LEASE AGREEMENT
THIS LEASE AGREEMENT is entered as of the date set forth on
the signature page hereof between the PORT OF HOUSTON AUTHORITY OF XXXXXX
COUNTY, TEXAS, a body politic and a governmental subdivision of the State of
Texas (the "Landlord"), and HARVEST STATES COOPERATIVES (the "Tenant").
Recitals
By Minute 11 of its meeting of September 27, 1995, the Port
Commission of the Port of Houston Authority, Landlord authorized the execution
of this Lease with Tenant for the leasing of approximately 2.8 acres, in Xxxxxx
County, Texas, more specifically described in Exhibit "A," which Exhibit is
incorporated herein and made a part hereof for all purposes. In this regard,
Landlord and Tenant are desirous of entering into this Lease to set forth the
terms and conditions of the leasing of the Leased Premises by Landlord to
Tenant.
Agreements
NOW, THEREFORE, in consideration of the mutual agreements
herein set forth, Landlord and Tenant agree as follows:
Article 1. Definitions. As used in this Lease, the following terms (in addition
to the terms defined elsewhere herein), and whether singular or plural thereof,
shall have the following meanings when used herein with initial capital letters:
"Award" shall mean any payment or other compensation received or
receivable from or on behalf of any governmental authority or any
person or entity vested with the power of eminent domain for or as a
consequence of any Taking.
"Additional Rent" shall have the meaning ascribed to it in Section
5.02.
"Base Rent" shall have the meaning ascribed to it in Section 5.01.
"Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday recognized in Landlord's Tariffs.
"Commencement Date" shall mean October 1, 1995.
"Completion Date" shall mean the date that the Project is complete,
commissioned and ready for operation in accordance with its
specifications or August 31, 1996, which ever date is earlier.
"Elevator" shall mean the Houston Public Grain Elevator No. 2 Facility
owned by Landlord and located adjacent to the Project.
"Excluded Property" shall mean the machinery and equipment described on
Exhibit "B-1", including all replacements, enhancements, accessions or
substitutives thereof or thereto and all other personal property,
office supplies, moveable office furniture and other property
constituting trade fixtures not attached to or constituting a part of
the Leased Premises.
"Force Majeure" shall mean:
(a) acts of God, landslides, lightning, earthquakes,
hurricanes, tornadoes, blizzards , fires, explosions, floods,
acts of a public enemy, wars, blockades, insurrections, riots
or civil disturbances;
(b) labor disputes, strikes, work slowdowns, or work
stoppages (excluding, however, those of Tenant's or Landlord's
employees); and
(c) any other similar cause or event, provided that
the foregoing is beyond the reasonable control of the party
claiming Force Majeure.
"Grain" shall mean wheat.
"Hazardous Materials" shall have the meaning ascribed to it in Section
4.03 hereof. "Impositions" shall mean (a) all real estate, personal
property, rental, water, sewer, transit, use, occupancy and other
taxes, assessments, charges, excises and levies which are imposed upon
or with respect to (i) the Leased Premises or any portion thereof, or
the sidewalks, streets or alley ways adjacent thereto, or the
ownership, use, occupancy or enjoyment thereof or (ii) this Lease and
the Rent payable hereunder; and (b) all charges for any easement,
license, permit or agreement maintained for the benefit of the Leased
Premises.
"Landlord" shall mean the Port of Houston Authority of Xxxxxx County,
Texas, the body politic and governmental subdivision identified in the
opening recital of this Lease, and its successors and assigns and
subsequent owners of the Leased Premises. "Landlord's Tariffs" shall
mean the rates, rules, regulations, policies and tariffs issued, by
Landlord and in effect as of the effective date of this Lease and any
amendments, modifications or changes thereto. In the event the Landlord
issues new tariff provisions on flour milling, flour milling's related
processed products, or the conveyance of such products, other than the
conveyance across Landlord's wharves, then the Tenant and the Project
shall be exempt from such new tariff provisions during the term of this
Lease unless otherwise agreed to in writing by Tenant.
"Lease" shall mean this Lease as amended in accordance with Section
22.08. "Leased Premises" shall mean (a) the property leased by Tenant
described in Exhibit "A" hereto.
"Legal Requirements" shall mean any and all (a) judicial decisions,
orders, injunctions, writs, statutes, rulings, rules, regulations,
promulgations, directives, permits, certificates or ordinances of any
governmental authority in any way applicable to Tenant or the Leased
Premises, including zoning, environmental and utility conservation
matters, (b) Landlord's Tariffs, (c) insurance requirements and (d)
other documents, instruments or agreements (written or oral) relating
to the Leased Premises or to which the Leased Premises may be bound or
encumbered.
"Permitted Use" shall mean Grain milling and the products and the
byproducts thereof, and the manufacture of any products using milled
products, byproducts and additives, together with all other related
business uses.
"Project" shall mean the mill, warehouse and other improvements to be
constructed by Tenant as further described in Exhibit "B" hereto
together with all alterations, improvements and additions to and
replacements of such improvements, and shall include the Excluded
Property.
"Rent" shall mean Base Rent, Additional Rent and all other amounts
provided for under this Lease to be paid by Tenant, whether as
additional rent or otherwise.
"Taking" shall mean the taking, damaging or destroying of all or any
portion of the Leased Premises or the Elevator by or on behalf of any
governmental authority or any other person or entity pursuant to its
power of eminent domain. "Total Taking" shall mean any Taking of all or
substantially all of the Leased Premises or the Elevator, or of so much
of the Leased Premises or the Elevator that the portion remaining
cannot, in Tenant's or Landlord's good faith judgment reasonably
exercised, be economically restored. "Partial Taking" shall mean any
Taking of less than all of the Leased Premises or the Elevator such
that the portion remaining can, in Tenant's or Landlord's good faith
judgment reasonably exercised, be economically restored.
"Tenant" shall mean the tenant identified in the opening recital of
this Lease and its permitted Transferees which succeed to the leasehold
estate created hereby.
"Tenant Grain" shall mean wheat purchased or owned by or under the
control of Tenant for use in the Project and put through the Elevator.
"Term" shall mean the effective period of this Lease, as described in
Article 3 hereof. "Transfer" shall mean (a) an assignment (direct or
indirect, absolute or conditional, by operation of law or otherwise) by
Tenant of all or any portion of Tenant's interest in this
Lease or the leasehold estate created hereby, (b) a sublease of all or
any portion of the Leased Premises or (c) the grant or conveyance by
Tenant of any concession or license within the Leased Premises. If
Tenant is a corporation then any transfer of this Lease by merger,
consolidation or dissolution.
"Transferee" shall mean the assignee, sublessee, pledgee, concessionee,
licensee or other transferee of all or any portion of Tenant's interest
in this Lease, the leasehold estate created hereby or the Leased
Premises.
Article 2. Leased Premises. Subject to the provisions of this Lease, Landlord
hereby leases, demises and lets to Tenant, and Tenant hereby leases from
Landlord, the Leased Premises. Article 3. Term. The Term of this Lease shall
commence on the Commencement Date and shall (subject to earlier termination as
herein provided) continue for a period of thirty (30) years thereafter. Tenant
may extend the term of this Lease for four (4) additional terms of five (5)
years each (the "Renewal Terms"). Said extension shall be exercised by written
notice by Tenant to Landlord no less than six (6) months prior to the end of the
term then in effect.
Article 4. Use.
Section 4.01. Permitted Use: Continuous Operation. (a) Tenant will
occupy and use the Leased Premises solely for the Permitted Use and in strict
compliance with all Legal Requirements.
(b) Tenant shall not cease business operations at the Leased
Premises for periods in excess of three (3) consecutive months during any twelve
(12) month period during the term of this Lease. The covenants of this Section
4.01(b) are material to this Lease and should Tenant fail to satisfy such
covenants, Landlord (as its sole remedy for such failure) shall have the right
to terminate this Lease by giving Tenant at least sixty (60) days prior written
notice of such termination, in which event Tenant shall pay to Landlord all Rent
and other amounts accrued hereunder to the effective date of termination.
