AMENDED AND RESTATED
LEASE AND OPERATING AGREEMENT
BETWEEN
PHILADELPHIA REGIONAL PORT AUTHORITY
AND
XXXX CARGO SYSTEMS, INC.
FOR
PACKER AVENUE MARINE TERMINAL
Page
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TABLE OF CONTENTS
ARTICLE I. LEASE AND USE OF TERMINAL . . . . . . . . . . . . . . . . 4
1.1 Grant . . . . . . . . . . . . . . . . . . . 4
1.2 Appointment . . . . . . . . . . . . . . . . 4
1.3 Independent Contractor . . . . . . . . . . 4
1.4 Use . . . . . . . . . . . . . . . . . . . . 5
1.5 PRPA Field Representative . . . . . . . . . 6
1.6 Operations to Maximize Use. . . . . . . . . 7
1.7 Title; Quiet Enjoyment. . . . . . . . . . . 7
1.8 Non-Disturbance . . . . . . . . . . . . . . 9
1.9 Estoppel Certificates . . . . . . . . . . . 10
1.10 Zoning and Other Permits. . . . . . . . . . 11
1.11 DRPA Owned Areas. . . . . . . . . . . . . . 11
ARTICLE II. EFFECTIVE DATE; TERM. . . . . . . . . . . . . . . . . . . 13
2.1 Effective Date. . . . . . . . . . . . . . . 13
2.2 Term. . . . . . . . . . . . . . . . . . . . 13
2.3 Renewal Options . . . . . . . . . . . . . . 13
2.4 Termination . . . . . . . . . . . . . . . . 18
2.5 Surrender of Possession; Holdover . . . . . 18
ARTICLE III. COMPENSATION . . . . . . .. . . . . . . . . . . . . . . . 22
3.1 Base Compensation . . . . . . . . . . . . . 22
3.2 Letter of Credit. . . . . . . . . . . . . . 31
3.3 Records and Books . . . . . . . . . . . . . 36
3.4 Reports . . . . . . . . . . . . . . . . . . 37
3.5 Late Charges. . . . . . . . . . . . . . . . 38
3.6 Certain Taxes . . . . . . . . . . . . . . . 38
ARTICLE IV. MARKETING; COOPERATION . . . . . . . . . . . . . . . . . 39
4.1 Marketing . . . . . . . . . . . . . . . . . 39
4.2 Transfer of Service. . . . . . . . . . . . 39
4.3 Intentionally Omitted . . . . . . . . . . . 44
4.4 Definition of XXXX . . . . . . . . . . . . 44
4.5 Certain Operating Agreements . . . . . . . 44
4.6 Certain Tax Exemptions . . . . . . . . . . 47
4.7 Transportation Tolls . . . . . . . . . . . 47
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ARTICLE V. INSURANCE; INDEMNIFICATION . . . . . . . . . . . . . . . 48
5.1 Property Insurance . . . . . . . . . . . . 48
5.2 Liability Insurance . . . . . . . . . . . . 49
5.3 Worker's Compensation Insurance . . . . . . 50
5.4 Automobile Insurance . . . . . . . . . . . 50
5.5 Waiver of Subrogation . . . . . . . . . . . 51
5.6 Insurance General . . . . . . . . . . . . . 51
5.7 Accident Reports . . . . . . . . . . . . . 53
5.8 Liability for Damage Caused by
Third Parties . . . . . . . . . . . . . . 53
5.9 Event of Loss . . . . . . . . . . . . . . . 54
5.10 Insurance Audit . . . . . . . . . . . . . . 55
5.11 Indemnification . . . . . . . . . . . . . . 55
ARTICLE VI. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . 57
6.1 PRPA's Obligations . . . . . . . . . . . . 57
6.2 XXXX'x Obligations . . . . . . . . . . . . 60
6.3 Wharf Structure . . . . . . . . . . . . . 64
6.4 Fire Systems . . . . . . . . . . . . . . . 65
6.5 Load Limits . . . . . . . . . . . . . . . 66
6.6 Maintenance and Servicing of Cranes . . . 66
6.7 Dredging . . . . . . . . . . . . . . . . . 68
6.8 Access . . . . . . . . . . . . . . . . . . 70
6.9 PRPA's Rights . . . . . . . . . . . . . . . 70
ARTICLE VII. EQUIPMENT; CAPITAL IMPROVEMENTS . . . . . . . . . . . . . 71
7.1 Provision . . . . . . . . . . . . . . . . . 71
7.2 Required Equipment. . . . . . . . . . . . . 72
7.3 XXXX Cranes . . . . . . . . . . . . . . . . 72
7.3A Purchase of Paceco Crane . . . . . . . . . 75
7.4 Ownership of XXXX Cranes and
Equipment . . . . . . . . . . . . . . . . 80
7.5 Heavy Lift Crane . . . . . . . . . . . . . 82
7.6 XXXX'x Improvements . . . . . . . . . . . . 83
7.7 PRPA's Improvements . . . . . . . . . . . . 91
7.8 Building 2A . . . . . . . . . . . . . . . . 95
ARTICLE VIII. UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . 96
8.1 Utilities . . . . . . . . . . . . . . . . . 96
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ARTICLE IX. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 96
9.1 Taxes . . . . . . . . . . . . . . . . . . . 96
9.2 Appeals . . . . . . . . . . . . . . . . . . 97
ARTICLE X. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . 97
10.1 Environmental Matters . . . . . . . . . . . 97
10.2 Compliance With Law . . . . . . . . . . . . 98
10.3 Site Contamination . . . . . . . . . . . . 100
10.4 Other Hazardous or Toxic Material . . . . 101
10.5 Disposal and Removal of Waste . . . . . . . 101
10.6 Indemnification by XXXX . . . . . . . . . 101
10.7 PRPA Responsibilities . . . . . . . . . . . 102
10.8 Inspections . . . . . . . . . . . . . . . . 103
10.9 Remedies. . . . . . . . . . . . . . . . . . 103
10.10 Survival. . . . . . . . . . . . . . . . . . 104
ARTICLE XI. ASSIGNMENT AND LICENSING . . . . . . . . . . . . . . . . 104
11.1 Assignment and Subleasing;
Transfers of Stock . . . . . . . . . . . 104
11.2 PRPA's Assignment and Successors . . . . . 109
ARTICLE XII. SIGNS AND PUBLICITY . . . . . . . . . . . . . . . . . . . 109
12.1 Signs . . . . . . . . . . . . . . . . . . . 109
12.2 Publicity . . . . . . . . . . . . . . . . . 110
ARTICLE XIII. DAMAGE TO THE TERMINAL . . . . .. . . . . . . . . . . . . 110
13.1 Damage and Destruction . . . . . . . . . . 110
ARTICLE XIV. CONDITION OF TERMINAL AND PRPA CRANES . . . . . . . . . . 111
14.1 Condition and Surrender of
Terminal . . . . . . . . . . . . . . . . 111
ARTICLE XV. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . 113
15.1 Waivers . . . . . . . . . . . . . . . . . . 113
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ARTICLE XVI. WAIVER OF CLAIMS; TERMINATION BY
REGULATORY AGENCY OR COURT DECREE . . . . . . . . . . . 114
16.1 Waiver of Claims . . . . . . . . . . . . . 114
16.2 Termination by Regulatory Agency
or Court Decree . . . . . . . . . . . . . 114
ARTICLE XVII. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . 115
17.1 Force Majeure . . . . . . . . . . . . . . . 115
ARTICLE XVIII. XXXX'X COVENANTS . . . . . . . . . . . . . . . . . . . . 117
18.1 XXXX'x Further Covenants . . . . . . . . . 117
18.2 Conditions . . . .. . . . . . . . . . . . . 118
ARTICLE XIX. REMEDIES; ARBITRATION . . . . . . . . . . . . . . . . . . 119
19.1 PRPA's Remedies . . . . . . . . . . . . . . 119
19.2 Remedies Cumulative . . . . . . . . . . . . 124
19.3 Expedited Proceedings . . . . . . . . . . . 124
19.4 Notice and Grace Period. . . . . . . . . . 124
19.5 Arbitration . . . . . . . . . . . . . . . . 126
ARTICLE XX. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . 129
20.1 Condemnation. . . . . . . . . . . . . . . . 129
ARTICLE XXI. RAILROADS . . . . . . . . . . . . . . . . . . . . . . . . 131
21.1 Railroad Tracks. . . . . . . . . . . . . . 131
ARTICLE XXII. EMPLOYMENT PRACTICES. . . . . . . . . . . . . . . . . . . 132
22.1 Fair Employment Practices . . . . . . . . . 132
ARTICLE XXIII. OPINION OF COUNSEL. . . . . . . . . . . . . . . . . . . . 132
23.1 Opinion of XXXX'x Counsel . . . . . . . . . 132
23.2 Opinion of PRFA's Chief Counsel . . . . . . 133
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ARTICLE XXIV. ADDITIONAL PROPERTY. . . . . . . . . . . . . . . . . . . 133
24.1 Delaware Avenue Parcel. . . . . . . . . . . 133
24.2 Additional Parcels. . . . . . . . . . . . . 135
ARTICLE XXV. PRPA'S RIGHT OF ACCESS TO THE TERMINAL. . . . . . . . . 146
25.1 Visitors . . . . . . . . . . . . . . . . . 146
25.2 Property and Cargo Under XXXX'x
Control . . . . . . . . . . . . . . . . . 146
25.3 Utility Lines and Easements . . . . . . . . 147
25.4 Commonwealth . . . . . . . . . . . . . . . 147
ARTICLE XXVI. PUBLICKER PROPERTY . . . . . . . . . . . . . . . . . . . 148
26.1 Publicker Site . . . . . . . . . . . . . . 148
ARTICLE XXVII. REPRESENTATIONS AND WARRANTIES
OF XXXX AND PRPA . . . . . . . . . . . . . . . . . . . 148
27.1 Authorization. . . . . . . . . . . . . . . 148
27.2 Non-Conflict . . . . . . . . . . . . . . . 148
27.3 Crane Relocation . . . . . . . . . . . . . 149
ARTICLE XXVIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 150
28.1 Notices . . . . . . . . . . . . . . . . . 150
28.2 Captions . . . . . . . . . . . . . . . . . 151
28.3 Terms Binding on Successors . . . . . . . . 151
28.4 Applicable Law . . . . . . . . . . . . . . 151
28.5 Consent to Jurisdiction,
Service and Venue . . . . . . . . . . . . 152
28.6 Limit on PRFA's Liability. . . . . . . . . 152
28.7 Certain Certificates. . . . . . . . . . . . 152
28.8 Time of Essence . . . . . . . . . . . . . . 153
28.9 Severability. . . . . . . . . . . . . . . . 153
28.10 Entire Agreement. . . . . . . . . . . . . . 154
28.11 No Third Party Beneficiaries. . . . . . . . 154
28.12 Certain Payments at End of Term . . . . . . 154
28.13 Releases. . . . . . . . . . . . . . . . . . 155
28.14 Review of Operations. . . . . . . . . . . . 156
28.15 Transfer Taxes . . . . . . . . . . . . . . 156
28.16 Refrigerated Warehouse Release. . . . . . . 156
28.17 Counterparts. . . . . . . . . . . . . . . . 156(a)
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SCHEDULE OF EXHIBITS:
EXHIBIT A - PACKER AVENUE MARINE TERMINAL SITE PLAN
EXHIBIT B - PLAN SHOWING THE MAIN TERMINAL AREA, THE
COMMONWEALTH AREA AND SHED C
EXHIBIT C - CONTAINER PICK RATE SCHEDULE
EXHIBIT D - COPY OF INITIAL LETTER OF CREDIT
EXHIBIT E - LIST OF MAJOR CRANE PARTS
EXHIBIT F - LOAD LIMITS
EXHIBIT G - HEAVY CRANE LIMIT
EXHIBIT H - PRPA CAPITAL IMPROVEMENTS
EXHIBIT I - XXXX CAPITAL IMPROVEMENTS
EXHIBIT J - NONDISCRIMINATION REQUIREMENTS; INTEGRITY
PROVISIONS
EXHIBIT K - LEASES AND OTHER AGREEMENTS AFFECTING THE
ADDITIONAL PARCELS
EXHIBIT L - CERTAIN TRACKAGE RIGHTS
EXHIBIT M - PLAN SHOWING THE ADDITIONAL PARCELS
EXHIBIT N - DEFERRED MAINTENANCE ITEMS
EXHIBIT 0 - CALCULATION OF BASE RENT UNDER SECTION 4.2(a)(ii)
EXHIBIT P - PAYMENT SCHEDULE REGARDING THE PACECO CRANE
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DEFINITIONAL CROSS-REFERENCE SHEET
Term Section
---- -------
"Additional Parcels" 24.2
"Additional Parcel Fee" 24.2(a)(iv)
"Additional Parcels Termination Date" 24.2(b)(iii)
"Additional Pick Fee" 3.1(c)
"Additional Pick Guarantee" 3.1(c)
"Alternative Purchase Date" 7.3A(b)
"Arbitrators" 2.3(c)
"Base Compensation" 3.1(f)
"Base Rent" 3.1(a)
"Base Rent Surcharge" 3.1(i)
"Berth 6" 6.2(a)(i)
"Best Efforts" 4.7
"Breakbulk Fee" 3.1(d)
"Breakbulk Capital Improvements" 7.7(a)
"Breakbulk Guarantee" 3.1(e)
"Breakbulk Guarantee Deficiency" 3.1(e)
"Building Six Extension" Exhibit H
"Canopy Project" Exhibit I
"Capital Improvements" 7.7(a)
"City" Preamble
"Commonwealth" Preamble
"Commonwealth Area" Preamble
"Commonwealth Sublease" Preamble
"Completed" 3.1(b)
"Container Capital Tmprovement" 7.7(a)
"Container Capital Improvements Completion Date" 3.1(a)(ii)
"Container Customer" 4.3
"Container Line" 4.2(b)(ii)
"Container Pick Fee" 3.1(b)
"Container Pick Rate" 3.1(b)
"Container Pick Guarantee" 3.1(c)
"Contamination" 10.3(b)
"Cost-Plus Arrangement" 4.5
"Crane Rail Extension" Exhibit H
"Crane Retrofit" Exhibit H
"Cranes" 6.7
"Crane Pick Credit" 4.2(b)(ii)
"Delaware Xxxxxx Xxxxxx" 00.0
"Demolition and Paving" Exhibit H
"Development Fee" 24.2(b)(i)
"DRPA" 1.11
"DRPA Area" 1.7
"DRPA Rent" 3.1(j)
"DRPA Parcel" 1.11
"DRPA Parcel Project" Exhibit I
- vii -
"Effective Date" 2.1
"Environmental Statutes" 10.2(a)
"Equipment Removal Period" 2.5(b)
"Existing Gatehouse Project" Exhibit I
"Fill Project Reimbursement Amount" 24.2(c)(ii)
"FMC" 1.6
"Gatehouse Booth Project" Exhibit I
"General Cargo" 3.1(d)
"Gloucester Terminal" 7.3(a)
"Gloucester Cranes" 7.3
"Gloucester Reefer Plugs" 7.3(c)
"Guarantee Period" 3.1(c)
"Hazardous Substances" 10.3(c)
"XXXX" Preamble
"XXXX Capital Improvements" 7.6(a)
"XXXX Cranes" 7.3(b)
"XXXX Crane Removal Period" 2.5(c)
"XXXX Management" 11.1(c)
"XXXX Proposal" 4.7
"ICTF" 21.1(b)
"Imposition" 9.1
"Interest Rate" 24.2(c)(ii)
"Initial Letter of Credit" 3.2(a)
"Lease Year" 3.1(a)
"Letter of Credit" 3.2(a)
"Main Terminal Area" Preamble
"Major Development" 7.6(e)
"Major Improvements" 24.2(d)(i)
"Master Plan" 24.2(d)(ii)
"MLWD" 6.7
"Moveable Capital Inventory" 3.4
"NJEDA" 27.2
"Paceco Crane" 7.3A
"Paceco Crane Lease" 7.3A(b)
"Paceco Crane Rent" 7.3A(b)
"PAMT" Preamble
"PASHA" 24.2(b)
"PCBs" 10.4
"Permanent Gate House" Exhibit H
"Pick" 3.1(b)
"Pick Credit" 4.2(b)(i)
"Plan" 7.4
"Portside" 6.2(a)(i)
"Portside License" Preamble
"PPC" Preamble
"PPC-XXXX Agreement" Preamble
"Preliminary Lease Term" 24.2(d)(iv)
"Proposed Master Plan" 24.2(d)(i)
"PRPA" Preamble
"PRPA Capital Improvements" 7.7(a)
"PRPA Cranes" 6.6(a)
viii
"PRPA Field Representative" 1.5
"PRPA Letter of Credit" 24.2(c)(iii)
"Purchase Date" 7.3A(a)
"Purchase Price" 7.3A(a)
"Railport" 24.1
"Reefer Plugs" Exhibit H
"Refrigerated Warehouse" 6.2(a)(i)
"Remaining Purchase Price" 7.3A(b)
"Removal Periods" 2.5(d)
"Renewal Period" 2.3
"Rent" 3.1(f)
"Requesting Party" 1.9
"Required Equipment" 7.2
"Shed 1-1A Project" Exhibit I
"Shed 3A Project" Exhibit I
"Shed C" Preamble
"Shed 96" 24.2(a)(v)
"Shed 98" 24.2(a)(v)
"Shop Heaters Project" Exhibit I
"Steel" 3.1(d)
"Stock Transaction" 11.1(a)
"Striping and Signage Project" Exhibit I
"Substantially Completed" 2.3(b)
"Term" 2.2
"Terminal" Preamble
"Terminal Lighting" Exhibit H
"Third Crane Rail" Exhibit H
"Transfer" 11.1(a)
"Transferee" 11.1(a)
"VARs" 3.4
"Wharf Structure" 6.3
- ix -
THIS AGREEMENT is made this 30th day of December, 1990, by and between
PHILADELPHIA REGIONAL PORT AUTHORITY ("PRPA"), a body politic and corporate and
a public authority and instrumentality of the Commonwealth of Pennsylvania, and
XXXX CARGO SYSTEMS, INC. ("XXXX"), a Delaware corporation.
