STATE OF LOUISIANA
PARISH OF CALCASIEU
GROUND LEASE AGREEMENT
This GROUND LEASE AGREEMENT ("Ground Lease") is entered into as
of September 1, 1998, by and between PIM, LLC, a Louisiana Limited
Liability Company, (the "Tenant"), and the LAKE XXXXXXX HARBOR & TERMINAL
DISTRICT, a political subdivision of the State of Louisiana, located in
Calcasieu Parish, Louisiana (the "District"),
WITNESSETH:
WHEREAS, the DISTRICT is a deep water port and political
subdivision of the State of Louisiana (the "State") exercising governmental
powers of the State as delegated and authorized pursuant to the Louisiana
Constitution and other statutory supplemental authorities thereof, acting
by and through the Executive Director of the District, having its office
and domicile at the Port of Lake Xxxxxxx, Lake Charles, Louisiana; and
WHEREAS, the Tenant is desirous of leasing land owned by the
District for the construction and development of a facility for the use and
occupancy of the Tenant for construction and operation of an off-shore oil
exploration rig fabrication and refurbishing facility and related activity;
and
WHEREAS, the District desires to lease such land to the Tenant in
order to develop the land with such a facility and thereby create and
provide employment opportunities for the inhabitants of the Parish of
Calcasieu (the "Parish"), which will add to the welfare and prosperity of
the persons residing within the geographic limits of the District and the
Parish; and
WHEREAS, Tenant previously executed an Assignment of Ground Lease
Agreement dated February 5, 1998 which assigned to Tenant, as of February
5, 1998, that Ground Lease Agreement dated September 16, 1997, between
Professional Industrial Maintenance, LLC and the District, hereinafter
referred to as "Prior Lease"; and
WHEREAS, Tenant and the District desire to restate, amend and
modify the Prior Lease with this Ground Lease Agreement effective as of the
effective date of this Ground Lease Agreement.
NOW, THEREFORE, in consideration of the above recitals and the
mutual covenants hereinafter contained, the parties herein covenant and
agree as follows:
1. DEFINITIONS. As used in this Ground Lease, the terms
"District," "Ground Lease," "Parish," "State," and "Tenant" shall have the
meanings indicated above, and the following terms shall have the respective
meanings indicated below:
"Applicable Laws" shall mean all present and future laws,
ordinances, orders, rules and regulations of all federal, state, parish,
and municipal governments, departments, commissions, or offices, in each
case having applicable jurisdiction over the Project Site, the District, or
the Tenant.
"District-Created Lien" means any lien, charge, or encumbrance
arising or resulting directly from acts or omissions of the District.
"District Improvements" means those improvements as described on
Exhibit "3" to this Ground Lease.
"Extended Term" means any five (5) year extension of this Ground
Lease occurring after the Initial Term as provided in Section 3.1 hereof.
"Ground Lease Commencement Date" means, as the area leased under
the Prior Lease (the area previously leased by Professional Industrial
Maintenance, LLC) of the project site, SEPTEMBER 1, 1998. As to the
balance of the project site, the Ground Lease Commencement Date shall be
those dates as certified by the District's consulting engineers, Xxxxx &
Associates, Inc., that excess fill material, as described in Exhibit "3",
has been removed and the area is available for occupancy for the Tenant.
The project site will be made available in incremental areas that are made
useable through the progress of the District's earth removal contractor.
"Initial Term" means the first seven (7) years of the term of
this Ground Lease, as provided in Section 3.1 hereof.
"Impositions" means (i) all real or personal property taxes and
assessments on the Tenant Improvements to be constructed on the Project
Site (but not real property taxes and assessments on the Project Site
itself, nor any income, transfer, gift, inheritance, estate, intangible
personal property, corporation, or similar taxes imposed on the District by
reason of its ownership of the Project Site or its interest in this Ground
Lease), the personal property located on the Project Site and taxes, if
any, imposed on the ground rent or other charges paid by the Tenant
hereunder or on the Tenant's interest in or under this Ground lease, (ii)
water and sewer rents, charges for public utilities, governmental excises,
levies, license, impact and permit fees, and (iii) other governmental
charges which at any time during the term of this Ground lease may be
assessed, levied, confirmed, imposed upon or become due and payable in
respect of or become a lien on the Tenant Improvements to be constructed on
the Project Site or any part thereof or any appurtenance thereto.
"Tenant Improvements" means the improvements as described on
Exhibit "2" to this Ground Lease.
"Lease Year" means a period of twelve (12) consecutive full
calendar months. The first Lease year shall begin on the Ground Lease
Commencement Date; provided, however, if said Ground Lease Commencement
Date shall occur on other than the first day of a calendar month, then the
first Lease Year shall commence upon the first day of the calendar month
next following the Ground Lease Commencement Date. Each succeeding Lease
Year shall commence upon the anniversary of the previous Lease Year.
"Person" means and includes natural persons, corporations,
general partnerships, limited partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts, or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
"Plans and Specifications" shall have the meaning set forth in
Section 6.1 and Section 7.1.
"Port" means the Port of Lake Xxxxxxx in the Parish.
"Project" means the construction and operation of an off-shore
oil exploration/production fabrication and refurbishing facility on that
property as described on Exhibit "1".
"Project Site" means the real property designated as Parcels I
and II consisting of approximately 50 acres and described specifically by
the survey and legal description on Exhibit "1" of this Ground Lease upon
which the Project will be located and which real property is owned by the
District and leased by the District to the Tenant pursuant to this Ground
Lease.
"Road" means the roadway to be used by Tenant for ingress and
egress to the Project Site which is to be maintained by the District as set
forth on Exhibit "1" hereto.
"Tenant's Property" means all machinery, equipment, furniture,
and other personal property and all severable fixtures of any kind and
neither at any time made, installed, fixed, or placed on, in, or to the
Project Site, but shall not include docks, wharves, warehouses, buildings,
or other structures or things deemed to be immovable.
2. GROUND LEASED PREMISES.
2.1 DISTRICT'S AGREEMENT TO LEASE. Upon the terms and
conditions hereinafter set forth, and in consideration of the payment of
the rents and the prompt performance by the Tenant of the covenants and
agreements to be kept and performed by the Tenant under this Ground Lease,
the District does lease to the Tenant and the Tenant hereby leases from the
District, the Project Site, consisting of Parcels I and II comprising of
approximately 50 acres as provided in Exhibit "1". Reasonable egress and
ingress from and to the Project Site sufficient to permit the Tenant to
accomplish its purposes in connection with the Project shall be made
available by the District to the Tenant, provided that (i) the exact route
over waterways shall be subject to the reasonable control of the District;
and (ii) vehicular access to the Project Site shall be limited to access
over and across the Road.
2.2 PROJECT SITE VARIANCE. Notwithstanding Section 2.1, Tenant
and the District agree that the Project Site may be more or less than the
area designated on Exhibit "1" depending upon the actual cost of and
available monies for the District to remove excess fill material from the
Project Site. Rent will be based upon the actual acreage from which excess
fill material is removed (estimated to be 45 acres as shown on Exhibit
"1").
2.3 DESCRIPTION OF CONTEMPLATED TENANT IMPROVEMENTS. In
consideration of, and as a material inducement to, the District's execution
of this Ground Lease, the Tenant hereby agrees and shall be obligated to
finance, construct, and maintain the Tenant Improvements, (Exhibit "2"), as
provided in Section 6.
2.4 DESCRIPTION OF CONTEMPLATED DISTRICT IMPROVEMENTS. In
consideration of, and as a material inducement to, the Tenant's execution
of this Ground Lease and contingent upon the District receiving $6 million
from the State of Louisiana and $2 million from the Parish of Calcasieu as
specified in Exhibit "3", the District agrees and shall be obligated to
finance and construct the District Improvements as provided in Section 7.
Upon completion, the Tenant shall maintain the District Improvements in
accordance with Section 6.7.
2.5 RIGHT OF WAY; ROAD. The District does hereby grant to the
Tenant a non-exclusive easement and right-of-way over the Road for the term
of this Ground Lease, however the use of such road shall be subject to the
reasonable regulation of the District. The District shall maintain the
Road at its own expense during the term of this Ground Lease.