Section 4.02. Specifically Prohibited Use. Tenant will not (a) use,
occupy or permit the use or occupancy of the Leased Premises for any purpose or
in any manner which is or may be, directly or indirectly, (i) inconsistent with
the requirements of Section 4.01 hereof, (ii) violative of any of the Legal
Requirements, (iii) dangerous to life, health, the environment or property, or a
public or private nuisance or (iv) disruptive to the activities any other tenant
or occupant of property adjacent to the Leased Premises, (b) commit or permit to
remain any waste to the Leased Premises or (c) commit, or permit to be
committed, any action or circumstance in or about the Leased Premises which,
directly or indirectly, would or might justify any insurance carrier in
cancelling the insurance policies maintained by Tenant or Landlord on the Leased
Premises or the Elevator and improvements thereon.
Section 4.03. Environmental Restrictions. Tenant shall not cause or
permit any Hazardous Materials to be generated, treated, stored on or about the
Leased Premises or transferred to the Leased Premises in contravention of
Landlord's Tariffs or any other Legal Requirement. Any use of Hazardous
Materials by any person on the Leased Premises shall be in strict conformance
with all Legal Requirements and shall not cause the Leased Premises to be
subject to remedial obligations to protect health or the environment. The term
"Hazardous Materials" shall mean any flammables, explosives, radioactive
materials, hazardous waste, toxic substances or related materials, including
substances defined as "hazardous substances," "hazardous materials," "toxic
substances" or "solid wastes" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801, et seq.;
the Resources Conservation and Recovery Act, 42 U.S.C. Sec. 6901, et seq.; the
Toxic Substance Control Act, as amended, 15 U.S.C. Sec. 2601 et seq.; Landlord's
Tariffs; the Texas Solid Waste Disposal Act, Tex. Rev. Civ. Stat. Xxx. Art.
4477-7; or any other Legal Requirement.
Article 5. Rent.
Section 5.01. Base Rent. In consideration of Landlord's leasing the
Leased Premises to Tenant, Tenant shall pay to Landlord, commencing as of the
Commencement Date, Base Rent of NINETY DOLLARS ($90.00) per acre per month up to
the Completion Date. Commencing as of the Completion Date, Tenant shall pay to
the Landlord Base Rent of NINE HUNDRED AND NO/100 DOLLARS ($900.00) per acre of
Lease Premises for each calendar month during the Term (the "Base Rent").
Landlord and Tenant agree that the Leased Premises consists of approximately
plus/minus (3) three acres. The Base Rent shall be adjusted every five (5) years
during the Term of this Lease (including Renewal Terms) to equal the usual and
ordinary rent per acre per month charged by the Landlord on similar property at
the time of such adjustment. The value and the use of the Project and the
Excluded Property shall be excluded in determining the Base Rent and the Base
Rent shall be based upon the rent charged by Landlord for bare land.
Section 5.02. Additional Rent. Tenant shall pay Landlord, as Additional
Rent hereunder, any and all rates, charges and amounts called for and provided
to be paid to Landlord under Landlord's Tariffs.
Section 5.03. Payment of Rent. Except as otherwise expressly provided
in this Lease, all Base Rent shall be due and payable in advance monthly
installments on the first day of each calendar month during the Term. The
Additional Rent shall be due and payable in accordance with Landlord's Tariffs,
and all other Rent shall be due and payable ten (10) days after Landlord
provides Tenant with a written invoice therefor. Rent shall be paid to Landlord
at its address for notice hereunder or to such other person or at such other
address in Xxxxxx County, Texas, as Landlord may from time to time designate in
writing. Rent shall be paid in legal tender of the United States of America (or
in legal tender of any other nationality acceptable to Landlord) without notice,
demand, abatement, deduction or offset.
Section 5.04. Delinquent Payments and Handling Charge. All Rent and
other payments required of Tenant hereunder shall bear interest from the date
due until the date paid at the rate of interest specified in Section 22.13. In
no event, however, shall the charges permitted under Section 5.03, Section 22.13
hereof, or elsewhere in this Lease, to the extent any or all of the same are
considered to be interest under applicable law, exceed the maximum rate of
interest allowable under applicable law.
Section 5.05. Prepaid Rent. Tenant shall provide to Landlord
contemporaneously with the execution of this Lease, the sum of NINETY AND NO/100
DOLLARS ($90.00) per acre repre senting (a) the first monthly installment of
Base Rent paid in advance, to be applied to the Base Rent for the first month of
the Term when due. Landlord may apply any or all of any installment of Rent
hereunder towards the payment of any sum or the performance of any obligation
which Tenant was obligated, but failed, to pay or perform hereunder.
Article 6. Construction, Ownership and Operation of the Project .
Section 6.01. The Project . Subject to delays caused by Force Majeure
(as specified in Section 22.18 hereof), Tenant shall complete, at its sole cost
and expense, the Project . Tenant shall construct the Project in a good and
workmanlike manner and in accordance with plans and speci
fications approved in writing in advance by Landlord and in compliance with any
applicable building code and all applicable Legal Requirements. Tenant shall
test all fill used in construction of Project for the presence of Hazardous
Materials. Tenant shall not use fill that contains Hazardous Materials.
Tenant shall provide a copy of all test results to Landlord.
Section 6.02 Alterations and Improvements.
(a) Tenant shall have the right to make alterations,
additions, or improvements to the Leased Premises or the Project, including
constructing or improving buildings. Such alterations, additions and
improvements shall be done at Tenant's cost and expense and in a good and
workmanlike manner. Plans for such alterations, additions and improvements shall
be submitted to and approved by Landlord, which approval shall not be
unreasonably withheld. Landlord acknowledges and agrees that, subject to a
mutual agreement being reached between Landlord and Tenant, Tenant may use the
warehouse facilities owned by Landlord adjacent to the Leased Premises. Tenant
would intend to construct a conveyor system or pneumatic piping from the Project
to such warehouse for transportation of finished product. Landlord agrees to
cooperate with Tenant in the location and construction of such system, subject
to reaching a mutually satisfactory agreement as set out above. Tenant
acknowledges that the warehouse is and will remain a transit shed for
water-bourne cargo. Tenant further acknowledges that this Section 6.02 is not to
be construed as limiting Landlord's ability to enter into leases or freight
handling assignments with third parties with respect to the warehouse or other
portion of Landlord's property at the Xxxxxxxxx Terminal.
(b) Tenant agrees to pay for in advance or to build or
otherwise provide, at Tenant's election, any government-required
improvements to the Elevator needed to support the Project.
Section 6.03. Permits. Tenant shall obtain and maintain in effect at
all times during the Term all permits, licenses and consents required or
necessary for the construction, installation, maintenance, use and operation of
the Project and Tenant's use and occupancy of and operations at the Leased
Premises.
Section 6.04. Ownership and Removal of the Excluded Property . The
Project (excluding the Excluded Property) shall constitute Tenant improvements
and shall be the property of Tenant, and provided that the Project (excluding
the Excluded Property) shall be surrendered with the Leased Premises as part
thereof at the expiration or earlier termination of the Term without any
payment, reimbursement or compensation therefor or at Landlord's sole option, be
removed from the Leased Premises within 240 days after the expiration or earlier
termination of the Term and Tenant shall repair any damages caused by such
removal. Tenant shall remove the Excluded Property upon the expiration or
earlier termination of the Term and Tenant shall repair all damage to the Leased
Premises caused by such removal. If Tenant fails to remove the Excluded Property
within 240 days following the expiration or earlier termination of the Term,
then, at Landlord's election, (x) Tenant's rights, title and interest in and to
such Excluded Property shall be vested in Landlord (without the necessity of
executing any conveyance instruments) or (y) Landlord shall be entitled to
remove and store such Excluded Property as specified in Article 17 hereof.
Section 6.05. Condition of Leased Premises. Tenant acknowledges that
Tenant has independently and personally inspected the Leased Premises and that
Tenant has entered into this Lease based upon such examination and inspection.
Tenant acknowledges that Landlord has provided to it the environmental site
assessment referred to in Article 16. Tenant accepts the Leased Premises in its
present condition, "AS IS, WITH ALL FAULTS, IF ANY, AND WITHOUT ANY WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED," specifically (without limiting the generality
of the foregoing) without any warranty of (a) the nature or quality of any
construction, structural design or engineering of any improvements currently
located at or constituting a portion of the Leased Premises, (b) the quality of
the labor and materials included in any such improvements, or (c) soil and
environmental conditions existing at the Leased Premises and the suitability of
the Leased Premises for any particular purpose or developmental potential.