WITNESSETH:
WHEREAS, the Philadelphia Port Corporation ("PPC") and XXXX entered into
that certain Lease and Operating Agreement dated March 30, 1989, filed with the
Federal Maritime Commission ("FMC") on March 31, 1989 and designated FMC
Agreement No. 224-200233, as amended by the following certain agreements filed
with the FMC: FMC Agreement Nos: 000-000000-00 and 000-000000-000, both
effective May 12, 1989; Agreement No. 224-2O0233-003, effective May 16, 1989;
Agreement No. 000-000000-000, effective June 28, 1989; and Agreement No.
000-000000-000, effective October 3, 1989; and
WHEREAS, PPC and Portside Refrigerated Services, Inc. ("Portside")
entered into a license agreement dated January 11, 1990, FMC Agreement No.
000-000-000 (the "Portside License"), with respect to a portion of PAMT, as
hereinafter defined, which license agreement shall be terminated no later than
the Effective Date hereof; and
WHEREAS, by that certain Tripartite Agreement dated July 26, 1990 between
PPC, PRPA and the City of Philadelphia (the "City"), PPC assigned to PRPA, and
PRPA assumed from PPC, inter alia, certain of PPC's rights, title and interest
in, to and under the said Lease and Operating Agreement and the Portside License
from and after July 26, 1990, which assignment and assumption was confirmed by
that certain Assignment Agreement between PPC and PRPA also dated July 26, 1990,
filed with the FMC on July 30, 1990 and designated FMC Agreement No.
000-000000-000, effective July 30, 1990 (the Lease and Operating Agreement, as
so amended and assigned prior to the date of this amendment and restatement is
hereinafter referred to as the "PPC-Xxxx Agreement"); and
WHEREAS, by that certain deed dated July 26, 1990 the City conveyed to
PRPA all of the City's right, title and interest in and to those certain port
facilities known as the Packer Avenue Marine Terminal ("PAMT") more fully
described on Exhibit A, attached hereto and made a part hereof; and
WHEREAS, PRPA owns in fee a certain portion of the PAMT (the "Main
Terminal Area") as shown on Exhibit B, and PRPA and the Commonwealth of
Pennsylvania (the "Commonwealth") own in fee as tenants in common a portion of
PAMT described as part of Exhibit B (the "Commonwealth Area") (PRPA's and the
Commonwealth's interest being 516/1000ths and 484/1000ths respectively); and
2
WHEREAS, PRPA and the Commonwealth own in fee as tenants in common a
portion of the PAMT commonly known as Shed C, as shown on Exhibit B ("Shed C")
(PRPA's and the Commonwealth's interest being 32/1000ths and 968/1000ths
respectively);
WHEREAS, the Commonwealth, pursuant to that certain Sublease Agreement
dated April 1, 1977, subleased its interest in PAMT to the City (the
"Commonwealth Sublease"); and
WHEREAS, by that certain Assignment Agreement dated July 26, 1990 the
City assigned to PRPA, and PRPA assumed from the City, all of the City's right,
title and interest in, to and under the Commonwealth Sublease; and
WHEREAS, PRPA is authorized to enter into leases, operating agreements
and other agreements with respect to the PAMT and to amend and modify existing
leases, operating agreements and other agreements with respect to the PAMT; and
WHEREAS, PRPA and XXXX desire to amend and restate the PPC-Xxxx
Agreement.
NOW, THEREFORE, in consideration of the mutual terms, covenants,
provisions and conditions herein set forth, and intending to be legally bound
hereby, the parties hereto agree as follows:
3
ARTICLE I
LEASE AND USE OF TERMINAL
1.1 Grant. PRPA hereby leases to XXXX, and XXXX hereby leases from PRPA,
the entire PAMT (consisting of the Main Terminal Area, the Commonwealth Area and
Shed C), the Additional Parcels (as hereinafter defined) (the Main Terminal
Area, the Commonwealth Area, Shed C and the Additional Parcels are hereinafter
collectively referred to as the "Terminal") and the PRPA Cranes (as hereinafter
defined), all for the term and on the conditions set forth herein.
1.2 Appointment. It is the intent of the parties that XXXX, subject to
the terms and conditions hereof, shall be the exclusive public marine terminal
operator at the Terminal, which shall be operated and used by XXXX in a
competent, efficient and first-class manner, to accommodate shipping of
containerized, bulk and breakbulk cargo through the Terminal by water, rail and
truck.
1.3 Independent Contractor. XXXX shall be an independent contractor in
the performance of its obligations under this Agreement. Any employees of XXXX
who perform terminal operations and/or stevedoring services or other services
shall be the employees of XXXX solely, and PRPA shall not be a joint employer of
any of XXXX'x employees. In addition, any employees of any other terminal
operator and/or stevedoring company contracted by XXXX to perform any services
at the Terminal shall
4
not be the employees of PRPA, and PRPA shall in no way be considered a joint
employer of such employees. To that end, XXXX shall have the exclusive right and
duty to supervise and direct the day-to-day activities of its employees,
including without limitation, the responsibility to determine and pay their
wages and any benefits, to fulfill all applicable requirements under any
collective bargaining agreements and to pay all federal, state and local taxes
or contributions imposed or required under unemployment, workers' compensation,
social security, wage and income tax laws with respect to them. There shall be
no direct or indirect participation by PRPA in any employee relations matter
concerning those persons employed to perform terminal or stevedoring operations.
Nothing herein shall be deemed to prohibit PRPA from participating in
discussions or negotiations between labor and management in the interest of
fostering labor relations.
1.4 Use.
(a) The primary use of the Terminal and to the extent applicable, the
Cranes, as hereinafter defined, shall be as a marine terminal, which is hereby
defined as a facility for: (1) the docking and mooring of vessels; (2) the
receipt, assembling, distributing, moving, loading and unloading of merchandise,
goods, and cargo in containers, bulk and breakbulk into and from such vessels;
and (3) uses incidental thereto. Other permitted uses shall be the providing of
berth space and/or terminal services to vessels of all kinds; the consolidating,
5
stuffing and stripping, storing and warehousing of merchandise, goods and cargo;
transferring merchandise, goods and cargo to, from and between cargo vessels of
all kinds, trucks and railcars; ancillary office activities; and marine
activities similar to the foregoing.
(b) XXXX shall not use or permit the Terminal to be used in whole or in
part during the Term of this Agreement for any purpose other than as hereinabove
set forth, except with the prior written consent of PRPA. XXXX expressly agrees
that it shall not use the Terminal for any use in violation of any present or
future laws, orders, ordinances, judgments, decrees, general rules, regulations
or the like of any public or federal, state or local governmental authority
(other than PRPA) at any time applicable thereto, including but not limited to,
the Commonwealth and the City, and including but not limited to laws, rules,
regulations, statutes and ordinances relating to the public health, safety or
welfare, or use of the Terminal. XXXX hereby expressly agrees at all times
during the Term of this Agreement, at its own cost except as expressly provided
in this Agreement, to operate the Terminal in compliance with any and all
present and future laws, ordinances and general rules or regulations of any
public or governmental authority (other than PRPA) now or at any time in force
during the Term of this Agreement, and to pay and save PRPA harmless from all
penalties, fines, damages or costs resulting from XXXX'x failure to do so.
6
1.5 PRPA Field Representative. PRPA shall have the right to have present
at the Terminal at all times a field representative (the "PRPA Field
Representative"). At no cost or expense to PRPA, XXXX shall provide the PRPA
Field Representative with sufficient and secure office space (acceptable to
PRPA) and access to restrooms at the Terminal to carry out his or her
responsibilities. XXXX shall, at its sole cost and expense, provide in-terminal
telephone service to the PRPA Field Representative. PRPA shall have the right to
install and operate a telephone system and line upon the Terminal, at PRPA's
sole cost and expense, for use by PRPA and the PRPA Field Representative. PRPA
shall be responsible for the maintenance and repair of such telephone system and
line.
1.6 Operations to Maximize Use. XXXX agrees to conduct its operations at
the Terminal at all times in such a commercially reasonable way as to maximize
the use of the Terminal.
1.7 Title: Quiet Enjoyment. PRPA represents and warrants that: the
Commonwealth Sublease has not been modified or amended on the date hereof, and
that a true and correct copy of the Commonwealth Sublease has been delivered to
XXXX prior to the date hereof. PRPA represents and warrants that, subject only
to the matters referred to in this Section 1.7 and Section 24.2, it has good and
marketable fee title to the Main Terminal Area (except that certain area owned
by DRPA (as hereinafter defined) as shown on Exhibit A (the "DRPA Area")), to
its 516/1000ths
7
interest in the Commonwealth Area, to its 32/1000ths fee interest in Shed C, to
all fixtures and other property located at PAMT on the date hereof, including
the PRPA Cranes (but excluding the Xxxx Cranes, as hereinafter defined, and
further excluding all other container-handling equipment such as tractors,
forklifts, chassis and top loaders owned by XXXX), to the Additional Parcels
(except, with respect to all the foregoing, to the land extending from the low
water xxxx to the pier head line of the Delaware River), and good and marketable
title to its leasehold interest in the Commonwealth Area and Shed X. XXXX
covenants that so long as XXXX observes and performs all of the covenants, terms
and conditions to be observed and performed by XXXX under this Agreement, XXXX
shall, subject to the matters referred to in this Section 1.7 and Section 24.2,
peaceably and quietly hold and enjoy the Terminal pursuant to this Agreement for
the term hereby demised. This Agreement and PRPA's interest in the Terminal are
subject to (i) easements, agreements and restrictions of record; (ii) easements
visible upon the ground; (iii) that certain Lease Agreement between PRPA, as
lessor, and the Commonwealth, as lessee, and that certain Agreement of Sublease
between PRPA, as sublessee, and the Commonwealth, as sublessor, both dated as of
July 15, 1990 (collectively, the "Commonwealth Leases"); (iv) trackage rights of
railroads as set forth on Exhibit L; (v) the leases and other agreements set
forth on Exhibit K affecting portions of the Additional Parcels; (vi) that
certain option agreement between PRPA and the City of Philadelphia dated
8
July 26, 1990, a copy of which has been delivered to XXXX; (vii) existing
riparian and navigational rights of the United States, the Commonwealth and the
public; and (viii) rights-of-way for public streets. PRPA represents and
warrants that the matters set forth in Subsections (i) through (iv) and (vi) of
the preceding sentence will not unreasonably interfere with the use or enjoyment
of the Terminal as a marine terminal as contemplated by this Agreement, that the
matters set forth in Subsection (v) of the preceding sentence will not
unreasonably interfere with the use or enjoyment of portions of the Terminal
other than the Additional Parcels as a marine terminal as contemplated by this
Agreement, and that the matters set forth in Subsection (viii) of the preceding
sentence will not unreasonably interfere with the use or enjoyment of the
Terminal as a marine terminal as the contemplated by this Agreement except to
the extent that streets shown on the City Plan and located within the Terminal
are not vacated.
1.8 Non-Disturbance. The Commonwealth, by joining in this Agreement
for the limited purposes set forth on the signature page hereof, as part fee
owner of the Commonwealth Area and Shed C, agrees that, notwithstanding any
breach of default by PRPA under the Commonwealth Sublease or the Commonwealth
Leases, or any termination or expiration of the Commonwealth Sublease or the
Commonwealth Leases prior to the end of the Term hereof, provided that XXXX is
not in default hereunder, the Commonwealth and its successors or assigns, shall
not disturb XXXX'x
9
possession of the Terminal pursuant to the covenants, terms and conditions of
this Agreement.
1.9 Estoppel Certificates. Each of PRPA and XXXX, at any time from time
to time upon the written request of the other of them (the "Requesting Party"),
shall within fifteen (15) days of the date of such written request, execute and
deliver to the Requesting Party a written statement:
(a) confirming the commencement and expiration dates of this Agreement;
(b) certifying that this Agreement is in full force and effect and has
not been modified, assigned, supplemented or amended except by such writings as
shall be stated;
(c) certifying that all conditions and agreements under this Agreement to
be satisfied or performed by the Requesting Party have been satisfied and
performed except as shall be stated;
(d) certifying that the Requesting Party is not in breach or default
under this Agreement and there are no defenses or offsets against the
enforcement of this Agreement by the Requesting Party except as shall be stated;
(e) stating the date through which the Base Compensation, as hereinafter
defined, and all other sums payable hereunder have been paid; and
(f) providing any other information which the Requesting Party shall
reasonably request.
