Document:

ex10_11.htm

 Exhibit 10.11 

 

 Execution Copy 

 

 STRATEGIC ALLIANCE AGREEMENT 

 

 This STRATEGIC ALLIANCE AGREEMENT (this “Agreement”) is made as of December 21, 2006 by and among OXBOW CARBON & MINERALS LLC, a Delaware limited liability company having a principal office address at 1601 Forum Place, Suite 1400, West Palm Beach, Florida 33401 (“Oxbow”) and GLOBAL ENERGY, INC., an Ohio corporation having a principal office address at 312 Walnut Street, Suite 2650, Cincinnati, Ohio 45202 (“Global Energy”). Oxbow and Global each may be referred to from time to time herein as a “Party” and collectively as the “Parties”. 

 

 RECITALS 

 

 WHEREAS, Oxbow is a world leader in petroleum coke trading, marketing, sales, and shipping; and 

 

 WHEREAS, Global Energy is a world leader in petroleum coke gasification, having optimized operations of the leading petroleum coke gasification technology, EGASTM technology, at its Wabash gasification facility in Indiana; and 

 

 WHEREAS, Oxbow leases a marine terminal site in Texas City, Texas which it believes to be well-suited for installation of petroleum coke gasification technology, in that gasification would optimize Oxbow’s flexibility in the sale and use of petroleum coke currently stored on the site, which could be converted into pipeline SNG or hydrogen, as well as being shipped onward to Oxbow’s traditional petroleum coke customers; and 

 

 WHEREAS, Global Energy is a leader in the development and permitting of gasification facilities, and currently is the only gasification facility owner/operator with permits to construct new gasification facilities (specifically, its Lima and Westfield Projects); and 

 

 WHEREAS, the Parties believe that an alliance as described in this Agreement will prove mutually beneficial; 

 

 NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 

 

 AGREEMENT 

 

 1. Purchase of Shares. Global Energy shall issue and sell to Oxbow, and Oxbow shall purchase from Global Energy, on the Closing Date, Twenty-Five Thousand (25,000) common shares of Global Energy (the “Shares”), on the following terms and conditions, and subject to satisfaction of the conditions set forth in Section 6 hereof: 

 

 (a) Purchase Price. The purchase price for the Shares shall be Five Million and No/100 Dollars ($5,000,000.00), or $200.00 per Share. 

 

  

1

  

 

 (b) Payment. Payment of the Purchase Price shall be made on the Closing Date by wire transfer of immediately available funds to Global Energy, as applicable, at the applicable account designated by Global Energy, as follows: 

 

	    	    	    	    	    	    	    	    	    	    	    	    	    
	
 Bank: 

	
    

	
 PNC Bank, N.A. 

	
    

	    	
    

	    	
    

	    	
    

	    
	    	
    

	
 Cincinnati, OH 

	
    

	    	
    

	    	
    

	    	
    

	    
	
 ABA No.: 

	
    

	
 042000398 

	
    

	    	
    

	    	
    

	    	
    

	    
	
 Account No.: 

	
    

	
 40-7690-5189 

	
    

	    	
    

	    	
    

	    	
    

	    
	
 Account Name: 

	
    

	
 Global Energy, Inc. 

	
    

	    	
    

	    	
    

	    	
    

	    

 

 (c) Closing. Unless this Agreement shall have been terminated and subject to the satisfaction or waiver of the conditions set forth in Section 6, the closing of the purchase of the Shares (the “Closing”) shall take place at 11:00 a.m., on December 22, 2006 (such date of closing referred to herein as the “Closing Date”) at the offices of Oxbow, 1601 Forum Place, Suite 1400, West Palm Beach, Florida 33401, unless another date, time or place is agreed to in writing by the parties hereto. At the Closing, Oxbow shall pay to Global Energy the Purchase Price and Global Energy shall deliver to Oxbow a stock certificate evidencing the issuance to Oxbow of the Shares. The Closing shall be deemed effective as of 12:01 a.m. U.S. Eastern Standard Time, on the Closing Date. 

 

 2. Strategic Alliance. The Parties hereby form a strategic alliance having the following key elements: 

 

 (a) Preferred Suppliers. Oxbow and Global Energy hereby designate one another as their preferred suppliers of certain goods and services, as follows: 

 

 (i) Oxbow shall be the preferred petroleum coke supplier to petroleum coke gasification projects owned or controlled by Global Energy. 

 

 (ii) Oxbow shall be a preferred supplier of coal, coal fines, gob or waste coal products (collectively, “Coal”) to gasification projects owned or controlled by Global Energy. 

 

 (iii) Global Energy shall be the preferred gasification technology supplier to petroleum coke gasification projects majority owned or controlled by Oxbow. 

 

 (iv) Global Energy shall be the preferred gasification project operator for petroleum coke gasification projects at sites majority owned or controlled by Oxbow. 

 

  

2

  

 

 (b) Further Cooperation. The Parties also agree to cooperate in good faith as follows in furtherance of their strategic alliance: 

 

 (i) Oxbow will identify Oxbow petroleum coke related sites for collaboration with Global Energy. 

 

 (ii) Global Energy will identify Global Energy petroleum coke related sites for collaboration with Oxbow. 

 

 The obligations of the Parties pursuant to this Section 2 are subject to continued demonstrated performance and their mutual agreement on the schedule, pricing, financing, economics and other terms and conditions applicable to any such project. 

 

 3. Lima Project. In addition to the strategic alliance described in Section 2 of this Agreement, the parties specifically agree to the following with respect to Global Energy’s proposed Lima, Ohio gasification project (the “Lima Project”): 

 

 (a) Investment by Oxbow. Oxbow will make a investment (the “Lima Investment”) in the company which owns the Lima Project (the “Lima Project Company”) in the amount of [*], as consideration for obtaining the fuel supply management agreement for the Lima Project and the other revenues and benefits described in this Section 3. Oxbow’s obligation to make this investment would be subject to: 

 

 (i) Oxbow obtaining the consent of its existing lenders; and 

 

 (ii) Global Energy securing one or more firm written commitments in form and substance reasonably acceptable to Oxbow for at least Two Hundred Seventeen Million and No/100 Dollars ($217,000,000.00) of equity funding for the Lima Project, or in the alternative, evidence demonstrating that Global has available cash of Two Hundred Seventeen Million and No/100 Dollars ($217,000,000.00) in its account. 

 

 (iii) Global Energy providing evidence satisfactory to Oxbow in its reasonable discretion that it has secured the right to purchase the site for the Lima Project from the City of Lima, Ohio for a purchase price of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00). 

 

 (b) Revenues and Benefits to Oxbow. If Oxbow makes the Lima Investment: 

 

 (i) Oxbow will receive four percent (4%) of the Lima Project’s pre-tax project cash flow after debt service and operation and maintenance (“O&M”) expenses. The Lima Project Company’s obligation to make such payment would be subject to satisfaction of the same lender covenants which will apply to distributions to equity investors in the Lima Project; and 

 

  

3

  

 

 (ii) Oxbow will receive two percent (2%) of those non-O&M revenues of Global Energy’s affiliate, Gasification Engineering Corporation, Inc. (“GEC”) related to the Lima Project (e.g., any of the $200 million EPC reserves/construction contingency which is not spent). 

 

 (iii) Oxbow will have a seat on the Board of Directors of GEC or any subsidiary or affiliate of GEC which is responsible for the engineering, procurement and construction (“EPC”) contract for the Lima Project. 

 

 (c) Fuel Management and Supply Agreement. In addition, if Oxbow makes the Lima Investment, Oxbow and Global Energy will enter into a fuel management and supply agreement (the “Fuel Management and Supply Agreement”) for all fuel to be utilized by the Lima Project, which would include the following material provisions: 

 

 (i) Oxbow will manage all fuel coke and Coal supply and logistics for the Lima Project. 

 

 (ii) Oxbow will be paid a management fee of One Million and No/100 Dollars ($1,000,000.00) per year, such fee to be paid irrespective of actual Coal or petroleum coke use by the Lima Project. 

 

 (iii) As fuel supply manager, Oxbow will receive a base commission of $0.12 per MMBTU consumed by the Lima Project, independent of fuel type (the “Base Commission”). As an incentive to obtain the lowest cost of fuel throughout the life of the Lima Project, the Lima Project Company would receive two-thirds (2/3) of any cost savings below $1.07 per MMBTU delivered to the project (such price, the “Price Basis”), escalated each year beginning in 2009 in accordance with increases in the Consumer Price Index, and Oxbow would receive one-third (1/3) of any such cost savings. Should the price of fuel delivered to the Lima Project be above the Price Basis, the commission will be reduced on a sliding scale according to the following formula: 

 

 C= BC+(PB-PI)*0.1094 

 

 Where: 

 

 C = commission 

 BC = Base Commission 

 PI = price invoiced per MMBTU 

 PB = Price Basis per MMBTU 

 

 However, the commission will never be less than $0.05 per MMBTU regardless of fuel price. For purposes of calculating this commission, the price of all fuel supply transactions would be based on the direct cost of supply and transportation expenses as invoiced. 

 

  

4

  

 

 (iv) Global Energy may provide up to ten percent (10%) of the annual fuel requirements of the Lima Project from renewable sources. Oxbow would receive the same commission on a per-BTU basis on any such fuel supplied by Global Energy. 

 

 (d) Project Management. In the event Oxbow funds its investment in the Lima Project Company as set forth in Section 3(a), and either or both of the following occur: 

 

	    	
 (i) 

	
 Closing and funding of the Lima Project financing does not occur on or before December 15, 2007; or 

 

	    	
 (ii) 

	
 There is a delay of twelve months or more in meeting any project milestones as set forth in Schedule 3(d) (“Project Milestones”); 

 

 then Oxbow shall have the right to take over the development and management of the Lima Project; provided, however, that the Lima Project fuel supply arrangements shall continue to be managed as set forth in the Fuel Management and Supply Agreement and Oxbow shall not be entitled to direct the disposition of ownership interests in the Lima Project Company, unless additional equity is required to finance the project. Further, if Oxbow elects to take over the development and management of the Lima Project and Oxbow subsequently determines that it does not desire to continue to participate in the Lima Project, it may withdraw from further participation, relinquish its economic interests in the Lima Project Company and GEC and terminate the Fuel Management and Supply Agreement, without further liability or obligation to Global Energy and/or the other Lima Project participants. 

 

 4. Representations and Warranties of Global Energy. Global Energy represents and warrants that the statements contained in this Section 4 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. 

 

 (a) Organization. Global Energy is a corporation duly formed, validly existing and in good standing under the laws of the State of Ohio, and has full corporate power and authority to own, or hold under lease, and operate its properties, and to conduct its business as such business is now being conducted. 

 

 (b) Capitalization of Global Energy. The total authorized share capital of Global Energy as of the date of this Agreement is 10,000,000 common shares and 500,000 preferred shares. As of this date, 5,549,847 common shares and 105,086 preferred shares have been issued. The preferred shares are convertible into common shares at the conversion rate of 1.0 preferred shares to 1.71 common shares. As of the Closing Date, after giving effect to the Share purchase and the conversion of the preferred shares, 5,729,544 common shares of Global Energy will be issued and outstanding. 

 

 (c) The Shares. 

 

 (i) The Shares are duly authorized, validly issued and fully paid and non-assessable and were issued in accordance with all applicable securities laws or pursuant to exemptions therefrom. As of the Closing Date, after giving effect to the Share purchase and the conversion of Global Energy’s preferred shares, the Shares will constitute a forty-four hundredths of one percent (0.44%) interest in the common shares of Global Energy. 

 

  

5

  

 

 (ii) As of Closing Date, Global Energy shall own, beneficially and of record, all of the Shares free and clear of all Liens. 

 

 (iii) No Person has a right to acquire any of the Shares. None of the Shares are subject to any preemptive or subscription right, right of first refusal or offer, option, warrant, put or call right, consent right, restrictive covenant, or any other agreement with any Person other than Oxbow. 

 

 (d) No Violation; Consents. 

 

 (i) The execution and delivery of, and performance under, this Agreement by Global Energy and the consummation of the transactions contemplated hereby by Global Energy and GEC, will not: 

 

 (A) violate any provision of Applicable Law or require any approval from or filing with any Governmental Authority; 

 

 (B) violate the provisions of any Governmental Approval, or the organizational or governing documents of Global Energy or GEC, or any agreement or other restriction to which Global Energy or GEC is a party or by which the property of Global Energy or GEC is bound or subject; 

 

 (C) result in a breach of or constitute (with due notice or lapse of time or both) a default under (or require notice or give rise to any right of termination, consent, cancellation, or acceleration under) any contract or agreement to which Global Energy or GEC is a party or by or to which the property of Global Energy or GEC is subject or bound; or 

 

 (D) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to or result in any loss of benefit under or with respect to, or give any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or result in the creation or imposition of any Lien upon Global Energy, GEC or any of their assets, in each case under any contract or license to which Global Energy or GEC is a party or by which any of its respective assets is bound or any Applicable Law. 