Landlord shall not be required to make any improvements to the Leased Premises
or to repair any damages to the Leased Premises.
Section 6.06. Repair and Maintenance.
(a) Tenant shall maintain the Leased Premises at all times
during the Term in a good, clean, and operable condition to the
standards prevailing for comparable flour xxxxx in the United States,
and will not commit or allow to remain any waste or damage to any
portion of the Leased Premises.
(b) Landlord shall maintain and keep the Elevator and
Landlord's roads leading up to the Project in good, clean, and operable
condition to the standards prevailing for export grain elevators in the United
States.
Section 6.07. Laborers and Mechanics. Tenant shall pay for all labor
and services performed for, materials used by or furnished to Tenant, or used by
or furnished to any contractor employed by Tenant with respect to the Leased
Premises and hold Landlord and the Leased Premises harmless and free from any
liens, claims, encumbrances or judgments created or suffered by Tenant. If
Tenant elects to post a payment or performance bond or is required to post an
improvement bond with a public agency in connection with the above, Tenant
agrees to include Landlord as an additional obligee thereunder.
Article 7. Landlord's Contribution to Project. Landlord agrees to reimburse
Tenant in the manner set out below the costs incurred by Tenant for
infrastructure improvements for the benefit of the Project, solely in the manner
set out below, up to a maximum of Five Hundred Thousand Dollars ($500,000).
Infrastructure improvements shall include the following: (i) road construction
and improvement; (ii) construction of utilities to serve the Project (including,
without limitation, electrical, sanitary sewer, storm sewer or drainage, water,
natural gas) and the purchase of any equipment in connection therewith; (iii)
rail or rail-related purchase and construction; and (iv) purchase and
construction of a conveyor system between the Elevator and the Project. Landlord
shall reimburse Tenant for such amount by crediting to Tenant all of the Base
Rent or put-through fees due to Landlord under this Lease until such
reimbursement has been paid in full. Landlord shall never be required to pay
Tenant any money in fulfillment of its obligation under this section of the
Lease, but only to provide credit from revenues due Landlord from Tenant under
the Lease. Not withstanding the foregoing, Tenant shall pay all water, gas
electricity, telephone, sewage treatment and drainage and any other utilities or
similar service charges or fees used in or on the Leased Premises. Tenant shall
pay the same promptly as such charges accrue, and agrees to protect, indemnify
and hold Landlord harmless from and against any and all liability for any such
costs or charges. To the extent Landlord provides any such services to the
Leased Premises or pays the cost for any such services, Tenant shall pay to
Landlord the cost of such services as Rent hereunder upon receiving an invoice
therefor pursuant to Section 5.03 hereof.
Article 8. Impositions. During the Term, Tenant shall pay or cause to be paid as
and when the same shall become due, all Impositions. Impositions that are
payable by Tenant for the tax year in which Commencement Date occurs as well as
during the year in which the Term ends shall be apportioned so that Tenant shall
pay its proportionate share of the Impositions payable for such periods of time.
Where any Imposition that Tenant is obligated to pay may be paid pursuant to law
in installments, Tenant may pay such Imposition in installments as and when such
installments become due. Tenant shall deliver to Landlord evidence of payment of
all Impositions Tenant is obligated to pay hereunder, concurrently with the
making of such payment. Tenant shall, within 60 days after payment of any
Imposition, deliver to Landlord copies of the receipted bills or other evidence
reasonably satisfactory to Landlord showing such payment.
Article 9. Transfer by Tenant.
Section 9.01. General. Tenant shall not effect or suffer any Transfer
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Any attempted Transfer without such consent shall be void
and of no effect. If Tenant desires to effect a Transfer, it shall deliver to
Landlord written notice thereof in advance of the date on which Tenant proposes
to make the Transfer, together with all of the terms of the proposed Transfer
and the identity of the proposed Transferee. Landlord shall have 45 days
following receipt of the notice and information within which to notify Tenant in
writing whether Landlord elects (a) to refuse to consent to the Transfer and to
continue this Lease in full force and effect as to the entire Leased Premises or
(b) to permit Tenant to effect the proposed Transfer. If Landlord fails to
notify Tenant of its election within said 45 day period, Landlord shall be
deemed to have elected option (b). The consent by Landlord to a particular
Transfer shall not be deemed a consent to any other Transfer. If a Transfer
occurs without the prior written consent of Landlord as provided in this Section
9.01, Landlord may nevertheless collect rent from the Transferee and apply the
net amount collected to the Rent payable hereunder, but such collection and
application shall not constitute a waiver of the provisions hereof or a release
of Tenant from the further performance of its obligations hereunder.
Notwithstanding the foregoing, Tenant may, without Landlord's consent, effect or
suffer a Transfer to any person or entity in which Tenant maintains at least a
50% interest in the equity or voting rights thereof, provided that in case of
such Transfer, Tenant shall not be relieved of its obligations under this Lease.
Section 9.02. Conditions. The following conditions shall automatically
apply to each Transfer, without the necessity of same being stated in or
referred to in Landlord's written consent:
(a) Tenant shall execute, have acknowledged and deliver to
Landlord, and cause the Transferee to execute, have acknowledged and
deliver to Landlord, an instrument in form and substance acceptable to
Landlord in which (i) the Transferee adopts this Lease and assumes and
agrees to perform, jointly and severally with Tenant, all of the
obligations of Tenant hereunder, as to the space transferred to it,
(ii) the Transferee grants Landlord an express first and prior contract
lien and security interest in its improvements located upon and
property brought into the transferred premises to secure its
obligations to Landlord hereunder, (iii) Tenant subordinates to
Landlord's statutory lien, contract lien and security interest any
liens, security interests or other rights which Tenant may claim with
respect to any property of the Transferee, (iv) Tenant agrees with
Landlord that, if the rent or other consideration due by the Transferee
exceeds the Rent for the transferred space, then Tenant shall pay
Landlord as Rent hereunder all such excess rent and other consideration
immediately upon Tenant's receipt thereof, (v) the Transferee agrees to
use and occupy the transferred space solely for the purposes permitted
under Article 4 and otherwise in strict accordance with this Lease and
(vi) Tenant and acknowledges and agrees in writing that,
notwithstanding the Transfer, Tenant remains directly and primarily
liable for the performance of all the obligations of Tenant hereunder
(including, without limitation, the obligation to pay all Rent), and
Landlord shall be permitted to enforce this Lease against Tenant or the
Transferee, or either of them, without prior demand upon or proceeding
in any way against any other persons, and
(b) Tenant shall deliver to Landlord a counterpart of all
instruments relative to the Transfer executed by all parties to such
transaction (except Landlord).
Section 9.03. Liens. Without in any way limiting the generality of the
foregoing, Tenant shall not grant, place or suffer, or permit to be granted,
placed or suffered, against all or any part of the Leased Premises or Tenant's
leasehold estate created hereby, any lien, security interest, pledge,
conditional sale contract, claim, charge or encumbrance (whether constitutional,
contractual or otherwise) and if any of the aforesaid does arise or is asserted,
Tenant will, promptly upon demand by Landlord and at Tenant's expense, cause
same to be released.
Article 10. Access by Landlord. In accordance with procedures agreed upon in
writing between Tenant and Landlord, Landlord, its employees, contractors,
agents and representatives, shall have the right (and Landlord, for itself and
such persons and firms, hereby reserves the right) to enter the Leased Premises
at all hours (a) to inspect the Leased Premises (b) to determine whether Tenant
is performing its obligations hereunder and, if it is not, to perform same at
Landlord's option and Tenant's expense, or (c) for emergency purposes, provided
that Landlord shall not unreasonably or unduly interfere with Tenant's business
operations.
Article 11. Landlord's Services.
Section 11.01. Handling of Tenant Grain. Landlord agrees to unload,
store in the Elevator and assist Tenant to transfer to the Project Tenant Grain.
Tenant shall be responsible for any overtime charges associated with such
transfer. Landlord shall unload Tenant Grain inbound by truck and shall further
unload Tenant Grain inbound by vessel if such service is or becomes available
from Landlord at a handling fee mutually acceptable to Landlord and Tenant.