10
1.10 Zoning and Other Permits. PRPA represents and warrants that the use
of the Terminal as a marine terminal as contemplated by this Agreement is a
permitted use of the Terminal pursuant to the Philadelphia Zoning Code. PRPA
makes no other warranty or representation with respect to the use of the
Terminal except as expressly stated herein.
1.11 DRPA Owned Areas.
(a) If the Delaware River Port Authority ("DRPA") leases the area
identified as the "DRPA Parcel" on Exhibit A to PRPA, PRPA shall, by amendment
to this Agreement, sublease the DRPA Parcel to XXXX for the shorter of the term
of the DRPA-PRPA lease and the Term of this Agreement, and the DRPA Parcel shall
be deemed a part of the Terminal, subject to the following terms and conditions
and upon such other terms and conditions as the parties may agree:
(i) XXXX shall assume all of the obligations, liabilities, terms,
conditions and covenants, including without limitation the payment of any rent
and other charges, of PRPA under the DRPA-PRPA lease. It is the intention of the
parties that such sublease shall be triple net. To that end XXXX shall also
agree to provide directly to DRPA any indemnifications required under the
DRPA-PRPA lease, and to name DRPA as an additional insured on any insurance
policy required to be maintained under the DRPA-PRPA lease.
(ii) XXXX shall enter into an indemnification agreement with PRPA
pursuant to which XXXX agrees to indemnify
PRPA with respect to any liability that it may incur under the DRPA-PRPA lease
and with respect to the DRPA Parcel;
(iii) PRPA shall not be deemed to have made any warranties or
representations of any sort with respect to the DRPA Parcel, and,
notwithstanding anything to the contrary contained herein, PRPA shall not have
any maintenance, repair or other obligations of any sort hereunder with respect
to the DRPA Parcel or any improvements that may be made thereon except for the
maintenance and repair of those items for which it is responsible with respect
to the Terminal pursuant to Section 6.1. XXXX shall have an opportunity to
comment on the terms and conditions of the proposed DRPA-PRPA lease and, to the
extent deemed necessary by PRPA, XXXX shall participate with PRPA in lease
negotiations with DRPA. PRPA shall not enter into a lease with DRPA for the DRPA
Parcel prior to XXXX'x written approval of the terms and conditions thereof.
(b) PRPA shall use its best efforts to cause DRPA to enter into a written
agreement pursuant to which DRPA grants to PRPA, its lessees and their
respective agents, employees and invitees, the right to use the DRPA Area for a
period not less than the Term of this Agreement. XXXX'x Base Compensation shall
not be increased on account of such agreement.
12
ARTICLE II
EFFECTIVE DATE; TERM
2.1 Effective Date. This Agreement shall become effective on the last
to occur of (i) January 1, 1991; (ii) the date on which an executed copy of this
Agreement is submitted to the FMC for filing in accordance with the Shipping Act
of 1984 (hereinafter the "Effective Date"); (iii) the date on which the Attorney
General of the Commonwealth of Pennsylvania approves this Agreement; and (iv)
the date on which the Commonwealth joins herein for the limited purposes set
forth on the joinder attached to this Agreement. PRPA shall cause this Agreement
to be submitted to the FMC for filing promptly following execution. The parties
shall execute and deliver to one another a confirmation of the Effective Date
promptly following the Effective Date.
2.2 Term. This Agreement shall commence on the Effective Date and shall
end, subject to Section 2.3 hereof, ten (10) years after the Effective Date (the
"Term"), unless sooner terminated as hereinafter provided.
2.3 Renewal Options.
(a) XXXX shall have the option to extend the Term of this Agreement
for two (2) consecutive additional periods of ten (10) years each (each of which
periods is hereinafter
13
referred to as a "Renewal Period"), provided that XXXX is not in default under
this Agreement either at the time of exercising such option or at the
commencement of the respective Renewal Period. XXXX shall exercise the aforesaid
options to renew, in each instance, by giving PRPA written notice at least 180
days prior to the end of the Term or the last day of the Renewal Period then in
effect, as applicable. Each Renewal Period shall begin on the day immediately
following either the end of the Term or the last day of the prior Renewal
Period, as applicable. In the event XXXX shall fail to exercise its option with
regard to any Renewal Period in a timely manner, XXXX'x rights hereunder with
regard to such Renewal Period and any subsequent Renewal Period shall
immediately and irrevocably terminate. The terms and conditions applicable in
each Renewal Period shall be those specified for the Term of this Agreement,
except for the compensation due from XXXX to PRPA for such Renewal Period and
the amount of the Letter of Credit (as hereinafter defined) required to be
delivered by XXXX, which items shall be established as set forth in subsection
(c) below, and except that upon the expiration of the second Renewal Period,
XXXX shall have no further right to extend the Term unless XXXX has been granted
additional renewal rights as set forth in Subsection 2.3(b).
(b) At such time, if any, during the Term (including any Renewal
Period) that the Major Development (as hereinafter defined) is substantially
completed by XXXX in accordance with plans therefor approved by PRPA in
accordance
14
with Sections 7.6 and 24.2 hereof, then XXXX shall be granted two (2) additional
options to renew for a period of ten years each (provided XXXX is not in default
under this Agreement either at the time of exercising such option or at the
commencement of the respective Renewal Period), each of which periods shall also
be referred to as a "Renewal Period" hereunder. XXXX shall exercise the
aforesaid options to renew, if at all, in each instance by giving PRPA written
notice at least 180 days prior to the end of the last day of the Renewal Period
then in effect. Each Renewal Period shall begin on the day immediately following
the last day of the prior Renewal Period. In the event XXXX shall fail to
exercise its option with regard to any Renewal Period in a timely manner, XXXX'x
rights hereunder with regard to such Renewal Period and any subsequent Renewal
Periods shall immediately and irrevocably terminate. The terms and conditions
applicable in each Renewal Period shall be those specified for the Term of this
Agreement, except for the compensation due from Xxxx to PRPA for such Renewal
Period and the amount of the Security Deposit and the Letter of Credit required
to be delivered by XXXX, which items shall be established as set forth in
Subsection (c) below, and except that upon expiration of the final Renewal
Period, Xxxx shall have no further right to extend the Term. For the purposes of
this Section 2.2.43(b) and Section 24.2, the Major Development shall be deemed
"substantially completed" upon the first to occur of the completion of the
construction or work in accordance with the plans therefor of 80%
15
of the Major Improvements (as hereinafter defined), subject only to minor punch
list items which can be completed without unreasonably interfering with XXXX'x
use of such improvements, or the commencement of XXXX'x use of such improvements
for their intended purpose without physical impediments significantly reducing
potential volume or increasing costs compared to those that will obtain upon
final completion. In the event that XXXX and PRPA fail to agree upon when a
Major Development is substantially completed, the issue shall, at the request of
either party, be determined by the Arbitrators (as hereinafter defined), whose
decision shall be final and binding and, if necessary, may be enforced by
appropriate judicial proceedings.
(c) XXXX and PRPA shall negotiate in good faith the compensation to
be paid by XXXX to PRPA with respect to a Renewal Period and the amount of the
Security Deposit and the Letter of Credit to be delivered by XXXX prior to the
commencement of such Renewal Period. In the event that XXXX and PRPA do not
reach agreement on such matters at least ninety (90) days prior to the last day
of the Term or the Renewal Period during which the option to renew was
exercised, then the compensation due from XXXX to PRPA for such Renewal Period
and the amount of the Letter of Credit and the Security Deposit shall be
determined by the Arbitrators. The Arbitrators shall base their decision upon
such factors as they deem commercially reasonable, including but not limited to
rent being charged and security being required for comparable facilities located
in the
16
Port of Philadelphia, and in other ports on the east coast of the United States
of America, XXXX'x costs incurred in providing services at the Terminal, PRPA's
operational and capital costs (including capital funds of the Commonwealth)
related to the Terminal, the fair market rental value of the Terminal if it were
available for lease to other interested parties, and XXXX'x costs incurred in
connection with non-moveable capital improvements to and (provided XXXX submits
the Moveable Capital Inventories as required by Section 3.4 hereof) moveable
capital improvements at the Terminal. The Arbitrators shall request such
information as they deem necessary to make their determination including without
limitation the accumulated depreciation in respect to the Moveable Capital
Inventories. Regardless of the fill or other improvements that XXXX may make to
the Additional Parcels, the Arbitrators shall not reduce below zero either the
Development Fee (as hereinafter defined) or the Additional Parcel Fee (as
hereinafter defined), if applicable, with respect to the Additional Parcels, nor
require any payment to XXXX by PRPA on account of such fill or other
improvements. In the event XXXX has not received approval of a Master Plan (as
hereinafter defined), then the Arbitrators, in determining the compensation for
the Additional Parcels, may consider, among other factors, the possibility that
XXXX may not enjoy possession of the Additional Parcels for the full Renewal
Period then under consideration. In determining the compensation for the
Additional Parcels, the Arbitrators shall value the Additional
17
Parcels independently from the remainder of the Terminal. If the Arbitrators
have not rendered their decision by the commencement of the applicable Renewal
Period, XXXX shall continue to pay compensation at the rates applicable during
the Lease Year preceding such Renewal Period and the amount of the Letter of
Credit shall remain at the amount for such preceding year until the Arbitrators
have rendered their decision, and, within forty-five (45) days following such
decision, XXXX shall pay to PRPA, or PRPA shall refund to XXXX, as the case may
be, the amount by which compensation for the applicable Renewal Period has been
underpaid or overpaid, and XXXX shall deliver the Letter of Credit in the amount
determined by the Arbitrators.
(d) In the event XXXX exercises a renewal option or options
hereunder, "Term" as used in this Agreement shall be deemed to include such
Renewal Period(s) unless the sense of this Agreement requires otherwise. The
parties hereto shall undertake, prior to the commencement of any Renewal Period,
to file with the FMC an amendment extending this Agreement for such Renewal
Period.
2.4 Termination. This Agreement is subject to the termination rights
granted hereunder to PRPA and XXXX. No termination shall be effective until
notice thereof has been filed with the FMC.
2.5 Surrender of Possession; Holdover.
(a) XXXX shall peaceably deliver up and surrender possession of the
Terminal to PRPA at the expiration or
18
termination of this Agreement. Except as otherwise provided in Subsections
2.5(b) and (c), XXXX shall not holdover in all or any part of the Terminal after
termination or expiration of this Agreement without first obtaining the written
approval of PRPA, which PRPA shall have no obligation whatsoever to grant. Any
such holdover shall be deemed an extension of this Agreement on a month-to-month
basis upon the same terms and conditions of this Agreement, except that XXXX
shall pay to PRPA during each month of the holdover period an amount equal to
the greater of (i) one-twelfth (1/12) of one hundred fifty percent (150%) of the
Base Compensation, as hereinafter defined, payable for the twelve (12) months
immediately preceding the inception of the holdover period, or (ii) an amount
equal to the Base Compensation determined pursuant to the terms hereof with
respect to operations during the holdover period. Nothing in this Section 2.5
shall be deemed to give XXXX any right to holdover or to prevent PRPA from
evicting XXXX or pursuing other remedies in the event of such holdover.
(b) Notwithstanding anything to the contrary contained herein, upon
the expiration or termination of this Agreement XXXX shall be permitted, at its
risk, to leave XXXX'x equipment and cargo upon the Terminal at such area as PRPA
reasonably determines (taking into consideration the reasonable needs for
security), for a period not to exceed thirty (30) days (the "Equipment Removal
Period"). PRPA shall at least twenty (20) days prior to the expiration or, if
appropriate, the
19
termination of this Agreement notify XXXX of such designated areas. XXXX, prior
to the expiration or termination of this Agreement, shall move, at its sole cost
and expense, all of its equipment and cargo to such designated area. XXXX shall
be permitted access to those areas of the Terminal designated by PRPA at
reasonable times and upon reasonable notice to remove such equipment and cargo
during the Equipment Removal Period. During the Equipment Removal Period, PRPA
shall be entitled to receive rent at a rate of ten cents ($0.10) per square foot
per month for such area designated for cargo, and XXXX shall not be required to
pay any holdover payment or charge for the storage of such equipment.
(c) Notwithstanding anything to the contrary contained herein, in
the event PRPA does not purchase all of the XXXX Cranes upon the expiration or
termination of this Agreement, the XXXX Xxxxx(s) not purchased by PRPA shall
not be used for operations of the Terminal following such termination or
expiration, and XXXX shall be permitted to leave upon the Terminal at a location
on the crane rail to be determined solely by PRPA, for a period not to exceed
one hundred fifty (150) days following the expiration or termination of this
Agreement (the "XXXX Xxxxx Removal Period"), the XXXX Crane(s) not purchased by
PRPA. There shall be no Base Compensation, holdover payments or other charges
due from XXXX on account of the XXXX Cranes during the XXXX Xxxxx Removal
Period. XXXX and its contractors shall be permitted access to the Terminal in
accordance with the Plan, as
20
hereinafter defined, to remove and dismantle such XXXX Xxxxx(s) during the XXXX
Crane Removal Period. If any such services are requested by XXXX, XXXX shall pay
to PRPA all of PRPA's reasonable incremental out of pocket costs associated with
or caused by such removal or dismantling such as, by way of example only,
utility, security and labor costs. XXXX shall, at its expense, restore the
Terminal and the crane rails to their condition prior to such removal.
(d) The Equipment Removal Period and the XXXX Xxxxx Removal Period
are hereinafter occasionally referred to collectively as the "Removal Periods."
During the Equipment Removal Period, and any subsequent holdover period, XXXX
shall cause to be insured as set forth in Section 5.1(b) all of XXXX'x equipment
and cargo which remains on the Terminal beyond the expiration or termination of
this Agreement. During the XXXX Crane Removal Period, and any subsequent
holdover period, XXXX shall keep the XXXX Cranes which are not purchased by PRPA
insured from "all risks" of direct physical loss on a replacement cost basis. In
addition, during the Removal Periods, and any subsequent holdover period: XXXX
shall continuously keep in effect the insurance set forth in Sections 5.2
through 5.6; XXXX'x indemnification obligation under Section 5.11(a) shall
continue in full force and effect (subject to Sections 5.11(c) and (d)); XXXX'x
representations, warranties, covenants and indemnification obligations in
Sections 6.2(a)(ii), 10.1, 10.2, in the last sentence of Section 10.3(a),
Sections 10.4, 10.5 (to
21
the extent generated by XXXX), 10.6 and 24.2(a)(ii) shall continue in full force
and effect; and all of PRPA's remedies in Sections 10.9 and 19.1 through 19.3
shall continue in full force and effect. XXXX shall further comply with the
provisions set forth in Section 7.4 regarding the removal of the XXXX Cranes.
(e) If XXXX fails to remove XXXX'x equipment and cargo by the end
of the Equipment Removal Period, or to remove the XXXX Xxxxx(s) by the end of
the XXXX Crane Removal Period, then PRPA shall give XXXX written notice of such
failure. If XXXX fails to remove XXXX'x equipment and cargo or the XXXX Cranes
within 30 days after such notice, then PRPA shall have the right to remove the
same to a reasonable location off the Terminal, in which event XXXX shall pay to
PRPA on demand all moving and storage costs incurred by PRPA. Following such
removal and notification to XXXX of the location to which such items were
removed, PRPA shall have no obligations whatsoever with respect to such items.