3. TERM.
3.1 INITIAL TERM AND EXTENSIONS. The Initial Term of this
Ground Lease shall be seven (7) years, commencing at 12:01 a.m. on the
Ground Lease Commencement Date and, unless sooner terminated as hereinafter
provided, ending at 11:59 p.m. on the seventh (7th) anniversary of the last
day of the month immediately preceding the Ground Lease Commencement Date,
provided that if the Ground Lease Commencement Date is not the first day of
a month, the Initial Term shall extend to 11:59 p.m. on the seventh (7th)
anniversary of the last day of the month in which the Ground Lease
Commencement Date occurs.
In consideration of and conditioned upon Tenant being in full
compliance with all terms and conditions set forth herein, the District
hereby grants unto Tenant the option to lease the Project Site for two (2)
additional five (5) year terms; the first of said terms commencing upon the
expiration of the Initial Term and extending for a period of five (5)
years, (hereinafter referred to as "first option term"), and the second of
said terms commencing upon the expiration of the first option term for a
period of five (5) years, (hereinafter referred to as "second option
term").
The option to lease the Project Site as set forth above must be
exercised in each case, if at all, by written notice from the Tenant to the
District on or before six (6) months prior to the expiration of the
preceding lease term. Failure to timely exercise either, the first option
term or the second option term, shall automatically terminate the right of
Tenant to exercise its option to lease the Project Site in any subsequent
lease term.
All the terms and conditions of this lease shall be applicable to
the first option term and the second option term, if any, and the rental
shall be determined in accordance with the provisions outlined in Exhibit
"4" attached hereto and made a part hereof.
4. RENT.
4.1 RENT. The Tenant shall pay to the District as ground rent
for the Project Site rent in the amounts set forth in Exhibit "4". Rent
for any period of less than one month shall be apportioned based on the
number of days in that month.
4.2 DUE DATE. All rental payments shall be made monthly in
advance and on the fifth working day of each month during the entire term
of this Ground Lease.
4.3 PLACE OF PAYMENT. Rent shall be payable at such place as
the District may specify, by written notice to the Tenant, as hereinafter
provided, from time to time.
5. NET LEASE; TAXES AND UTILITY EXPENSES; ROAD COSTS.
5.1 NET LEASE. This Ground Lease is a net lease and it is
agreed and intended that the Tenant shall pay or cause to be paid all
operating costs and Impositions of every kind and nature whatsoever
relating to the Project Site except as expressly otherwise provided in this
Ground Lease. The Tenant shall pay to the District absolutely net
throughout the term of this Ground Lease, the rent and other payments
hereunder, free of any charge, assessments, Impositions, expenses, or
deductions of any kind, and without abatement, deduction or set off, except
as expressly otherwise provided in this Ground Lease.
5.2 TAXES AND UTILITY EXPENSES.
(a) Subject to Section 5.2(b) hereof, the Tenant shall pay or
cause to be paid, before any fine, penalty, interest, or cost may be added
thereto for the nonpayment thereof, all Impositions.
(b) The Tenant shall bear the burden of and shall make timely
remittances of all Impositions and shall file timely, with appropriate
governmental units, all returns, statements, and reports legally required
with respect thereto. The Tenant shall promptly remit to any governmental
unit any such Imposition, unless the Tenant shall in good faith, with due
diligence, and by appropriate judicial or administrative proceedings,
contest the validity, applicability, or amount thereof. The Tenant shall
give the District 10 days' prior written notice of the Tenant's intent to
contest such Imposition. Any such contest shall be at the Tenant's sole
cost and expense.
(c) The Tenant, upon the request of the District, shall furnish
to the District, within thirty (30) days after the date when an Imposition
becomes delinquent if not paid, official receipts of the appropriate taxing
authority or other evidence satisfactory to the District evidencing the
payment thereof. The certificate, advice or xxxx of non-payment of such
Imposition issued by the proper official designated by law to make or issue
the same or to receive payment of an Imposition shall be prima facie
evidence that such Imposition is due and unpaid at the time of the making
of such certificate, advice, or xxxx.
(d) Except as expressly otherwise provided herein, nothing
contained herein shall modify, amend, or constitute a waiver of, expressly
or by implication, any applicable taxes or Imposition with respect to all
or any portion of the Project or the operation thereof.
5.3 UTILITY CONNECTIONS. The Tenant shall be responsible for
obtaining, at its own cost, electricity, telephone and other utility
service to the Project Site.
6. TENANT IMPROVEMENTS.
The Tenant shall have the right and obligation to finance,
construct, and install on the Project Site (in conformity with Section 6.1
hereof) the Tenant Improvements and such related improvements as are
incidental thereto, all of which shall remain the property of the Tenant
during the term of this Ground Lease. Tenant shall be responsible for all
planning, engineering, construction or other cost related to the Tenant
Improvements.
6.1 CONFORMITY TO PLANS AND SPECIFICATIONS. A preliminary
description of the Tenant Improvements is attached hereto as Exhibit "2".
The Tenant Improvements shall be constructed and completed in substantial
conformity with such preliminary description. All plans and specifications
shall be prepared by the Tenant and submitted to the District for approval
prior to commencement of construction of the Tenant Improvements by Tenant.
The District shall have ten (10) working days to approve or disapprove such
plan and specifications. Approval by the District of such plans and
specifications shall not be unreasonably withheld. Substantial
modifications or revisions to approved plans and specifications shall, in
the same way, be submitted to the District for approval.
6.2 FILING OF PLANS AND SPECIFICATIONS. Prior to commencing the
construction of the Tenant Improvements, the Tenant shall file the final
Plans and Specifications with the District. Promptly after receipt of any
proper governmental approvals or permits, the Tenant shall supply to the
District a complete copy of such final approvals and a photocopy of the
required permits issued by the appropriate governmental agency.
6.3 COMMENCEMENT OF CONSTRUCTION. Within twelve (12) months
after the Ground Lease Commencement Date, the Tenant shall commence
construction of the Tenant Improvements. The Tenant shall commence and
proceed with due diligence to construct and build the Tenant Improvements,
without any cost, expenses, charge, liability, or obligation to be borne by
the District. The District shall be a named beneficiary of all payment and
performance bonds obtained by the Tenant's general contractor for
construction of the Tenant Improvements. Prior to commencement of
construction of the Tenant Improvements, the Tenant shall obtain payment
and performance bonds in the full amount of the cost of construction of the
Tenant Improvements. The Tenant Improvements shall meet the following
requirements:
(a) The Tenant shall obtain the prior written approval by
the District of any material modification to the Plans and Specifications,
which approval shall not be unreasonably withheld, delayed or conditioned
and the Tenant Improvements shall be constructed in substantial conformity
with such Plans and Specifications; and
(b) The Tenant Improvements shall be built in accordance
with all applicable laws, ordinances, zoning regulations, rules and
regulations of all federal, state, parish, municipal, or other governmental
or public authorities and agencies having jurisdiction thereover.
6.4 FAILURE TO COMPLETE. Failure to complete construction of
the Tenant Improvements in substantial conformity with the Plans and
Specifications prior to 18 months after the commencement of construction
shall constitute an Event of Default under Section 16.1, provided that no
such Event of Default shall be deemed to have occurred if the delay was
primarily caused by the acts or omissions of a third party. Any delays in
the completion of construction of the Tenant Improvements caused primarily
by strike, lock-outs, labor disputes, wars, insurrections, riots, fires,
acts of God, inability to obtain construction materials due to governmental
regulations or interference, rationing, or other restrictions and
conditions or causes unavoidable or reasonably beyond the control of the
Tenant shall be deemed reasonable delays, and the time with which the
Tenant shall complete the construction of said Tenant Improvements and the
construction completion date shall be extended by the length of such delay.
6.5 DISTRICT'S RIGHT TO INSPECT. Provided that the District
shall not unreasonably interfere with the construction of the Tenant
Improvements, the District, it officers, representatives, agents, and
employees shall have the right, at reasonable times and upon reasonable
advance notice to the Tenant, to examine and inspect the Tenant
Improvements in order that the District, its officers, representatives,
agents, and employees may be able to determine that same substantially
conforms to the Plans and Specifications, including without limitation, the
right to observe or conduct reasonable tests of the Tenant Improvements to
the extent necessary to determine such substantial conformity to the Plans
and Specifications. If any test conducted by the District, its officers,
representatives, agents, or employees under this Section 6.5 reveals that
the Tenant Improvements are not in substantial conformity with the Plans
and Specifications, the Tenant shall pay the costs of such test; otherwise,
the cost of all such tests shall be at the District's expense.