Tenant agrees to give Landlord at least two (2) Business days advance notice of
inbound rail shipments of Tenant Grain and at least ten (10) days advance notice
of inbound vessel shipments of Tenant Grain. When inbound vessels of Tenant
Grain are loaded for Tenant, Tenant shall thereupon promptly notify Landlord of
the vessel's estimated time of arrival at the Elevator. Landlord shall unload
Tenant Grain as expeditiously as possible.
If as a result of Landlord's failure to unload Tenant Grain from any
train in a timely manner (that is, unloading 52 cars per 24 hours after
constructive placement of the cars, non-Business Days excluded, provided that
Saturdays shall not be excluded if Saturdays are not demurrage free days for the
railroad delivering the rails cars and provided further that Tenant shall be
responsible for any overtime charges for unloading cars on a Saturday if Tenant
has requested that Landlord unload cars on a Saturday), and only when Tenant's
space allocation as set forth in Section 11.02(a) and (b) has not been exceeded,
if as a result of Landlord's failure to unload cars in a timely manner, Tenant
loses rebates or allowances negotiated by Tenant with the rail carrier, or if
Tenant is charged any demurrage costs, expenses, or penalties as a result of
Landlord's failure to unload a train in a timely manner, then Landlord shall
reimburse Tenant as provided below for the amount of such rebates, allowances,
demurrage costs, expenses or penalties lost or paid as a direct result of
Landlord's failure to unload timely as provided above. Notwithstanding anything
else to the contrary in this Section, Landlord's liability to Tenant for failure
to unload a train in a timely manner shall not exceed $2,000
per calendar month and further provided that Landlord's liability to Tenant
under this Section shall be reduced by any credits or reimbursements Tenant
obtains from the rail carrier for that train. Losses and credits shall be
documented in writing before the Landlord is liable to pay any money under this
section. Landlord agrees that it will unload cars in accordance with its usual
and customary practice and that it will not intentionally defer unloading
Tenant's cars so as to avoid demurrage liability to a third party.
Tenant shall take a sample of Grain from each car carrying inbound
Tenant Grain and shall provide grades to the Landlord. Sampling shall be
conducted by a third party firm or agency approved by Landlord.
To the extent Landlord performs such services, Landlord shall take
samples of Grain from each truck carrying inbound Tenant Grain and shall provide
grades to Tenant. If Landlord ceases to provide such services, Tenant shall take
samples from trucks and provide grades to Landlord.
Landlord shall immediately notify Tenant if Landlord believes that
Tenant Grain appears off-grade or abnormal in any other respect and immediately
stop unloading such grain until Tenant advises otherwise.
Section 11.02. Storage; Transfer of Grain.
(a) All Tenant Grain stored at the Elevator by Landlord shall
be stored on an identity-preserved basis. Landlord agrees to have
available for Tenant at all times on an exclusive basis during the Term
hereof sufficient space for storage of 550,000 bushels of Tenant Grain.
Landlord shall provide a minimum of nine (9) separations. In the event
the Tenant is not using space; Landlord may use the empty bins;
provided that 550,000 bushels of storage shall be available when needed
by Tenant for Tenant Grain.
(b) If Tenant requires additional storage space for Tenant
Grain at any time during the Term hereof because of expansion of
Tenant's milling capacity, Landlord agrees to provide 40,000 bushels of
dedicated identity-preserved storage for each addition of 1,000 cwt.
per 24 hours of expanded milling capacity, provided that the additional
storage capacity shall not exceed 180,000 bushels. Landlord agrees to
provide for Tenant Grain one (1) additional separation for each 60,000
bushels of expanded storage capacity dedicated to the Project.
(c) Landlord agrees to transfer Tenant Grain from storage to
the Project at Tenant's request on Business Days during normal business
hours. Tenant will notify Landlord at least 24 hours prior to each
required transfer with the quantities and specific storage bins where
those quantities are stored. Landlord will transfer Tenant Grain from
storage to the Project from those bins specified by Tenant. During the
transfer of Tenant Grain, Tenant will
work with Landlord to avoid slowing, shutting down or otherwise,
negatively affecting Landlord's export grain operations. The Project
shall include an automated conveyor system to permit transfer of Tenant
Grain from the Elevator to the Project by Tenant, which system is
acceptable to Landlord and Tenant.
Section 11.03 Overtime. If requested by Tenant, Landlord shall provide
the services to Tenant specified in this Article 11 on a non-Business Day;
provided that Tenant shall reimburse Landlord for the additional costs and
expenses incurred by Landlord as a result thereof.
Section 11.04. Outbound Shipments; Access for Truck and Rail Service.
Tenant shall be solely responsible for shipment of outbound products, including
designation of and contracting with carriers. To the extent within Landlord's
control, Landlord shall provide continued uninterrupted access to the Project
for truck and rail service for inbound wheat and outbound product necessary for
the efficient operation of the Project.
Section 11.05. Handling and Storage Restrictions.
(a) All shrink in excess of .25% shall be for the account of
Landlord and Landlord shall reimburse Tenant for all losses resulting therefrom.
Landlord agrees that it shall use the same standard of care when handling and
storing Tenant Grain as it uses when Landlord handles other Grain in the
Elevator, including, without limitation, periodically monitoring the temperature
of and, at Tenant's request, the turning of any stored Tenant Grain at the
charge provided in Landlord's Tariff No, 18.
(b) Landlord assumes no responsibility and shall have no
liability to Tenant hereunder if Tenant Grain is received at the
Elevator in condition or of a quality different from the condition or
quality which Tenant expects or is entitled to receive. Landlord agrees
to give access to Tenant and its agents for the purpose of making
reasonable inspection of inbound Tenant Grain shipments.
(c) Landlord shall provide daily inventory bin reports based
upon inbound Tenant Grain received and Tenant Grain provided to the
Project for the previous day. Landlord agrees to give Tenant monthly
inventory reports based upon soundings of the Tenant's bins. If Tenant
objects to any inventory report made by Landlord and the parties cannot
resolve the differences, then the disputed quantities of Tenant Grain
shall be loaded out, weighed and replaced in storage. The scale weights
thus taken shall be conclusive and the cost of the loading and weighing
shall be borne equally by the parties hereto. Landlord shall provide
Tenant with house unload and house transfer weights of all Tenant Grain
handled by Landlord for Tenant. All transfers and unload weights will
be received in writing within 24 hours. Each car and truck shall be
weighed individually. At least once each year during the term of this
Lease, Landlord shall conduct a weigh-up of all Tenant Grain owned by
the Tenant and stored in the Elevator and shall provide Tenant with a
report of the results of such weigh-ups.
(d) Tenant shall provide to Landlord the grade, quantity,
quality, and car number at least two (2) working days prior to arrival
of Tenant's Grain.
Section 11.06. Through-Put Fee.
(a) Tenant shall pay Landlord a through-put fee (the "Fee") of
three cents per bushel for each bushel of Tenant Grain transferred by
Landlord from or through the Elevator to the Project, provided that the
Fee shall not exceed the through-put fee (if lower) charged by Landlord
for Grain of lesser or equal volumes and the Fee shall be reduced to
such lesser fee during the time the lesser fee is in effect. In
determining the volume of Grain put through the Elevator by the Tenant
for the purpose of calculating a reduction in the Fee for Tenant Grain,
all Grain put through the Elevator by Tenant (including all of its
affiliates, parent and its parent's divisions or subsidiaries) shall be
considered.
(b) The Fee in effect from time to time shall be increased or
decreased every five (5) years during the Term of this Lease (including
Renewal Terms) by the increase or decrease in the Consumer Price Index
Urban - Houston, Texas, as calculated at the time of such increase or
decrease, from the first day of the preceding five-year period until
the last day of such period, provided however that the Fee should never
be less than zero cents (0(cent)).
(c) The Fee shall be computed and invoiced by Landlord to
Tenant in arrears. The Fee shall be paid by Tenant within thirty (30) days
following receipt of the invoice.