ARTICLE III
COMPENSATION
3.1 Base Compensation. As consideration to PRPA for XXXX'x use of the
Terminal and the PRPA Cranes, and for the benefits specified herein, XXXX shall
during the Term hereof pay to PRPA in United States Dollars, on the fifteenth
day of each
22
month, without prior demand, set-off, or delay (but after having deducted any
credits specifically authorized by this Agreement in the amounts and at the
times so provided), at the offices of PRPA as set forth in Section 28.1 hereof
or at such other place as PRPA may from time to time direct, compensation as
follows:
(a) Base Rent. (i) Commencing on the Effective Date and continuing
thereafter until the expiration of the Term, an annual base rent (the "Base
Rent"), in advance, in the amount set forth below in Schedule I for each
respective Lease Year, as hereinafter defined. The Base Rent shall be due and
payable during each respective Lease Year in twelve equal monthly installments
as set forth below in Schedule I. If the Effective Date is a day other than the
15th of a calendar month, XXXX shall pay to PRPA on or before the Effective Date
a pro rata portion of the Base Rent. If the last month of the Term ends on a day
other than the 14th of a calendar month, Base Rent for the last month shall be
prorated on a per diem basis.
SCHEDULE I
LEASE YEAR ANNUAL BASE RENT MONTHLY INSTALLMENT
---------- ---------------- -------------------
91 1 $ 400,000 $ 33,333.33
92 2 $ 425,000 $ 35,416.67
93 3 $ 750,000 $ 62,500.33
94 4 $ 825,000 $ 68,750.33
95 5 $1,025,000 $ 85,416.67
96 6 $1,150,000 $ 95,833.33
97 7 $1,300,000 $108,333.33
98 8 $1,370,000 $114,116.67
99 9 $1,425,000 $118,750.00
2000 10 $1,445,000 $120,416.67
23
A "Lease Year" as used in this Agreement shall mean a one year period, the first
of which shall commence on the Effective Date.
(ii) Notwithstanding anything to the contrary contained in this
Section 3.1(a), in the event that the Container Capital Improvements (as
defined, in Section 7.7(a)) are not completed (as defined in 3.1(b)) or the
repairs set forth on Exhibit N are not completed on or before the first day of
the third Lease Year, then, as XXXX'x sole remedy (provided that the failure to
complete the Container Capital Improvements by such date is not due to PRPA's
failure to proceed with due diligence to meet the respective target completion
dates for each Container Capital Improvement as set forth in Exhibit H), the
Base Rent shall remain at and be $425,000 until the earlier of the (A) date upon
which the last Container Capital Improvement to be completed is completed and
the repairs set forth on Exhibit N have been completed (the "Container Capital
Improvements Completion Date"), and (B) the first day of the fifth Lease Year,
when the Base Rent shall be increased to $525,000 and shall remain at such
amount until the Container Capital Improvements Completion Date. Notwithstanding
Schedule I, the Base Rent shall be determined as follows: (x) in the event the
Container Capital Improvements Completion Date occurs during the third Lease
Year, the Base Rent due and payable for the period from the Container Capital
Improvements Completion Date to the end of the third Lease Year shall be
pro-rated on a per diem basis at the amount for the
24
third Lease Year as set forth on Schedule I, and thereafter the Base Rent shall
increase on each anniversary of the Effective Date to the amount set forth on
Schedule I for the next Lease Year; (y) in the event the Container Capital
Improvements Completion Date occurs during the fourth Lease Year, the Base Rent
due and payable for the period from the Container Capital Improvements
Completion Date to the end of the fourth Lease Year shall be prorated on a per
diem basis at the amount for the third Lease Year as set forth in Schedule I,
and thereafter the Base Rent shall increase on the next anniversary of the
Effective Date to the amount set forth on Schedule II for the fourth Lease Year
and thereafter on each anniversary of the Effective Date to the amount set forth
on Schedule II for the next Lease year; and (z) in the event the Container
Capital Improvements Completion Date occurs on or after the first day of the
fifth Lease Year, the Base Rent due and payable for the period from the
Container Capital Improvements Completion Date to the end of the Lease Year in
which such date occurs shall be prorated on a per diem basis at the amount for
Lease Year #3 as set forth on Schedule II, and thereafter the Base Rent shall
increase on the next anniversary of the Effective Date to the amount set forth
on Schedule II for the fourth Lease Year and thereafter on each anniversary of
the Effective Date to the amount set forth on Schedule II for the next Lease
Year.
25
SCHEDULE II
LEASE YEAR ANNUAL BASE RENT MONTHLY INSTALLMENT
---------- ---------------- -------------------
1 N/A N/A
2 N/A N/A
3 $ 850,000 $ 70,833.33
4 $ 925,000 $ 77,083.33
5 $1,025,000 $ 85,416.67
6 $1,150,000 $ 95,833.33
7 $1,300,000 $108,333.33
8 $1,370,000 $114,116.67
9 $1,425,000 $118,750.00
10 $1,445,000 $120,416.67
(b) Container Pick Fees. A container pick fee (the "Container Pick
Fee") equal to the product of the applicable container pick rate ("Container
Pick Rate") as set forth on Exhibit C, attached hereto and made a part hereof,
multiplied by the number of moves of a container (loaded or unloaded) onto or
off any and all vessels, excluding restows, which occurred at the Terminal
during the preceding month (each such move is hereinafter referred to as a
"pick"). No Container Pick Fee shall be due or payable by XXXX to PRPA until the
Container Capital Improvements are completed. For the purposes of Section
3.1(a), this Section 3.1(b), Section 3.1(c), Section 6.2(a) and Section 7.3(a),
the term "completed" shall mean the earlier of completion of the construction,
demolition, renovation or other work, in accordance with the plans therefor,
subject only to minor punch list items which can be completed without
unreasonably interfering with XXXX'x use and enjoyment of such
26
improvements, or the commencement of XXXX'x use of such improvements for their
intended purpose without physical impediments significantly reducing potential
volume or increasing costs compared to those that will obtain upon final
completion. In the event that XXXX and PRPA fail to agree upon when the
Container Capital Improvements are completed, the issue shall, at the request of
either party, be determined by the Arbitrators, whose decision shall be final
and binding and, if necessary, may be enforced by appropriate judicial
proceedings.
(c) Container Pick Guarantee. Commencing on the Container Capital
Improvements Completion Date and continuing thereafter during the Term, XXXX
guarantees to PRPA that XXXX shall handle at the Terminal 225,000 picks (the
"Container Pick Guarantee") during each consecutive thirty-six (36) month period
during the Term (the "Guarantee Period"), the first of which periods shall
commence on the Container Capital Improvements Completion Date, with subsequent
periods commencing every three years thereafter. In the event XXXX fails to meet
the Container Pick Guarantee during any Guarantee Period, XXXX shall pay to
PRPA within thirty (30) days of the end of such Guarantee Period a fee equal to
the sum of Ten Dollars ($10.00) multiplied by the difference between 225,000 and
the number of picks handled by XXXX during such Guarantee Period (the
"Additional Pick Fee"). PRPA's sole remedy in the event that XXXX fails to meet
the Container Pick Guarantee shall be its receipt of the Additional Pick Fee.
27
(d) Breakbulk Cargo Fees. A breakbulk cargo fee (the "Breakbulk Fee")
equal to the sum of (x) the product of $1.50 multiplied by the number of tons of
temperature controlled breakbulk cargo moved onto or off any and all vessels at
the Terminal during the preceding month, plus (y) the product of $.20 multiplied
by the number of tons of breakbulk steel, iron, aluminum, zinc, copper and other
metal ingots, sheets, rods, bars, coils and similar products ("Steel") moved
onto or off any and all vessels at the Terminal during the preceding month, plus
(z) the product of $0.70 multiplied by the number of tons of all other types of
breakbulk cargo ("General Cargo") moved onto or off any and all vessels at the
Terminal during the preceding month. At such time, if any, that the Breakbulk
Fee paid by XXXX with respect to a Lease Year equals the Breakbulk Guarantee (as
herein defined), then any additional Breakbulk Fee due with respect to such
Lease Year shall be determined based solely upon the tonnage of temperature
controlled breakbulk cargo, with no additional Breakbulk Fee with respect to
such Lease Year based upon Steel or General Cargo.
(e) Breakbulk Cargo Guarantee. Commencing on the Effective Date and
continuing thereafter during the Term, XXXX guarantees to PRPA that XXXX shall
handle at the Terminal during each Lease Year an aggregate amount of breakbulk
cargo that will generate Two Hundred Fifty Thousand Dollars ($250,000) in
Breakbulk Fees (the "Breakbulk Guarantee"). In the event XXXX fails to meet the
Breakbulk Guarantee during any Lease Year, XXXX
28
shall pay to PRPA within thirty (30) days of the end of such Lease year a fee
(the "Breakbulk Guarantee Deficiency") equal to the difference between Two
Hundred Fifty Thousand Dollars ($250,000) and the total amount of Breakbulk Fees
paid by XXXX to PRPA with respect to such Lease Year. PRPA's sole remedy in the
event that XXXX fails to meet the Breakbulk Guarantee shall be its receipt of
the Breakbulk Guarantee Deficiency. To the extent that XXXX fails to meet the
Container Pick Guarantee and XXXX exceeds the level of the Breakbulk Guarantee
over the three year period corresponding to that Guarantee Period, the Breakbulk
Fees paid by XXXX to PRPA in excess of the Breakbulk Guarantee during such three
year period corresponding to the Guarantee Period shall be applied by PRPA
against the shortfall in the Container Pick Guarantee and toward XXXX'x
obligations in regard thereto.
(f) Base Compensation Defined. The fees, charges and compensation
payable by XXXX to PRPA under this Agreement, including without limitation the
Base Rent, the Container Pick Fee, the Breakbulk Fee, the Base Rent Surcharge
(as hereinafter defined), the DRPA Rent (as hereinafter defined), the Additional
Pick Fee, the Breakbulk Guarantee Deficiency, the Development Fee (as
hereinafter defined) and the Additional Parcel Fee (as hereinafter defined) are
hereinafter collectively referred to as "Base Compensation." All amounts payable
as Base Compensation and all other sums payable by XXXX hereunder shall be
deemed to be "rent," and all remedies available at law or in equity for the
collection of rent will be available to PRPA to collect the same.
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(g) Proration. If the last Guarantee Period of the Term (including all
exercised Renewal Periods) is less than a full thirty-six (36) month period, the
Container Pick Guarantee for such Guarantee Period shall be prorated on a per
diem basis. On the fifteenth day of the first month after the end of the Term,
XXXX shall pay to PRPA the balance of the Base Compensation due to PRPA with
respect to the last Lease Year of the Term.
(h) Bulk Cargo. Prior to any bulk cargos being handled at the Terminal
XXXX and PRPA shall agree upon the method of handling the bulk cargo and the
terms and conditions with respect thereto.
(i) Base Rent Surcharge. Commencing on the first day of the seventh
Lease Year, and each year thereafter during the initial Term, Xxxx shall pay a
Base Rent Surcharge of $100,000 per year (the "Base Rent Surcharge"). The Base
Rent Surcharge shall be due and payable during each of such Lease Years in
advance in twelve equal monthly installments of $8,333.33 each. If the first day
of the seventh Lease Year is a day other than 15th day of the calendar month,
XXXX shall pay to PRPA on or before the first day of seventh Lease Year a pro
rata portion of the Base Rent Surcharge, with subsequent payments to be made on
the 15th day of each month together with payments of Base Rent. If the last
month of the initial Term ends on a day other than the 14th day of a calendar
month, the Base Rent Surcharge for the last month shall be prorated on a per
diem basis.
30
(j) DRPA Rent. Not later than five (5) days before the date that
such payments are due under the DRPA-PRPA lease, XXXX shall pay to PRPA all rent
and other charges required to be paid by PRPA under the DRPA-PRPA lease (the
"DRPA Rent").
3.2 Letter of Credit.
(a) XXXX delivered to PPC, pursuant to the PPC-Xxxx Agreement, a
letter of credit issued by Meridian Bank in the amount of One Million Dollars
($1,000,000), which letter of credit was transferred by PPC to PRPA, and a
replacement letter of credit was subsequently issued by Meridian Bank to PRPA,
as beneficiary (the "Initial Letter of Credit"), a copy of which is attached
hereto as Exhibit D. As security for the payment of Base Compensation and its
faithful performance of all covenants, terms and conditions of this Agreement,
promptly following the Effective Date, XXXX shall cause the Initial Letter of
Credit in the amount of One Million Dollars ($1,000,000) to be amended to: (i)
refer to this Agreement rather than to the PPC-Xxxx Agreement; (ii) reduce the
amount thereof to One Hundred Seventy-Five Thousand Dollars ($175,000); and
(iii) to have an expiration date of January 15, 1992, which amended letter of
credit (the "Letter of Credit") shall be substantially in the same form as the
Initial Letter of Credit, with only such modifications as are acceptable to PRPA
in form and substance, issued or confirmed by a Philadelphia bank acceptable to
PRPA, naming PRPA as beneficiary. PRPA shall cooperate with XXXX to make
arrangements reasonably acceptable to PRPA by which PRPA
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shall surrender the Initial Letter of Credit to the issuing bank in order to
permit such bank to issue the Letter of Credit in accordance with the terms of
the preceding sentence and concurrently therewith the issuing bank shall deliver
to PRPA the Letter of Credit. In the event XXXX fails to deliver to PRPA by
January 15, 1991 such an amended Letter of Credit, PRPA may draw upon the
Initial Letter of Credit up to the amount of $175,000 and deposit the proceeds
thereof into an account to serve as security for XXXX'x performance of the terms
and conditions of this Agreement. Upon delivery to PRPA of the amended Letter of
Credit, the proceeds so deposited, less any amounts properly retained by PRPA on
account of breaches of this Agreement by XXXX, shall be paid to XXXX. Within ten
(10) days of the Container Capital Improvements Completion Date, XXXX shall at
its option either cause the amount of the Letter of Credit to be increased by
Three Hundred Twenty-Five Thousand Dollars ($325,000), to a total of Five
Hundred Thousand Dollars ($500,000), and cause an amended Letter of Credit to be
delivered in such increased amount to PRPA meeting the requirements of this
Section 3.2(a), or deliver to PRPA cash in the amount of Three Hundred
Twenty-Five Thousand Dollars ($325,000) (the "Security Deposit"). For the
purposes of this Agreement, any reference to the Letter of Credit shall be
deemed to include and be a reference to the Security Deposit, and any right of
PRPA to draw on the Letter of Credit shall be deemed to include the right to
draw on the Security Deposit. The Security Deposit shall be
32
deposited or invested by PRPA in any account or instrument in which PRPA may
invest or deposit its funds pursuant to the Philadelphia Regional Port Authority
Act, as directed from time to time in writing by XXXX. In the event XXXX does
not provide PRPA with written directions regarding the investment of the
Security Deposit, PRPA shall deposit or invest the Security Deposit in direct
obligations of the United States Government, each having a maturity date of
ninety (90) days or less. All interest accruing on the Security Deposit shall be
for the account of XXXX. Interest accrued on the Security Deposit, if any, shall
be distributed to XXXX by PRPA by check on March 1, June 1, September 1 and
January 1 of each Lease Year (or if such date is a Saturday, Sunday or a holiday
on the next business day). During the Term hereof XXXX shall cause the Letter of
Credit to be renewed and replaced yearly, and XXXX shall cause to be delivered
each replacement Letter of Credit on or before December 15 of each year of the
Term. Each Letter of Credit shall have an expiration date of January 15 of the
year which is two (2) years after the date on which it is delivered, except for
the Letter of Credit to be delivered on December 15 of the last Lease Year of
the initial term or the last Lease Year of any Renewal Period, which shall have
an expiration date no earlier than February 15 of the year which is two years
after the date on which such Letter of Credit is delivered. XXXX shall cause
the Letter of Credit, in place at such time as this Agreement expires or is
terminated to be extended to a date not earlier than one
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month after the end of the Removal Periods. In the event that at such time as
this Agreement expires or is terminated an issue is pending before the
Arbitrators, the determination of which could result in XXXX'x owing sums to
PRPA, XXXX shall cause the Letter of Credit in place at such time to be extended
to a date not earlier than sixty days after the Arbitrator's determination of
such issue. In the event XXXX fails to cause to be delivered any such
replacement Letter of Credit to PRPA by December 15 of any year of the Term, or
to cause to be extended the Letter of Credit as provided above, PRPA may draw
upon the then current Letter of Credit to its full amount, and shall deposit the
proceeds in an interest-bearing account in a bank, the accounts of which are
federally insured, as security for the payment of Base Compensation and XXXX'x
faithful performance of all covenants, terms and conditions of this Agreement;
upon delivery of such replacement or extended Letter of Credit to PRPA, the
proceeds so deposited, less any amounts retained by PRPA on account of breaches
of this Agreement by XXXX and any incidental costs related to such deposits,
shall be paid to XXXX.