6.6 TENANT'S PROPERTY. All Tenant's Property shall at all times
be and remain the sole property of the Tenant. The Tenant shall be
obligated to remove Tenant's Property from the Project Site within 60 days
after the expiration or termination of this Ground Lease provided the
Tenant repairs any damage caused by such removal.
6.7 MAINTENANCE OF TENANT IMPROVEMENTS. During the continuance
of this Ground Lease, the Tenant will keep in reasonably good state of
repair any and all property, open areas, sea walls, bulkheads, moorings,
buildings, fixtures and building equipment that are brought or constructed
or placed upon the Project Site by the Tenant, (Tenant Improvements) or
which are placed upon the Project Site by the District (District
Improvements), and the Tenant will repair such property as often as may be
necessary in order to keep the Tenant Improvements in reasonably good
repair and condition.
6.8 SIGNS. The Tenant shall be permitted to place reasonable
signs and other means of identification of its business on the Project Site
so long as the same comply with applicable statutes, laws, and ordinances.
6.9 ALTERATIONS. The Tenant shall be permitted to make
improvements or alterations of the Project Site during the Initial and
Extended Terms without the District's approval or consent as long as such
alterations and improvements do not (a) alter the exterior appearance of
the Tenant Improvements in any material respect, (b) impair the structural
integrity of the Tenant Improvements, (c) violate any applicable statute,
law, or ordinance, or (d) result in any change of the uses of the Project
Site permitted by this Ground Lease.
6.10 PREFERENCE TO LOUISIANA CONTRACTORS. Tenant, in
construction of all Tenant Improvements, shall give preference to Louisiana
contractors, sub-contractors and suppliers. A Louisiana contractor, sub-
contractor or supplier shall be selected by Tenant in construction of
Tenant Improvements if the price provided by such Louisiana contractor,
sub-contractor or supplier does not exceed by more than five (5%) percent
the cost of the lowest price provided by an out of state contractor, sub-
contractor or supplier.
"Louisiana contractor, sub-contractor or supplier" shall mean any
person, partnership, company, corporation, association or limited liability
company authorized and properly licensed to do business under the laws of
the State of Louisiana for three (3) years prior to commencement of the
Tenant Improvements and who has maintained its principle place of business
in Louisiana for at lease three (3) years preceding the commencement of the
work to be done on the Tenant Improvements.
"Out of state contractor, sub-contractor, or supplier" shall mean
any person, partnership, company, corporation, association or limited
liability company who fails in any respect to meet the definition of a
Louisiana contractor.
All Louisiana and out of state contractors, sub-contractors and
suppliers performing any work on the Tenant Improvements or supplying any
materials or services for the Tenant Improvements shall be properly
licensed and authorized to do business under the laws of the State of
Louisiana.
7. DISTRICT IMPROVEMENTS.
The District shall have the right and obligation to finance,
construct, and install on the Project Site (in conformity with Section 7.1
hereof) the District Improvements and such related improvements as are
incidental thereto, all of which shall remain the property of the District,
subject to use by the Tenant pursuant to the terms of this Ground Lease,
during the term of this Ground Lease.
7.1 CONFORMITY TO PLANS AND SPECIFICATIONS. A preliminary
description of the District Improvements is attached hereto as Exhibit "3".
The District Improvements shall be constructed and completed in substantial
conformity with such preliminary description. All plans and specifications
shall be prepared by the District and submitted to the Tenant for approval
prior to commencement of construction of the District Improvements by the
District. The Tenant shall have ten (10) working days to approve or
disapprove such plan and specifications. Approval by the Tenant of such
plans and specifications shall not be unreasonably withheld. Substantial
modifications or revisions to approved plans and specifications shall, in
the same way, be submitted to the Tenant for approval.
7.2 FILING OF PLANS AND SPECIFICATIONS. Prior to commencing the
construction of the District Improvements, the District shall file the
final Plans and Specifications with the Tenant. Promptly after receipt of
any proper governmental approvals or permits, the District shall supply to
the Tenant a complete copy of such final approvals and a photocopy of the
required permits issued by the appropriate governmental agency.
7.3 COMMENCEMENT OF CONSTRUCTION. Within ten (10) months after
the Ground Lease Commencement Date, the District shall commence
construction of the District Improvements. The District shall commence and
proceed with due diligence to construct and build the District
Improvements, without any cost, expenses, charge, liability, or obligation
to be borne by the Tenant except as otherwise specified in this Ground
Lease Agreement. Prior to commencement of construction of the District
Improvements, the District shall obtain payment and performance bonds in
the full amount of the cost of construction of the District Improvements.
The District Improvements shall meet the following requirements:
(a) The District shall obtain the prior written approval by
the Tenant of any material modification to the Plans and Specifications,
which approval shall not be unreasonably withheld, delayed or conditioned
and the District Improvements shall be constructed in substantial
conformity with such Plans and Specifications; and
(b) The District Improvements shall be built in accordance
with all applicable laws, ordinances, zoning regulations, rules and
regulations of all federal, state, parish, municipal, or other governmental
or public authorities and agencies having jurisdiction thereover.
7.4 FAILURE TO COMPLETE. Failure to complete construction of
the District Improvements in substantial conformity with the Plans and
Specifications prior to 15 months after the commencement of construction
shall constitute an Event of Default under Section 17.1, provided that no
such Event of Default shall be deemed to have occurred if the delay was
primarily caused by the acts or omissions of a third party. Any delays in
the completion of construction of the District Improvements caused
primarily by strike, lock-outs, labor disputes, wars, insurrections, riots,
fires, acts of God, inability to obtain construction materials due to
governmental regulations or interference, rationing, or other restrictions
and conditions or causes unavoidable or reasonably beyond the control of
the District shall be deemed reasonable delays, and the time with which the
District shall complete the construction of said District Improvements and
the construction completion date shall be extended by the length of such
delay.
7.5 TENANT'S RIGHT TO INSPECT. Provided that the Tenant shall
not unreasonably interfere with the construction of the District
Improvements, the Tenant, its officers, representatives, agents, and
employees shall have the right, at reasonable times and upon reasonable
advance notice to the District, to examine and inspect the District
Improvements in order that the Tenant, its officers, representatives,
agents, and employees may be able to determine that same substantially
conforms to the Plans and Specifications, including without limitation, the
right to observe or conduct reasonable tests of the District Improvements
to the extent necessary to determine such substantial conformity to the
Plans and Specifications. If any test conducted by the Tenant, its
officers, representatives, agents, or employees under this Section 7.5
reveals that the District Improvements are not in substantial conformity
with the Plans and Specifications, the District shall pay the costs of such
test; otherwise, the cost of all such tests shall be at the Tenant's
expense.
7.6 MAINTENANCE OF DISTRICT IMPROVEMENTS. During the
continuance of this Ground Lease, the Tenant will keep in reasonably good
state of repair any and all property, open areas, sea walls, bulkheads,
moorings, buildings, fixtures and building equipment that are brought or
constructed or placed upon the Project Site by the District, (District
Improvements) or which are placed upon the Project Site by the Tenant
(Tenant Improvements), and the Tenant will repair such property as often as
may be necessary in order to keep the District Improvements in reasonably
good repair and condition.
8. TENANT'S SURRENDER OF PROJECT SITE.
8.1 SURRENDER AT END OF GROUND LEASE. The Tenant shall and will
on the last day of the Initial Term hereof, or if extended, on the last day
of any Extended Term hereof, or upon any early termination of this Ground
Lease, for any reason, surrender and deliver, without cost to the District,
the Project Site and the Tenant Improvements or District Improvements
thereon to the District and, except as provided in Section 14, in good
condition and repair (in light of the age, construction, and nature
thereof), less normal wear and tear, free and clear of any liens or
encumbrances, except for District-Created Liens. The Tenant shall remove
the Tenant's Property. The Tenant shall not be required to restore the
Project Site to its condition prior to construction of the Tenant
Improvements or District Improvements or to restore any alterations.