Section 11.07. Minimum Bushels. Tenant hereby guarantees Landlord that
a minimum of 5,000,000 bushels of Tenant Grain will be through-put the Elevator
for the Project annually; provided that such volume requirement shall be
phased-in as follows:
(a) 70% of such requirement shall be met during the first
fourteen (14) months commencing with the Completion Date.
(b) 100 % of such requirement shall be met every twelve (12)
months thereafter.
(c) Tenant shall pay to Landlord the difference between the
Fee actually paid during the time period specified in Section 11.07 (a) and (b)
above and the Fee that would have been paid during that period had Tenant met
its minimum tonnage commitments as set out in this section.
Section 11.08. Independent Operations. It is understood and agreed by
the parties that Tenant is acting entirely as an independent contractor and not
in any respect as an agent, employee, representative, partner or co-venturer
with Landlord. As such, Tenant shall, without interference by or on behalf of
Landlord, have full authority over the operation of its business on the Leased
Premises, including without limitation the authority to establish prices for its
goods and services.
Article 12. Insurance. Tenant shall obtain and maintain throughout the
Term the following policies of insurance:
(a) Insurance on the Project and improvements to or
constituting a part of the Leased Premises (including boiler and
machinery insurance, as applicable) sufficient to provide coverage for
the full insurable value thereof; and the policy for such insurance
shall have a replacement cost endorsement or similar provision. "Full
insurable value" shall mean actual replacement value, and such full
insurable value shall be confirmed from time to time (but not more
frequently than the dates of renewals of such policy) at the request of
Landlord by one of the insurers or (at the option of Landlord) by an
insurance appraiser;
(b) Commercial general liability, covering claims for personal
injury, death and property damage occurring in or about the Leased
Premises; such insurance to afford protec
tion to the limits of $1,000,000 combined single limit each occurrence
for bodily injury and property damage, subject to a $2,000,000 general
aggregate limit;
(c) Wharfingers' and Warehousemans' legal liability.
(d) Vehicle liability insurance, including coverage for all
owned or leased vehicles, such insurance to afford protection to the
limits of at least $500,000 combined single limit each accident for
bodily injury and property damage;
(e) Umbrella liability insurance having limits of not less
than $1,000,000 (over and above the limits of liability on the
underlying policies specified in clauses (b) and (d) above) with
respect to bodily injury or death to any number of persons in any one
accident or occurrence;
(f) Workers' compensation insurance with limits required by
the Workers' Compensation Laws of the State of Texas.
The minimum insurance protection amounts set forth in clauses (b), (d), and (e)
above shall be increased from time to time upon request by Landlord to an amount
which is reasonable at the time. Tenant shall deliver to Landlord, prior to the
Commencement Date, certificates of the insurance described in this Article 12,
or such other proof of insurance as shall be deemed acceptable by the Authority
and shall, at all times during the Term, deliver to Landlord upon request true
and correct copies of said insurance policies. The policies of such insurance
shall (w) (except for the workers' compensation insurance) name Landlord as an
additional insured, (x) provide that it will not be can celled or reduced in
coverage without 30 days' prior written notice to Landlord, (y) be primary
coverage, so that any insurance coverage obtained by Landlord shall be in excess
thereto and (z) permit deductible or self-insured retention limits up to a
maximum of $500,000.00. Tenant shall deliver to Landlord certificates of renewal
prior to the expiration date of each such policy and copies of new policies
prior to terminating any such policies. All policies of insurance required to be
obtained and maintained by Tenant shall be subject to the approval of Landlord
as to terms, coverage, deductibles and issuer, which approval shall not be
unreasonably withheld.
Article 13. Tenant Indemnity. Tenant agrees to indemnify and hold Landlord
harmless from and against any and all claims, costs, expenses, actions, causes,
liens, liabilities, damages, judgments and attorneys fees arising from or
connected with property damage or personal injury or death caused directly or
indirectly by Tenant's acts or omissions as lessee, occupant or operator of or
at the Leased Premises.
Article 14. Casualty Loss.
Section 14.01. Obligation to Restore.
(a) If all or any part of the improvements located on (or
constituting a part of) the Leased Premises are destroyed or damaged by
any casualty during the Term, Tenant shall promptly commence and
thereafter prosecute diligently to completion the restoration of the
same to the condition in which the destroyed or damaged portion existed
prior to the casualty. Tenant will perform such restoration with at
least as good workmanship and quality as the improvements being
restored, and in compliance with the provisions of Article 6 hereof.
Notwithstanding the foregoing provisions of this subparagraph (a) to
the contrary, if all of such improvements are wholly destroyed by any
casualty, or are so damaged or destroyed that, in Tenant's sole
judgment it would be uneconomical to cause the same to be restored (and
Tenant shall give written notice of such determination to Landlord
within 90 Business Days after the date the casualty occurred), then
Tenant shall not be obligated to restore such improvements and this
Lease shall terminate as of the date of the casualty or its discovery.
(b) If all or any part of the Elevator serving the Project is
damaged by any casualty during the Term, Landlord shall promptly
commence and thereafter prosecute diligently to completion the
restoration of the same to the condition in which the destroyed or
damaged portion existed prior to the casualty. Notwithstanding the
foregoing provisions of this subparagraph (b) to the contrary, if the
Elevator is wholly destroyed by any casualty, or if it is so damaged or
destroyed that in Landlord's sole judgment it would be uneconomical to
cause the same to be restored (and Landlord shall give written notice
of such determination to Tenant within 90 Business Days after the date
the casualty occurred or is discovered), the Landlord shall not be
obligated to restore the Elevator and this Lease shall terminate as of
the date of the casualty or its discovery.
(c) If a casualty loss affecting the Leased Premises occurs,
all insurance proceeds arising from policies maintained by Tenant for
the damages arising from such casualty and which is attributed to the
Project (including the Excluded Property) shall be distributed and paid
directly to Tenant.
Section 14.02. Notice of Damage. Tenant shall immediately notify
Landlord of any destruction of or damage to the Leased Premises.
Article 15. Condemnation.
Section 15.01. Total Taking. If a Total Taking of the Leased Premises
or Elevator occurs, then this Lease shall terminate as of the date the
condemning authority takes lawful possession of the Leased Premises or Elevator
and Tenant shall be entitled to receive and retain the Award for the Taking of
the Project (including the Excluded Property) and Landlord shall be entitled to
receive and retain the Award for the Taking of the balance of the Leased
Premises and for the Elevator.
Section 15.02. Partial Taking. If a Partial Taking of the Leased
Premises or Elevator occurs and both Land and Tenant desire to continue the
Lease, (a) this Lease shall continue in effect as to the portion of the Leased
Premises or Elevator not Taken, and (b) Tenant shall promptly commence and
thereafter prosecute diligently to completion the restoration of the remainder
of the Project located in (or constituting a part of) the Leased Premises to an
economically viable unit with at least as good workmanship and quality as
existed prior to the Taking. In the event a Partial Taking occurs, either
Landlord or Tenant may terminate this Lease by giving 90 Business Days written
notice to the other. In the event of a Partial Taking of the Leased Premises,
Tenant shall be entitled to receive and retain the Award for the portion of the
Project Taken and the Landlord shall be entitled to receive and retain the Award
for the balance of the Leased Premises Taken. In addition, upon a Partial
Taking, the Base Rent payable during the remainder of the Term (after the
condemning authority takes lawful possession of the portion Taken) shall be
reduced proportionally giving due regard to the relative value of the portion of
the Leased Premises (excluding the Project) Taken as compared to the remainder
thereof.
Section 15.03. Notice of Proposed Taking. Tenant and Landlord shall
immediately notify the other of any Proposed Taking of any portion of the Leased
Premises.
Section 15.04. Tenant's Option Upon Casualty Loss or Total or Partial
Taking. If a casualty loss to or a Total or Partial Taking of the Elevator
occurs as described in Sections 14.01 (b), 15.01 or 15.02 and as a result
thereof Landlord has determined in its sole judgment that it would be
uneconomical to cause the Elevator to be restored, and has notified Tenant of
its intention to terminate this Lease as provided in those sections, Tenant
shall have the option, at Tenant's sole cost and expense, exercised by written
notice to Landlord by Tenant within ninety (90) days after Landlord's written
notice to Tenant that it will not restore the elevator and intends to terminate
this Lease, to:
(a) Restore the Elevator to the extent necessary to continue
to serve and operate the Project; or
(b) Construct new grain storage, rail unloading facilities and
rail on the Project-restoration site shown on Exhibit "A" to this Lease to the
extent necessary to continue to operate the Project.