 

 (ii) The execution and delivery of, and performance under, this Agreement by Global Energy and the consummation of the transactions contemplated hereby will not require any Consent as to Global Energy. 

 

 (e) Authority; Enforceabilitv. Global Energy has full legal capacity, power and authority to execute, deliver and perform this Agreement, and the other agreements and instruments to be executed and delivered by him pursuant hereto and to consummate the transactions 

 

  

6

  

 

 contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by Global Energy and, assuming due authorization, execution and delivery hereof by Oxbow, is a legal, valid and binding obligation of Global Energy, enforceable against it in accordance with its terms. 

 

 (f) Disclosure. No representation or warranty of Global Energy made in this Agreement or any certificate, statement, schedule, list or other information furnished or to be furnished to Oxbow (or any Affiliate or representative thereof) pursuant to this Agreement or in connection with the transactions contemplated hereby (“Transaction Information”) contains any untrue statement or omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they are made (including any materiality or knowledge qualifiers), not misleading. 

 

 (g) Qualification; Organization. Global Energy is qualified to conduct its business as such business is now being conducted and is in good standing in all jurisdictions listed on Schedule 4(g), which are all the jurisdictions in which the nature of its business makes such qualification necessary or advisable. True and complete copies of the Articles or Certificates of Incorporation and Bylaws of Global Energy and GEC (the “Governing Documents”) have been furnished to Oxbow. Each such Governing Document is in full force and effect and has not been amended or modified. 

 

 (h) Bankruptcy. Neither Global Energy nor GEC has filed any voluntary petition in bankruptcy or been adjudicated bankrupt or insolvent, or filed any petition or answer seeking any reorganization, liquidation, dissolution or similar relief under any federal or state bankruptcy, insolvency or other debtor relief or similar law, or sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator or liquidator of all or any substantial part of its properties. No court of competent jurisdiction has entered an order, judgment or decree approving a petition filed against Global Energy or GEC seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any federal or state bankruptcy act, or other debtor relief or similar law, and no other liquidator has been appointed for any of them, or of all or any substantial part of any of their properties. No proceeding has been commenced or, to Global Energy’s knowledge, has been threatened, seeking to adjudicate Global Energy or GEC as bankrupt or seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief. 

 

 (i) Shareholder List. Global Energy has provided to Oxbow prior to the execution of this Agreement a true and correct list of the shareholders of Global Energy and their respective shareholdings as of the date of such list. 

 

 (j) Officers and Directors. The officers and directors of Global Energy and GEC are listed on Schedule 4(j) hereto. 

 

 (k) Litigation and Claims. There are no Proceedings pending or threatened against Global Energy which question the validity of this Agreement or any of the transactions contemplated hereby, and Global Energy does not have knowledge of any substantive basis for any such Proceeding. Global Energy is not subject to any Decree and does not have any knowledge of any substantive basis for any Decree. 

 

  

7

  

 

 (1) Environmental Matters. Except as set forth on Schedule 4(1) hereto: 

 

 (i) Each of Global Energy and GEC has complied in all respects with all Environmental Laws or has resolved any non-compliance to the satisfaction of the Governmental Authority having jurisdiction thereof and has provided Oxbow with evidence of such satisfaction. Each of Global Energy and GEC is in compliance with all Environmental Laws. 

 

 (ii) Neither Global Energy nor GEC has any liability, known or unknown, contingent or absolute, under any Environmental Law, nor is either Global Energy or GEC responsible for any such liability of any other Person under any Environmental Law, whether by contract, by operation of law or otherwise. There are no pending or, to the knowledge of Global Energy threatened, Environmental Claims and there are no fact(s) which might reasonably form the basis for any Environmental Claim and Neither Global Energy nor any of its Affiliates, including GEC, has received any notice of any Environmental Claim or threatened Environmental Claim. 

 

 (m) Permits, Approvals and Site for Lima Project. Global Energy and/or its Affiliates: 

 

 (i) have obtained all licenses, permits or franchises required to be issued by or obtained from any Governmental Authority for the construction, commissioning and operation of the Lima Project; and 

 

 (ii) have obtained a legally binding right to purchase the site for the Lima Project from the City of Lima, Ohio for a purchase price of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00). 

 

 The representations and warranties set forth in this Section 4 shall survive the Closing. 

 

 5. Representations and Warranties of Oxbow. Oxbow represents and warrants that the statements contained in this Section 5 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. 

 

 (a) Organization. Oxbow is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority to conduct its business as such business is now being conducted. Oxbow is properly registered to do business in all jurisdictions in which the nature of the business conducted by it makes such registration necessary in order to avoid any material disadvantage or liability to it. 

 

 (b) Authority; Enforceability. Oxbow has full power and authority to execute, deliver and perform this Agreement, and the other agreements and instruments to be executed and delivered by it pursuant hereto, and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly and validly authorized, executed and delivered by Oxbow and, assuming 

 

  

8

  

 

 due authorization, execution and delivery hereof by Global Energy, is a legal, valid and binding obligation of Oxbow, enforceable against Oxbow in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or equity). No other or further authorization is required for Oxbow’s performance hereunder other than those authorizations to be obtained by Oxbow on or prior to the consummation of the transactions contemplated by this Agreement. 

 

 (c) No Violation: Consents. The execution and delivery of, and performance under, this Agreement by Oxbow and the consummation by Oxbow of the transactions contemplated hereby and thereby, will not: (a) violate any provision of Applicable Law; (b) violate the provisions of any Governmental Approval, or the organizational or governing documents of Oxbow, or any agreement or other restriction to which any Oxbow is a party or by or pursuant to which Oxbow or the property of Oxbow is bound or subject; or (c) result in a breach of or constitute (with due notice or lapse of time or both) a default under (or give rise to any right of termination, consent, cancellation, or acceleration under) any material contract or agreement to which Oxbow is a party or by or pursuant to which Oxbow’s property is subject or bound. The execution and delivery of, and performance under, this Agreement by Oxbow will not require any Consent, other than (i) such Consents which, if not obtained or made, will not prevent Oxbow from performing its obligations hereunder, (ii) such Consents which become applicable to Oxbow solely as a result of the specific regulatory status of Global Energy or GEC, and (iii) the Consents set forth on Schedule 5(c). 

 

 (d) Litigation and Claims. There are no Proceedings pending or threatened against Oxbow which question the validity of this Agreement or any of the transactions contemplated hereby, and Oxbow does not have knowledge of any substantive basis for any such Proceeding. Oxbow is not subject to any Decree and does not have any knowledge of any substantive basis for any Decree. 

 

 (e) Investment Representations. Oxbow is acquiring the Shares for its own account for investment, and not with a view to resale or other distribution within the meaning of the Act, and Oxbow will not distribute the Shares or any part thereof in violation of the Act or any other applicable securities law. Oxbow understands that the Shares have not been, and prior to appropriate registration statements becoming effective will not be, registered under the Act, by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Oxbow’s representations as expressed herein. Oxbow acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Shares. 

 

 (f) Bankruptcy. There are no bankruptcy, reorganization, or arrangement proceedings pending against, being contemplated by or, to the knowledge of Oxbow, threatened against, Oxbow. 

 

 The representations and warranties set forth in this Section 5 shall survive the Closing. 

 

  

9

  

 

 6. Conditions to Closing of the Share Purchase. 

 

 (a) Oxbow Conditions. The obligation of Oxbow to proceed with the Closing of the Share purchase contemplated under Section 1 is subject to the satisfaction of all of the conditions set forth in this Section 6(a): 

 

 (i) Representations and Warranties. The representations and warranties made by Global Energy in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though all such representations and warranties were made on and as of that date (without giving effect to any materiality qualifications contained therein), and Global Energy shall have delivered to Oxbow a certificate, dated as of the Closing Date and signed by Global Energy, to such effect. 

 

 (ii) Covenants and Agreements. All of the covenants and agreements in this Agreement to be complied with and performed by Global Energy on or before the Closing Date shall have been complied with and performed in all material respects, and Global Energy shall have delivered to the Oxbow a certificate, dated as of the Closing Date and signed by Global Energy, to such effect. 

 

 (iii) Consents. Each Consent necessary in order to authorize the acquisition by Oxbow of the Shares and to execute and deliver this Agreement, including all those applicable Consents set forth on Schedule 5(c), shall have been obtained and delivered to Oxbow and shall be in full force and effect. 

 

 (iv) No Injunction. No preliminary or permanent injunction or other order or Decree by any Governmental Authority which, prevents the consummation of the purchase of the Shares shall have been issued and remain in effect (and Global Energy and Oxbow agree to use commercially reasonable efforts to have any such injunction, order, or Decree lifted). 

 

 (v) Constitutive Documents. Global Energy shall have delivered to Oxbow copies of the Governing Documents of Global Energy and GEC, including all amendments thereto, each certified as true, correct, complete and in effect as of the Closing by the secretary of each such company. 

 

 (b) Global Energy Conditions. The obligations of Global Energy to proceed with the Closing of the Share purchase contemplated under Section 1 is subject to the satisfaction of all of the conditions set forth in this Section 6(b): 

 

 (i) Representations and Warranties. The representations and warranties made by Oxbow in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though all such representations and warranties were made on and as of that date (without giving effect to any materiality or qualifications contained therein), and Oxbow shall have delivered to the Global Energy a certificate, dated as of the Closing Date and signed by an officer of Oxbow, to such effect. 

 

  

10

  

 

 (ii) Covenants and Agreements. All of the covenants and agreements in this Agreement to be complied with and performed by Oxbow on or before the Closing Date shall have been complied with and performed in all material respects, and Oxbow shall have delivered to the Global Energy a certificate, dated as of the Closing Date and signed by an executive officer of such Oxbow, to such effect. 

 

 (iii) Consents. All Consents necessary in order to authorize the acquisition by Oxbow of the Shares and to execute and deliver this Agreement shall have been obtained and delivered to Global Energy and shall be in full force and effect. 

 

 (iv) No Injunction. No preliminary or permanent injunction or other order or Decree by any Governmental Authority which prevents the consummation of the purchase of the Shares shall have been issued and remain in effect (and Global Energy and Oxbow agree to use commercially reasonable efforts to have any such injunction, order, or Decree lifted.) 

 

 7. Covenants of the Parties. 

 

 (a) Access to Information. Global Energy and Oxbow shall, in good faith, and subject to the terms and conditions hereof, disclose to one another such information relative to the strategic alliance contemplated by this Agreement as may be necessary or appropriate to effectuate the purposes thereof. 

 

 (b) Further Assurances. 

 

 (i) Subject to the terms and conditions of this Agreement, each of the Parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the purchase and sale of the Shares pursuant to this Agreement and the other transactions contemplated herein. 

 

 (ii) Each Party also further agrees that it will not take any action in breach of this Agreement or that will cause any representation or warranty contained herein to become untrue in any material respect, including any action which would result in any assignment or transfer of (or encumbrance not permitted hereunder upon) any of the Shares or which would restrict such Party’s ability to consummate the transactions herein contemplated. 

 

 (c) Confidential Information. Confidential Information shall not be used for any purpose other than to evaluate and consummate the transactions contemplated by this Agreement, and shall not be disclosed without prior written consent of the other Party, except to: 

 

 (i) those employees with a need to know the Confidential Information for the purpose of performing work related to the transactions contemplated by this Agreement; provided, however that the Parties shall require all such employees receiving the Confidential Information abide by the terms of this confidentiality covenant. Each Party shall be responsible for any breach of this Agreement by its employees or Affiliates; or 

 

  

11

  

 

 (ii) those advisors, agents, contractors or lenders with a need to know the Confidential Information for the purpose of performing work related to the transactions contemplated by this Agreement; provided, however that the Parties shall require all such advisors, agents, contractors or lenders to agree to abide by the terms of this Agreement and to undertake the same obligations as the Parties have undertaken hereunder. Each Party shall be responsible for any breach of this Agreement by its advisors, agents, contractors or lenders. 

 

 (iii) If a Party is requested or required by legal or regulatory authority to disclose any Confidential Information, such disclosing Party shall promptly notify the other Party of such request or requirement prior to disclosure so that the other Party may seek an appropriate protective order and/or waive compliance with the terms of this Agreement. If a protective order or other remedy is not obtained, or the other Party waives compliance with the provisions hereof, the disclosing Party agrees to furnish only that portion of the Confidential Information that it reasonably determines, in consultation with its counsel, is consistent with the scope of the subpoena or demand, and to exercise reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information. 

 

 (iv) Each Party agrees that money damages would not be a sufficient remedy for any breach of this Section 7(c) and that the Parties shall be entitled to injunctive or other equitable relief to remedy or prevent any breach or threatened breach of this Section 7(c). Such remedy shall not be the exclusive remedy for any breach of this Section 7(c), but shall be in addition to all other rights and remedies available at law or in equity. 

 

 (v) Any Confidential Information, including all copies of same (including that portion of the Confidential Information that consists of analyses, forecasts, studies or other documents prepared by a Party or its advisors, agents, contractors or lenders), shall be returned to the other Party, or at such Party’s option destroyed, within five (5) days of (A) a request by a Party at anytime; or (B) the termination of this Agreement in accordance with the terms hereof. Upon the written request of a Party, the other Party shall certify the destruction of such material by written notice to the requesting Party. 