8.2 DISTRICT NOT LIABLE. The District shall not be responsible
for any loss or damage occurring to any real or personal property owned,
leased, or operated by the Tenant, its agents, or employees, prior to or
subsequent to the termination of this Ground Lease, other than, to the
extent permitted by law, for such loss or damage occurring as a result of
the willful misconduct of the District, its officers, representatives,
agents, or employees or the District's misrepresentations or its breach of
or default under this Ground Lease.
9. USE.
9.1 NO UNLAWFUL ACTIVITIES. The Tenant agrees not to make any
unlawful use of the Project Site, Tenant Improvements or District
Improvements, including without limitation, any use constituting a nuisance
of the Project Site or to adjoining or neighboring property.
9.2 PERMITTED USES. The Tenant covenants not to use or permit
the Project Site to be used for any purpose other than (i) the construction
and operation of the Project as provided herein, or (ii) such other uses as
may be approved by the District in writing in connection with any consent
given by the District to a sublease or assignment of the Tenant's rights
hereunder. The District shall not unreasonably withhold, delay or
condition its approval of such other use, it being understood that the
District shall not be required to approve any such other use which shall be
for an unlawful purpose, which permits use or occupancy in a manner which
would in any way make void or voidable or impossible to obtain any
insurance required to be furnished by the Tenant hereunder, which would
constitute a public or private nuisance, which would violate any present or
future, ordinary or extraordinary, foreseen or unforeseen, laws,
regulations, ordinances, or requirements of any governmental authority
having jurisdiction, including without limitation, any lawful limitations
imposed on the District generally with respect to the permitted use by
lessees of real property owned by the District or which proposed use is not
maritime related.
9.3 WASTE. The Tenant shall not cause, allow, or suffer to
exist any waste of the Project Site or the Tenant Improvements or District
Improvements.
9.4 CONTINUOUS USE. The Tenant and District agree that the
Project Site is located within a highly developed industrial area owned and
operated by the District. The prime consideration of this lease agreement
is the creation of jobs and economic development and the well being of the
economy in the area. Therefore, Tenant shall, within eighteen (18) months
of completion of the Tenant Improvements, take all reasonable steps to
employ at least five hundred (500) full-time permanent workers and Tenant
shall take all reasonable steps to maintain such permanent employees during
the term of this lease.
10. INDEMNIFICATION.
10.1 TENANT'S GENERAL AGREEMENT TO INDEMNIFY. The Tenant
releases the District, its officers, representatives, employees, agents,
successors and assigns, (individually and collectively, "District
Indemnitee") from, assumes any and all liability for, and agrees to
indemnify the District Indemnitee against all claims, liabilities,
obligations, damages, penalties, litigation, costs, charges, and expenses
(including, without limitation, reasonable attorney's fees, engineers'
fees, architects' fees, and the costs and expenses of appellate action, if
any), imposed on, incurred by or asserted against the District Indemnitee
or its interest in real property in the Project Site arising out of (i) the
use or occupancy of the Project Site by the Tenant, its officers,
representatives, agents, and employees, (ii) the construction or operation
of the Project by the Tenant, its officers, representatives, agents, and
employees, (iii) any claim arising out of the use, occupancy, operation, or
construction of the Project Site by the Tenant, its officers,
representatives, agents, and employees, and (iv) activities on or about the
Project Site by the Tenant, its officers, representatives, agents, and
employees, of any nature, whether foreseen or unforeseen, ordinary, or
extraordinary, in connection with the construction use, occupancy,
operation, maintenance, or repair of the Project, the Improvements, or the
Project Site by the Tenant, its officers, representatives, agents, and
employees; provided, however, that any such claim, liability, obligation,
damage or penalty arising solely as a result of the negligence or willful
misconduct of the District Indemnitee shall be excluded from this
indemnity. The indemnity provided in this section shall include within its
scope any liability imposed by law on the District on a strict liability
theory as landowner for physical defects in the Project Site (except for
environmental contamination or conditions existing prior to the Ground
Lease Commencement Date as provided in the Professional Industrial
Maintenance, LLC, lease), it being the intention of the parties for Tenant
to assume liability for such defects in the Project Site during the term of
this Ground Lease or the term of the Professional Industrial Maintenance,
LLC lease. This section shall include within its scope but not be limited
to any and all claims or actions for wrongful death, but any and all claims
brought under the authority of or with respect to any local, state, or
federal environmental statute or regulation shall be covered by Section
10.2 and not this Section 10.1.
10.2 TENANT'S ENVIRONMENTAL INDEMNIFICATION. The Tenant agrees
that it will comply with all environmental laws and regulations applicable
to the Tenant, including without limitation, those applicable to the use,
storage, and handling of hazardous substances in, on, or about the Project
Site. The Tenant agrees to indemnify and hold harmless each of the
District Indemnitee against and in respect of, any and all damages, claims,
losses, liabilities, and expenses (including, without limitation,
reasonable attorneys, accounting, consulting, engineering, and other fees
and expenses), which may be imposed upon, incurred by, or assessed against
any of the District Indemnitee by any other party or parties (including,
without limitation, a governmental entity), arising out of, in connection
with, or relating to the subject matter of: (a) the Tenant's breach of the
covenant set forth above in this Section 10.2 or (b) any environmental
condition of contamination on the Project Site or any violation of any
federal, state, or local environmental law with respect to the Project Site
first occurring after the Ground Lease Commencement Date provided for in
the Professional Industrial Maintenance LLC lease and caused by the
Tenant's operations or facilities.
10.3 BURDEN OF PROOF. The Tenant, at its own cost, shall cause
to be conducted a Phase I and, if required by the results of the Phase I
assessment, a Phase II environmental assessment of the Project Site prior
to the commencement of construction of the Tenant Improvements and a copy
of all written reports issued in connection with such assessment shall be
given to the District within five (5) days of completion. If, as a result
of such assessments, environmental contamination of the Project Site is
discovered, such contamination shall be deemed to have existed prior to the
Ground Lease Commencement Date provided in the Professional Industrial
Maintenance, LLC lease. Any condition of environmental contamination
discovered on the Project Site after the completion of the environmental
assessments (Phase I and Phase II) shall be presumed, for purposes of the
Tenant's agreement to indemnify the District Indemnitee, to have been
caused by the Tenant's operations or facilities, unless the Tenant can
demonstrate, by a preponderance of the evidence, that (i) such condition
originated off the Project Site, or (ii) such condition was not caused by
the Tenant's operations or facilities. The provision of this Section 10.3
are intended only to allocate the burden of establishing causation between
the Tenant and the District with respect to environmental contamination
discovered before and after the Ground Lease Commencement Date. In no
event shall any third party other than the District Indemnitee and the
Tenant Indemnitee be entitled to any benefit, reliance, or presumption
based on the provisions of causation or liability of either party with
respect to any environmental contamination of the Project Site.
10.4 SURVIVAL OF INDEMNITIES. The foregoing indemnities shall
survive the term and shall be in addition to any of the District's or the
Tenant's obligations for breach of a representation or warranty.
11. INSURANCE.
11.1 PUBLIC LIABILITY. The Tenant agrees to carry or cause to be
carried public liability insurance with respect to the Project Site and the
uses and activities of the Tenant thereon in the minimum combined single
limit amount of Two Million dollars ($2,000,000) for the death of or
personal injury to one or more persons and for property damage for each
occurrence in connection with the Project Site and the use thereof or
activities of the Tenant thereon, and same shall include the District as an
additional named insured with respect to any matters arising out of this
Ground Lease or arising out of the District's ownership of the Project
Site. Such insurance policy shall contain a provision or be accompanied by
a certificate or endorsement to the effect that the insurance company shall
not cancel or materially modify such policy without first giving written
notice thereof to the District at least thirty (30) days in advance of such
cancellation to material modification. At the District's request, the
Tenant shall promptly provide to District certificates evidencing such
insurance and shall furnish copies of such policies to the District. The
District may change by reasonable amounts, consistent with prevailing
commercial practices in the Port of Lake Xxxxxxx, the limits of insurance
coverage required by this Section 11.1 upon ninety (90) days written notice
to the Tenant stating such changed limits of coverage and the reasons for
the change.
11.2 WORKERS' COMPENSATION. The Tenant further covenants and
agrees, at its expense, to take out and maintain at all times, all
necessary workers' compensation insurance covering all persons employed by
the Tenant in and about the Project Site to the extent required by
Applicable Laws.