If Tenant exercises its option pursuant to this Section
15.04 then:
(y) Landlord shall have been deemed to have elected to close
the Elevator and the provisions, terms and conditions of Section 22.21
shall apply, including without limitation the terms of Section
22.21(c); and
(z) The improvements shall be constructed by Tenant in
accordance with Section 6.02.
Article 16. Landlord's Representations and Warranties. Landlord has provided
Tenant with Phase I, Phase II and Phase III Environmental Site assessments
obtained by Landlord from HBJ and Associates. Tenant may perform its own
environmental site assessments and install any monitoring xxxxx needed. Should
the results of Tenant's environmental site assessment show, in Tenant's sole
judgement, that the Leased Premises are not suited for Tenant's purposes, Tenant
shall have the right upon written notice to Landlord to cancel this Lease,
provided, however, Tenant shall exercise its right to cancel this Lease pursuant
to this section no later than February 1, 1996.
Article 17.00. Quiet Enjoyment. Tenant, on paying the Rent and all other sums
called for herein and performing all of Tenant's other obligations contained
herein, shall and may peaceably and quietly have, hold, occupy, use and enjoy
the Leased Premises during the Term subject to the provisions of this Lease.
Landlord agrees to warrant and forever defend Tenant's right to occupancy of the
Leased Premises against the claims of any and all persons whomsoever lawfully
claiming the same or any part thereof, by, through or under Landlord (but not
otherwise), subject to the provisions of this Lease, all matters of record in
the Official Public Records of Real Property of Xxxxxx County, Texas, and any
unrecorded easements or licenses executed by Landlord to the extent the
foregoing are validly existing and applicable to the Leased Premises.
Article 18. Default by Tenant.
Section 18.01. Events of Default. Each of the following occurrences
shall constitute an "Event of Default" by Tenant under this Lease:
(a) The failure of Tenant to pay Rent as and when due
hereunder and the continuance of such failure for a period of fifteen
(15) days after written notice of default is sent by Landlord to
Tenant;
(b) The failure of Tenant to perform, comply with or observe
any other agreement, obligation or undertaking of Tenant, or any other
term, condition or provision, in this Lease, and the continuance of
such failure for a period of 45 days after written notice from Landlord
to Tenant specifying the failure; provided, however that if a failure
other than failure to pay Rent cannot reasonably be cured within the
45-day time period, Tenant shall not be in default if Tenant commences
to cure within the 45-day period and thereafter pursues curing the
failure diligently until completion.
(c) The filing of a petition by or against Tenant (the term
"Tenant" meaning, for the purpose of this clause (c), shall include any
Guarantor) (i) in any bankruptcy or other insolvency proceeding, (ii)
seeking any relief under the Code or any similar debtor relief law,
(iii) for the appointment of a liquidator or receiver for all or
substantially all of Tenant's property or for Tenant's interest in this
Lease or (iv) to reorganize or modify Tenant's capital structure; and
(d) The admission by Tenant in writing that it cannot meet its
obligations as they become due or the making by Tenant of an assignment
for the benefit of its creditors.
Section 18.02. Remedies of Landlord. Upon any Event of Default,
Landlord may, at Landlord's option and in addition to all other rights, remedies
and recourse afforded Landlord hereunder or by law or equity, terminate this
Lease by the giving of written notice of termination to Tenant, in which event
Tenant shall pay to Landlord upon demand the sum of (i) all Rent and other
amounts accrued hereunder to the date of termination, (ii) all amounts due under
Section 18.03 and (iii) damages in an amount equal to (A) the total Rent that
Tenant would have been required to pay for the remainder of the Term discounted
to present value at a discount rate reasonably designated by Landlord minus (B)
the then present fair rental value of the Leased Premises for such period. If
Tenant cures the Event or Events of Default within 20 days after receipt of the
notice of termination, Landlord may rescind such notice by giving a written
notice to Tenant.
Section 18.03. Payment by Tenant. Upon any Event of Default, Tenant
shall also pay to Landlord all costs and expenses incurred by Landlord,
including court costs and reasonable attorneys' fees, in (a) retaking or
otherwise obtaining possession of the Leased Premises, (b) removing and storing
Tenant's or any other occupant's property, (c) repairing, restoring, altering,
remodeling or otherwise putting the Leased Premises into its original condition,
(d) reletting all or any part of the Leased Premises, (e) paying or performing
the underlying obligation which Tenant failed to pay or perform and (f)
enforcing any of Landlord's rights, remedies or recourses arising as a
consequence of the Event of Default.
Section 18.04. Reletting. Upon termination of this Lease, Landlord may,
but shall not be obligated to, attempt to relet the Leased Premises. If Landlord
does elect to relet, Landlord may relet such portion of the Leased Premises, for
such period, to such tenant, and for such use and purpose as Landlord, in the
exercise of its sole discretion, may choose. Tenant shall not be entitled to the
excess of any rent obtained by reletting over the Rent herein reserved.
Section 18.05. Landlord's Right to Pay or Perform. If Tenant fails to
perform or observe any of its covenants, agreements, or obligations hereunder
for a period of 10 days after notice of such failure is given by Landlord, then
in addition to all other rights of Landlord provided herein Landlord shall have
the right, but not the obligation, at its sole election (but not as its
exclusive remedy), to perform or observe the covenants, agreements, or
obligations which are asserted to have not been performed or observed at the
expense of Tenant and to recover all costs or expenses incurred in connection
therewith as Rent hereunder by delivering an invoice therefor to Tenant pursuant
to Section 5.03 hereof. Any performance or observance by Landlord pursuant to
this Section 18.05 shall not constitute a waiver of Tenant's failure to perform
or observe.
Section 18.06. Injunctive Relief; Remedies Cumulative. Landlord may
restrain or enjoin any Event of Default or threatened Event of Default by Tenant
hereunder without the necessity of proving the inadequacy of any legal remedy or
irreparable harm. The rights, remedies and recourses of Landlord for an Event of
Default shall be cumulative and no right, remedy or recourse of Landlord,
whether exercised by Landlord or not, shall be deemed to be in exclusion of any
other.
Section 18.07. No Waiver; No Implied Surrender. Provisions of this
Lease may not be waived orally or impliedly, but only by the party entitled to
the benefit of the provision evidencing the waiver in writing. Thus, neither the
acceptance of Rent by Landlord following an Event of Default (whether known to
Landlord or not), nor any other custom or practice followed in connection with
this Lease, shall constitute a waiver by Landlord of such Event of Default or
any other Event of Default. Further, the failure by Landlord to complain of any
action or inaction by Tenant, or to assert that any action or inaction by Tenant
constitutes (or would constitute, with the giving of notice and the passage of
time) an Event of Default, regardless of how long such failure continues, shall
not extinguish, waive or in any way diminish the rights, remedies and recourses
of Landlord with respect to such action or inaction. No waiver by Landlord of
any provision of this Lease or of any breach by Tenant of any obligation of
Tenant hereunder shall be deemed to be a waiver of any other provision hereof,
or of any subsequent breach by Tenant of the same or any other provision hereof.
Landlord's consent to any act by Tenant requiring Landlord's consent shall not
be deemed to render unnecessary the obtaining of Landlord's consent to any
subsequent act of Tenant. No act or omission by Landlord (other than Landlord's
execution of a document acknowledging such surrender) or Landlord's agents,
including the delivery of the keys to the Leased Premises, shall constitute an
acceptance of a surrender of the Leased Premises.