 

 (vi) This covenant shall survive the termination or expiration of this Agreement and shall continue in full force and effect for a period of three (3) years thereafter. 

 

 (d) Regulatory Approvals. 

 

 (i) Each Party shall use all commercially reasonable efforts to obtain all authorizations, consents, orders, and approvals of, and to give all notices to and make all filings with, all Governmental Authorities (including those pertaining to the Governmental Approvals) and third parties that may be or become necessary for its execution and delivery of, and the performance of its obligations under, this Agreement and will cooperate fully with the other Party in promptly seeking to obtain all such authorizations, consents, orders, and approvals, giving such notices, and making such filings. 

 

  

12

  

 

 (ii) Each Party agrees to use its commercially reasonable efforts to assist the other Party in obtaining any consents of third parties and Governmental Authorities which may be necessary or advisable for such Party to obtain in connection with the transactions contemplated by this Agreement, including providing to such third parties and Governmental Authorities such financial statements and other financial information with respect to such Party and their Affiliates as such third parties or Governmental Authorities may reasonably request. 

 

 (e) Exclusive Dealing. Each Party agrees that it will not circumvent or attempt to circumvent the other by contacting or participating with any third party with respect to, or otherwise attempting to consummate, the transactions contemplated by this Agreement, except in participation with each other. 

 

 (f) Price Protection. If at any time on or prior to the earlier of (i) December 31, 2007, or (ii) the date on which Global Energy completes an initial public offering (“IPO”) of its common stock, Global Energy sells additional common shares or other financial instruments convertible into its common shares, or enters into any similar transaction for the sale of an ownership interest in Global Energy which is the same or substantially the same as that sold to Oxbow under Section 1 of this Agreement, and the price of which is less than $200.00 per share, Global Energy shall issue additional common shares to Oxbow such that Oxbow’s adjusted per-share price for its stockholdings shall be no greater than the lowest price paid by any such subsequent purchaser of its shares. It is understood that the price protection afforded by this covenant extends to and includes the offering price pursuant to the IPO. 

 

 (g) Board of Directors. During the term of this Agreement, and so long as Oxbow continues to own at least 15,000 common shares of Global Energy (as such amount may be adjusted to reflect any subsequent stock splits), Global Energy agrees that Oxbow shall have a seat on Global Energy’s Board of Directors. 

 

 8. Term; Termination and Remedies. 

 

 (a) Term. This Agreement shall be for an initial term of five (5) years, and unless earlier terminated in accordance with this Agreement, shall automatically renew for an additional term of five (5) years thereafter. 

 

 (b) Termination for Default or Bankruptcy. Either Party may terminate this Agreement by written notice to the other Party in the event of the following: 

 

 (i) Default. Material nonperformance by the other Party of any provisions set forth in this Agreement which is not cured within thirty (30) days after receipt of notice thereof from the Party not in default; or 

 

  

13

  

 

 (ii) Bankruptcy. The filing by or against the other Party of a petition or application in any proceeding relating to such other Party as debtor under any bankruptcy or insolvency law of any jurisdiction; provided that in the event of an involuntary bankruptcy or insolvency proceeding, such other Party shall have a sixty (60) day period in which to obtain dismissal or withdrawal of such petition or application. 

 

 (c) Remedies. In the event of termination of this Agreement, the Party not in default shall be entitled to obtain all appropriate relief available to it under this Agreement and at law or equity. 

 

 (d) Survival. The expiration or earlier termination of this Agreement shall not terminate or otherwise affect Oxbow’s ownership of the Shares or the validity of any other definitive agreements executed prior to such expiration or termination in connection with the Lima Project, the Texas City Project or any other business arrangement arising out of the strategic alliance contemplated by this Agreement. 

 

 9. Defined Terms. 

 

 (a) As used in this Agreement, the following terms have the following meanings: 

 

 “Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder. 

 

 “Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 

 

 “Agreement” has the meaning specified in the preamble to this Agreement, and includes all exhibits and schedules hereto. 

 

 “Applicable Law” means, with reference to any Person, all Laws applicable to such Person or its property or in respect of its operations. 

 

 “Base Commission” has the meaning specified in Section 3(c). 

 

 “BTU” means British Thermal Units. 

 

 “Closing” has the meaning specified in Section 1(c). 

 

 “Closing Date” has the meaning specified in Section 1(c). 

 

 “Coal” has the meaning specified in Section 2(a). 

 

  

14

  

 

 “Confidential Information” means any information not in the public domain, in any form, whether acquired prior to or after the Closing Date, received by a Party from the other Party or any of its Affiliates or advisors, relating to the business and operations of such Party and its respective Affiliates, including, without limitation, information regarding vendors, suppliers, trade secrets, training programs, technical information, contracts, systems, procedures, know-how, trade names, improvements, price lists, financial or other data, business plans, computer programs, software systems, internal reports, personnel files or any other compilation of information, written or unwritten, which is or was used in the business of such Party or its Affiliates, except for information (i) that was or becomes generally available to the public, other than as a result of disclosure by a Party receiving such information; or (ii) that is received by a Party on a non-confidential basis from a third party that is not prohibited from disclosing such information by obligation to the disclosing Party. 

 

 “Consent” means any authorization, approval, consent, waiver, license, filing, registration, ruling, permit or certification by or with any Person. 

 

 “Consumer Price Index” shall mean the Consumer Price Index for all Urban Consumers (CPI-U), base years 1982-1984=100, for the Cleveland-Akron OH metropolitan area, as published by the United States Department of Labor, Bureau of Labor Statistics. 

 

 “Decree” means any claim, consent decree, conciliation agreement, settlement agreement, outstanding judgment, rule, order, writ, injunction or other decree of a Governmental Authority. 

 

 “Environmental Claim” means any and all administrative or judicial actions, suits, orders, claims, liens, notices, notices of violations, investigations, complaints, proceedings, or other written communication, whether criminal or civil, pursuant to or relating to any applicable Environmental Law by any Person, including any Governmental Authority, based upon, alleging, asserting, or claiming any actual or potential (i) violation of, or liability under any Environmental Law, (ii) violation of any Environmental Permit, or (iii) liability for investigatory costs, cleanup costs, removal costs, remedial costs, response costs, natural resource damages, property damage, personal injury, fines, or penalties arising out of, based on, resulting from, or related to the presence, Release, or threatened Release into the environment of any Hazardous Materials at, from, or related to any Real Property or any other property owned, leased, licensed, or operated by any of the Companies, including any off-site location to which Hazardous Materials, or materials containing Hazardous Materials, were sent for handling, storage, treatment or disposal. 

 

 “Environmental Law” means all Applicable Laws relating to pollution or protection of the environment, natural resources and health and safety, including laws relating to Releases or threatened Releases of Hazardous Materials (including Releases to ambient air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, Release, transport, disposal or handling of Hazardous Materials. “Environmental Laws” include the Comprehensive Environmental Response Conservation and Liability Act (“CERCLA”) (42 U.S.C. §§ 960 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§1801 et seq.), the Resource Conservation and Recovery Act (42 U-S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act (also known as the Clean 

 

  

15

  

 

 Water Act) (33 U.S.C. §§ 1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §§ 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.) and their implementing regulations, state implementation plans, and analogous state or local laws or regulations, and all other applicable federal state or local laws that address the release or discharge of Hazardous Materials into the environment or the impact of Hazardous Materials on human health or the environment. 

 

 “Fuel Management and Supply Agreement” has the meaning specified in Section 3(c). 

 

 “GEC” has the meaning specified in Section 3(b). 

 

 “Governing Documents” has the meaning specified in Section 4(g). 

 

 “Governmental Approval” means any authorization, approval, consent, waiver, license, filing, registration, ruling, permit or certification by or with any Governmental Authority, including all environmental permits. 

 

 “Governmental Authority” means any applicable federal, state, county, municipal or local governmental, judicial or regulatory authority, agency, arbitration board, body, commission, instrumentality or court. 

 

 “Hazardous Material” means (i) any substance or material regulated under applicable Environmental Laws or any other product, substance, pollutant, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, Release or effect, either by itself or in combination with other materials used by the Business, is either potentially injurious to the public health, safety or welfare, or the environment, or (ii) could reasonably be expected to provide a basis for liability of any of the Companies or to any Governmental Authority or other Person under any Applicable Environmental Law. Hazardous Material shall include, without limitation, infectious or toxic substances, pollutants, radioactive materials, toxic hydrocarbons, petroleum or petro chemical products, gasoline, oil, diesel fuel or polychlorinated biphenyls or any products, by-products or fractions thereof, and asbestos. 

 

 “IPO” has the meaning specified in Section 6(f). 

 

 “Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in the United States or any other country, or any domestic or foreign state, county, city or other political subdivision or of any Governmental Authority. 

 

 “Lima Investment” has the meaning specified in Section 3(a). 

 

 “Lima Project” has the meaning specified in Section 3. 

 

 “Lima Project Company” has the meaning specified in Section 3 (a). 

 

 “MMBTU” mean one million British Thermal Units. 

 

  

16

  

 

 “Party” and “Parties” means either or both of Global Energy or Oxbow. 

 

 “Person” means and includes (i) an individual, (ii) a legal entity, including a partnership, a joint venture, a corporation, a trust, a limited liability company, a limited duration company, or a limited liability partnership, (iii) companies or associations or bodies of persons, whether or not incorporated, and (iv) a Governmental Authority. 

 

 “Price Basis” has the meaning specified in Section 3(c). 

 

 “Proceedings” means judicial or administrative actions, labor disputes, suits, proceedings, arbitrations, citations, complaints, or investigations. 

 

 “Project Milestones” has the meaning specified in Section 3(d). 

 

 “Purchase Price” has the meaning specified in Section 1. 

 

 “Release” means any spilling, leaking, pumping, pouring, discharging, injecting, dumping or disposing of any (i) Hazardous Material or (ii) other substance which is not a Hazardous Material, in each case not in compliance with all applicable Laws, whether intentional or unintentional. 

 

 “Shares” has the meaning specified in Section 1. 

 

 “Transaction Information” has the meaning specified in Section 4(f). 

 

 (b) In this Agreement, unless otherwise indicated or otherwise required by the context: 

 

 (i) Reference to and the definition of any document (including this Agreement) shall be deemed a reference to such document including the exhibits and schedules thereto and as such document may be amended, supplemented, revised, assigned or modified from time to time prior to the applicable Closing Date; provided, however, that this rule of interpretation shall not apply to references to documents in the Schedules; 

 

 (ii) All references to an “Article”, “Section”, “Schedule” or “Exhibit” are to an Article or Section hereof or to a Schedule or an Exhibit attached hereto, unless otherwise noted; 

 

 1. The table of contents, article and Section headings, and other captions in this Agreement are for the purpose of reference only and do not limit or affect its meaning; 

 

 2. Defined terms in the singular include the plural and vice versa, and the masculine, feminine, or neuter gender include all genders; 

 

 3. Accounting terms used herein but not defined in this Agreement shall have the respective meanings given to them under GAAP; 

 

  

17

  

 

 4. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; 

 

 5. Any reference herein to a time of day means Eastern Standard Time or Eastern Daylight Time, as appropriate; 

 

 6. References to any Person or Persons shall be construed as a reference to any successors or permitted assigns of such Person or Persons; and 

 

 7. The words “including”, “include” and “includes”, when used in this Agreement shall mean, as required by the context, including, include, and includes “without limitation” and “without limitation by specification.” 

 

 10. Miscellaneous. 

 

 (a) Contracts. All contracts contemplated to be entered into by the Parties pursuant to this Agreement shall be negotiated in good faith and shall contain terms and conditions, and be performed for prices, which are commercially reasonable. 

 

 (b) Publicity. No public statements or press releases shall be issued by either Party relating to the terms of this Agreement or the business affairs of the Parties hereunder without the prior consent of the other Parties, However, nothing herein shall prevent a Party from supplying such information or making such statements relating to this Agreement as such Party may consider necessary in order to satisfy its legal obligations (including, but not limited to, its obligations of disclosure under applicable securities laws). 

 

 (c) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery, if delivered personally or by recognized overnight courier service; if sent by first-class mail, five (5) days after being mailed, return receipt requested and postage prepaid; or if sent by facsimile or e-mail, upon receipt. Such notices shall be sent to the following addresses, or at such other address as either Party shall hereafter specify in writing. 

 

 If to Global: 

 

 Global Energy, Inc. 

 312 Walnut Street, Suite 2650 

 Cincinnati, Ohio 45202 

 Facsimile No.: (513) 621-5947 

 Attention: H.H. Graves, President and CEO 

 HHG@globalenergyinc.com 

 

  

18

  

 

 If to Oxbow: 

 

 Oxbow Carbon & Minerals LLC 

 1601 Forum Place, Suite 1400 

 West Palm Beach, FL 33401 

 Facsimile No.: (561) 697-1876 

 Attention: John P. Stauffer, Vice President 

 john.stauffer@oxbow.com 

 

 (d) Consequential Damages. Neither Party shalI be liable to the other Party in connection with this Agreement or the subject matter hereof for any indirect, incidental, special or consequential damages, including but not limited to loss of revenue, cost of capital or loss of profit or business opportunity, whether such liability arises out of contract, tort (including negligence), strict liability or otherwise. 

