PHYSICAL SCOPE OR SIZE OF THE PROJECT OR ALTER THE PHYSICAL INFRASTRUCTURE
("MINOR MODIFICATIONS").
LESSEE SHALL NOT BE
9
ENTITLED TO MAKE MODIFICATIONS THAT WOULD EXPAND THE PHYSICAL SCOPE OR SIZE OF
THE PROJECT OR ALTER THE PHYSICAL INFRASTRUCTURE, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSION, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD
("MAJOR MODIFICATIONS").
ALL MINOR MODIFICATIONS AND MAJOR MODIFICATIONS
UNDERTAKEN BY THE LESSEE SHALL BE MADE IN ACCORDANCE WITH THIS ARTICLE.
ANY
MODIFICATIONS, MINOR AND MAJOR, SHALL ALSO BE REFERRED TO HEREIN AS "LESSEE'S
WORK".
DURING THE DEMISED TERM, THE PROJECT AND ALL OTHER LESSEE'S WORK SHALL
BE THE PROPERTY OF LESSEE.
SECTION 4.03.
ASSURANCE OF PAYMENT AND PERFORMANCE.
LESSEE SHALL
PROMPTLY PAY ALL EXPENSES, COSTS AND CHARGES OF EVERY KIND AND NATURE ARISING
OUT OF LESSEE'S WORK, AS THE SAME BECOME