Article 19. Defaults by Landlord. Landlord shall not be in default under this
Lease, and Tenant shall not be entitled to exercise any right, remedy or
recourse against Landlord or otherwise as a consequence of any alleged default
by Landlord under this Lease, unless and until Landlord fails to perform any of
its obligations hereunder and said failure continues for a period of 90 days
after Tenant gives Landlord written notice thereof specifying, with reasonable
particularity, the nature of Landlord's failure; provided, however, that if the
failure cannot reasonably be cured within the 90 day time period, Landlord shall
not be in default hereunder if Landlord commences to cure the failure within the
90 days and thereafter pursues the curing of same diligently to completion. If
Landlord in curing its default hereunder is required to advertise for public
bids for the work to complete such cure, then Landlord shall be deemed to have
commenced such cure upon commencement of preparation of specifications to be
used in advertising such public bids. If Landlord defaults under this Lease and,
as a consequence of the default, Tenant recovers a money judgment against
Landlord, the judgment, which must be final, shall be satisfied only out of, and
Tenant hereby agrees to look solely to, any money due by Tenant to Landlord
under this Lease and the interest of Landlord in the Leased Premises as the same
may then be encumbered, and Landlord shall not be liable for any deficiency. In
no event shall Tenant have the right to levy execution against any property of
Landlord other than its interest in the Leased Premises. Tenant's remedies for a
default by Landlord hereunder shall be limited to claims for damages, specific
performance and injunctive relief; and in no event shall Tenant be entitled to
rescind or terminate this lease or Tenant's obligations hereunder as a
consequence of such default by Landlord. Landlord shall not be obligated to
impose taxes or any special assessments to satisfy its obligations hereunder.
Article 20. Right of Reentry. Upon the expiration or termination of the Term,
Tenant shall immediately, quietly and peaceably surrender to Landlord possession
of the Leased Premises in the condition and state of repair required under
Section 6.05 hereof and Tenant shall remove the Removable Property in accordance
with Section 6.04 hereof. If Tenant fails to surrender possession as herein
required, Landlord may initiate any and all legal action as Landlord may elect
to dispossess Tenant and all of its Excluded Property, and all persons or firms
claiming by, through or under Tenant and all of their Excluded Property, from
the Leased Premises, and may remove from the Leased Premises and store (without
any liability for loss, theft, damage or destruction thereto) any such Excluded
Property at Tenant's cost and expense. For so long as Tenant remains in
possession of the Leased Premises after such expiration, termination or exercise
by Landlord of its re-entry right, Tenant shall be deemed to be occupying the
Leased Premises as a tenant-at-sufferance, subject to all of the obligations of
Tenant under this Lease, except that the daily Base Rent shall be twice the per
day Base Rent in effect immediately prior to such expiration, termination or
exercise by Landlord. No such holding over shall extend the Term. If Tenant
fails to surrender possession of the Leased Premises in the condition herein
required, Landlord may, at Tenant's expense, restore the Leased Premises to such
condition. Article 21. Conditions Precedent to Tenant's Obligations. The
obligations and liabilities of Tenant arising under this Lease are subject to
and contingent upon the following:
Section 21.01 Tax Abatement. Tenant shall have received the approval of
all applicable governmental authorities to tax abatement status for the Project
from property taxes levied by county and local taxing authorities, which
abatement shall be upon terms and conditions reasonably acceptable to Tenant.
Section 21.02. Rail Service Contracts. Tenant shall have obtained rail
service contracts to service the Project upon terms and conditions reasonably
acceptable to Tenant.
Section 21.03. Permits and Approvals. Tenant shall have obtained all
federal, state, county and local platting, subdivision, permits and other
approvals required for the Project.
Section 21.04. Construction Contracts. Tenant shall have executed
construction, engineering and equipment supply contracts for construction and
operation of the Project upon terms and conditions reasonably acceptable to
Tenant.
Section 21.05. Utility Service Contracts. Tenant shall have obtained
power, water, sewer, natural gas and other service contracts required for
operation of the Project upon terms and conditions reasonably acceptable to
Tenant.
Section 21.06. Environmental Audit; Engineering Tests. Tenant shall
have obtained and completed an environmental review and environmental audit of
the Leased Premises, along with any other engineering tests, including soil
tests, necessary for construction of the Project, the results of which shall be
reasonably satisfactory Tenant.
The foregoing conditions shall be satisfied, or waived in writing by
Tenant in its sole discretion, on or before February 1, 1996, or either party
may, upon ten (10) days prior written notice to the other, elect to terminate
this Lease. Upon such termination, neither party shall have any further rights
or obligations to the other.
If Landlord elects to terminate this Lease as provided in the preceding
paragraph then, within such ten (10) day notice period, Tenant may waive in
writing any conditions remaining unsatisfied, in which event this Lease shall
remain in full force and effect.
Article 22. Miscellaneous.
Section 22.01. Time of Essence. Time is of the essence with respect to
each date or time specified in this Lease by which an event is to occur.
Section 22.02. Applicable Law. This Lease shall, insofar as relevant,
be governed by the Constitution and laws of the State of Texas, and including
the Texas Tort Claims Act.
Section 22.03. Estoppel Certificates. From time to time at the request
of Landlord, Tenant will promptly and without compensation or consideration
execute, have acknowledged and deliver a certificate stating (a) the rights (if
any) of Tenant to extend the Term or to expand the Leased Premises, (b) the Rent
(or any components of the Rent) currently payable hereunder, (c) whether this
Lease has been amended in any respect and, if so, submitting copies of or
otherwise identifying the amendments, (d) whether, within the knowledge of
Tenant after due investigation, there are any existing breaches or defaults by
Landlord hereunder and, if so, stating the defaults with reasonable
particularity and (e) such other information pertaining to this Lease as
Landlord may reasonably request.
Section 22.04. Signs. Tenant shall be permitted to install any signs,
placards or other advertising or identifying marks upon the Leased Premises or
upon the exterior of any improvements to or constituting a part of the Leased
Premises provided that such signs have been approved in writing in advance by
Landlord, which approval shall not be unreasonably withheld. Tenant agrees to
remove promptly (at Tenant's sole cost and expense) upon the expiration or
earlier termination of the Term any and all such signs, placards or other
advertising or identifying marks.
Section 22.05. Relation of the Parties. Nothing in this Lease shall be
construed to make the parties partners or joint venturers or to render either
party liable for any obligation of the other.
Section 22.06. Public Disclosure. Landlord is a governmental authority
subject to the requirements of the Texas Open Meetings Act and the Texas Open
Records Act (Texas Government Code Chapters 551 and 552), and as such Landlord
is required to disclose to the public (upon request) this Lease and certain
other information and documents relating to the consummation of the transactions
contemplated hereby. In this regard, Tenant agrees that the disclosure of this
Lease or any other information or materials related to the consummation of the
transactions contemplated hereby to the public by Landlord as required by the
Texas Open Meetings Act, Texas Open Records Act, or any other Legal Requirement
will not expose Landlord (or any party acting by, through or under Landlord) to
any claim, liability or action by Tenant.
Section 22.07. Notices. All notices and other communications given
pursuant to this Lease shall be in writing and shall either be mailed by first
class United States mail, postage prepaid, registered or certified with return
receipt requested, and addressed as set forth in this Section or delivered in
person to the intended addressee, or sent by prepaid telegram, cable or telex
followed by a confirmatory letter. Notice mailed in the aforesaid manner shall
become effective three business days after deposit; notice given in any other
manner, and any notice given to Landlord, shall be effective only upon receipt
by the intended addressee. For the purposes of notice, the address of
(a) Landlord shall be:
Port of Houston Authority
000 Xxxx Xxxx Xxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Executive Director
and
(b) Tenant shall be:
Harvest States Cooperatives
0000 Xxxxxxxx Xxxxxx Xxxxx
Post Office Xxx 00000
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx Xxxxxxxx
Each party shall have the continuing right to change its address for notice
hereunder by the giving of 15 days' prior written notice to the other party in
accordance with this Section 22.07; provided, however, if Tenant vacates the
location that constitutes its address for notice hereunder without changing its
address for notice pursuant to this Paragraph 22.07, then Tenant's address for
notice shall be deemed to be the Leased Premises.
Section 22.08. Entire Agreement, Amendment and Binding Effect. This
Lease constitutes the entire agreement between Landlord and Tenant relating to
the subject matter hereof and all prior agreements relative hereto which are not
contained herein are terminated. This Lease may be amended only by a written
document duly executed by Landlord and Tenant, and any alleged amendment which
is not so documented shall not be effective as to either party. The provisions
of this Lease shall be binding upon and inure to the benefit of the parties
hereto and their heirs, executors, administrators, successors and assigns;
provided, however, that this Section 22.08 shall not negate, diminish or alter
the restrictions on Transfers applicable to Tenant set forth elsewhere in this
Lease.