 

 (e) Successor and Assigns: No Partnership. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective Affiliates, and to their respective successors and permitted assigns. Nothing contained in this Agreement shall be construed as creating a partnership among the Parties. 

 

 (f) Exclusive Understanding. This Agreement and the exhibits hereto sets forth the sole and complete understanding between the Parties with respect to the subject matter hereof, and supersedes all other prior oral or written agreements, arrangements and understandings between the Parties with respect thereto. This Agreement shall not confer any legal rights or benefits on any third party (other than Affiliates of the Parties hereto, to the extent set forth herein). 

 

 (g) Attorneys’ Fees. In the event either Party files an action to enforce or otherwise arising out of this Agreement, the prevailing Party in such action shall be entitled to reasonable attorneys’ fees and court costs in addition to such other relief to which it may be entitled. 

 

 (h) Governing Law. This Agreement, and the rights and obligations of the Parties hereunder, shall be subject to, and construed in accordance with, the laws of the State of New York. 

 

 (j) Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original for all purposes, but all of which shall constitute one and the same instrument. 

 

 [BALANCE OF PAGE LEFT BLANK. SIGNATURES ON NEXT PAGE] 

 

  

19

  

 

 IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date first set forth above. 

 

	   	    	    
	   	
 OXBOW CARBON & MINERALS LLC 

	   	    	    
	   	
 By 

	

 /s/ Brian L. Acton 

	   	    	
 Brian L. Acton 

	   	    	
 President 

	   	    
	   	
 GLOBAL ENERGY, INC. 

	   	    	    
	   	
 By 

	

 /s/ H.H. Graves 

	   	    	
 H.H. Graves 

	   	    	
 President and Chief Executive Officer 

 

 

 

 

 

20ex10_12.htm

 Exhibit 10.12 

 DRAFT – NOT EXECUTED 

 REAL ESTATE ACQUISITION 

 AND 

 DEVELOPMENT AGREEMENT 

 

 By and Between 

 

 THE CITY OF LIMA, OHIO 

 

 and 

 

 LIMA ENERGY COMPANY 

 

 Dated as of 

 July 1, 2010 

 

 

 

 

  

  

  

 

 TABLE OF CONTENTS 

 

	    	   	
 Page 

	   
	
 ARTICLE I DEFINITIONS 

	   	   	 1 	   
	
 Section 1.1.  Definitions. 

	   	   	 1 	   
	
 Section 1.2.  Certain Words Used Herein; References. 

	   	   	 4 	   
	
 Section 1.3.  Captions and Headings. 

	   	   	 4 	   
	    	   	   	   	   
	
 ARTICLE II ACQUISITION AND DEVELOPMENT 

	   	   	 5 	   
	
 Section 2.1.  Grant of Acquisition Right. 

	   	   	 5 	   
	
 Section 2.2.  Exercise and Purchase Price. 

	   	   	 5 	   
	
 Section 2.3.  Conditions Precedent. 

	   	   	 5 	   
	
 Section 2.4.  Acquisition Closing. 

	   	   	 6 	   
	
 Section 2.5.  Casualty; Condemnation. 

	   	   	 6 	   
	
 Section 2.6.  Default; Nonexercise of Acquisition Right. 

	   	   	 6 	   
	
 Section 2.7  Development and Use. 

	   	   	 7 	   
	
 Section 2.8.  Construction of the Project. 

	   	   	 8 	   
	
 Section 2.9.  City Covenants. 

	   	   	 8 	   
	    	   	   	   	   
	
 ARTICLE III THE CITY 

	   	   	 8 	   
	
 Section 3.1.  Prior Services. 

	   	   	 8 	   
	
 Section 3.2.  Future Services and Obligations. 

	   	   	 9 	   
	
 Section 3.3.  Authority. 

	   	   	 9 	   
	    	   	   	   	   
	
 ARTICLE IV THE COMPANY 

	   	   	 9 	   
	
 Section 4.1.  Payments in Lieu of Real Property Taxes. 

	   	   	 9 	   
	
 Section 4.2.  Payments in Lieu of Personal Property Taxes. 

	   	   	 9 	   
	
 Section 4.3.  Contractor Tax Identification. 

	   	   	 11 	   
	
 Section 4.4.  Authority. 

	   	   	 11 	   
	    	   	   	   	   
	
 ARTICLE V EVENTS OF DEFAULT AND REMEDIES 

	   	   	 11 	   
	
 Section 5.1.  Events of Default and Remedies. 

	   	   	 11 	   
	
 Section 5.2.  No Remedy Exclusive. 

	   	   	 12 	   
	
 Section 5.3.  No Additional Waiver Implied by One Waiver. 

	   	   	 12 	   
	
 Section 5.4.  Provisions Subject to Applicable Law. 

	   	   	 13 	   
	    	   	   	   	   
	
 ARTICLE VI MISCELLANEOUS 

	   	   	 13 	   
	
 Section 6.1.  Notices. 

	   	   	 13 	   
	
 Section 6.2.  Extent of Provisions Regarding the City. 

	   	   	 13 	   
	
 Section 6.3.  Binding Effect. 

	   	   	 13 	   
	
 Section 6.4.  Disposition of Project and Assignment. 

	   	   	 13 	   
	
 Section 6.5.  Survival and Benefit; No Merger. 

	   	   	 14 	   
	
 Section 6.6.  Execution of Counterparts. 

	   	   	 14 	   
	
 Section 6.7.  Governing Law and Venue. 

	   	   	 14 	   
	
 Section 6.8.  Severability. 

	   	   	 14 	   
	
 Section 6.9.  Entire Agreement. 

	   	   	 14 	   

 

  

 i 

  

 

	
 EXHIBIT A DECLARATION OF COVENANTS 

	   	   	 A-1 	   
	
 EXHIBIT B PROPERTY 

	   	   	 B-1 	   

 

 

 

 

 

 

 

 

  

 ii 

  

 

 This REAL ESTATE ACQUISITION AND DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into as of July 1, 2010, by and between THE CITY OF LIMA, OHIO, a municipal corporation duly organized and validly existing under the Constitution and laws of the State of Ohio and its Charter (the “City”), and LIMA ENERGY COMPANY, an Ohio corporation (the “Company”), under the circumstances summarized in the following recitals (capitalized words and terms used in the recitals have the meanings assigned to them in Article I): 

 

 WHEREAS, the City previously acquired the Property to promote and advance the City’s Purposes; and 

 

 WHEREAS, the Company desires to acquire the Property to construct and operate the Project; and 

 

 WHEREAS, the City has determined that the Company’s construction and operation of the Project will promote and advance the City’s Purposes; and 

 

 WHEREAS, subject to the terms and conditions contained herein, the City has provided, and shall continue to provide, services to facilitate the Company’s construction and operation of the Project; and 

 

 WHEREAS, the City is willing to convey the Property to the Company to facilitate the construction and operation of the Project; 

 

 NOW, THEREFORE, in consideration of the foregoing premises, the representations, agreements and covenants contained in this Agreement, the City and the Company agree as follows: 

 

 ARTICLE I 

 DEFINITIONS 

 

 Section 1.1.  Definitions.     Capitalized words and terms used in this Agreement shall have the following meanings: 

 

 “Acquisition Right” means the right granted to the Company by the City to acquire the Property pursuant to Article II. 

 

 “Acquisition Closing” means the Company’s exercise of the Acquisition Right and its acquisition of the Property. 

 

 “Acquisition Period” means that period of time commencing upon the execution and delivery of this Agreement and ending on September 1, 2011, unless otherwise extended by mutual agreement. 

 

 “Agreement” means this Agreement. 

 

  

  

  

 

 “City” means the City of Lima, Ohio, a municipal corporation duly organized and validly existing under the Constitution and laws of the State of Ohio and its Charter. 

 

 “City Purposes” means the elimination and prevention of blight, the creation and preservation of jobs and employment opportunities, the improvement of the economic welfare of the residents of the City and the State, the increase of the valuation of the Property on the tax list and duplicate and the resulting increase in the amount of ad valorem taxes to be collected by the City and other political subdivisions, and the increase of the taxes collected by the City on the income of individuals and the net profits of businesses. 

 

 “Commencement of Commercial Operations” means the date on which the Project produces synthetic natural gas or electricity  and delivers either natural gas or electricity for sale. 

 

 “Community Reinvestment Agreement” means the Community Reinvestment Agreement, City of Lima, Ohio CRA #5, Lima Energy Company, by and between the City and Lima Energy executed by the City on August 30, 2004 and by Lima Energy on September 2, 2004. 

 

 “Company” means the Lima Energy Company, a corporation duly organized and validly existing under the laws of the State of Ohio and its successors and assigns. 

 

 “CRA Donation Agreement” means the Global CRA Donation Agreement made and entered into on August 31, 2004 by and between Lima Energy, the City and the Lima City School District, as amended from time to time. 

 

 “Declaration of Covenants” means a declaration in the form attached as Exhibit A. 

 

 “Deed” means a quit claim deed from the City to the Company conveying the Property, subject to the retention by the City of all easements necessary for public streets and utilities. 

 

 “Enterprise Zone Agreement” means the Enterprise Zone Agreement by and among the City, the Board of County Commissioners of Allen County, Ohio, and Lima Energy executed by the City on June 7, 2004, by the Board of County Commissioners on July 20, 2004 and by Lima Energy on June 28, 2004. 

 

 “Force Majeure” means acts of God; fires; epidemics; landslides; floods; strikes; lockouts or other industrial disturbances; acts of public enemies; acts or orders of any kind of any governmental authority; insurrections; riots; civil disturbances; arrests; explosions; breakage or malfunctions of or accidents to machinery, transmission pipes or canals; partial or entire failures of utilities; shortages of labor, materials, supplies or transportation; lightning, earthquakes, hurricanes, tornadoes, storms or droughts; periods of unusually inclement weather or excessive precipitation; or any cause or event not reasonably within the control of the City or the Company, as the case may be. 

 “Lima Energy” means Lima Energy Company, an Ohio corporation. 

 “Mayor” means the Mayor of the City. 

 

  

 2 

  

 

 “Multi-Party EZ Donation Agreement” means the Multi-Party  Enterprise Zone Donation Agreement made and entered into June 22, 2004 by and between Lima Energy, the City and the Lima City School District. 

 

 “Net Distributable Cash Flow” means all gross income received by the Company for operation of the Project less (i) taxes paid by the Company from the ownership and operation of the Project, (ii) the Company’s operational and maintenance costs, including major maintenance  accrual, of the Project, (iii) all debt service, debt service reserves, and other reserves required by any lender to the Company of loans to pay costs of the  construction or operation of the Project. All transactions between the Company and  any Related Party shall be at commercially reasonable rates and terms. Net Distributable Cash Flow is intended to reflect the annual available cash benefits to shareholders of the Company 

 

 “Notice Address” means as to: 

 

	    	
 the City: 

	
 City of Lima 

	    	    	
 50 Town Square 

	    	    	
 Lima, Ohio  45801 

	    	    	
 Attention:  Mayor 

	    	    	    
	    	
 with a copy to: 

	
 City of Lima 

	    	    	
 50 Town Square 

	    	    	
 Lima, Ohio  45801 

	    	    	
 Attention:  Director of Law 

	    	    	    
	    	
 Company: 

	
 Lima Energy Company 

	    	    	
 312 Walnut Street, Suite 2300 

	    	    	
 Cincinnati, Ohio  45202-4094 

	    	    	
 Attention:  President 

 "ODOD Grant" means that Grant Agreement entered into by the Ohio Department of Development, as grantor, and the City, as grantee, providing funds to offset certain costs of the City's development in creating a technical center/research laboratories job ready site, which site includes a portion of the Property. 

 

 “Payments in lieu of Personal Property Taxes” means the payments from the Company to the City pursuant to Section 4.2. 

 

 “Payments in lieu of Real Property Taxes” means any payments from the Company to the City pursuant to Section 4.1. 

 

 “Project” means an environmental energy park on the Property, initially consisting of synthetic natural gas, electric power, and hydrogen production facilities, and related ancillary facilities, and shall include all facilities located on the Property during the term of this Agreement. The City and the Company expect that the Project may be constructed in phases. 

 

 “Property” means the real property described in Exhibit B. 

 

  

 3 

  

 

 "Related Party" means as to the Company, initially, Global Energy Company, USA Synthetic Fuel Corporation and Gasification Engineering Corporation, and shall include (i) any other entity owned or controlled by the Company and (ii) any entity that is owned or controlled by an entity that owns or controls the Company. 

 

 “State” means the State of Ohio. 