(b) Subject to Section 19.1(d), if at the end of the Term of this
Agreement or the sooner termination hereof any of the Base Compensation shall
be overdue and unpaid, or any other sum payable by XXXX to PRPA hereunder shall
be overdue and unpaid, then PRPA may, at its option, draw on the Letter of
Credit and/or the Security Deposit for the payment of any such overdue Base
Compensation or other sum in an amount equal to the
34
amount by which such overdue Base Compensation and other sums exceeds undisputed
amounts PRPA owes to XXXX. In the event of the failure of XXXX to keep and
perform any of its other obligations under this Agreement, then PRPA, at its
option, may draw on the Letter of Credit and/or the Security Deposit to the
extent necessary to make PRPA whole and to compensate PRPA for any loss or
damage sustained or suffered by PRPA due to such breach on the part of XXXX. If
at any time PRPA should draw on the Letter of Credit and/or on the Security
Deposit, XXXX shall, within sixty (60) days after written demand by PRPA, cause
the Letter of Credit and/or the Security Deposit, as applicable, to be restored
to its full required amount.
(c) Should XXXX comply with all of said terms, covenants and
conditions hereunder and pay all Base Compensation hereunder provided for, and
pay all other sums payable by XXXX to PRPA hereunder, the Letter of Credit (or
its replacement) and the Security Deposit shall be returned to XXXX on or before
sixty (60) days after the later of (i) the end of the Term or the earlier
termination of this Agreement, (ii) the end of the Removal Periods; (iii) the
completion of all restorations or repairs to the Terminal required to be made by
XXXX, including, if applicable, repairs or restorations necessitated by the
removal of the XXXX Cranes; or (iv) the determination by the Arbitrators of any
and all issues submitted to them the determination of which could result in
XXXX'x owing sums to PRPA. At such time, if any, after the end of the Term or
the
35
termination of this Agreement that such repairs or restorations are limited to
reasonable punchlist items or other reasonably ascertainable amounts
substantially less than the amount of the Letter of Credit, PRPA shall agree to
the reduction of the aggregate amount of the Letter of Credit and the Security
Deposit to an amount equal to one hundred fifty percent (150%) of the cost of
such punchlist items or other ascertainable amounts, as reasonably determined by
PRPA.
3.3 Records and Books. XXXX shall keep complete and accurate books,
records and accounts relating to all its operations upon the Terminal, including
without limitation the number of containers handled, the number of picks, the
tonnage of bulk and breakbulk (other than steel) cargo handled, the tonnage of
steel handled, the hours of Crane usage, the number of moves through the
Terminal gate, cargo storage and transshipment information, and vessel occupancy
of the berths, and PRPA and the Commonwealth shall have the right and privilege
through their representatives and at all reasonable times, upon one week's
advance notice, to inspect and audit such books, records and accounts in order
to verify the accuracy of the amounts of Base Compensation due and owing to PRPA
hereunder. XXXX agrees that such books, records and accounts for each year shall
be kept by XXXX for a ten (10) year period and shall be made available to PRPA
and/or the Commonwealth in Philadelphia, Pennsylvania, upon written request.
XXXX shall keep separate books and records for its operations at the Terminal
and its other operations. If any
36
audit conducted under this Section shows that XXXX has underpaid the Base
Compensation due from it to PRPA under the terms of this Agreement, XXXX shall
pay the shortfall upon demand, and in the event the amount of underpayment is in
excess of three percent (3%) of the amount paid by XXXX with respect to the
audited period, then XXXX shall pay all costs and expenses for the PRPA audit,
if any. PRFA shall use its best efforts to coordinate any such audit with the
Commonwealth. The duty to retain books, records and accounts imposed on XXXX and
the right herein granted by XXXX to PRPA and the Commonwealth to inspect such
books, records and accounts shall survive the expiration or termination of this
Agreement.
3.4 Reports. XXXX shall submit to PRPA, as soon as it is practicable,
on a ship-by-ship basis written vessel activity reports ("VARs") in form
satisfactory to PRPA, summarizing all vessel movements, all containers and cargo
loaded, discharged or held at the Terminal, and the number of containers
handled, both loaded and empty, the type of cargo (temperature controlled,
steel, or other) and the tonnage of such cargo. To the extent necessary for PRPA
to comply with all applicable laws and regulations, XXXX shall also submit to
PRPA such other reports as reasonably requested in writing by PRPA from time to
time. PRPA shall maintain the confidentiality of all information regarding
XXXX'x customers and all XXXX trade secrets contained in such reports (other
than the VARs) to the extent permitted by law. On or before July 31 of each
year, XXXX shall submit to PRPA an
37
itemized inventory of all moveable capital equipment owned or leased by XXXX and
used at the Terminal during the year ended July 1 of such year and of all
moveable capital equipment owned or leased by XXXX and removed from the Terminal
during such year ("Moveable Capital Inventory"). XXXX and PRPA shall investigate
the possibility and feasibility of providing to PRPA on-line access to XXXX'x
computer system and programs in order for PRPA to review data therein contained
in respect of the information required to be set forth in the VARs. Such access
shall not unreasonably interfere with XXXX'x use and operation of the computer
system, and shall not permit PRPA access to any confidential information of XXXX
not otherwise available to PRPA under this Agreement.
3.5 Late Charges. As compensation to PRPA for costs and expenses
involved in handling delinquent payments, all charges that remain due and unpaid
for a period of ten (10) days after the date they are due shall be subject to a
delinquency payment equal to one and one-half percent (1.5%) of said charges per
month or fraction thereof from the end of the ten day period until the charges
have been paid. Said delinquency payment is in addition to all other remedies
that PRPA may have that are provided by this Agreement or otherwise by law to
enforce payment of charges that have been incurred and have not been paid.
3.6 Certain Taxes. If the Terminal or operations on the Terminal become
subject to any taxes, assessments or charges which are not in effect on the date
hereof and which will result
38
in a significant increase in the tax burden of XXXX, then PRPA and XXXX will
renegotiate the Base Compensation in an equitable manner taking into account
such increase. In the event that XXXX and PRPA are unable to agree on an
equitable adjustment to the Base Compensation, the matter shall be determined by
the Arbitrators. Nothing in the preceding sentence shall be deemed to entitle
XXXX to any renegotiation of the Base Compensation on account of any federal or
state corporate income tax, or any change in the rates thereof.
ARTICLE IV
MARKETING: COOPERATION
4.1 Marketing. XXXX shall market its services offered at the Terminal
and the Terminal itself in a professional, first class manner at least
equivalent to the marketing efforts of similar terminals.
4.2 Transfer of Service.
(a) (i) Within a reasonable period of time after the execution of
this Agreement, XXXX shall provide to PRPA evidence satisfactory to PRPA of
commitments to call at the Terminal from various container lines acceptable to
PRPA, in its sole discretion, and whose anticipated volume of container activity
shall be acceptable to PRPA, in its sole discretion.
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(ii) Notwithstanding anything to the contrary contained in this
Agreement, in the event that XXXX does not deliver the commitments required by
Subsection 4.2(a)(i). Xxxx and PRPA, without the necessity of notice or
opportunity to cure, shall engage in good faith negotiations with respect to
what amendments, if any, should be made to this Agreement in view of the absence
of such commitments, and from and after the date on which PRPA notifies XXXX
that XXXX has failed to fulfill the requirements of Subsection 4.2(a)(i) until
the earlier of (A) the expiration of the Term of this Agreement and (B) the
filing with the FMC of an amendment to this Agreement specifically referring to
this Subsection and setting forth the agreement of the parties with respect to
the amendments, if any, to obtain for the balance of the Term, this Agreement
shall be deemed automatically to have been amended to provide as follows:
1. The Additional Parcels shall be excluded from the Terminal demised
hereunder. Xxxx shall have no development or other rights with respect thereto,
and the Development Fee and the Additional Parcel Fee shall be abated;
2. Xxxx shall be granted only one ten year option to renew the Term;
3. The last sentence of Subsection 3.1(d), capping a portion of the
Breakbulk Fee under certain circumstances, shall be deemed deleted from the
Agreement; and
4. PRPA shall not be required to complete any of the PRPA Capital
Improvements other than the Crane Retrofit; provided,
40
however, that in the event the Container Capital Improvements are not completed
by PRPA on or before the first day of the third Lease Year, Base Rent shall be
calculated as set forth on Exhibit O.
In the event this Agreement is automatically amended as provided herein, the
parties shall promptly execute and PRPA shall promptly file confirmation thereof
with the FMC. Except as expressly provided in this Subsection, this Agreement
shall be unamended and remain in full force and effect.
(b) In recognition of certain costs associated with the transfer of
certain customer operations and the Gloucester Cranes to the Terminal:
(i) subject to the provisions of this Subsection, XXXX shall be
entitled to a Five Dollar ($5.00) credit against Base Rent for each pick of a
container at the Terminal onto or off any vessel owned or chartered by any of
the container shipping lines or groups which currently call at XXXX'x Gloucester
Terminal (each, a "Container Line") (the "Pick Credit") up to an aggregate
maximum of Three Hundred Twenty Thousand Dollars ($320,000);
(ii) in the event both Gloucester Cranes are moved to the
Terminal pursuant to Section 7.2, XXXX shall be entitled to a Five Dollar
($5.00) credit against Base Rent for each pick of a container at the Terminal
onto or off a Container Line vessel or a vessel of any other new line introduced
at the
41
Terminal by XXXX after the Effective Date hereof provided that such picks occur
after the date on which the Gloucester Cranes are made operational at the
Terminal, up to an aggregate maximum of One Hundred Eighty Thousand Dollars
($180,000) (the "Crane Pick Credit"); provided, however, that: during the first
Lease Year the aggregate of Crane Pick Credits and Pick Credits shall not exceed
$320,000; during the first Lease Year a container movement cannot earn both a
Pick Credit and a Crane Pick Credit; and the aggregate maximum of Pick Credits
and Crane Pick Credits shall never exceed $500,000. From and after the first
anniversary of the Effective Date, a container movement can earn both a Pick
Credit and a Crane Pick Credit.
(iii) Pick Credits and Crane Pick Credits shall be credited
against the payment of Base Rent due on the 15th day of the month following the
date on which such Pick Credits or Crane Pick Credits are earned, in an amount
up to the amount of Base Rent due with respect to such month, with any unused
portion of such Credits being carried forward to the succeeding month or months
until XXXX has been able to utilize the full amount thereof.
(c) XXXX hereby agrees to accommodate and handle at the Terminal
during the Term (including all Renewal Periods) all new container business which
XXXX secures for Delaware River marine terminal facilities. Notwithstanding the
preceding sentence, XXXX may handle at the Gloucester Terminal (i) incidental
containers on ships whose primary mission is not the
42
transportation of containers and (ii) new container business in the event that
(A) the Terminal is unable to accommodate such containers due to the volume of
cargo being handled at the Terminal, and (B) PRPA, within thirty (30) days
following notice by XXXX to PRPA of the Terminal's inability to accommodate such
container business, is unable to provide substantially equivalent alternate
facilities at which XXXX can handle such container cargo at costs comparable to
costs for similar container cargo incurred by XXXX at XXXX'x Gloucester Terminal
or is unable to provide alternative arrangements for some or all of XXXX'x other
activities at the Terminal in order to make space available at the Terminal to
accommodate such new container business. XXXX shall not be required to accept
such alternative arrangements unless the parties reach a mutually acceptable
arrangement with respect to the adverse financial impact, if any, of such
alternative arrangements on XXXX and/or its customers. For the purposes of this
Section 4.2(c) only, PRPA's marine terminal facilities at Tioga Avenue,
Philadelphia shall be deemed comparable to the Terminal. XXXX shall consider in
good faith any such alternative facility offered for XXXX'x use by PRPA. XXXX
shall provide, upon PRPA's request, all information relating to the costs
incurred by XXXX at XXXX'x Gloucester Terminal for container cargo similar to
the proposed new container business. XXXX recognizes that such proposed
alternative facilities and any use thereof by XXXX may be subject to the rights
of other tenants or licensees of PRPA, but XXXX shall not be required to accept
43
any alternative facilities if the exercise of such rights by others would
unreasonably interfere with XXXX'x operations. In the event XXXX and PRPA
disagree as to whether the Terminal has the capacity to handle such new
container business, whether an alternate facility proposed by PRPA is
substantially equivalent, or whether an alternate arrangement has an adverse
financial impact on XXXX or its customers, the issue shall be submitted to the
Arbitrators whose decision shall be final. In the event any XXXX container
customer does not wish to call at either PAMT or such alternative facility, and
PRPA has been afforded a reasonable opportunity to participate with XXXX in
discussions with such XXXX customer to persuade such customer to call at the
Terminal or the alternative facility, then XXXX may accommodate such customer at
the Gloucester Terminal.
4.3 Intentionally Omitted.
4.4 Definition of XXXX. For the purposes of Section 4.2, XXXX shall
mean Xxxx Cargo Systems, Inc., its parent from time to time, and all present and
future subsidiaries and affiliates, any Transferee (as hereinafter defined), and
Xxxxxx X. Xxxx and all members oil Xxxxxx X. Xxxx'x immediate family during the
time they are employed by Xxxxxx X. Xxxx or any of the entities described in
this Section 4.4.
