Exhibit 10.40
LEASE AGREEMENT AND OTHER ARRANGEMENTS
By the terms in this lease agreement of a land portion,
I. AsLESSOR: USINA SÃO MARTINHO S/A., with registered office at Fazenda São Martinho, in the city of Pradópolis - SP, registered with the Taxpayers’ Registry of the Ministry of Finance under no. CNPJ/MF 48.663.421/0001-29, herein represented by its Agribusiness Officer, , and its Administrative Officer, ;
II. AsLESSEE: SMA - INDÚSTRIA QUÍMICA S/A, with registered office at Fazenda São Martinho, in the city of Pradópolis - SP, with pending Taxpayers’ Registry of the Ministry of Finance, herein represented by its Plant Director, ; and its Director: ,
enter into this “lease agreement of a land portion and other arrangements”, to be governed under the terms in the current laws and according to the following conditions:
1. PROPERTY
1.1. TheLESSOR is the legitimate owner and holder of the rural property named “Fazenda São Martinho”, located in the city of Pradópolis - SP, registered with INCRA in a larger area under No. 613.070.000.744-0 and with the Revenue Office under No. 0.780.459-8 under registry No. 357 in Book 2-RG in the Registrar of Properties in the County of Guariba - SP.
2. OBJECT
2.1. The object of this agreement is the lease of a portion of land, hereinafter referred to as “property” with approximately 48,500 (forty-eight thousand and five hundred) square meters, according to the attached preliminary planimetric survey, separated from the respective property, where theLESSEE is to build and operate its renewable chemicals production plant.
2.1.1. This lease is agreed upon between the Parties under ajoint venture established by the same parties, under theJoint Venture Agreement executed on April 14, 2010 (the “Joint Venture Agreement”).
2.1.2. The parties agree that the measurements of the leased property may be increased or decreased according to the needs of the industrial plant presented by theLESSEE.
3. TERM
3.1. The term of the lease is 20 (twenty) years, starting on May 1, 2010 and ending on April 30, 2030, when theLESSEEagrees upon returning the property leased hereunder.
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4. RENTAL FEE AND PAYMENT
4.1. Rent is to be monthly and the rental fee is to be calculated by square meter made available for deployment of the industrial plant, which shall be timely paid by theLESSEE, by the 5th (fifth) working day each month, directly to theLESSOR, by means of deposit into the account No..
4.1.1. The parties agree that theLESSEEshall be exempted from the payment of rent in the period from May 1, 2010 to December 31, 2010 or until approval of the construction of the industrial plant by the Board of Directors of theLESSEE, whichever occurs first, and rental payment shall commence therefrom.
4.1.2. Notwithstanding the above-mentioned grace period, the Parties recognize that, in accordance with the terms in theJoint Venture Agreement and in order to make the joint venture object of that agreement feasible, from the time of execution of this Agreement, the property must be made available by theLESSOR to theLESSEE free from any encumbrance and theLESSEE shall employ its best efforts to ensure to theLESSEE the possession of the property.
4.1.3. Following the period of exemption from the payment of rents set forth under the terms in clause “4.1.1” herein, theLESSOR shall set forth, according to current market prices for properties in the area where the property qualified in item 1.1 is located, the price per square meter for purposes of rental payment, by means of amendment to this agreement, which shall be paid by theLESSEEunder terms set forth in this agreement.
4.2. The receipt of the rental after the date set forth shall be considered mere tolerance and liberty by theLESSOR, with no prejudice whatsoever to any of the terms in this agreement.
4.3. TheLESSEE agrees that the payment after the set forth date shall not represent settlement of obligations that are not charged at the right time, especially rental differences and fees set forth in this agreement, and it is hereby agreed that the terms in Article 322 in the Civil Code shall not apply.
4.4. The deposits of payments in check shall be effective, following respective compensation. Should the bank refuse to pay, for any reason, theLESSEE is immediately subject to interest, as result of the non-existence of settlement.
4.5. Failure to present timely payment of rent, at the agreed upon date, shall imply a two per cent (2%) fine over the adjusted value, with interest rate at one per cent (1%) a month, incurring over the adjusted value, and theLESSEEshall also be subject to the consequences of default set forth hereunder this agreement or in the law, especially the filing of eviction claim due to lack of payment, and theLESSEE shall be responsible for the adjusted rental fee, added with interest and fees of ten per cent (10%), in the amicable phase, or twenty per cent (20%), with the filing of a judicial claim.
4.6. If, during the term of this agreement, or during the tacit extension of the lease, the rent is not paid on the due date and/or when payable by theLESSEE with the proper addition, by mistake by theLESSOR, this shall not be deemed as amendment to this clause, reason why the amount due by theLESSEE due to the payment of lower amount and/or resulting from [sic] of legal additions, as soon as calculated and notified, shall be paid, regardless of months passed and that were not subject to the appropriate increase.