 

 “Term” means the period of time commencing the day this Agreement has been signed by both the City and the Company and terminating on December 31, of the 20th full calendar year following the Commencement of Commercial Operations unless the Agreement is terminated pursuant to Section 2.6(b). 

 

 “Trust” means the Lima Energy Trust to be created as an Ohio non-profit corporation, in a form and substance satisfactory to the City and the Company. 

 

 Section 1.2.  Certain Words Used Herein; References.     Any reference herein to the City, any members or officers thereof, or any other public boards, commissions, departments, institutions, agencies, bodies or other entities, or members or officers thereof, includes, without limitation, entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or performing their functions lawfully. 

 Any reference to a section, provision or chapter of the Ohio Revised Code, federal or state laws or the Charter or Codified Ordinances of the City includes without limitation, that section, provision, chapter or law as amended, modified, revised, supplemented or superseded from time to time; provided, however, that no amendment, modification, revision, supplementation or superseding section, provision, chapter or law shall be applicable by reason of this Section if that applicability would constitute in any way an impairment of the rights, remedies, powers, covenants, agreements or obligations of the City or the Company under this Agreement. 

 

 Words of any gender include the correlative words of any other gender.  Unless the context indicates otherwise, words importing the singular number include the plural number, and vice versa.  The terms “hereof”, “herein”, “hereby”, “hereto” and “hereunder”, and similar terms refer to this Agreement; and the term “hereafter” means after, and the term “heretofore” means before, the date of this Agreement. 

 

 Unless the context clearly indicates otherwise, any reference to an “Article”, “Section” or “Exhibit” is a reference to an article, section or exhibit of this Agreement. 

 

 Section 1.3.  Captions and Headings.     The captions and headings of Articles, Sections and Exhibits of this Agreement are solely for convenience of reference and in no way define, limit or describe the scope or intent of any Articles, Sections or Exhibits of this Agreement. 

 

  

 4 

  

 ARTICLE II 

 ACQUISITION AND DEVELOPMENT 

 Section 2.1.  Grant of Acquisition Right.     The City hereby grants to the Company, subject to the terms and conditions of this Agreement, a right to purchase the Property, together with all buildings, structures and improvements located on the Property. 

 Section 2.2.  Exercise and Purchase Price.     The Company may exercise the Acquisition Right at any time during the Acquisition Period. 

 

 In consideration of the acquisition of the Property and the City’s longstanding support for the Project and services provided and to be provided by the City as set forth in this Agreement, to exercise its Acquisition Right, the Company shall: 

 

 (a) pay a  purchase price of $1,500,000 for the Property at the Acquisition Closing; and 

 (b) form the Trust prior to the Acquisition Closing; and 

 (c) contribute $100,000 to the Lima Energy Trust at the Acquisition Closing; and 

 (d) contribute annually to the Trust on or before March 31 for three years $100,000, commencing the calendar year immediately following the commencement of the construction of the Project; and 

 (e)  contribute annually to the Trust on or before March 31 for 20 years the lesser of five million dollars ($5,000,000) or ten percent (10%) of the Net Distributable Cash Flow of the Project for the immediately preceding calendar year, commencing the calendar year immediately following the first full calendar year immediately following Commencement of Commercial Operations.  In any year such contribution is less than $5,000,000, the Company shall allow the City or the Trust to review the Company’s audited accounts and to conduct an audit of the Company to verify the calculation of the amount of the contribution. To the extent permitted by law, the contents of the Company’s audited accounts and any such audit shall be treated as confidential information.  If there has been any underpayment of an annual contribution to the Trust, the Company shall promptly pay the balance it owes for the annual contribution.  If it is determined that the Company has underpaid any annual contribution by an amount in excess of $500,000, the Company shall pay reasonable and customary expenses for the review of the audited accounts or the audit, up to a maximum of $50,000. 

 

 Section 2.3.  Conditions Precedent.   The City’s obligation to convey the Property pursuant to the Acquisition Right is subject to the occurrence of the following events on or prior to the date of the Acquisition Closing: 

 (a)           The creation of the Trust in a form satisfactory to the City; and 

 (b)           The delivery to the City on the date of the Acquisition Closing the items listed in 2.4(b); and 

 

  

 5 

  

 (c)           If agreed by the Lima City School District, the execution of any necessary amendment to the CRA Agreement by the City and the Company to provide that that the 15 years of tax abatement ,and the payments in lieu of those taxes, commences after the Acquisition Closing. 

 Section 2.4.  Acquisition Closing.     The Acquisition Closing shall be held at a time and place mutually agreed upon by the City and the Company. 

 

 (a)           On or prior to the date of the Acquisition Closing, City shall provide the following: 

 (i)            The executed Deed; and 

 (ii)           Evidence to the satisfaction of the Company that all current taxes and assessments accrued as of the date of the Acquisition Closing have been paid or provision for their payment has been made at closing. 

 (b)           At Acquisition Closing, the Company shall provide the following: 

 (i)            Payment, in a form satisfactory to the City, of $1,500,000 to the City; and 

 (ii)           Payment, in a form satisfactory to the City, of $100,000 to the Trust; and 

 (iii)          The executed Declaration of Covenants. 

 Section 2.5.  Casualty; Condemnation.     In the event that during the Acquisition Period the Property or any portion of the Property shall be damaged or destroyed, or taken or condemned by any governmental authority or other entity having the power of eminent domain, or the City receives a notice of a proposed taking or condemnation, the City shall immediately notify the Company in writing of the occurrence of any of those events.  The Company shall then have the right to (a) terminate this Agreement by giving written notice to the City, and both the City and the Company shall be released from all further obligations under this Agreement, or (b) proceed with the Acquisition Closing but require the City to assign to the Company at the Acquisition Closing all of the City’s right, title and interest in any proceeds of insurance payable in connection with the damage or destruction or any awards that may be made by reason of a taking or condemnation, in which event there shall be no adjustment to the Purchase Price. 

 

 Section 2.6.  Default; Nonexercise of Acquisition Right.     (a) If the City defaults in the performance of any of its obligations set forth in this Article II, the Company shall be entitled to exercise all remedies as may be available to it either at law or in equity. 

 

 (b)           If the Company fails to exercise the Acquisition Right, during the Acquisition Period this Agreement terminates on September 1, 2010 and the City and the Company shall be released from all further obligations under this Agreement.  The Term of this Agreement shall be extended 10 months to July 1, 2011 upon payment by September 1, 2010, of $100,000 by the Company to the City. 

 

  

 6 

  

 Section 2.7  Development and Use.     Upon its acquisition of the Property, the Company agrees and covenants that: 

 (a)           Construction.  By June 30, 2014, it shall (i) complete the construction of the Project and (ii) be employing at least 90 individuals on a full-time basis (or the equivalent thereof) at the Project. 

 

 (b)           Use of the Property.  It shall, unless otherwise agreed by the City in writing, use the Property solely for the Project. Such use shall be consistent with the site use requirements of the ODOD Grant, and the Company covenants that it will provide necessary documentation for the City's site certification due December 18, 2010 pursuant to the ODOD Grant. 

 

 (c)           Compliance with Law.  It shall construct and operate the Project in accordance with all applicable federal, State and local environmental and health and safety laws, regulations and ordinances including, without limitation, the Clean Air Act, 42 U.S.C. § 7401 et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., and the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., all analogous State laws, and any governmental or regulatory permits, orders and directives issued with respect to the Project.  If the Project ceases operations, the Company covenants that it shall comply with all applicable requirements under the Cessation of Regulated Operations Statute, O.R.C. Ch. 3752, including any regulations, orders or directives thereunder, and shall conduct any and all investigatory, remedial or monitoring activities necessary or required to properly address any releases, discharges, emissions, wastes, pollution, contamination, or environmental threats or impacts relating to or arising out of the Project or its operations in accordance with all applicable laws, regulations, ordinances, permits, orders or directives. 

 

 (d)           Feedstock.  The  Project will use petroleum coke and coal as its primary feedstock.  Any renewable or other fuel may used pursuant to a written agreement with the City. 

 

 (e)           Employment Opportunities.  It shall use its best efforts to provide that at least 20% of the Project’s initial employees will be residents of the City residing south of Kibby Street.  The Company further represents that it expects that the Project will continually employ at least 90 individuals on a full-time basis (or the equivalent thereof) after Commencement of Commercial Operations. 

 

 (f)           Conveyance of Necessary Easements, Right-of-Way or other Property Interest.  It shall convey to the City, at no cost or expense to the City, any easement, rights-of-way or other property interest in the Property necessary to permit construction or improvement of a railroad grade separation on Main Street. 

 

 (g)           Covenants Running with the Land.  It shall immediately, at its expense, file the Deed and the Declaration of Covenants in the Official Records at the Recorder of Allen County, Ohio. 

 

  

 7 

  

 

 Section 2.8.  Construction of the Project.     The Company covenants that it will complete the Acquisition Closing prior to any further construction of the Project. 

 

 Section 2.9.  City Covenants.     Upon Commencement of Commercial Operations, the City covenants to improve the sidewalks and curbs adjacent to Main Street, Third Street and Fourth Street.  The City’s construction or improvement of the railroad grade separation on Main Street, referred to in Section 2.6(f) above, shall be in the form of a concrete retaining wall and not an earthen berm. 

 ARTICLE III 

 THE CITY 

 

 Section 3.1.  Prior Services.     To promote and advance the City’s Purposes, to facilitate the Company’s construction and operation of the Project, in anticipation of the execution and delivery of this Agreement, the City has performed the following services: 

 

 (a)           Acquired the Property. 

 

 (b)           Remediated the Property in accordance with Ohio Revised Code Chapter 3746, received a covenant from the Ohio Environmental Protection Agency not to sue pursuant to Ohio Revised Code Chapter 3746, received a comfort letter for the United States Environmental Protection Agency in support of the Ohio Environmental Protection Agency’s action, received an affidavit from the Ohio Environmental Protection Agency stating that no operating and maintenance plan for the Property is required, and recorded covenant not to sue, the comfort letter and the affidavit in the Official Records of the Recorder of Allen County, Ohio. 

 

 (c)           Advocated and facilitated sales and transmission of electrical power to be produced by the Project. 

 

 (d)           Employed consultants and legal counsel to facilitate the Company’s construction and operation of the Project. 

 

 (e)           Formally intervened and supported the Project before the Federal Energy Regulatory Commission. 

 

 (f)           Facilitated the required certification of the Project by the Ohio Power Siting Board. 

 

 (g)           Supported the Project through the permitting process of the Ohio Environmental Protection Agency. 

 

 (h)           Commenced various public improvements to facilitate the Project. 

 

 (i)           Permitted the Company to commence construction of the Project on the Property in anticipation of this Agreement. 

 

  

 8 

  

 

 Section 3.2.  Future Services and Obligations.     The City agrees to: 

 

 (a)           Provide pre-screening skill assessments for, and identify eligible City residents as, prospective employees at the Project; and 

 

 (b)           Construct various public improvements to facilitate the Project. 

 

 Section 3.3.  Authority.     The City represents and covenants that: 

 

 (a)           It is a municipal corporation duly organized and validly existing under the Constitution and laws of the State of Ohio and its Charter. 

 

 (b)           The execution and delivery of this Agreement by the City, and its performance of the City’s obligations contemplated hereby, have been duly authorized. 

 

 (c)           This Agreement constitutes the valid and binding obligation of the City in accordance with its terms. 

 

 (d)           Neither the execution and delivery of this Agreement, nor the performance of the City’s obligations hereunder, will conflict with or constitute a default under any other obligations of the City. 

 

 ARTICLE IV 

 THE COMPANY 

 Section 4.1.  Payments in Lieu of Real Property Taxes.     Pursuant to the Community Reinvestment Agreement, the Project is exempt from real property taxes for a period of 15 years.  Pursuant to the CRA Donation Agreement for the benefit of the Lima City School District, the Company agreed to pay to the City in each year an amount equal to 40% of the real property taxes exempted pursuant to the Community Reinvestment Agreement during that year.  In addition, the Company agrees to pay to the City in each year an amount equal to the remaining 60% of the real property taxes exempted pursuant to the Community Reinvestment Agreement during that year. 

 

 If all or any portion of the Project is further exempted from real property taxes during the Term, the Company hereby agrees and covenants to thereafter pay to the City in each year payments in lieu of taxes equal to the amount of the real property taxes exempted during that year.  Such payments shall be paid on or before the dates on which the real property taxes would have otherwise be due or payable. 

 

 Any such payments in lieu of taxes not paid when due shall bear interest and shall be subject to penalties at the same rate and in the same amount, and payable at the same time, as would be payable for delinquent real property taxes. 