11.3 QUALIFICATION FOR INSURER. All insurance policies required
above shall be issued by companies authorized to do business under the
State of Louisiana, and be rated no less than "B" as to management, and no
less than "Class V" as to financial strength by the latest edition of
Best's Insurance Guide, published by A. M. Best Company, Oldwick, New
Jersey, or an equivalent rating agency, subject to the approval of the
District. Alternatively, Tenant may elect to be self-insured subject to the
approval of the District, which approval shall not be unreasonably
withheld.
11.4 WAIVER OF SUBROGATION. As a part of the consideration of
this Ground Lease, each of the parties hereby releases the other from all
liability for damage due to any act or neglect of the other party which is
the result of fire or other casualty to the extent covered by any insurance
policy; provided, however, the releases herein contained shall not affect
the rights of either party under this Ground Lease to be paid insurance
proceeds received by the other or apply to loss or damage resulting from
the willful or premeditated acts of either of the parties hereto, their
agents or employees; and provided further, nothing in this paragraph shall
be interpreted as or have the effect of relieving or modifying any
obligation of any insurance company and shall be void if and to the extent
it would have such effect. Any party required by this Ground Lease to
maintain any casualty insurance shall make reasonable attempts to obtain
the written consent to this waiver of subrogation from its insurer.
12. LIENS AND MORTGAGES.
12.1 PROHIBITION OF LIENS AND MORTGAGES. The Tenant shall not
create or permit to be created or to remain in connection with the Project,
the Project Site, or the Tenant's activities thereon, any liens or
mortgages against any property interest of the District, and the Tenant
shall discharge any lien, encumbrance, or charge (levied on account of any
Imposition or any mechanics', laborers', or materialmen's lien or security
agreement) which might be or become a lien, encumbrance, or charge upon the
District's interest in the Project Site or any part thereof in accordance
with Section 12.2 hereof.
12.2 DISCHARGE OF LIENS. If any mechanics', laborers', or
materialmen's lien (other than a District-Created Lien) shall at any time
be filed against the District's interest in the Project Site or any part
thereof in connection with the Project or the Tenant's activities thereon,
the Tenant, within 30 days after notice of the filing thereof, shall elect
to contest the same or cause the same to be discharged of record by
payment, deposit, bond, order of a court of competent jurisdiction or
otherwise. If the Tenant does not contest such lien and shall fail to
cause such lien to be discharged within the period aforesaid, then in
addition to any other right or remedy of the District hereunder, the
District may, but shall not be obligated to, discharge the same either by
paying the amount claimed to be due or by procuring the discharge of such
lien by deposit or by bonding proceedings, and in any such event the
District shall be entitled, if the District so elects, to compel the
prosecution of an action for the foreclosure of such lien by the lienor
with interest, attorneys' fees, costs, and allowances. Any amount so paid
by the District and all costs and expenses incurred by the District in
connection therewith, including reasonable attorneys' fees together with
interest thereon at one percent (1%) per annum above the prime rate of
interest quoted from time to time by Bank of America, New York, as Bank of
America's Prime Rate, from the respective dates of the District's making of
the payment or incurring of the cost and expense, shall constitute
additional rent payable by the Tenant under this Ground Lease and shall be
paid by the Tenant to the District within fifteen (15) days of written
demand therefor.
12.3 DISTRICT NOT LIABLE FOR MECHANIC'S LIENS. Nothing herein
contained shall be deemed or construed in any way to constitute the consent
of or request by the District, express or implied, to a contractor,
subcontractor, laborer or materialman for the performance of any labor or
the furnishing of any materials for any specific improvement, alteration to
or repair of the Project Site, the Tenant Improvements or District
Improvements or any part thereof. NOTICE IS HEREBY GIVEN THAT THE DISTRICT
SHALL NOT BE LIABLE FOR ANY LABOR OR MATERIALS FURNISHED OR TO BE FURNISHED
TO THE TENANT UPON CREDIT AND THAT NO MECHANIC'S OR OTHER LIEN FOR ANY SUCH
LABOR OR MATERIALS SHALL ATTACH TO OR AFFECT THE REVERSIONARY OR OTHER
INTEREST OF THE DISTRICT IN AND TO THE PROJECT SITE AND THE TENANT
IMPROVEMENTS OR DISTRICT IMPROVEMENTS THEREON.
12.4 CONSENT TO GROUND LEASEHOLD MORTGAGES. The Tenant may not
encumber without the District's consent, the Ground Lease or any interest
connected to the Ground Lease.
13. ENTRY ON PREMISES BY DISTRICT, ETC.
13.1 ENTRY ON PREMISES. In addition to such rights of entry as
are granted to the District pursuant to Section 6.5 hereof, the Tenant
shall permit the District and its authorized representatives to enter the
Project Site during normal business hours upon reasonable notice, which
shall be no less than twenty-four (24) hours in advance, for the purposes
of inspecting the Project Site and verifying compliance by the Tenant with
the Terms of this Ground Lease.
13.2 SHOWINGS. The District shall have the right to enter the
Project Site at reasonable times during usual business hours for the
purpose of showing the same to prospective tenants, purchasers, or
mortgagees of the Project Site and Tenant Improvements or District
Improvements.
14. DESTRUCTION BY FIRE OR OTHER CASUALTY.
If Tenant Improvements erected on the Project Site shall be
destroyed or so damaged by fire or any other casualty whatsoever, not due
to the willful misconduct of the Tenant, where repair or restoration cannot
be reasonably accomplished within one hundred and twenty (120) days of the
date of such fire or casualty, the Tenant, by written notice to the
District accompanied by a certified copy of a resolution of the Board of
Directors of the Tenant to such effect, may, at its election, decide not to
restore nor reconstruct the Tenant Improvements and cancel this Ground
Lease. In the event that the Tenant so decides not to restore or
reconstruct the Tenant Improvements and cancel this Ground Lease, the
Tenant shall notify the District thereof in writing and shall proceed with
due diligence to demolish and remove any ruins or rubble remaining on the
Project Site at the Tenant's sole cost and expense, so as to return the
Project Site as nearly as reasonably practicable to the condition thereof
upon completion of the District Improvements. Any such cancellation of
this Ground Lease shall be effective as of the date the Tenant completes
such demolition and removal work, and all unaccrued liability of the Tenant
hereunder shall thereupon terminate.
15. RESTRICTION ON ASSIGNMENTS AND TRANSFERS.
The Tenant shall not assign this Ground Lease, in whole or in
part, or sublet all or any portion of the Project Site, without the consent
of the District, which consent shall not be unreasonably withheld, delayed
or conditioned. The District agrees that any portion of the Project Site
may be subleased by the Tenant so long as the Tenant continues to be
responsible for the performance of all of its obligations under this Ground
Lease and the sublessee's intended use of the Project Site is consistent
with those uses permitted of the Tenant hereunder or is otherwise approved
by the District. In addition, the District acknowledges that no approval
or consent shall be required in connection with an assignment of this
Ground Lease for security purposes for any financing permitted hereby, or
which is to any entity which controls, is controlled by, or under common
control with, the Tenant, or is a result of any merger or acquisition of
the Tenant so long as the surviving entity is fully responsible for all of
the obligations of the Tenant hereunder.
16. EVENTS OF DEFAULT OF TENANT.
If any one or more of the following events shall happen and not
be remedied as herein provided an Event of Default shall be deemed to have
occurred:
16.1 BREACH OF SPECIAL COVENANTS. Subject to the provisions of
Sections 24 and 6.4, if the Tenant shall fail to commence construction of
the Tenant Improvements when required pursuant to Section 6.3 or fail to
substantially complete construction when required pursuant to Section 6.4.
16.2 BREACH OF COVENANT. If default shall be made by the Tenant
in the performance of or compliance with any of the covenants, agreements,
terms, or conditions contained in this Ground Lease other than those
referred to in the foregoing Section 16.1, and such default shall continue
for a period of thirty (30) days after written notice thereof from District
to the Tenant specifying the nature of such default and the acts required
to cure the same, or, in the case of a default or a contingency which
cannot with due diligence be cured within such period of thirty (30) days,
the Tenant fails to proceed with all due diligence within such period of
thirty (30) days, to commence cure of the same and thereafter to prosecute
the curing such default with all due diligence (it being intended that in
connection with a default not susceptible of being cured with due diligence
within thirty (30) days that the time of the Tenant within which to cure
same shall be extended for such period as may be necessary to complete the
same with all due diligence).