4.5 Certain Operating Agreements. From and after the date hereof until
the expiration or termination of this Agreement, PRPA shall not make or enter
into any cost-plus arrangements (as hereinafter defined) with any terminal
44
operators, stevedoring companies or other terminal lessees or licensees with
respect to container cargo facilities owned, leased or operated by PRPA, except
as permitted under this Section 4.5. The term "cost-plus arrangement" shall
mean, with respect to terminal operations and/or stevedoring services, payment
by PRPA of (or agreement to pay) all or any part of any terminal operating
expense that is not paid by PRPA on behalf of XXXX under this Agreement, or
payment by PRPA of a sum of money, or other comparable arrangement, not paid on
behalf of XXXX (excluding for this purpose as a payment to XXXX any credits
provided to XXXX by the terms of this Agreement). Payment by or on behalf of
PRPA of capital costs in connection with any PRPA port facility shall not give
rise to a cost-plus arrangement. PRPA shall not make or enter into any cost-plus
arrangement with respect to container cargo facilities owned, leased or operated
by PRPA prior to publicly soliciting responses to a request for proposals with
respect to such facility. If, upon PRPA's exercise of its reasonable business
judgment (which shall relate to the quality and cost of the service to be
provided, the need therefor, and the desire to promote the PRPA's policies and
objectives), PRPA makes or enters into a cost-plus arrangement at such container
cargo facilities with a party other than XXXX, then PRPA shall notify XXXX that
it has done so, and XXXX and PRPA shall negotiate in good faith for a period of
up to thirty (30) days with respect to the reduction, if any, required to be
made in the Base Compensation payable by XXXX to PRPA hereunder
45
and other modifications, if any, required to be made to this Agreement in order
to permit XXXX to compete on commercially reasonable terms for business with the
intended recipient of the cost-plus arrangement. If at the expiration of such
30-day period XXXX and PRPA have not reached a mutually satisfactory agreement,
then the issue, at XXXX'x option and as XXXX'x sole remedy, shall be submitted
to the Arbitrators, whose decision shall be final, or by written notice to PRPA
within 30 days of the expiration of such 30 day period, XXXX may terminate this
Agreement. In the event the issue is submitted to the Arbitrators, the
Arbitrators may consider all matters that may bear upon XXXX'x ability to
compete on commercially reasonable terms. Notwithstanding the foregoing, if an
agreement for services at a container cargo facility owned, leased or operated
by PRPA expires, is terminated by PRPA or is breached by the terminal operator,
stevedoring company, lessee or licensee, then PRPA may make or enter into a
cost-plus arrangement with respect to such services at such facility for a
period not to exceed nine (9) months (including renewal periods) without thereby
invoking the provisions of this Section 4.5. Nothing contained in this Section
shall be deemed to restrict or prohibit PRPA from entering into a management
agreement with a person or entity that manages and operates such facility for
PRPA in consideration of a predetermined fee paid by PRPA which is not tied to
and will not be adjusted by such person's or such entity's operating costs or
results of operations, provided that any such person or entity
46
and any of their affiliates will not also provide, directly or indirectly,
stevedoring services or equipment at such facility. The exercise by any lessee
or operator of a PRPA port facility of any right of renewal contained in an
agreement filed as of the date hereof with the FMC shall not be deemed to invoke
the provisions of this Section 4.5.
4.6 Certain Tax Exemptions. PRPA shall use its best efforts to assist
XXXX in qualifying for the same exemptions from Commonwealth of Pennsylvania
and/or City of Philadelphia taxes related to XXXX'x use and occupancy of the
Terminal that are available to any other similarly situated lessee of PRPA.
4.7 Transportation Tolls. PRPA shall use its best efforts to cause the
DRPA to eliminate tolls for the movement of all containerized cargo shipped
through the Ports of Philadelphia across the bridges under DRPA's control. For
the purposes of this Section 4.7 and Section 4.6, "best efforts" shall mean
meeting and discussing with appropriate governmental or DRPA staff or officials
the subject matter of Sections 4.6 or 4.7, as the case may be; in no event shall
PRPA be required to incur any costs in connection therewith.
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ARTICLE V
INSURANCE: INDEMNIFICATION
5.1 Property Insurance.
(a) PRPA shall keep the Terminal, including without limitation the
pier and Wharf Structure, continuously insured from "all risk" of direct
physical loss on a replacement cost basis during the Term. PRPA shall include
XXXX as an additional insured as its interest may appear, including extra
expense insurance in the amount of One Million Dollars ($1,000,000) from any one
loss, with no monthly limitation.
(b) XXXX shall keep the contents of the Terminal, including the
property of others and cargo, improvements and betterments, and "contractor's
equipment," continuously insured during the Term from "all risks" of direct
physical loss, on a legal liability basis with respect to cargo and property of
others, and an actual cash value basis with respect to all other contents,
improvements and betterments and "contractor's equipment." XXXX shall include
PRPA and the Commonwealth as additional insureds as their respective interest
may appear.
(c) XXXX shall keep the Cranes continuously insured from "all
risks" of direct physical loss, including "mechanical breakdown" and removal of
any boom warranty, on a replacement cost basis during the Term; provided, that
if mechanical breakdown coverage for the PRPA Cranes is not available at rates
mutually acceptable to XXXX and PRPA, then
48
XXXX shall have no obligation to obtain mechanical breakdown coverage for any of
the Cranes. With respect to the Cranes, XXXX shall also maintain extra expense
insurance and business interruption insurance in the combined amount of One
Million Dollars ($1,000,000) from any one loss, with no monthly limitation. PRPA
shall pay to XXXX an equitable percentage of the cost of such coverage allocable
to the PRPA Cranes by crediting such amount to XXXX against Base Compensation
owing by XXXX in the month immediately following XXXX'x payment of a premium for
such insurance. XXXX shall include PRPA and the Commonwealth as additional
insureds, loss payees or mortgagees as their respective interests may appear.
(d) PRPA shall provide comprehensive boiler and machinery coverage
on insurable objects (excluding the Cranes) on a Repair or Replacement basis
during the Term. PRPA shall include XXXX as an additional insured as its
interest may appear, including extra expense insurance in an amount of Two
Hundred Fifty Thousand Dollars ($250,000), for any one loss, with no monthly
limitation.
5.2 Liability Insurance. XXXX shall continuously keep in effect
comprehensive general liability insurance of at least Ten Million Dollars
($10,000,000.00) as to personal injury, including bodily injury, sickness,
disease or death, and property damage combined. XXXX shall cause the policies
evidencing such insurance to name the Commonwealth and PRFA as additional
49
insureds and to incorporate cross liability endorsement provisions substantially
as follows:
"Cross Liability - it is understood and agreed that the insurance
afforded by this policy for more than one insured shall not operate to
increase the limits of the Company's liability, but otherwise shall not
operate to limit or void the coverage of any one insured with respect
to claims against the said insured by any other insured or the
employees of any such other insured."
5.3 Worker's Compensation Insurance. XXXX itself shall maintain in full
force and effect at all times during the Term of this Agreement, Statutory
Worker's Compensation and Employers' Liability insurance, United States
Longshoremens' and Harborworkers' Act insurance, Xxxxx Act insurance,
Occupational Disease Act insurance, and any disability benefits act insurance
required by law, in appropriate statutory amounts under policies written by an
insurance company authorized to engage in the insurance business in the
Commonwealth of Pennsylvania or otherwise acceptable to PRPA, or XXXX in the
event XXXX becomes an approved self insured. In the event XXXX becomes an
approved self insured, it agrees to maintain excess insurance of the types
enumerated above in this Section 5.3 in amounts not less than $10,000,000 for
each accident or occupational disease.
5.4 Automobile Insurance. XXXX shall continuously keep in effect
comprehensive automobile liability insurance in the amount of $10,000,000 per
each accident for bodily injury and property damage combined.
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5.5 Waiver of Subrogation. All casualty insurance (excluding that
described in Section 5.3) and all property insurance policies carried by either
party covering PRPA and XXXX as required by this Article V shall expressly waive
any right on the part of the party carrying such insurance and its insurer
against the other insureds; provided, however, that if there is an additional
premium charge to obtain such waiver, then the party carrying such insurance may
discontinue such waiver upon notice to the other party of an intent to
discontinue such waiver, unless within thirty (30) days of the giving of such
notice the other party agrees to pay such additional premium charge.
5.6 Insurance General.
(a) If either XXXX or PRPA fails to maintain any insurance required
in this Agreement to be maintained by XXXX or by PRPA, the other party may
procure same, wherever available, at the non-complying party's expense, and the
non-complying party shall pay the cost thereof, and such other costs incurred by
such party in connection therewith, including without limitation, its reasonable
attorney's fees, on demand as compensation.
(b) Every policy of insurance required by this Agreement to be
maintained by XXXX or by PRPA shall contain a provision prohibiting cancellation
thereof or changes therein without at least thirty (30) days prior written
notice to XXXX or to PRPA, and to the Commonwealth at the address designated
from time to time in writing by the Commonwealth. Prior to the
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Effective Date and on each anniversary thereof, each party shall deliver to the
other two copies of certificates evidencing each of the insurance policies that
it is required to carry under this Article V, and shall upon the written request
of the other party deliver two copies of such portions of each such policy
providing the insurance herein required to the other party.
(c) All policies required hereunder and any renewals thereof shall
be in form satisfactory to PRPA, shall be issued by companies authorized to
engage in the insurance business in the Commonwealth or otherwise satisfactory
to PRPA, and shall be maintained in full force and effect. Other policies and
coverages purchased by XXXX not specifically required by PRPA, including
coverages carried in excess of the required minimum, shall be with companies as
XXXX deems appropriate. Notwithstanding anything to the contrary in this
Agreement, PRPA may satisfy any or all of its insurance coverage obligations
herein contained through participation by PRPA in the Commonwealth's insurance
or self-insurance programs, so long as the coverage provided thereby is not
less than is required by this Agreement.
(d) XXXX shall provide such additional types of insurance in such
amounts as PRPA shall reasonably require with a view to a change in the nature
of the Terminal, or the use to be made thereof by XXXX. In the event that any
such additional insurance is required, XXXX shall deliver two certificates of
each policy to PRPA and shall upon PRPA's written request deliver
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two copies of such portions of each policy providing such insurance to PRPA.
PRPA shall investigate the possibility and feasibility of its obtaining for the
account and at the expense of XXXX certain types of insurance required to be
maintained by XXXX under this Agreement.
(e) XXXX agrees not to use the Terminal in any manner that will
result in the cancellation or increase in cost of any insurance policy that PRPA
or XXXX is required to carry hereunder.
5.7 Accident Reports. XXXX shall provide a report to PRPA, in writing,
within seven (7) days after XXXX, its officers, or agents have knowledge of any
accident or occurrence involving death of or injury to any person or persons, or
damage in excess of Twenty Thousand Dollars ($20,000) to property (other than
cargo) of any person other than XXXX and PRPA, occurring upon or about the
Terminal. All such reports shall include, to the extent available and
appropriate, (1) the names and address of the persons involved; (2) a general
statement as to the nature and extent of the injury or damage; (3) the date and
hour of the occurrence; (4) the names and addresses of witnesses; and (5) such
other information reasonably requested by PRPA as may be known to XXXX, its
officers or agents.
5.8 Liability for Damage Caused by Third Parties. XXXX shall maintain
the necessary security on the Terminal to assure that the Terminal is not being
used by anyone not having the permission of XXXX or PRPA. XXXX is and shall be
liable
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(a) for all damage to the Terminal not insured against under Section 5.1 or with
respect to which a waiver of subrogation is not being carried pursuant to
Section 5.5 and (b) for all damage to the Terminal up to the amount of any
deductible of any insurance policy required to be maintained under Section 5.1,
which damage is caused by third parties not authorized to be upon the Terminal,
or by XXXX, XXXX'x employees, agents, contractors, invitees, or licensees.
5.9 Event of Loss. In the event of loss to the Terminal or the PRPA
Cranes, XXXX shall give notice thereof as soon as practicable to PRPA, and PRPA
may make proof of loss if not made promptly by XXXX; any adjustment of a proof
of loss shall require the prior written consent of PRPA. Each insurance company
issuing any property insurance policies in respect to the Terminal is hereby
authorized and directed to make payment under such insurance directly to PRPA
instead of to XXXX and PRPA jointly, and XXXX appoints PRPA, irrevocably, as
XXXX'x attorney-in-fact to endorse any draft therefor; provided, that
notwithstanding the foregoing, proceeds of insurance required under Section
5.1(b) or Section 5.1(c) (except for proceeds of insurance for a loss to the
PRPA Cranes), and extra expense insurance proceeds, shall be paid directly to
XXXX. Such policies of property insurance and all renewals thereof are hereby
assigned to PRPA as additional security for XXXX'x performance of its
obligations hereunder, and XXXX agrees that after default hereunder any values
available thereunder upon
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cancellation or termination of any of said policies or renewals, whether in the
form of return of premiums or otherwise, shall be payable to PRPA as assignee.
5.10 Insurance Audit. On the second anniversary of the Effective Date
and every three years thereafter during the Term and any Renewal Period, XXXX
and PRPA shall cause an insurance audit to be conducted jointly by their
respective insurance consultants to determine the adequacy and availability at
commercially reasonable rates of the types of insurance and the amounts of
coverages then being carried by either of them. In the event that PRPA's and
XXXX'x insurance consultants are unable to arrive at mutually agreeable
recommendations as a result of the insurance audit required under this Section
5.10, the parties agree that they will submit such dispute to the Arbitrators,
and the decision of the Arbitrators shall be final and binding upon the parties.
XXXX and PRPA agree that promptly following such insurance audit or the
resolution of any dispute, this Article V shall be amended to conform to the
recommendations of the insurance audit, and PRPA and XXXX shall promptly obtain
and maintain such insurance of such amounts as this Agreement, as so amended,
shall require.
5.11 Indemnification.
(a) XXXX hereby covenants and agrees to indemnify, defend and hold
PRPA and the Commonwealth harmless from any and all liability, loss, cost or
expense, claims, and/or suits for, or by reason of, any injury, loss or damage
to any
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person or property occurring on the Terminal from a condition caused by or for
which XXXX is responsible under the terms of this Agreement, or arising out of
XXXX'x use of or operations at the Terminal, whether the loss, injury or damage
be to the person or property of XXXX or any other person, except to the extent
due to PRPA's failure to fulfill its obligations or responsibilities under this
Agreement or to the negligence of PRPA, or the Commonwealth, and their
respective agents, contractors, employees, lessees, invitees or licensees.
(b) The indemnification obligations of XXXX under this Section 5.11
shall not be limited in any way by any limitation on the amount or type of
damages, compensation or benefits payable by or for XXXX or any of its employees
under workers' compensation acts, disability benefits acts or other employee
benefits acts.
(c) The provisions of Sections 5.11(a) shall not apply to any
matter insured against under Section 5.1 and as to which a waiver of
subrogation is in effect, or to any matters covered by the subject matter of
Article X.
(d) The indemnifications given in this Section 5.11 shall survive
the expiration or termination of this Agreement.
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ARTICLE VI
REPAIRS AND MAINTENANCE
6.1 PRPA's Obligations.
(a) PRPA shall maintain the structural integrity of and shall
repair the roof, exterior walls, floors, foundations, pavements and pilings of
all Terminal buildings and structures, maintain and repair the structural
integrity of the Wharf Structure, as hereinafter defined, maintain and repair
the mooring capstans and the fendering system, perform exterior painting
required to preserve all such buildings and structures, perform any necessary
maintenance and repairs to any perimeter fencing on the Terminal, and perform
any required structural maintenance and repairs as distinguished from
nonstructural maintenance and repairs, all when not caused by XXXX, its
employees, agents, contractors, invitees or licensees (normal wear and tear
excepted) and as PRPA reasonably shall determine, taking into account among
other things, the operational needs of the Terminal. PRPA shall determine the
type of fendering system to be employed at the Terminal. PRPA shall also perform
structural maintenance of and repairs to the underground systems of water, sewer
and electric utilities upon the Terminal. PRPA's obligations hereunder shall
include maintenance and repairs of the scales and track, including switches, on
the Terminal and the furnishing and maintenance of safe berths, including
moorage and approaches to the berths as PRPA reasonably shall determine.