 

 Section 4.2.  Payments in Lieu of Personal Property Taxes.     Pursuant to the Enterprise Zone Agreement, all personal property located on the Property is exempt from personal property taxes for 10 years.  Pursuant to the Multi-Party EZ Donation Agreement, Lima Energy agreed to pay to the County Auditor of Allen County, Ohio an amount equal to 40% of the amount of the personal property taxes exempted pursuant to the Enterprise Zone Agreement.  Since the execution and delivery of the Enterprise Zone Agreement and the Multi-Party EZ Donation Agreement, the 126th Ohio General Assembly amended Ohio Revised Code Section 5711.22 that provides that all manufacturing equipment not used in Ohio by the owner of the manufacturing equipment before January 1, 2005 shall be listed for personal property taxes at zero percent of its true value.  Thus, all of the Project’s manufacturing equipment will not be subject to personal property taxes, and, thus, none of the Project’s manufacturing equipment will be exempted from personal property taxes pursuant to the Enterprise Zone Agreement. 

 

  

 9 

  

 Furthermore, Ohio Revised Code Section 5711.22, as amended, reduced the percentage that all other personal property used in business is listed for personal property taxes from 25% of its true value for tax year 2005, to 18-3/4% of its true value for tax year 2006, to 12-1/2% for tax year 2007, to 6-1/4% for tax year 2008, and to zero percent for tax years 2009 and thereafter. 

 In addition, the 128th  Ohio General Assembly enacted Substitute House Bill 232 that exempts qualifies projects, including all energy renewable technologies, from tangible personal property taxes and real property taxes if the project is constructed prior to January 1, 2012. 

   Therefore, the value of the personal property exempted by, and the amount Lima Energy would pay pursuant to, the Enterprise Zone Agreement is less than contemplated by the City and Lima Energy at the time the Enterprise Zone Agreement was executed and delivered.  Thus: 

 (a)           The Company hereby agrees that at Commencement of Commercial Operations that it will provide to the City a schedule of all the personal property located on the Property listing the costs of the personal property and the useful life of the personal property determined in accordance with the modified accelerated cost recovery system provided in the Internal Revenue Code of 1954, as amended.  On or before June 1 of the year immediately succeeding Commencement of Commercial Operations and on or before June 1 of each year thereafter, the Company agrees to pay to the City an amount equal to .04329, multiplied by 25% of the “adjusted basis” of the personal property located on the Real Property at Commencement of Commercial Operation.  For purposes of this paragraph, “adjusted basis” of that personal property in the year immediately succeeding Commencement of Commercial Operations means 100% of the costs of that personal property, and in each succeeding year shall mean the initial adjusted basis of that property minus depreciation of the personal property deducted in the same amount of each year of its useful life (“straight line method” of depreciation).  If the Project is constructed in phases, upon the Commencement of Commercial Operations resulting in additional production capacity, the Company hereby agrees that it will provide to the City a schedule of all the personal property located on the Property which will have been installed to produce the additional capacity, and the useful life of that personal property determined in accordance with the modified accelerated cost recovery system provided in the Internal Revenue Code of 1954, as amended.  The Company agrees to pay to the City an amount for the newly installed personal property in accordance with the formula set forth in this paragraph.  Currently, the Company anticipates the construction of the first phase to result in an energy equivalent of 120 megawatts (MW) of power, the construction of the second phase to add an energy equivalent of 60 MW, and the construction of the third phase to bring the total Project production capacity to 540 MW, 

 

  

 10 

  

 (b)           If all or any portion of personal property located on the Property placed in service after Commencement of Commercial Operations should be subject to taxes by the State of Ohio or any of its political subdivisions, and if all or any portion of such personal property is exempted from such taxes during the Term, the Company agrees and covenants thereafter to pay to the City in each year payments in lieu of taxes equal to the amount of such taxes exempted during that year.  Such payments shall be paid on or before the dates on which the personal property taxes would have otherwise been due or payable. 

 (c)           Any payment in lieu of taxes pursuant to (a) above not paid when due shall bear interest and shall be subject to penalties at the same rate and in the same amount as would be payable for delinquent real property taxes. 

 (d)           Any payment in lieu of taxes pursuant to (b) above not paid when due shall bear interest and shall be subject to penalties at the same rate and in the same amount, and payable at the same time, as would be payable for delinquent personal property taxes. 

 Section 4.3.  Contractor Tax Identification. 

 

 The Company will provide a list of all contractors and subcontractors performing work on the Property, and their respective federal tax identification numbers to facilitate reporting, withholding and payment of the City tax on the income of individuals and on the net profits of businesses. 

 

 Section 4.4.  Authority. 

 

 The Company represents and covenants that: 

 

 (a)           It is a Company duly organized and validly existing under the laws of the State of Ohio. 

 

 (b)           The execution and delivery of this Agreement by the Company, and its performance contemplated hereby, have been duly authorized. 

 

 (c)           This Agreement constitutes the valid and binding obligations of the Company in accordance with its terms. 

 

 (d)           Neither the execution or delivery of this Agreement, nor the performance of the obligations hereunder, by the Company will conflict with or constitute a default under any other obligation of the Company. 

 

 

 ARTICLE V 

 EVENTS OF DEFAULT AND REMEDIES 

 Section 5.1.  Events of Default and Remedies. 

 

  

 11 

  

 

 (a)           Except as otherwise provided in this Agreement, in the event of any default in or breach of this Agreement, or any of its terms or conditions, by the City or the Company, each shall, upon written notice from the other, proceed promptly to cure or remedy such default or breach.  In case such remedial action is not taken or not diligently pursued within thirty (30) days of such written notice, the entity asserting default or breach may institute such proceedings at law or in equity, and in the case of a claim against the City, an action in mandamus, as may be necessary or desirable in its opinion to remedy such default or breach. 

 

 (b)           Notwithstanding the preceding paragraph, if by reason of Force Majeure the City or the Company fails in the observance or performance of any of its agreements, duties or obligations to be observed or performed under this Agreement, the City or the Company, as appropriate, shall not be deemed to be in default under this agreement.  The City or the Company, as appropriate, will give notice promptly to the other of any event of Force Majeure and will use its best efforts to remedy that event with all reasonable dispatch; provided that the City and the Company will not be required to settle strikes, lockouts or other industrial disturbances by acceding to the demands of any opposing person or entity, when in the City’s or the Company’s, as appropriate, judgment, that course would be unfavorable to it. 

 

 Section 5.2.  No Remedy Exclusive.     Unless provided expressly otherwise herein, no right, remedy or power conferred upon or reserved to the City or the Company under this Agreement is intended to be exclusive of any other available right, remedy or power, but each right, remedy and power shall be cumulative and concurrent and shall be in addition to every other right, remedy and power available under this Agreement or existing at law, in equity or by statute or otherwise now or hereafter. 

 

 No exercise, beginning of the exercise, or partial exercise by the City or the Company of any one or more rights, remedies or powers shall preclude the simultaneous or later exercise by the City or the Company of any or all of its other rights, remedies or powers.  No delay or omission in the exercise of any right, remedy or power accruing upon any Event of Default hereunder shall impair that or any other right, remedy or power or shall be construed to constitute a waiver of any Event of Default hereunder, but any right, remedy or power may be exercised from time to time and as often as may be deemed to be expedient. 

 

 Section 5.3.  No Additional Waiver Implied by One Waiver.     In the event that any covenant, agreement or obligation under this Agreement shall be breached by the Company or the City, and the breach shall have been waived thereafter by the Company or the City, as the case may be, the waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other or any subsequent breach. 

 

 No failure by the City or the Company to insist upon the strict observance or performance by the other of any covenant, agreement or obligation under this Agreement and no failure to exercise any right, remedy or power consequent upon a breach thereof, shall constitute a waiver of any right to strict observance or performance or a waiver of any breach.  No express waiver shall be deemed to apply to any other breach or to any existing or subsequent right to remedy the breach. 

 

  

 12 

  

 

 Section 5.4.  Provisions Subject to Applicable Law.     All rights, remedies and powers hereunder may be exercised only to the extent permitted by applicable law.  Those rights, remedies and powers are intended to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under any applicable law. 

 

 ARTICLE VI 

 MISCELLANEOUS 

 

 Section 6.1.  Notices.     All notices, certificates, requests or other communications hereunder shall be given sufficiently and shall be deemed given when mailed by registered or certified mail, postage prepaid to the appropriate Notice Address. 

 

 Section 6.2.  Extent of Provisions Regarding the City.     (a) All representations, covenants, agreements and obligations of the City under this Agreement and any related documents shall be effective to the extent authorized and permitted by applicable law.  None of those representations, covenants, agreements or obligations shall be deemed to be a representation, covenant, agreement or obligation of any present or future member, officer, agent or employee of the City in other than his or her official capacity. 

 

 (b)           Neither the members of City Council nor any official executing this Agreement or related documents shall be subject to any personal liability or accountability by reason of the execution or delivery of this Agreement, the deeds or related documents or by reason of the representations, covenants, agreements or obligations of the City herein. 

 

 (c)           The Mayor of the City is authorized to make any representation, covenant or warranty required by this Agreement, and any representation or covenant related to or in furtherance of the purpose of this Agreement.  Wherever actions or exercises of discretion are permitted or required by this Agreement, the Mayor is authorized to take such actions or exercises of discretion on behalf of the City.  All such acts or exercises of discretion shall be evidenced in writing. 

 

 Section 6.3.  Binding Effect.     This Agreement shall inure to the benefit of and shall be binding upon the City and the Company and their respective successors or assigns.  The City and the Company agree and acknowledge that the Trust is a third party beneficiary of this Agreement with the right to enforce the  contributions by the Company to the Trust pursuant to Section 2.2.  Other than the Trust, no third party is intended to or shall have any rights hereunder. 

 

 Section 6.4.  Disposition of Project and Assignment.     The Company hereby covenants that it will not sell, assign, convey, lease or transfer the Property or the Project without the prior written consent of the City.  The consent of the City for any sale, assignment, conveyance, lease or transfer shall be given if evidence, satisfactory to the City, is provided that:  (a) any proposed transferee, assignee or lessee shall have the qualifications and financial ability to construct and operate the Project and to perform the obligations and covenants of the Company under this Agreement, (b) the proposed transferee, assignee or lessee shall assume, in a written instrument satisfactory to the City, the performance of all obligations and covenants of the Company under this Agreement, and (c) all instruments and documents pertaining to the proposed sale, assignment, conveyance, lease or transfer shall be presented to the City for its review.  Nothing within this Agreement shall prohibit the Company from mortgaging the Property or the Project to obtain financing for it. 

 

  

 13 

  

 

 This Agreement cannot be assigned by the City or the Company without the written consent of the other. 

 

 Section 6.5.  Survival and Benefit; No Merger.     All representations, covenants, agreements and obligations of the City and the Company shall survive the Closing and shall inure to the benefit of and be binding upon their respective successors and assigns. This Agreement shall not merge with the Deed. 

 

 Section 6.6.  Execution of Counterparts.     This Agreement may be executed in counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same Agreement.  It shall not be necessary in proving this Agreement to produce or account for more than one of the counterparts. 

 

 Section 6.7.  Governing Law and Venue.     This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio.  The City and the Company agree that any litigation regarding the terms or performance of this Agreement shall be filed in the Allen County, Ohio Court of Common Pleas, and the City and the Company consent to the jurisdiction and venue of that court. 

 

 Section 6.8.  Severability.     In case any section or provision of this Agreement is held to be illegal or invalid for any reason, or is inoperable at any time, that illegality, invalidity or inoperability shall not affect any other section or provision, all which shall be construed and enforced at the time as if the illegal, invalid or inoperable section or provision was not contained in this Agreement. 

 

 Section 6.9.  Entire Agreement.     This Agreement contains the entire agreement and understanding of the City and the Company with respect to subject matters contained herein, and this Agreement may not be amended, modified or discharged; and none of its terms may be waived, except by an instrument in writing signed by the City and the Company. 

 

 

 

 

 

  

 14 

  

 

 IN WITNESS WHEREOF, the City and the Company have caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first written above. 

 

	
 Witnesses as to City of Lima 

	    	
 THE CITY OF LIMA, OHIO 

	    	    	    
	    	    	    
	    	    	
 By: 

	    
	    	    	    	
 David J. Berger, Mayor 

	    	    	    
	    	    	    
	
 Approved: 

	    	    	    
	    	
 Law Director 

	    	    
	    	    	    
	    	    	    
	
 Witnesses as to the Company 

	    	    
	    	    	
 LIMA ENERGY COMPANY 

	    	    	    
	    	    	    
	    	    	 
 By: 

	
 

	    	    	
 Dwight N. Lockwood, Secretary 

	
 

	    	    

	
 STATE OF OHIO 

	
 ) 

	    
	    	
 ) 

	
     SS: 

	
 COUNTY OF ___________ 

	
 ) 

	    

 

 On this 7th day of June, 2010, David J. Berger, Mayor of the City of Lima, Ohio, personally appeared before me, and acknowledged the execution of the foregoing instrument and that the execution thereof is his voluntary act and deed on behalf of the City and the voluntary and corporate act and deed of the City. 

 

	    	    
	    	
 Notary Public 

 

 

 

  

 15 

  

 

	
 STATE OF OHIO 

	
 ) 

	    
	    	
 ) 

	
      SS: 

	
 COUNTY OF __________ 

	
 ) 

	    

    

    

 On this 7th day of June, 2010, Dwight N. Lockwood, Secretary of the Lima Energy Company  personally appeared before me, and acknowledged the execution of the foregoing instrument and that the execution thereof is his voluntary act and deed on behalf of the Company and the voluntary and corporate act and deed of the Company. 