16.3 DISTRICT'S REMEDIES. CURE.
(a) RIGHT TO TERMINATE. Upon the occurrence of an Event of
Default, the District may give written notice to the Tenant stating that
this Ground Lease and the term hereby demised shall expire and terminate on
the date specified by such notice, and this Ground Lease, the term hereby
demised, and the rights of the Tenant under this Ground Lease shall expire
and terminate unless such default is fully remedied in a timely manner and
all arrears of rent, and all other amounts payable by the Tenant under this
Ground Lease, in each case within sixty (60) days from the date of such
notice, together with interest thereon at the rate of twelve percent (12%)
per annum from the time when the same became due and payable, and all costs
and expenses reasonably incurred by or on behalf of the District as a
result of the Event of Default, including reasonable attorneys' fees, shall
have been fully and promptly paid by the Tenant to the District and all
other defaults shall have been fully cured and made good or cured to the
reasonable satisfaction of the District, in either of which events the
consequences of such Event of Default shall be deemed to be annulled.
(b) RIGHT TO CURE. Upon the occurrence of an Event of Default,
the District may take whatever actions are reasonably necessary to cure
such Event of Default, including the hiring of attorneys, contractors,
consultants, architects, engineers, laborers, or others, purchasing the
required goods or services and procuring necessary insurance or performance
bonds. The Tenant shall be responsible for all costs, including attorney's
fees and the fees of other professionals, reasonably incurred by the
District pursuant to this Section and such costs shall be billed to the
Tenant in addition to any and all rent due hereunder. The Tenant shall pay
all such additional costs and charges within fifteen (15) days after
billing by the District.
(c) INJUNCTIONS AND DAMAGES. Upon the occurrence of any Event
of Default hereunder, the District at any time thereafter shall have the
right to enjoin such breach and to invoke any right and remedy allowed
herein, by law or in equity (except for the right of specific performance),
or by statute or otherwise including, without limitation, remedies at law
for damages and for reimbursement of expenses to the District in connection
with any such action, including reasonable attorney's fees, costs, and
appellate expenses.
16.4 TAKING OF POSSESSION; ACCELERATION OF GROUND RENT. Upon any
expiration or termination of this Ground Lease or any termination by
summary proceedings or otherwise, (a) the Tenant shall quit and peacefully
surrender the Project Site to the District, without any payment therefor by
the District, and the District, upon or at any time after any such
expiration or termination, may without further notice, enter upon and re-
enter the Project Site, by summary proceedings, ejectment, or otherwise,
and may dispossess the Tenant and remove the Tenant and all other persons
and property from the Project Site and may have, hold, and enjoy the
Project Site and the right to receive all rental income of and from the
same; and (b) the District shall be entitled to collect forthwith upon such
termination as liquidated damages, an amount equal to the remaining
aggregate rent; and (c) all obligations of the Tenant hereunder for
additional rent, or Impositions, or any portion thereof arising or accruing
with respect to any period prior to such termination and any obligations of
the Tenant under the indemnification provisions hereof arising or accruing
with respect to any period prior to such termination hereof, in each case
without regard to whether such matter is first noticed to the District
prior to or subsequent to such termination, shall survive the termination
hereof.
16.6 AGENT FOR SERVICE. The Tenant shall maintain a registered
agent of the Tenant for service of process, which agent will be located
within the State of Louisiana. The Tenant shall provide the name and
address of such agent or any successor agent to the District in writing
prior to the commencement of the lease term. If the Tenant shall fail to
maintain such a registered agent within the State of Louisiana, service of
process may be accomplished by public posting on the Project Site in the
same manner and for the same period as provided in Louisiana statutes, with
written notice becoming effective at the time of posting.
17. EVENTS OF DEFAULT OF THE DISTRICT.
17.1 BREACH OF SPECIAL COVENANTS. Subject to the provisions of
Section 2.4 and 7.4, if the District shall fail to commence construction of
the District Improvements when required pursuant to Section 7.3 or fail to
substantially complete construction when required pursuant to Section 7.4.
17.2 DISTRICT'S EVENT OF DEFAULT. Any failure of the District to
comply with any of its obligations under this Ground Lease shall constitute
a "District's Event of Default" hereunder if such failure continues for
thirty (30) days after the Tenant gives the District written notice thereof
and the acts required to cure the same.
17.3 TERMINATION OF GROUND LEASE. In the event of a District's
Event of Default of the District under this Ground Lease, the Tenant may
cancel this Ground Lease by written notice to the District. Except to the
extent the Tenant is otherwise indebted to the District, all deposits,
unearned rent and other unearned payments by the Tenant under this Ground
Lease shall be returned to the Tenant immediately upon such cancellation.
17.4 RIGHT TO CURE. Upon the occurrence of a District's Event of
Default, the Tenant may take whatever actions are reasonably necessary to
cure such Event of Default, including the hiring of attorneys, contractors,
consultants, architects, engineers, laborers, or others, purchasing the
required goods or services and procuring necessary insurance. The District
shall be responsible for all costs including attorneys' fees and the fees
of other professionals, reasonably incurred by the Tenant pursuant to this
Section and such costs shall be billed to the District in addition to any
and all rent due hereunder. The District shall pay all such additional
costs and charges within fifteen (15) days after billing by the Tenant.
17.5 TENANT'S RIGHT TO DAMAGES. Except to the extent
specifically waived in this Ground Lease, the Tenant shall have the right,
with or without canceling this Ground Lease, to recover damages caused by a
District's Event of Default.
18. MUTUAL OBLIGATIONS.
18.1 LATE CHARGES; INTEREST. If any rent or other sum is not
paid when due under this Ground Lease, and if such delinquency continues
for a period of ten (10) days after written notice from the District to
Tenant, such sum shall bear a late charge equal to twelve percent (12%) of
the amount thereof, the parties recognizing and agreeing that such charge
represents a reasonable approximation of the additional administrative
costs and expenses which are likely to be incurred by the non-defaulting
party. Additionally, and except where otherwise provided herein, any sum
not paid within twenty (20) days after its due date and any judgment
rendered therefor shall bear interest after said twentieth (20th) day to
the date of collection at the rate of twelve percent (12%) per annum.
18.2 OBLIGATIONS TO MITIGATE DAMAGES. Both the District and the
Tenant shall have the obligation to take reasonable steps to mitigate their
damages caused by any default under this Ground Lease.
18.3 FAILURE TO ENFORCE NOT A WAIVER. No failure by either party
to insist upon the strict performance of any covenant, agreement, term, or
condition of this Ground Lease or to exercise any right or remedy arising
upon the breach thereof, and no acceptance by the District of full or
partial rent during the continuance of any such breach, shall constitute a
waiver of any such breach of such covenant, agreement, term, or condition.
No covenant, agreement, term, or condition of this Ground Lease to be
performed or complied with by either party and no breach thereof shall be
waived, altered, or modified except by a written instrument executed by
both parties. No waiver of any breach shall affect or alter this Ground
Lease, but each and every covenant, agreement, term, or condition of this
Ground Lease shall continue in full force and effect with respect to any
other then existing or subsequent breach hereof.
18.4 RIGHTS CUMULATIVE. Each right and remedy of the parties
provided in this Ground Lease shall be cumulative and shall be in addition
to every other right or remedy provided for in this Ground Lease or now or
thereafter existing at law or in equity or by statute or otherwise
(excluding, however, specific performance against the Tenant) and the
exercise or beginning of the exercise by the parties of any one or more of
such rights or remedies provided for in this Ground Lease or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the parties of any or all
other such rights or remedies provided for in this Ground Lease or now or
hereafter existing at law or in equity or by statute or otherwise.
19. NOTICES.
19.1 ADDRESSES. All notices, demands, and requests which may or
are required to be given hereunder shall be in writing, delivered by
personal service, or shall be sent by facsimile, United States registered
or certified mail, return receipt requested, postage prepaid, to the
parties at the following numbers and addresses:
To the Tenant: Chief Financial Officer
PIM, LLC
0000 Xxxx Xxxx
Xxx Xxxxxx, XX 00000
Facsimile No. 000-000-0000
To the District: Executive Director
Lake Xxxxxxx Harbor & Terminal District
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Facsimile No. (000) 000-0000
or to such other numbers or addresses as either party may from time to time
designate by written notice to the other party hereto at least fifteen (15)
days in advance of an effective date stated therein.