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PRPA shall be responsible for any necessary repair or replacement of any
electrical transformers on the portions of the Terminal other than the
Additional Parcels. Notwithstanding anything to the contrary contained herein,
neither XXXX nor PRPA shall be required to maintain, repair or replace the
electrical transformers currently servicing Shed 98. Except as expressly
provided in this Agreement, PRPA shall not be obligated to make any repairs,
alterations, additions or betterments to the Terminal during the Term hereof.
Subject to Section 14.1 hereof, PRPA's obligation to maintain and repair as
described above shall be deemed to require PRPA to maintain and repair those
portions of PAMT for which it is responsible in their "as is" condition as of
the XXXX Possession Date or their repaired or upgraded condition with respect to
those matters which are repaired or upgraded by PPC or by PRPA as a result of
and following the survey referred to in Section 14.1, or the terms of this
Agreement. Notwithstanding anything to the contrary contained herein, PRPA shall
have no responsibility to maintain, repair or replace the Additional Parcels or
any improvements thereon, other than any obligation of PRPA set forth in
Article X.
(b) Upon completion of any of the Capital Improvements, PRPA
shall maintain and repair those elements of the Capital Improvements set forth
in Section 6.1(a) which have been completed in good condition, reasonable wear
and tear excepted, but in any event in operable condition.
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(c) If PRPA fails to perform any of its obligations of maintenance,
painting, or repair under this Section 6.1, then XXXX, at its option, if PRPA
fails to perform or to commence in good faith to perform (and thereafter
diligently to perform) any such obligation after having received, in the case of
an emergency requiring prompt attention in order to prevent danger to life or
serious property damage, 24 hours, and in the case of other matters, 72 hours
written notice from XXXX, and if PRPA provides its written approval of the
specific action proposed to be undertaken by XXXX, then XXXX shall be permitted
but shall not be obligated to perform such maintenance, painting or repair, and
XXXX shall be reimbursed for the reasonable cost thereof, provided that XXXX
shall not be reimbursed for any such costs in excess at any time of $100,000.
Costs incurred by XXXX and eligible for reimbursement hereunder shall be
reimbursed as follows: XXXX shall be entitled to a credit in an amount up to
fifty percent (50%) of all Base Compensation payable to PRPA by XXXX in that
month, until such time as all amounts to which XXXX is entitled to reimbursement
under this Section 6.1 have been repaid in full. Any notice or approval given
pursuant to this Section 6.1(c) shall be delivered in accordance with the
provisions of Section 28.1 in respect of emergencies. In the event that PRPA
fails to provide XXXX notice of PRPA's approval or disapproval of any course of
action proposed to be undertaken by XXXX pursuant to this Section, within, in
the case of an emergency requiring prompt attention in
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order to prevent danger to life or serious property damage 24 hours, and
otherwise 72 hours, of PRPA's receipt of XXXX'x notice, PRPA's approval of such
proposed course of action shall be deemed granted.
(d) PRPA agrees that for the purposes of this Agreement, unless
specifically stated otherwise, the duty to repair an item includes, in the
event such item becomes inoperable, the duty to replace such item with an
operable item of like kind.
6.2 XXXX'x Obligations.
(a) (i) XXXX shall, at all times, keep the Terminal in a neat,
clean and orderly condition. XXXX shall perform all nonstructural maintenance
and repair, including without limitation sweeping, snow removal, trash removal,
all interior painting, traffic or terminal striping, relamping of Terminal
lights, replacing light bulbs, cleaning closed drains, daily janitorial service,
storm, drain inlet maintenance and repair, rolling and sliding door maintenance
and repair, Terminal electrical signage maintenance and repair (excluding
electrical signs installed after the Effective Date by PRPA), Gatehouse
equipment maintenance and repair, carpet, tile and vinyl floor replacement, and
shall be responsible for security in and about the Terminal. XXXX shall be
responsible for any necessary maintenance of all electrical transformers on the
Terminal. XXXX shall use every reasonable precaution against fire. XXXX shall
perform aboveground maintenance and repair (except the repair and
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replacement of electrical transformers on portions of the Terminal other than
the Additional Parcels) of water, sewer and electric utilities upon the
Terminal. Notwithstanding anything to the contrary contained herein, neither
XXXX nor PRPA shall be required to maintain, repair or replace the electrical
transformers currently servicing Shed 98. XXXX shall be liable, at its own
expense, to make all repairs to windows, irrespective of cause. XXXX shall be
responsible for and shall repair all damage to the Terminal within a reasonable
period of time following the occurrence of damage. XXXX shall not be obligated
to repair any damage to the Terminal caused by PRPA, its employees, agents,
contractors, invitees, licensees, or lessees (other than XXXX). XXXX'x
obligations hereunder shall be to maintain and repair those elements of the
Terminal for which it is responsible in the condition they were in at the
commencement of XXXX'x possession with respect to the applicable portion of the
Terminal (the "XXXX Possession Date"); provided, that upon any repair or
upgrading of such element by PPC or by PRPA following the survey referred to in
Section 14.1 or in accordance with Sections 7.6 or 7.7, XXXX shall maintain and
repair such elements for which XXXX is responsible in their repaired or upgraded
condition, reasonable wear and tear excepted. The XXXX Possession Date as used
in this Agreement means April 1, 1989 with respect to PAMT (other than the
premises licensed to Portside pursuant to the Portside License (the
"Refrigerated Warehouse") and the Berth 6 area which was leased to XXXX by
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previous amendment to the PPC-Xxxx Agreement dated October 2, 1989 ("Berth
6")), October 3, 1989 with respect to Berth 6, and January 19, 1990 with respect
to Refrigerated Warehouse, and the Effective Date with respect to the Additional
Parcels. Notwithstanding anything to the contrary contained in this Section
6.2(a)(i), as to those items as to which XXXX has maintenance or repair
obligations hereunder, XXXX shall not have any such obligation to maintain or
repair any deferred maintenance item set forth on Exhibit N until the repair to
such item to be undertaken by PRPA is completed; provided, however, XXXX shall
be responsible for damage caused to such item by XXXX, its employees, agents,
contractors, invitees or licensees, and XXXX'x obligation to maintain or repair
as to each such deferred maintenance item shall commence when the repair to such
item has been completed. PRPA shall be responsible for replacing any exterior
terminal lighting bulbs which burn-out during the period from the Effective Date
to the date on which the Container Capital Improvement relating to terminal
lighting is completed, and thereafter XXXX shall be responsible for replacing
any such bulbs.
(ii) Notwithstanding anything to the contrary contained herein,
except with respect to damage caused by XXXX, its agents or invitees, XXXX'x
maintenance and repair obligations with respect to the Additional Parcels shall
be to maintain and repair the Additional Parcels to a level commensurate with
the use thereof by XXXX, provided that in the event of such use such
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maintenance and repair shall always be performed to a level sufficient to comply
with all applicable laws and regulations with respect to the health and safety
of persons. XXXX shall indemnify, defend and hold PRPA harmless from and against
any and all expense, loss, claim, suit or liability suffered by PRPA as a result
of death or injury to person, or property damage occurring on or about the
Additional Parcels, even if such death, injury or property damage is due in part
to the negligence of PRPA with respect to the current or future condition of the
Additional Parcels (except as to a future condition caused by an affirmative
negligent act of PRPA), the negligence of the Commonwealth, or their respective
agents, contractors, employees, lessees, invitees or licensees. The
indemnification obligation of XXXX under this Section shall not be limited in
any way by any limitation on the amount or type of damages, compensation or
benefits payable by or for XXXX or any of its employees under workers'
compensation acts, disability benefits acts, or other employee benefits acts.
(b) Upon the completion of each Capital Improvement, as
hereinafter defined, XXXX shall maintain and repair those elements of such
Capital Improvement set forth in Section 6.2(a) in good condition, reasonable
wear and tear excepted, but in any event in operable condition.
(c) In the event any alterations or improvements shall be made by
XXXX which can easily be removed without damage to the Terminal, or trade
fixtures installed by XXXX which can be
63
removed without injury to the Terminal, such alterations, improvements or trade
fixtures shall remain the property of XXXX, and upon the expiration or
termination of this Agreement XXXX may remove the same within the XXXX Equipment
Removal Period, provided that XXXX shall repair and restore any damage to the
Terminal caused thereby. Any such alterations, improvements or trade fixtures
which are not removed by XXXX from the Terminal within the XXXX Equipment
Removal Period shall be and remain the property of PRPA. It is expressly agreed
that the XXXX Cranes are fixtures, but XXXX shall nevertheless have the right
and obligation to remove the XXXX Cranes after the termination of this Agreement
as provided in Section 7.4. XXXX agrees that if and when any repairs,
alterations, additions or betterments shall be made by it as provided in this
Section 6.2, it promptly shall pay for all labor done or materials furnished and
shall keep the Terminal free of all liens and shall comply with the applicable
provisions of Article VII.
(d) XXXX agrees that for the purposes of this Agreement, unless
specifically stated otherwise, the duty to repair an item includes, in the event
such item becomes inoperable, the duty to replace such item with an operable
item of like kind.
6.3 Wharf Structure. Notwithstanding anything to the contrary in this
Agreement, if damage to the Wharf Structure is caused by the acts of or failure
to act by XXXX, its officers, employees, agents, contractors, invitees, or
licensees, including
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persons performing work on the Terminal at the request or under the direction of
XXXX, PRPA may make all necessary repairs and XXXX agrees to reimburse PRPA for
all such costs incurred by PRPA upon presentation of supporting documentation by
PRPA to XXXX to the extent such costs are not covered by insurance. For the
purposes of this Agreement, the "Wharf Structure" shall mean and be defined as
the beams, girders, subsurface support slabs, and prestressed concrete or wood
piling located between the pier head line and the bulkhead line and any and all
mooring dolphins that service the berths at the Terminal. The Wharf Structure
shall not include the surface paving at the Terminal.
6.4 Fire Systems. All fire protection sprinkler systems, fire hydrant
systems, standpipe systems, fire alarm systems, portable fire extinguishers and
other fire protective or extinguishing systems or appliances which have or may
be installed on the Terminal shall be maintained and repaired by XXXX in an
operational condition and in accordance with all applicable laws at all times,
subject to Exhibit N. All repairs and servicing shall be made in accordance with
all applicable laws, including without limitation, the City of Philadelphia Fire
Code and the regulations of the Department of Licenses and Inspections of the
City of Philadelphia and all additions, revisions and amendments thereto, and in
accordance with the recognized standards relating thereto. XXXX shall cause a
sprinkler system maintenance and inspection service, each as approved by the
agency having jurisdiction over same and by PRPA,
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in its reasonable judgment, to carry out, respectively, systematic inspection,
adjustment and maintenance, to the extent required by law, and to furnish
reports of each such inspection to PRPA. At XXXX'x sole cost and expense XXXX
shall provide remote monitoring of the fire protection system. In the event the
fire protection system must be replaced or overhauled in PRPA's reasonable
judgment, or if the system must be replaced as a result of legislative action,
PRPA shall, at its sole cost and expense, cause the system to be replaced or
overhauled, as appropriate.
6.5 Load Limits. XXXX shall not place loads on the Terminal in excess
of the maximum load limits which are set forth in the certification of PRPA's
engineer which are attached hereto as Exhibit F and made a part hereof, without
the prior written consent of PRPA. XXXX acknowledges receipt of the Xxxxxx
Engineers report on the load capabilities of the Additional Parcels and agrees
to consult with PRPA concerning uses that may adversely affect the structural
integrity of the Additional Parcels.
6.6 Maintenance and Servicing of Cranes.
(a) During the Term hereof, XXXX shall at its own cost and expense
provide crane operators to provide for the operation of the two (2) Xxxxx 45LT
container cranes and one (1) Xxxxx combination heavy lift (385T) container crane
located on the Terminal (collectively, the "PRPA Cranes") and the XXXX Cranes,
as hereinafter defined (the PRPA Cranes and the XXXX
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Cranes are occasionally referred to herein collectively as the "Cranes"), and
XXXX shall contract with an independent crane maintenance contractor acceptable
to PRPA, in its reasonable judgment, to maintain and service the Cranes or
undertake such maintenance and service by itself, including without limitation
the observance of the manufacturers' recommendations (except to the extent that
XXXX demonstrates to PRPA's reasonable satisfaction that certain of such
recommendations are inapplicable or have been satisfied by alternative measures)
so as to keep them in the same operating condition they were in, as to the PRPA
Cranes, on April 1, 1989 or as subsequently retrofitted by PRPA, and, as to the
XXXX Cranes, at the date each such XXXX Xxxxx was introduced into service at the
Terminal, subject in all cases to ordinary wear and tear. (Notwithstanding
anything to the contrary contained herein, PRPA and not XXXX shall be required
to replace any major crane parts (as listed on Exhibit E), as needed, on any
PRPA Crane (other than the heavy lift crane) until such PRPA Crane (other than
the heavy lift crane) has been retrofitted by PRPA as provided herein, unless
the need for such replacement is caused by XXXX'x negligence or by XXXX'x
failure to perform its maintenance obligations set forth in this Section 6.6(a).
Furthermore, PRPA and XXXX agree that with respect to diesels and generators for
the PRPA Cranes, after the completion of the Crane Retrofit with respect to a
PRPA Crane, the first time each diesel and generator with respect to such Crane
needs to be replaced, XXXX shall bear the cost thereof
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to the extent that such replacement is not covered by insurance, up to $100,000,
and PRPA shall pay the balance. Thereafter, each time such diesel and generator
needs to be replaced, XXXX shall bear the full cost thereof (to the extent that
such replacement is not covered by insurance)). Crane maintenance personnel
shall be fully trained and qualified to perform such services. If requested by
PRPA, maintenance reports shall be submitted to PRPA by XXXX not less frequently
than quarterly. PRPA shall not be liable for the actions of any crane operator,
crane maintenance contractor, or the employees of either of them.
(b) PRPA shall not be liable for any claims, liabilities, costs and
expenses, including, without limitation, consequential and incidental damages,
arising out of or caused by a breakdown of the Cranes or their being out of
service for any reason whatsoever (except to the extent caused by PRPA's
failure to perform its obligations hereunder), and XXXX hereby releases PRPA
from any such liability.
(c) PRPA shall make crane parts available for purchase by XXXX from
PRPA's spare parts inventory at the fair market value for such parts.
6.7 Dredging.
(a) During the Term hereof and any Renewal Period, PRPA shall, at
its sole cost and expense, and at such times as it reasonably determines
necessary taking into account the soundings referred to in Section 6.7(c), and
upon its obtaining all necessary permits and approvals (which PRPA will
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pursue in a commercially reasonable manner), conduct maintenance dredging
alongside Berths #1 and #2 at the Terminal to a depth of thirty-six (36) feet
from Mean Low Water Datum ("MLWD"), alongside Berths #3, #4 and #5 to a depth of
forty (40) feet from MLWD, and alongside Berth #6 to a depth of thirty-eight
(38) feet from MLWD. Upon the presentation by XXXX to PRPA of reasonable
evidence illustrating a reasonable, current business need, PRPA shall, upon its
obtaining all necessary permits and approvals (which PRPA will pursue in a
commercially reasonable manner), dredge alongside Berths #1, #2 and #6, to the
extent of such demonstrated need, to a depth of forty (40) feet from MLWD. PRPA
shall conduct maintenance dredging to a depth of forty (40) feet from MLWD
alongside any such Berth that PPC or PRPA previously caused to be dredged to
such depth so long as a reasonable, current business need exists for such a
depth to be maintained.