 

	    	    
	    	
 Notary Public 

 

 

 

 

 

 

 

  

 16 

  

 

 EXHIBIT A 

 DECLARATION OF COVENANTS 

 This DECLARATION OF COVENANTS (this “Declaration”) is made by Lima Energy Company, an Ohio corporation (the “Declarant) with a mailing address of 312 Walnut Street, Suite 2300, Cincinnati, Ohio  45202-4094. 

 WITNESSETH: 

 

 WHEREAS, the Declarant has acquired and currently holds fee simple title in the real property described in Appendix A attached hereto (the “Property), having acquired such fee simple title by instrument number ________________ recorded in the Official Records of the Office of the Recorder of Allen County, Ohio; and 

 

 WHEREAS, the Declarant and the City of Lima, Ohio (the “City”) entered into a Real Estate Acquisition and Development Agreement dated as of June 7th, 2010 (the “Agreement”); and 

 

 WHEREAS, this Declaration is being made and filed of record pursuant to Section 2.7(g) of the Agreement; 

 

 NOW, THEREFORE, the Declarant, pursuant to the Agreement and for itself and all subsequent owners of the Property, hereby declares that the Property or any part thereof (the Declarant and each subsequent owner is individually referred to as an “Owner” and collectively as the “Owners”) and the Project (as defined in the Agreement) thereon shall be held, developed, encumbered, leased, occupied, improved, built upon, used and conveyed subject to the following terms and provisions: 

 

 Section 1.  Covenant to Make Payments in Lieu of Taxes.  The Declarant covenants to pay all Payments in lieu of Real Property Taxes and Payments in lieu of Personal Property Taxes (each as defined in the Agreement) pursuant to and in accordance with the Agreement.  Such Payments in lieu of Real Property Taxes and Payments in lieu of Personal Property Taxes as are levied and assessed from time to time shall be made semiannually to the City on or before the date on which the semi-annual payment in respect of real property taxes would otherwise be due and payable for the Improvements without penalty or interest. Each semiannual payment of Payments in lieu of Real Property Taxes shall be in the same amount as the real property taxes that would have been charged and payable had any exemption from real property taxes not been granted, including any interest assessed on any late payment of such taxes (currently established under Sections 323.121(B)(1) and 5703.47 of the Ohio Revised Code).  Each annual payment of Payments in lieu of Personal Property Taxes due pursuant to Section 4.2(a) of the Agreement shall be in the amount determined in accordance with that Section and Section 4.2(c) of the Agreement.  Each semi-annual payment of Payments in lieu of Personal Property Taxes due pursuant to Section 4.2(b) of the Agreement shall be in the same amount as the personal property taxes that would have been charged and payable had the exemption from personal property taxes not been granted, including any interest assessed on any later payment of such taxes (currently established under Ohio Revised Code 5711.33). 

 

  

 A-1 

  

 

 Section 2.  Lien of Service Payments. The Declarant grants to the City a continuing lien on the Property as security for the timely payment of the Payments in lieu of Real Property Taxes and Payments in lieu of Personal Property Taxes in accordance with the Agreement. 

 

 Section 3.  Use of the Property.  The Declarant covenants that: (a) unless otherwise agreed by the City in writing, the Property will be used only for the Project, (b) such use shall be consistent with the site use requirements of the ODOD Grant (as defined in the Agreement), and (c) it will provide necessary documentation for the City's site certification due December 18, 2010pursuant to the ODOD Grant. 

 

 Section 4.  Feedstock.  The Declarant covenants that it will use petroleum coke and coal as its primary feedstock at the Project.  Any renewable or other fuel may also be used pursuant to a written agreement with the City. 

 

 Section 5.  Conveyances for Utilities and Streets. In accordance with Article 2.7(f) of the Agreement, the Declarant covenants to convey to the City, at no expense to the City, any easements, rights-of-way or other interests in the Property necessary to permit the City to construct or improve a railroad grade separation on Main Street. 

 

 Section 6. Prohibition of Other Conveyances. The Declarant covenants not to sell, assign, convey, lease or transfer the Property or the Project without the written consent of the City, which consent shall be given pursuant to Section 6.4 of the Agreement.  Nothing within this Declaration shall prohibit the Declarant from mortgaging the Property or the Project to obtain financing for it. 

 

 Section 7.  Covenants to Run With the Land.  The Declarant agrees that the covenants in Sections 1, 2 3, 4, 5 and 6 above are covenants running with the land and that (i) every future deed conveying any portion of the Property shall provide that those covenants are covenants running with the land, and (ii) those covenants shall, in any event and without regard to technical classification or designation, legal or otherwise, be binding to the fullest extent permitted by law and equity, for the benefit and in favor of, and enforceable by, the City against the Property, the Project and the Owners.  Those covenants shall remain in effect for the term of the Agreement.  The Declarant has further agreed that all such covenants, whether or not such provisions are included by any Owner in any deed to a subsequent Owner, shall be binding upon each Owner and shall be enforceable by the City in the manner provided herein. 

 

 In amplification of, and not in restriction of, the provisions of this Section 7, the City, and its respective successors and assigns shall each be deemed a beneficiary of the covenants provided in this declaration.  Such covenants shall run in favor of the City for the entire term of the Agreement, without regard to whether either the City, has at any time been, remains or is an owner of any land or interest therein to, or in favor of, which such covenants relate.  The City shall have the right in the event of any breach of any covenant herein contained, to exercise all of the rights and remedies, and to maintain all actions or suits at law or in equity or in other proper proceedings, to cure such breach, to which it or any other beneficiaries of such covenant may be entitled. 

 

  

 A-2 

  

 

 IN WITNESS WHEREOF, the Declarant has caused this Declaration to be executed and effective as of June7th, 2010. 

 

	
 Signed and Acknowledged in the 

	    	
 LIMA ENERGY COMPANY 

	
 Presence of: 

	    	    
	    	    	    
	    	    	
 By: 

	    
	    	    	    	
 Dwight N. Lockwood, Secretary 

	    	    	    

	
 STATE OF OHIO 

	
 ) 

	    
	    	
 ) 

	
 SS: 

	
 COUNTY OF __________ 

	
 ) 

	    

 

 

 On this 7th day of June, 2010, Dwight N. Lockwood Secretary of the Lima Energy Company, personally appeared before me and acknowledged the execution of the foregoing instrument and that the execution thereof is his voluntary act and deed on behalf of the Company and the voluntary and corporate act and deed of the Company. 

 

	    	    
	    	
 Notary Public 

 

 

  

 A-3 

  

 

 APPENDIX A 

 PROPERTY 

 Parcel No. 1 

 Part of the southwest quarter of Section 6, Township-4-South, Range-7-East, in what was Perry Township, now City of Lima, also known as Lot 13474 of The Lima Locomotive Subdivision (Plat Book 3, Page 347) [also known as Allen County Tax Map Parcel No. 47-0600-03-002.000], plus parts of the southeast quarter of Section 1, Township-4-South, Range-6-East, in what was Shawnee Township, now City of Lima, Allen County, Ohio, also known as all of Lot 13475, all of Lot 13476, part of Lot 13477, and part of Lot 13478 [also known as Allen County Tax Map Parcel No. 46-0100-04-001.000], altogether described by metes and bounds as follows: 

 Commencing at a county monument box established at a point where the old Shawnee Indian Reservation Line intersects the centerline of Buckeye Road, which point is the best reckoning of the southeast corner of the south half of the west half of the northeast fractional quarter of Section 12 of said Shawnee Township; 

 thence westerly with the centerline of Buckeye Road at N 89o54'34"W, 210.63 feet to a P.K. nail of record in the centerline of railroad property now operated by CSX Transportation; 

 thence north-northeasterly with said centerline of railroad property at N 23°20'00"E, 3297.33 feet; 

 thence west-northwesterly thru said railroad property on a right angle to the previous course at N 66°40'00"W, 50.00 feet to a P.K. nail (set) which replaces a chiseled "X" of record (found) in the west line of said railroad property at the southeast corner of the parcel herein described, which point is also the POINT OF BEGINNING; 

 thence westerly with the north line of Fourth Street at S 89°29'10"W, 73.44 feet (record distance is 72.00 feet) to an iron pipe (set) that is 2.4 feet westerly from a fence corner post of record (found); 

 thence generally southwesterly with the north line of Fourth Street on a curve concave northwesterly (not tangent to the previous course) an arc distance of 803.64 feet thru a radius of 865.80 feet (chord bears S 62°48'00"W, 775.10 feet thru a central angle of 53°10'55") to an iron pipe (set) at a theoretical point of tangency; 

 thence westerly continuing with said north line of Fourth Street at S 89°22'21"W, 1033.15 feet to a railroad spike (set) in the east line of S. Dixie Highway, which point is also the southwest corner of said Lot 13477 [this course passes an iron pipe of record (found) at 109.80 feet, and an iron pipe (set) at 227.31 feet]; 

 thence north-northeasterly with the west line of said Lot 13477 at N 19°24'14"E, 144.45 feet (record distance is 144.65 feet) to a fence corner post of record (found); 

 

  

 A-4 

  

 thence easterly with a jog in said west line at S 75°43'42"E, 9.95 feet (record distance is 10.00 feet) to a fence corner post of record (found); 

 thence resuming north-northeasterly with said west line of Lot 13477 at N 24°24'13"E, 356.26 feet (record distance is 355.82 feet) to an iron pipe of record (found) at the northwest corner of said Lot 13477, being also the southwest corner of said Lot 13476; 

 thence north-northeasterly with the west line of said Lot 13476 at N 19°39'01"E, 195.99 feet (record distance is 195.89 feet) to a vertical railroad rail of record (found) at the northwest corner of said Lot 13476; 

 thence northeasterly with the northwest line of said Lot 13476, which line by record is the south line of railroad property formerly in the name of The Lake Erie and Western Railroad (as per said Plat Book 3, Page 347), which railroad is now Norfolk Southern property, at N 51°48'41"E, 1020.11 feet (record distance is 1019.61 feet) to a vertical railroad rail of record (found) at an angle point in said line, which point is also the southwest corner of said Lot 13475; 

 thence northeasterly continuing with the previous course at N 56°39'01"E, 437.73 feet (record distance is 438.44 feet) to a fence corner post of record (found) at another angle point in said line; 

 thence northeasterly continuing with the previous course at N 51°54'51"E, 479.66 feet (record distance is 480.95 feet) to a fence corner post of record (found) in the east line of said southeast quarter of Section 1, which point is also the northeast corner of said Lot 13475; 

 thence southerly with said east line of southeast quarter of Section 1, being also the west line of said southwest quarter of Section 6, at S 00°26'05"E, 3.22 feet to a fence corner post of record (found) at the northwest corner of said Lot 13474; 

 thence resuming northeasterly now with the northwest line of said Lot 13474, which line by record is also said south line of former Lake Erie and Western Railroad property, at N 51°47'24"E, 253.49 feet (record distance is 252.06 feet) to a two-inch iron bar of record (found) at a theoretical point of curvature in said line; 

 thence generally northeasterly with the previous course on a curve concave northwesterly an arc distance of 948.03 feet thru a radius of 3919.83 feet (chord bears N 46°11'09"E, 945.72 feet thru a central angle of 13°51'26") to a cotton gin spindle (set) in the west line of S. Main Street, which point is also the northeast corner of said Lot 13474 [this point is 2.01 feet southerly from a mine spike of record (found) which encroaches upon the former Lake Erie & Western Railroad property]; 

 thence southerly with said west line of S. Main Street at S 00°05'27"W, 162.93 feet (record distance is 163.38 feet) to a P.K. nail (set) in the west line of said CSX Transportation property; 

 

  

 A-5 

  

 thence south-southwesterly with said west line of CSX property at S 23°20'00"W, 2275.18 feet (record distance is 2276.98 feet) to the POINT OF BEGINNING. 

 Thus far, an area of 57.938 acres has been described; HOWEVER, a subtraction must be made for a landlocked parcel within this area which is known as Allen County Tax Map Parcel No. 46-0100-04-001.001 and is now in the name of Electron Ventures, Limited (Deed Volume 829, Page 269, plus Deed Volume 890, Page 632), described more particularly as follows: 

 Commencing at the railroad spike (set) called for above at the southwest corner of said Lot 13477 of The Lima Locomotive Subdivision; 

 thence easterly with the south line of said Lot 13477, being also the north line of Fourth Street, at N 89°22'21"E, 805.84 feet (record distance is 805.56 feet) to an iron pipe (set); 

 thence northerly into said Lot 13477 at N 00°25'17"W, 36.61 feet (record distance is 36.85 feet) to an iron pipe of record (found) at the southwest corner of said Electron Ventures property and the POINT OF BEGINNING; 

 (1) thence continuing northerly at N 00°25'17"W, 81.84 feet to an iron pipe of record (found); 

 (2) thence east-northeasterly at N 65°27'34"E, 27.12 feet to an iron pipe of record (found); 

 (3) thence east-northeasterly at N 79°50'19"E, 88.82 feet to an iron pipe of record (found); 

 (4) thence easterly at S 82°38'42"E, 23.75 feet to an iron pipe (set 2001); 

 (5) thence northerly at N 01°02'37"W, 35.96 feet to an iron pipe (set 2001); 

 (6) thence easterly and a right angle to the previous course at N 88°57'23"E, 228.74 feet to an iron pipe (set 2001); 

 (7) thence southerly at S 00°25'17"E, 66.00 feet to an iron pipe of record (found); 

 (8) thence southerly at S 00°25'17"E, 65.28 feet to an iron pipe of record (found); 

 (9) thence westerly at S 79°55'22"W, 50.72 feet to an iron pipe of record (found); 

 (10) thence westerly at S 88°57'23"W, 314.18 feet to the POINT OF BEGINNING. 