19.2 WHEN DEEMED DELIVERED. Notices, demands, and requests which
may or shall be served in accordance with Section 19.1 hereof shall be
deemed sufficiently served or given for all purposes hereunder at the
earlier of (i) the time such notice, demand, or request shall be received
by the addressee, or (ii) ten (10) days after posting via United States
registered or certified mail, return receipt requested, postage prepaid.
20. QUIET ENJOYMENT; TITLE.
20.1 QUIET ENJOYMENT. Subject to the terms and conditions of
this Ground Lease, the Tenant, upon paying the ground rent and all
additional rent, Impositions, and other charges herein provided for and
observing and keeping all covenants, agreements, and conditions of this
Ground Lease on its part to be kept and performed in all material respects,
shall quietly have and enjoy the Project Site during the term of this
Ground Lease, without hindrance or molestation by the District or anyone
claiming or under or through the District. This agreement shall be
construed as a covenant running with the land. Nothing in this Section or
any other section herein shall constitute a waiver of the District's
exercise of its police powers under the law applicable to third parties
generally.
20.2 DISTRICT'S TITLE. District represents and warrants as a
condition of this Ground Lease that it is the sole record holder of good
title to the Project Site subject to no cloud or encumbrances which would
materially affect the Tenant's use and enjoyment or peaceable possession of
the Project Site or would prevent the Tenant from obtaining a leasehold
policy of title insurance insuring its interest in the Project without
exceptions to which the Tenant reasonably objects; and that during the term
hereof it shall not encumber the Project Site; that it is authorized to
make this Ground Lease for the term hereof; that the provisions of this
Ground Lease do not and will not conflict with or violate any of the
provisions of existing agreements between District and any third party;
that the certificate of occupancy, when issued, will allow the Tenant to
use the Tenant Improvements and District Improvements for the purposes set
forth herein, subject to applicable federal, state, and local laws,
ordinances, and building codes; and that District will deliver the Project
Site free of all tenants and occupants and claims thereto.
21. NON-MERGER OF LEASEHOLD. There shall be no merger of this
Ground Lease or of the leasehold interest hereby created with the record
owner's reversionary interest in the Project Site or any part thereof by
reason of the fact that the same Person may acquire or hold, directly or
indirectly, this Ground Lease or leasehold interest hereby created or any
interest in this Ground Lease or in such leasehold interest and the owner's
reversionary interest in the Project Site or any interest therein.
22. EMINENT DOMAIN.
22.1 COMPLETE CONDEMNATION. If, during the term hereof, the
whole of the Project Site shall be taken under the power of eminent domain
by any public or private authority, then this Ground Lease and the term
hereof shall cease and terminate as of the date of such taking, provided
that the Tenant shall share in the condemnation award as provided herein.
The Tenant may, upon the written approval of the District, continue to
occupy the Project Site, subject to the terms of this Ground Lease, for all
or such part of the period between the date of such taking and the date
when possession of the Project Site shall be taken by the taking authority,
and any unearned rent or other charges, if any, paid in advance, shall be
refunded to the Tenant. If required, the Tenant shall procure from the
applicable governmental authority, at the Tenant's sole cost and expense,
all necessary consents and authorizations to continue to occupy the Project
Site from and after the date of such taking.
22.2 PARTIAL CONDEMNATION. If, during the term hereof, any
public or private authority shall, under the power of eminent domain, make
a taking resulting in the reduction of the Project Site or Tenant
Improvements by fifteen percent (15%) or more in the Tenant's not being
able to use the remainder thereof for the purposes contemplated hereby,
then the Tenant may, at its election, terminate this Ground Lease by giving
the District notice of the exercise of its election within thirty (30) days
of the date of notice to the Tenant of such taking. In the event of
termination by the Tenant under this Section 22.2, the term hereof shall
cease and terminate as of the last day of the calendar month in which such
notice of exercise of its election to terminate has been given, and any
unearned rent or other charges, if any, paid in advance, shall be refunded
to the Tenant, and the Tenant shall share in the condemnation award as
provided herein.
22.3 RENT ADJUSTMENT. In the event that the Tenant does not
elect to terminate this Ground Lease pursuant to Section 22.2 above, then
this Ground Lease and the term hereof shall continue in full force and
effect, and the base annual rent shall be adjusted pro-rata in accordance
with the amount of property actually taken by the condemning authority.
22.4 ALLOCATION OF AWARD. In the event of a complete taking (or
partial taking resulting in termination of this Ground Lease) of the
Project Site and/or the Tenant Improvements, the District shall be entitled
to recover that portion of the condemnation award (or settlement) fairly
attributable to the value of the land taken. The Tenant shall be entitled
to recover that portion of the award fairly attributable to the value of
the Tenant Improvements taken. In the event no Tenant Improvements are
taken, the Tenant shall not be entitled to any portion of the award, and in
the event no land is taken, the District shall not be entitled to any
portion of the award, unless the Tenant elects to terminate this Ground
Lease pursuant to Section 22.2, in which event the award or settlement
shall be allocated as provided above. In the event of a partial taking of
the Tenant Improvements not resulting in a termination, the entire award or
settlement shall be paid to the Tenant. Nothing contained herein shall
prohibit the Tenant's claiming relocation damages and/or business losses
against the taking authority in any appropriate proceeding.
23. TEMPORARY TAKING OR OTHER DEPRIVATION. If, during the term
hereof, (i) less than all of the record owner's title to all or any portion
of the Project Site is taken for temporary use or occupancy, or (ii) any
public or private authority takes any action not resulting in a taking of
all or any portion of the Project Site but resulting in a right to
compensation therefor, such as charging of the grade of any street upon
which the Project Site abut, then, except as otherwise provided in Section
22, the Tenant shall be entitled to make claim for, recover, and retain all
awards, whether pursuant to judgment, agreement, or otherwise, recoverable
in connection therewith.
24. FORCE MAJEURE. Either party hereto shall be excused from
performing any of its respective obligations or undertaking provided in
this Ground Lease, excepting any of its respective obligations or
undertakings to pay any sums of money under the applicable provisions
hereof, for so long as the performance of such obligations are prevented or
significantly delayed, retarded or hindered by act of God, fire, flood,
hurricane, acts of war (declared or undeclared), invasion, or insurrection,
if such party hereto gives written notice of such delay to the other party
within twenty (20) calendar days of the occurrence of such event.
25. MISCELLANEOUS.
25.1 TIME IS OF THE ESSENCE. Time is of the essence of each and
all of the terms and provisions of this Ground Lease.
25.2 ACCESS TO PREMISES. The District agrees to provide the
Tenant, its agents, employees, and invitees with reasonable access to the
Project Site 24 hours a day, 365 (or 366, as the case may be) days a year
during the term of this Ground Lease; provided, however, that the Tenant
agrees to comply with any and all reasonable rules and regulations of the
District regarding access to secured areas of the port and regarding the
proper identification of all visitors to the Project Site.
25.3 SUCCESSORS. The covenants, agreements, terms, provisions,
and conditions contained in this Ground Lease shall apply to and inure to
the benefit of and be binding upon the District and the Tenant and their
respective successors and assigns, except as expressly otherwise herein
provided, and shall be deemed covenants running with the respective
interests of the parties hereto.
25.4 SURVIVING COVENANTS. Each provision of this Ground Lease
which may require performance in any respect by or on behalf of either the
Tenant or the District after the expiration of the term hereof or its
earlier termination shall survive such expiration or earlier termination.
25.5 PROVISIONS DEEMED CONDITIONS AND COVENANTS. All of the
provisions of this Ground Lease shall be deemed and construed to be
"conditions" and "covenants" as though the words specifically expressing or
importing covenants and conditions were used to each separate provision
hereof.
25.6 HEADINGS. The headings and section captions in this Ground
Lease and the Table of Contents are inserted only as a matter of
convenience and for reference and in no way define, limit, or describe the
scope or intent of this Ground Lease or in any way affect this Ground Lease
as to matters of interpretation or otherwise.