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5. ADJUSTMENT
5.1. The rental fee will be adjusted, annually, according to theIGPM-FGVvariation.
5.1.1.Should there be any legislative changes to the frequency of rental adjustments, for period shorter than twelve (12) months, the new period shall immediately apply to this agreement and in case of eventual legal omission of such frequency, it is hereby agreed that it shall be monthly, when at the effectiveness of the new law, the monthly rent shall be adjusted according to the inflation rate measured from the beginning or the last adjustment, as the case may be.
5.1.2.Should the rate to be used for adjustment of the rent or default debts is terminated or frozen, the parties hereby choose the IGP (FGV), as alternative for the adjustment of rents and, in lack thereof, the rate set forth by the Federal Government for the adjustment of non-residential leases.
6. VACANCY AND RETURN
6.1. TheLESSEE agrees upon formalizing the return of the property to theLESSOR or whoever is duly authorized, by theLESSOR, upon receipt, when the acceptance of the property shall not imply settlement of obligations agreed upon by theLESSEE, regarding rents, fees, and expenses for damages caused to the property.
6.2. Neither theLESSOR, or its legal representatives, shall bear any responsibility before theLESSEEin case of fire, even when caused by short-circuit, damages or defects in the electrical facilities, that may occur at industrial plant of theLESSEE.
6.3. Should theLESSEE vacate the property for any reason (agreement termination, eviction, abandonment, etc.), leaving goods or belongings behind, theLESSORmay, at its sole discretion, dispose of them as deemed to be appropriate.
7. EXTENSION
7.1. Upon termination of this agreement, with extension of the lease by law or convenience of the parties, all the terms and conditions agreed upon hereunder shall be deemed to be extended, to govern the relation between the parties until final and effective vacancy and formal return of the property.
8. INSPECTION
8.1. TheLESSEEhereby declares to have inspected the leased property, receiving it in perfect order for construction of the industrial plant.
9. RESPONSIBILITY FOR CONSTRUCTION OF THE INDUSTRIAL PLANT
9.1. TheLESSEE shall be solely and exclusively responsible for the construction of the industrial plant and its respective operation, including regarding approval and operating licenses that may be required, with competent public bodies, with no costs for theLESSOR, which is exempted from each and every responsibility.
9.2. Under no circumstance, under penalty of contractual termination and fine, theLESSEEshall give to the property any destination other than that set forth in the object of this agreement.
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10.SUBLEASE
10.1. TheLESSEEshall not assign or transfer this agreement to any third-party, without prior and formal consent “in writing” by theLESSOR, and such consent, under no circumstance, may be deemed as implied.
11. PENALTY CLAUSE
11.1. The party that infringes this agreement, in any of the clauses and conditions, shall pay to the other party a fine equal to three rents current at the time of the infringement, and without prejudice to the right of the innocent party to require compliance with the agreement or deem the agreement to be terminated.
11.2. The fine does not exempt theLESSEEfrom the payment of eventual damages caused to the property.
11.3. If this agreement is extended for indefinite term, theLESSEE may terminate the lease, upon written notice to theLESSOR, at least thirty (30) days in advance.
12. SUCCESSORS
12.1. Clauses and conditions of this agreement bind the successors at any title.
13. SPECIAL TERMS
13.1. TheLESSEE is hereby required to respond to notifications by public entities, agreeing upon not engaging, and preventing any engagement, with illegal use or practices, under limitations of the property.
13.2. Should theLESSEE intend to annotate or register this agreement, all the incurring expenses shall be solely borne by it, and it shall also be responsible for, at its costs, the cancellation of the annotation or registry, upon termination of this agreement.
13.3. TheLESSEE shall be solely responsible for the following expenses, without limitation, required for construction of the industrial plant:
(i) Civil work related to the industrial plant
(ii) Asphalt pavement on the roads to access the industrial plant;
(iii) Electric power connection and consumption;
(iv) Water connection and consumption;
(v) Maintenance and repair at the industrial plant and other benefits to the property;
(vi) Gardening services in general;
(vii) Removal of waste or debris;
(viii) Construction of fence surrounding the perimeter of the property object of this agreement;
(ix) Security services;
(x) Telephone connection and consumption;
(xi) Retention of employees and their services.
13.4. Circulation to access the property object of this agreement, by employees, third-parties, or vehicles, shall be according to pathways established in the blueprint attached that, being initialed by the parties, shall be part of this agreement.
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14. APPLICABLE LAW
14.1. This lease is to be governed by the terms in Law No. 8,245/91 and other applicable laws.
15. VENUE
15.1. All the conflicts arising out of this agreement shall be solved by the Courts in the County of Guariba - SP.
In witness whereof, the parties execute this agreement in two counterparts of equal tenor for one sole purpose, before two witnesses.
Pradópolis, May 1, 2010
SÃO MARTINHO S/A
LESSOR
[Signature] Mario Ortiz Gandini Agribusiness Officer | [Signature] Roberto Pupulin Administrative Officer |
SMA INDÚSTRIA QUÍMICA S/A
Lessee
[Signature] Mauro Pini França Plant Director | [Signature] Ericson Aparecido Marino Officer |
WITNESSES:
[Signature] Carlos Leandro Aurélio | [Signature] Luis Roberto de Medeiros |
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