 THUS, correcting for said landlocked area, the gross area of subject Parcel 1 is 56.906 acres, of which no area is occupied by any present roadway, leaving a net area also of 56.906 acres; subject to all legal easements and other restrictions of record.  Of this 56.906 acres, 14.905 acres are in Tax Parcel No. 47-0600-03-002.000 (Lot 13474) and 42.001 acres are in Tax Parcel No. 46-0100-04-001.000. 

 

  

 A-6 

  

 Bearings are based on a record bearing of N 23°20'00"E for the centerline of the railroad property now operated by CSX Transportation.  All iron pipes which were set during previous work by K&K are 3/4-inch diameter by 30-inch long iron pipes with an orange plastic "K&K/LIMA" plug. 

 Parcel No. 2 

 Being all of Lots 6182 thru 6198 of Brice’s Second Addition (Plat Book 4, Page 99), and all of Lots 8970 thru 8980 of Bowers Addition (Plat Book 3, Page 277), plus adjacent vacated streets and alleys, all in the City of Lima, Allen County, Ohio, which lands are also known as Allen County Tax Map Parcel No. 47-0610-06-001.000, more particularly described by metes and bounds as follows: 

 BEGINNING at an iron pipe (set) at the intersection of the north line of Third Street and the east line of railroad property now occupied by CSX Transportation, which point is also the southwest corner of Lot 6193 of Brice’s Second Addition [this point is 0.52 feet easterly from an iron pipe of record (found) which encroaches upon said railroad property]; 

 thence north-northeasterly with said east line of CSX property at N 23°20’00”E, 1218.72 feet (record distance is 1221.07 feet) to an iron pipe (set) at the north corner of Lot 8980 of Bowers Addition [this point is 1.98 feet southerly from an iron pipe of record (found) which encroaches upon said railroad property]; 

 thence southerly with the west line of S. Main Street at S 00.02’37”E, 1116.49 feet (record distance is 1118.30 feet) to a chiseled “X” of record (found) at the southeast corner of Lot 6188 of Brice’s Second Addition, which point is also in the north line of Third Street; 

 thence westerly with said north line of Third Street at S 89°41’51”W, 483.56 feet (record distance is 483.65 feet) to the POINT OF BEGINNING. 

 This parcel contains a gross area of 6.197 acres, of which no area is occupied by any present roadway, leaving a net area also of 6.197 acres; subject to all legal easements and other restrictions of record. 

 

 

 

  

 A-7 

  

 EXHIBIT B 

 PROPERTY 

 Parcel No. 1 

 Part of the southwest quarter of Section 6, Township-4-South, Range-7-East, in what was Perry Township, now City of Lima, also known as Lot 13474 of The Lima Locomotive Subdivision (Plat Book 3, Page 347) [also known as Allen County Tax Map Parcel No. 47-0600-03-002.000], plus parts of the southeast quarter of Section 1, Township-4-South, Range-6-East, in what was Shawnee Township, now City of Lima, Allen County, Ohio, also known as all of Lot 13475, all of Lot 13476, part of Lot 13477, and part of Lot 13478 [also known as Allen County Tax Map Parcel No. 46-0100-04-001.000], altogether described by metes and bounds as follows: 

 Commencing at a county monument box established at a point where the old Shawnee Indian Reservation Line intersects the centerline of Buckeye Road, which point is the best reckoning of the southeast corner of the south half of the west half of the northeast fractional quarter of Section 12 of said Shawnee Township; 

 thence westerly with the centerline of Buckeye Road at N 89°54'34"W, 210.63 feet to a P.K. nail of record in the centerline of railroad property now operated by CSX Transportation; 

 thence north-northeasterly with said centerline of railroad property at N 23°20'00"E, 3297.33 feet; 

 thence west-northwesterly thru said railroad property on a right angle to the previous course at N 66°40'00"W, 50.00 feet to a P.K. nail (set) which replaces a chiseled "X" of record (found) in the west line of said railroad property at the southeast corner of the parcel herein described, which point is also the POINT OF BEGINNING; 

 thence westerly with the north line of Fourth Street at S 89°29'10"W, 73.44 feet (record distance is 72.00 feet) to an iron pipe (set) that is 2.4 feet westerly from a fence corner post of record (found); 

 thence generally southwesterly with the north line of Fourth Street on a curve concave northwesterly (not tangent to the previous course) an arc distance of 803.64 feet thru a radius of 865.80 feet (chord bears S 62°48'00"W, 775.10 feet thru a central angle of 53°10'55") to an iron pipe (set) at a theoretical point of tangency; 

 thence westerly continuing with said north line of Fourth Street at S 89°22'21"W, 1033.15 feet to a railroad spike (set) in the east line of S. Dixie Highway, which point is also the southwest corner of said Lot 13477 [this course passes an iron pipe of record (found) at 109.80 feet, and an iron pipe (set) at 227.31 feet]; 

 thence north-northeasterly with the west line of said Lot 13477 at N 19°24'14"E, 144.45 feet (record distance is 144.65 feet) to a fence corner post of record (found); 

 

  

 B-1 

  

 thence easterly with a jog in said west line at S 75°43'42"E, 9.95 feet (record distance is 10.00 feet) to a fence corner post of record (found); 

 thence resuming north-northeasterly with said west line of Lot 13477 at N 24°24'13"E, 356.26 feet (record distance is 355.82 feet) to an iron pipe of record (found) at the northwest corner of said Lot 13477, being also the southwest corner of said Lot 13476; 

 thence north-northeasterly with the west line of said Lot 13476 at N 19°39'01"E, 195.99 feet (record distance is 195.89 feet) to a vertical railroad rail of record (found) at the northwest corner of said Lot 13476; 

 thence northeasterly with the northwest line of said Lot 13476, which line by record is the south line of railroad property formerly in the name of The Lake Erie and Western Railroad (as per said Plat Book 3, Page 347), which railroad is now Norfolk Southern property, at N 51°48'41"E, 1020.11 feet (record distance is 1019.61 feet) to a vertical railroad rail of record (found) at an angle point in said line, which point is also the southwest corner of said Lot 13475; 

 thence northeasterly continuing with the previous course at N 56°39'01"E, 437.73 feet (record distance is 438.44 feet) to a fence corner post of record (found) at another angle point in said line; 

 thence northeasterly continuing with the previous course at N 51°54'51"E, 479.66 feet (record distance is 480.95 feet) to a fence corner post of record (found) in the east line of said southeast quarter of Section 1, which point is also the northeast corner of said Lot 13475; 

 thence southerly with said east line of southeast quarter of Section 1, being also the west line of said southwest quarter of Section 6, at S 00°26'05"E, 3.22 feet to a fence corner post of record (found) at the northwest corner of said Lot 13474; 

 thence resuming northeasterly now with the northwest line of said Lot 13474, which line by record is also said south line of former Lake Erie and Western Railroad property, at N 51°47'24"E, 253.49 feet (record distance is 252.06 feet) to a two-inch iron bar of record (found) at a theoretical point of curvature in said line; 

 thence generally northeasterly with the previous course on a curve concave northwesterly an arc distance of 948.03 feet thru a radius of 3919.83 feet (chord bears N 46°11'09"E, 945.72 feet thru a central angle of 13°51'26") to a cotton gin spindle (set) in the west line of S. Main Street, which point is also the northeast corner of said Lot 13474 [this point is 2.01 feet southerly from a mine spike of record (found) which encroaches upon the former Lake Erie & Western Railroad property]; 

 thence southerly with said west line of S. Main Street at S 00°05'27"W, 162.93 feet (record distance is 163.38 feet) to a P.K. nail (set) in the west line of said CSX Transportation property; 

 thence south-southwesterly with said west line of CSX property at S 23°20'00"W, 2275.18 feet (record distance is 2276.98 feet) to the POINT OF BEGINNING. 

 

  

 B-2 

  

 Thus far, an area of 57.938 acres has been described; HOWEVER, a subtraction must be made for a landlocked parcel within this area which is known as Allen County Tax Map Parcel No. 46-0100-04-001.001 and is now in the name of Electron Ventures, Limited (Deed Volume 829, Page 269, plus Deed Volume 890, Page 632), described more particularly as follows: 

 Commencing at the railroad spike (set) called for above at the southwest corner of said Lot 13477 of The Lima Locomotive Subdivision; 

 thence easterly with the south line of said Lot 13477, being also the north line of Fourth Street, at N 89°22'21"E, 805.84 feet (record distance is 805.56 feet) to an iron pipe (set); 

 thence northerly into said Lot 13477 at N 00°25'17"W, 36.61 feet (record distance is 36.85 feet) to an iron pipe of record (found) at the southwest corner of said Electron Ventures property and the POINT OF BEGINNING; 

 (1) thence continuing northerly at N 00°25'17"W, 81.84 feet to an iron pipe of record (found); 

 (2) thence east-northeasterly at N 65°27'34"E, 27.12 feet to an iron pipe of record (found); 

 (3) thence east-northeasterly at N 79°50'19"E, 88.82 feet to an iron pipe of record (found); 

 (4) thence easterly at S 82°38'42"E, 23.75 feet to an iron pipe (set 2001); 

 (5) thence northerly at N 01°02'37"W, 35.96 feet to an iron pipe (set 2001); 

 (6) thence easterly and a right angle to the previous course at N 88°57'23"E, 228.74 feet to an iron pipe (set 2001); 

 (7) thence southerly at S 00°25'17"E, 66.00 feet to an iron pipe of record (found); 

 (8) thence southerly at S 00°25'17"E, 65.28 feet to an iron pipe of record (found); 

 (9) thence westerly at S 79°55'22"W, 50.72 feet to an iron pipe of record (found); 

 (10) thence westerly at S 88°57'23"W, 314.18 feet to the POINT OF BEGINNING. 

 THUS, correcting for said landlocked area, the gross area of subject Parcel 1 is 56.906 acres, of which no area is occupied by any present roadway, leaving a net area also of 56.906 acres; subject to all legal easements and other restrictions of record.  Of this 56.906 acres, 14.905 acres are in Tax Parcel No. 47-0600-03-002.000 (Lot 13474) and 42.001 acres are in Tax Parcel No. 46-0100-04-001.000. 

 Bearings are based on a record bearing of N 23°20'00"E for the centerline of the railroad property now operated by CSX Transportation.  All iron pipes which were set during previous work by K&K are 3/4-inch diameter by 30-inch long iron pipes with an orange plastic "K&K/LIMA" plug. 

  

 B-3 

  

 

 Parcel No. 2 

 Being all of Lots 6182 thru 6198 of Brice’s Second Addition (Plat Book 4, Page 99), and all of Lots 8970 thru 8980 of Bowers Addition (Plat Book 3, Page 277), plus adjacent vacated streets and alleys, all in the City of Lima, Allen County, Ohio, which lands are also known as Allen County Tax Map Parcel No. 47-0610-06-001.000, more particularly described by metes and bounds as follows: 

 BEGINNING at an iron pipe (set) at the intersection of the north line of Third Street and the east line of railroad property now occupied by CSX Transportation, which point is also the southwest corner of Lot 6193 of Brice’s Second Addition [this point is 0.52 feet easterly from an iron pipe of record (found) which encroaches upon said railroad property]; 

 thence north-northeasterly with said east line of CSX property at N 23°20’00”E, 1218.72 feet (record distance is 1221.07 feet) to an iron pipe (set) at the north corner of Lot 8980 of Bowers Addition [this point is 1.98 feet southerly from an iron pipe of record (found) which encroaches upon said railroad property]; 

 thence southerly with the west line of S. Main Street at S 00.02’37”E, 1116.49 feet (record distance is 1118.30 feet) to a chiseled “X” of record (found) at the southeast corner of Lot 6188 of Brice’s Second Addition, which point is also in the north line of Third Street; 

 thence westerly with said north line of Third Street at S 89°41’51”W, 483.56 feet (record distance is 483.65 feet) to the POINT OF BEGINNING. 

 This parcel contains a gross area of 6.197 acres, of which no area is occupied by any present roadway, leaving a net area also of 6.197 acres; subject to all legal easements and other restrictions of record. 

 

 

 

 

 

 B-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]