25.7 NO ORAL CHANGE OR TERMINATION. This Ground Lease and the
exhibits appended hereto and incorporated herein by reference contain the
entire agreement between the parties hereto with respect to the subject
matter hereof, and this Ground Lease restates and modifies that Ground
Lease Agreement dated September 16, 1997 between the Lake Xxxxxxx Harbor &
Terminal District and Professional Industrial Maintenance, LLC, which was
assigned to PIM, LLC on February 5, 1998, and no other change,
modification, or discharge hereof in whole or in part shall be effective
unless such change, modification, or discharge is in writing and signed by
the party against whom enforcement of the change, modification, or
discharge is sought. This Ground Lease is the full and complete agreement
applicable between the parties, shall be the controlling agreement between
the parties and cannot be changed or terminated orally.
25.8 GOVERNING LAW; SEVERABILITY. This Ground Lease shall be
governed by and construed in accordance with the laws of the State of
Louisiana. To the extent permitted by law, the parties hereto shall be
deemed to have waived to the maximum extent possible all legal provisions
to the end that this Ground Lease shall be enforceable in accordance with
its terms. If any term or provision of this Ground Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remaining provisions of this Ground Lease or
the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Ground Lease shall be
valid and enforceable to the fullest extent permitted by law.
25.9 COUNTERPARTS. This Ground Lease may be executed in one or
more counterparts, each of which so executed shall be deemed to be an
original and all of which together shall constitute but a single document.
25.10 LITIGATION. In case of any litigation between the parties
hereto regarding the subject matter hereof, the losing party shall pay all
reasonable costs and expenses (including reasonable attorneys' fees) of the
prevailing party.
25.11 GENDER OF WORDS. Words of any gender in this Ground Lease
shall be held to include masculine or feminine and words denoting a
singular number shall be held to include the plural, and plural shall
include the singular, whenever the sense requires.
25.12 SOVEREIGN IMMUNITY; STATUTORY AUTHORITY. The District
represents and warrants that it has the statutory authority to enter into
this Ground Lease, that, when executed, this Ground Lease shall be binding
and enforceable in accordance with its terms, and that it is not immune
from suit or judgment resulting from any claim or action brought against it
by the Tenant pursuant to the express terms of this Ground Lease.
25.13 NO BROKERS. Neither party to this Ground Lease shall be
liable for any real estate brokers' or leasing agents' commissions in the
absence of a written agreement which expressly provides therefor and which
is to be charged.
25.14 LEGAL RELATIONSHIPS. This Ground Lease shall not be
interpreted or construed as establishing a partnership or joint venture
between the District and the Tenant and neither party shall have the right
to make any representations or be liable for the debts or obligations of
the other. Neither party is executing this Ground Lease as an agent for an
undisclosed principal. No third party is intended to be benefited by this
contract.
25.15 MEMORANDUM OF LEASE. At either party's request, the
parties hereto agree to execute and cause to be properly recorded a
memorandum of this Ground Lease, sufficient in form and content to give
third-parties constructive notice of the Tenant's interest hereunder.
25.16 OPTION TO LEASE ADDITIONAL PROPERTY. In consideration of
and conditioned upon Tenant being in full compliance with all terms and
conditions of this Ground Lease and subject to the conditions set forth
herein, Tenant shall have the option to lease that area designated as
"Option A Area" on Exhibit "1" for the same terms and conditions as set
forth in this Ground Lease with the lease terms terminating at the same
time as this Ground Lease. This option shall extend for a period of five
(5) years from the Ground Lease Commencement date, (the "Option Period").
The right to exercise this option is conditioned upon Tenant expending the
sum of $3,000,000 or securing the expenditure of state funds without the
expenditure or commitment of any District funds to remove excess fill
material from "Option A Area" and level "Option A Area" to a grade of eight
(8') feet.
The option to lease the "Option A Area" must be exercised by
written notice from the Tenant to the District during the time periods
provided in this section for such option to lease. Failure to timely give
such notice shall automatically terminate the right of Tenant to exercise
its option to lease "Option A Area".
Notwithstanding the above, if during the above Option Period the
District receives a bona fide offer from a third party to lease "Option A
Area", then in that event, the District may give Tenant written notice of
such offer and Tenant shall have forty-five (45) days from such written
notice to elect to exercise the option provided for herein or elect to
lease "Option A Area" on the same terms and conditions as offered by such
third party.
IN WITNESS WHEREOF, the undersigned parties have executed this
Ground Lease as of the date first above written.
DISTRICT:
ATTEST: LAKE XXXXXXX HARBOR & TERMINAL
DISTRICT, a political subdivision
of the State of Louisiana
By: /S/ XXXXXXX X. XXXX By: /S/ XXXXXXXX X. XXXXXXX
---------------------- ----------------------------
Name: XXXXXXX X. XXXX Name: Xxxxxxxx X. Xxxxxxx
Title: GENERAL COUNSEL Title: Executive Director
(SEAL)
TENANT:
ATTEST: PIM, LLC
By: /S/ XXXXXX X. XXXXXXX By: /S/ XXXXX X. XXXXX
----------------------- ------------------------
Name: XXXXXX X. XXXXXXX Name: XXXXX X. XXXXX
Title: NOTARY Title: CHIEF FINANCIAL OFFICER
(SEAL)
LIST OF EXHIBITS
Exhibit 1 PROJECT SITE AND PLAT;
ROAD AREA TO BE USED BY TENANT
Exhibit 2 DESCRIPTION OF TENANT IMPROVEMENTS
Exhibit 3 DESCRIPTION OF DISTRICT IMPROVEMENTS
Exhibit 4 GROUND LEASE RENTAL
EXHIBIT 2
DESCRIPTION OF TENANT IMPROVEMENTS
Fabrication Shop - $ 2,000,000
157'x300'x80' tall, galvanized
aluminum exterior, with two
78' fabrication bays
Tool room and rest room - $ 300,000
lean to design, 20'x200'x22'
tall, galvanized aluminum
exterior, designed with second
floor throughout
Pipe shop - $ 450,000
50'x200'x30' tall, galvanized
aluminum exterior
Administrative office building - $ 375,000
60'x100'x24' tall with tele-
communications capability
Electrical, gas and air $ 1,500,000
underground piping
Track cranes, overhead cranes, cherry $ 3,500,000
pickers, and other heavy equipment
-----------
$ 8,125,000
-----------------
** Ground Stabilization/Drainage/Site Roadways (amount to be determined)
** Actual construction dollar amount to be based on actual level of
improvement as determined by Tenant
EXHIBIT 3
DESCRIPTION OF DISTRICT IMPROVEMENTS
The District shall at its expense and contingent upon the receipt of
$6 million in State Capital Outlay funds and $2 million from the Parish of
Calcasieu construct the following improvements:
1. Removal of excess fill material from the project site and level to
approximate grades shown on the plat attached hereto as Exhibit "3-A".
2. New bulkhead, tie-back system, dredging, heavy lift pods/crane pads
along existing bulkhead at west side of turning basin as shown on
Exhibit "3-A".
EXHIBIT 4
GROUND LEASE RENTAL
Rental for the first year of the Initial Term shall be *$635.00
per acre, per month. Thereafter, the rental shall be increased each year
of the Initial Term and any option period as of the date the rental is owed
by an amount determined using the formula set forth below. The amount of
the increase will be determined by multiplying the rental of $635.00 per
acre, per month, by the percent of change in the Consumer Price Index (CPI-
W), all items. The percent change will be computed by comparing the index
figure published for the month of July, 1998 with the month prior to the
Ground Lease Commencement Date for each particular year that the Ground
Lease continues. For example, if the Ground Lease Commencement Date is
September 1, 1998, the adjustment for the monthly rental due September 1,
1999, shall be calculated using the index published for July, 1999 and
comparing it to July, 1998 for the percent of change. The index to be used
will be the U.S. Department of Labor Revised Consumer Price Index for Wage
Earners and Clerical Workers U.S. City Average, all items figure, (Base to
December 1982=100) published by the Bureau of Labor Statistics or any
successor index published by the Department of Labor. Rental shall never
be less than $635.00 per acre, per month, and shall only increase in
accordance with the above formula.
* For a period of ten (10) years from completion of the District
Improvements or until termination of this Ground Lease, whichever occurs
first, the District will use 13.4% of the Ground Lease Rental to partially
repay the Parish of Calcasieu for its contribution toward the required
District Improvements. A separate agreement between the District and the
Parish of Calcasieu will be executed.