Section 22.09. Severability. This Lease is intended to be performed in
accordance with and only to the extent permitted by all Legal Requirements. If
any provision of this Lease or the application thereof to any person or
circumstance shall, for any reason and to any extent, be invalid or
unenforceable, but the extent of the invalidity or unenforceability does not
destroy the basis of the bargain between the parties as contained herein, the
remainder of this Lease and the application of such provision to other persons
or circumstances shall not be affected thereby, but rather shall be enforced to
the greatest extent permitted by law.
Section 22.10. Construction. Unless the context of this Lease clearly
requires otherwise, (a) pronouns, wherever used herein, and of whatever gender,
shall include natural persons and corporations and associations of every kind
and character; (b) the singular shall include the plural wherever and as often
as may be appropriate; (c) the term "includes" or "including" shall mean
"including without limitation"; (d) the word "or" has the inclusive meaning
represented by the phrase "and/or"; and (e) the words "hereof" or "herein" refer
to this entire Lease and not merely the Section or Article number in which such
words appear. Article and Section headings in this Lease are for convenience of
reference and shall not affect the construction or interpretation of this Lease.
Any reference to a particular "Article" or "Section" shall be construed as
referring to the indicated article or section of this Lease.
Section 22.11. Attorneys' Fees. If either party initiates any
litigation against the other relating to this Lease, the party that prevails in
such litigation shall be entitled to recover, in addition to all damages allowed
by law and other relief, all court costs and reasonable attorneys' fees incurred
in connection with such litigation.
Section 22.12. Brokers. Tenant hereby warrants and represents unto
Landlord that it has not incurred or authorized any brokerage commission,
finder's fees or similar payments in connection with this Lease, and agrees to
defend, indemnify and hold Landlord harmless from and against any claim for
brokerage commission, finder's fees or similar payment arising by virtue of
authorization by, through or under Tenant in connection with this Lease.
Section 22.13. Interest on Tenant's Obligations. Any amount due from
either party to the other which is not paid when due shall bear interest at the
maximum rate allowed by law (or, if there is no maximum rate, at twenty percent
per annum) from the date such payment is due until paid, but the payment of such
interest shall not excuse or cure the default in payment.
Section 22.14. Dollars. As used in this Lease, the symbol "$" shall
mean United States dollars, the lawful currency of the United States.
Section 22.15. Authority. The person executing this Lease on behalf of
Tenant personally warrants and represents unto Landlord that (a) Tenant is a
duly organized and existing legal entity, in good standing in the State of, and
authorized to do business in, Texas, (b) Tenant has full right and authority to
execute, deliver and perform this Lease, (c) the person executing this Lease on
behalf of Tenant was authorized to do so and (d) upon request of Landlord, such
person will deliver to Landlord satisfactory evidence of his or her authority to
execute this Lease on behalf of Tenant.
Section 22.16. Recording. Landlord agrees that this Lease (including
any Exhibit hereto) or any memorandum hereof may be recorded by Tenant.
Section 22.17. Incorporation by Reference. Exhibits "A" and "B" and
"B-1" hereto are incorporated herein for any and all purposes.
Section 22.18. Force Majeure. Landlord and Tenant shall be entitled to
rely upon Force Majeure as an excuse for timely performance hereunder only as
expressly provided herein and shall not be entitled to rely upon Force Majeure
as an excuse for timely performance unless the party seeking to rely on Force
Majeure (a) uses its good faith efforts to overcome the effects of the event of
Force Majeure, (b) gives written notice to the other party within 5 days after
the occurrence of the event describing with reasonable particularity the nature
thereof, (c) commences performance of its obligation hereunder immediately upon
the cessation of the event and (d) gives written notice to the other party
within 5 days after the cessation of the event advising the other party of the
date upon which the event ceased to constitute an event of Force Majeure.
Section 22.19. Interpretation. Both Landlord and Tenant and their
respective legal counsel have reviewed and have participated in the preparation
of this Lease. Accordingly, no presumption will apply in favor of either
Landlord or Tenant in the interpretation of this Lease or in the resolution of
the ambiguity of any provision hereof.
Section 22.20. Assignment by Landlord. Landlord shall have the right to
assign, in whole or in part, any or all of its rights, titles or interests in
and to the Leased Premises or this Lease; provided that, as a condition of such
assignment the Assignee shall agree in writing to become bound by the terms and
conditions of this Lease. Further, any purchaser acquiring the Elevator shall
agree in writing to be bound by the terms and conditions of this Lease as a
condition to purchasing the Elevator from the Landlord.
Section 22.21 Closure of the Elevator.
(a) Closure Period. Upon not less than six (6) months prior
written notice to Tenant from Landlord, Landlord may close the Elevator
(the period of time during which the elevator is thus closed is
referred to herein as a "Closure Period"). The closure date specified
in such notice shall be deemed to be the beginning of the relevant
Closure Period. During such Closure Period, Landlord's obligations
under this Lease for operation and maintenance of the Elevator shall be
suspended including specifically those in Articles 6 and 11; Upon not
less than thirty (30) calendar days' prior written notice to Tenant
from Landlord, Landlord may resume operations at the Elevator and end
any then-current Closure Period, provided that:
(i) Landlord's obligations pursuant to Article 11 and Section
6.06 (b) hereof shall resume as of the end of the Closure Period.
(ii) If the period of notice provided to Tenant by Landlord to
end a Closure Period is less than six (6) months, then Landlord shall reimburse
Tenant for any out-of-pocket expenses reasonably incurred by Tenant with regard
to the winding up of Tenant's operations at the Elevator and transfer of the
operations of the Elevator back to Landlord, including without limitation any
liabilities pursuant to the Worker Adjustment and Retraining Notification Act,
29 U.S.C. Section 2101 et seq., provided Landlord's liability under this
subsection shall never exceed $5,000.00.
(iii) Landlord purchases from Tenant all of the capital
improvements made by Tenant to the Elevator or the Elevator site during
the Closure Period which were reasonably necessary for continued
operation of the Project at the net book value of such capital
improvements on Tenant's books as of the end of the Closure Period,
provided Landlord has prior approval over those capital improvements,
which approval shall not be unreasonably withheld.
(b) Operation of Elevator During any Closure Period. During
any Closure Period, Tenant shall have the right and option, at Tenant's
cost and expense, to operate the Elevator for the benefit of the
Project, including fulfilling Landlord's obligations for operation of
the Elevator under this Lease, including specifically those in Articles
6 and 11. If Tenant operates the Elevator, Tenant shall use the
Elevator only to maintain and operate the Project and shall indemnify
and defend the Landlord from any loss, claim, damage or injury
resulting from Tenant's use. Tenant shall continue to pay Rent during
the Closure Period, except for through-put charges due to Landlord
under this Lease.
(c) Landlord's Sale or Lease of the Elevator. Upon Landlord's
sale or lease of the Elevator during the Closure Period, Landlord shall
provide written notice ("Landlord's Notice") thereof to Tenant at least
thirty (30) days prior to such sale or lease. The Closure Period shall
be deemed to end upon such sale or lease of the Elevator by Landlord
and all terms and conditions of this Lease shall be in full force and
effect, binding upon the purchaser or lessee of the Elevator. If
Landlord's Notice is less than six months prior to the effective date
of the sale or lease of the Elevator, the terms of Section 22.21(a)
(ii) shall apply.
Section 22.22. Multiple Counterparts. This Lease may be executed in two
or more counterparts, each of which shall be an original, but all of which shall
constitute but one instrument.
EXECUTED as of October 3, 1995.
ATTEST/SEAL: HARVEST STATES COOPERATIVES
Xxxxx X. Xxxxx By /s/ Xxxxxxx Xxxxxxxx
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Assistant Secretary Name Xxxxxxx Xxxxxxxx
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(Type or Print)
(Affix Corporate Seal Here) Title Senior Vice President
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PORT OF HOUSTON AUTHORITY
By /s/ X.X. Xxxxxxxx
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Executive Director
APPROVED AS TO FORM: APPROVED AS TO REAL ESTATE
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx XxXxxxxx
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Counsel Manager