(b) No later than the substantial completion of a Major Development
contemplating the use of one or more of the berths on the Additional Parcels,
PRPA shall, upon its obtaining all necessary permits and approvals (which PRPA
will pursue in a commercially reasonable manner), dredge alongside such berths
to the depths for which there is a demonstrated reasonable, current business
need, and, upon its obtaining all necessary permits and approvals (which PRPA
will pursue in a commercially reasonable manner), and so long as reasonable,
current business needs exist for such depths to be maintained, PRPA shall
conduct maintenance dredging of such berths to such depths.
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(c) During the Term of this Agreement, XXXX, at its cost and
expense, shall cause a reputable engineering company to perform soundings
alongside Berths #1 through #6 at PAMT and, following the dredging of such
berths pursuant to Section 6.7(b), the berths at the Additional Parcels and
shall make the results of such soundings available to PRPA. XXXX shall cause
such soundings to be made periodically during the Term as XXXX determines is
necessary, but in any event XXXX shall cause such soundings to be made at least
once per year during the Term of this Agreement.
6.8 Access. PRPA, its contractors, invitees and their respective
employees shall have the right of access to the Terminal to perform their
respective duties, responsibilities and jobs as contemplated under this Article
VI and to determine the state of maintenance and repair. PRPA will schedule such
access, to the extent, possible, so as to not unduly interfere with any terminal
operations. PRPA shall, at its expense, make all improvements and repairs to the
Terminal for which it is responsible within a reasonable period of time and
shall be responsible for all damage to cargo, containers and all other property
of others located on the Terminal when such repair is necessitated by or damage
is caused by the negligent or wrongful acts of PRPA or its employees, agents,
contractors, lessees, invitees, or licensees.
6.9 PRPA's Rights. Should XXXX fail to make any repairs or perform any
maintenance for which it is responsible,
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including without limitation any repair or maintenance to the Cranes, PRPA shall
have the option to make or perform the same if XXXX fails to do so after having
received thirty (30) days written notice from PRPA or immediately if in PRPA's
reasonable business judgment the repairs required must be made to prevent
further damage, injury or loss. Upon receipt of an invoice together with
supporting documentation, as appropriate, from PRPA, XXXX shall promptly
reimburse PRPA for the reasonable cost thereof. The making of such repairs by
PRPA shall in no event be construed as a waiver of the duty of XXXX to make
repairs as herein provided.
ARTICLE VII
EQUIPMENT; CAPITAL IMPROVEMENTS
7.1 Provision. Throughout the Term XXXX shall provide by lease or
purchase, at its sole cost and expense, an IBM AS-400 computer or equivalent and
appropriate software for monitoring and coordinating its operations conducted at
the Terminal. XXXX shall provide the equipment necessary for the efficient
operation of the Terminal, including without limitation all container handling
equipment such as tractors, fork lifts, chassis, and top loaders, except the
PRPA Cranes, which shall be provided by PRPA. XXXX shall, at its sole cost and
expense, on or before the date that is thirty (30) days following the completion
of the
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Container Capital Improvements either (i) purchase container handling equipment
or (ii) move to the Terminal from the Gloucester Terminal such of XXXX'x
container handling equipment, in either case as may be necessary for efficient
container operations at the Terminal.
7.2 Required Equipment. Any modification, improvement, or addition to
the Terminal (other than the Capital Improvements), and any equipment
installation or system modification required by the Fire Department of the City
of Philadelphia, Department of Licenses and Inspections of the City, Coast
Guard, Environmental Protection Agency, or any other local, regional, state or
federal agency ("Required Equipment") as a result of any modification,
improvement, or addition to the Terminal (other than the Capital Improvements)
or an equipment installation or system modification made by XXXX shall be
constructed, installed or made at XXXX'x sole cost and expense and in accordance
with all rules of such requiring agency. Any Required Equipment necessitated by
a change in the laws or regulations of such requiring agency or as a result of
the construction of the Capital Improvements or as a result of any other
improvements made by PRPA shall be constructed or installed at PRPA's sole cost
and expense and in accordance with all rules of such requiring agency.
7.3 XXXX Cranes.
(a) XXXX shall use its best efforts to obtain on or before the date
that is sixty (60) days following the
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Effective Date any and all approvals necessary from all governmental,
quasi-governmental and private parties necessary to permit XXXX to move to the
Terminal the two container cranes (the "Gloucester Cranes") currently located at
XXXX'x marine terminal in Gloucester, New Jersey (the "Gloucester Terminal"). If
XXXX obtains all such approvals on or before June 16, 1994, XXXX shall cause, at
its sole cost and expense, the Gloucester Cranes to be moved to, installed and
made operational on the Terminal as promptly as reasonably possible, but in any
event not later than ninety (90) days after the Third Crane Rail (as hereinafter
defined) has been completed. The June 16, 1994 date set forth in the preceding
sentence shall not be affected by any event of force majeure. XXXX shall use its
best efforts to schedule barge service for the move of such cranes at a time
that will permit XXXX to comply with the preceding sentence. If all such
approvals have not been obtained within such sixty (60) day period following the
Effective Date, which period shall not be affected by any event of force
majeure, upon the demonstration of the need for an additional container crane at
the Terminal, XXXX shall (unless it has, by the date such need is demonstrated,
obtained such approvals and delivered to PRFA an opinion as contemplated by
Section 23.1, and thereafter installs the Gloucester Cranes on the Terminal),
within 120 days following the latter of the end of the Lease Year in which such
need is demonstrated and, if XXXX petitions the Arbitrators with respect to the
demonstration of such need, the date of the decision of
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the Arbitrators with respect thereto, at its sole cost and expense, contract
with a container crane manufacturer for the purchase, delivery and installation
of a current model of a container crane suitable for use on the Terminal's crane
rail system and of a quality and with specifications equal to or better than the
Paceco Crane previously installed on the Terminal by XXXX and shall use its best
efforts to cause such crane to be delivered, installed and operational on the
Terminal on or before three hundred sixty (360) days from the date on which XXXX
is required to order such crane or, if the crane manufacturer's then-current
delivery schedule is longer than 360 days, in accordance with such schedule. For
purposes of this Subsection, the need for an additional container crane shall be
deemed to have been demonstrated when XXXX has performed one hundred thirty
thousand (130,000) container picks or more in any Lease Year; provided,
however, that XXXX may petition the Arbitrators not later than thirty (30) days
following the end of such Lease Year if XXXX believes that such volume of picks
is equal to one hundred ten percent (110%) or more of the reasonably anticipated
level of container activity at the Terminal for each of the immediately
following two (2) Lease Years. If the Arbitrators determine that such volume is
equal to one hundred ten percent (110%) or more than the reasonably anticipated
level of container activity at the Terminal for each of the immediately
following two (2) Lease Years, then the need for the additional crane shall be
deemed not to have been demonstrated. In the event that XXXX
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has not obtained all approvals referred to in the first sentence of this Section
7.3(a) on or before June 16, 1994, XXXX may nevertheless, at its option, move
the Gloucester Cranes to the Terminal, in which event PRPA shall proceed with
the Third Crane Rail. At such time, if any, that both Gloucester Cranes are
installed and made fully operational on the Terminal, XXXX'x obligation to
purchase an additional crane upon demonstration of the need therefor shall be
deemed satisfied.
(b) The Gloucester Cranes, upon their installation on the Terminal,
the Paceco Crane presently on the Terminal (until such time, if any, that it is
purchased by PRPA), and the Crane XXXX may be required to purchase pursuant to
the preceding paragraph of this Section 7.3 are collectively hereunder referred
to as the "XXXX Cranes". The XXXX Cranes shall be and remain at the Terminal
until the expiration or termination of the Term and all exercised Renewal
Periods subject to Section 2.5(c). If XXXX, during the Term of this Agreement or
any renewals thereof, provides any additional or replacement container cranes
to the Terminal, such cranes shall also be deemed to be XXXX Cranes and shall be
subject to the same terms and conditions applicable to the XXXX Cranes as set
forth herein.
7.3A Purchase of Paceco Crane.
(a) When XXXX moves the Gloucester Cranes to the Terminal as
contemplated by Section 7.3(a), then PRPA shall purchase from XXXX (or the
record title holder), within thirty (30) days of the date on which the
Gloucester Cranes become
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operational on the Terminal (the "Purchase Date"), the Paceco Crane (and the
spreader and all other accessories and parts used in connection therewith,
together with all warranties and service contracts related thereto)
(collectively, the "Paceco Crane") currently located on the Terminal, free and
clear of all liens, encumbrances and security interests, for a purchase price to
be determined by an independent appraiser selected by the parties and on such
other terms and conditions agreed to by the parties. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Agreement,
in the event that on or before June 16, 1994, XXXX has not delivered to PRPA
written notice of its intent to move the Gloucester Cranes to the Terminal and
an opinion of XXXX'x counsel as contemplated by Section 23.1, then PRPA shall
not have any obligation to purchase the Paceco Crane from XXXX. The June 16,
1994 date set forth in the preceding sentence shall not be affected by any event
of force majeure. In the event the parties are unable to agree on the selection
of an appraiser, the selection of the appraiser shall be made by the
Arbitrators. The appraiser shall determine the purchase price as an "in-place"
item, giving value to the lead time that would otherwise be required for the
delivery of a comparable crane (the "Purchase Price"). In the event that XXXX
fails to cause the Gloucester Cranes to be moved to and installed and made
operational on the Terminal as provided in Section 7.3(a), then PRPA shall have
no obligation to purchase the Paceco Crane. At such time, if any, that PRPA
purchases the Paceco
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Crane, the Paceco Crane shall be deemed a PRPA Crane hereunder, and XXXX shall
continue to be responsible for the maintenance, repair and operation of the
Paceco Crane in the same operating condition it was in on the date the Paceco
Crane was accepted from the manufacturer by XXXX, subject to ordinary wear and
tear.
(b) In the event that PRPA is not able to purchase the Paceco Crane
on the Purchase Date, then XXXX shall lease to and PRPA shall lease from XXXX
the Paceco Crane (the "Paceco Crane Lease"). The lease payments to be made by
PRPA to XXXX shall be made in such amounts and at such times in order to enable
XXXX to meet its scheduled principal and interest payments to the Export-Import
Bank in such amounts and at such times as they become due as reflected on
Exhibit P. The term of the Paceco Crane Lease shall commence on the Purchase
Date and shall terminate on June 15, 1994. In the event the Purchase Date is a
date other than a date on which a payment is scheduled to be made in accordance
with Exhibit P, the initial lease payment to be made by PRPA to XXXX shall be
pro-rated on a per diem basis. In addition to the above sums to be paid by PRPA
to XXXX, there shall also be paid and included as lease payments to XXXX an
amount equal to interest, at the Interest Rate (as hereinafter defined) on the
difference between the Purchase Price and the outstanding principal due on the
Purchase Date by XXXX to Export-Import Bank as reflected on Exhibit P. On June
15, 1994 (the "Alternate Purchase Date"), PRPA shall purchase the Paceco Crane
from XXXX for a price equal to the difference between the
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Purchase Price and the sum of the principal payments made by XXXX to the Bank,
which principal payments were received by XXXX from and included in the lease
payments by PRPA to XXXX ("Remaining Purchase Price").
(c) In the event that PRPA is unable to purchase the Paceco Crane
on the Alternate Purchase Date, then PRPA shall continue to lease the Paceco
Crane from XXXX for an additional twenty-four (24) months for rent equal to One
Million Dollars ($1,000,000.00) per year ("Paceco Crane Rent"), plus interest on
the difference between the Remaining Purchase Price and Paceco Crane Rent paid
to date by PRPA at a rate equal to the Interest Rate plus three (3%) percent, to
be paid in twenty-four (24) equal installments of Paceco Crane Rent, plus
interest as aforesaid, over the extended twenty-four (24) month term of the
Paceco Crane Lease. At the end of the Paceco Crane Lease, PRPA shall purchase
the Paceco Crane for a sum equal to the Remaining Purchase Price less fifty
percent (50%) of the Paceco Crane Rent paid by PRPA. If PRPA is unable to
purchase the Paceco Crane at the end of such additional twenty-four (24) month
period, then PRPA's right to purchase the Paceco Crane shall terminate, and XXXX
shall have the right to determine the disposition of the Paceco Crane
thereafter.
(d) PRPA may pay the unpaid portion of the Purchase Price or the
Remaining Purchase Price in full at any time without penalty, except as set
forth below, in which event PRPA shall be entitled to a credit against the
Purchase Price in
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an amount equal to the aggregate lease payments made by PRPA to XXXX which were
applied toward payment of principal due to Export-Import Bank, or, if the
prepayment occurs after the Alternate Purchase Date, in an amount equal to
one-half (1/2) of the Paceco Crane Rent paid by PRPA. In the event PRPA
purchases the Paceco Crane on a date after the Purchase Date, PRPA shall pay any
prepayment penalty due under the Export-Import Bank loan.
(e) XXXX covenants to comply with and perform all of its
agreements, covenants and obligations under any document, instrument or
agreement between XXXX and Export-Import Bank relating to the Paceco Crane, not
to amend any of the foregoing without PRPA's written consent, and to remedy any
default under any of the foregoing. Any default by XXXX under any such document,
instrument or agreement shall be a default hereunder. In the event that
Export-Import Bank proceeds to execute on its security interest in the Paceco
Crane or otherwise exercises any remedy against XXXX to which it is entitled
which may affect the title to the Paceco Crane, PRPA may terminate the Paceco
Crane Lease, whereupon XXXX shall immediately reimburse PRPA all amounts that
PRPA has paid to XXXX on account of the Purchase Price (including without
limitation the portion of lease payments relating to the payment of principal to
the Export-Import Bank) and Paceco Crane Rent. XXXX covenants that it shall not
permit the Paceco Crane to be further encumbered or permit additional security
interests to be granted with respect thereto, except as set forth in Subsection
7.3A.
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(f) Subject to the consent of PRPA, which shall not be unreasonably
withheld, XXXX may refinance the Export-Import Bank loan, and in connection
therewith grant a security interest in the Paceco Crane to the lender, provided
that: (i) the Export-Import Bank loan is repaid in full and all security
interests in connection therewith are terminated; (ii) the new loan is in an
amount not greater than the then current principal balance of the Export-Import
Bank loan; and (iii) the new loan is on terms and conditions (other than
interest rate) not more onerous than those of the Export-Import Bank loan. In
such event the provisions of Subsection 7.3A(e) shall apply with respect to such
new loan. PRPA's payments with respect to the lease and/or purchase of the
Paceco Crane shall not be affected by any such refinancing.
7.4 Ownership of XXXX Cranes and Equipment. The XXXX Cranes and all
other equipment provided by XXXX (including without limitation that equipment
described in Sections 7.1 and 7.2) shall be and remain the property of XXXX.
Upon the expiration or termination of this Agreement (except when (i) such
termination results from XXXX'x exercise of its termination rights set forth in
Section 4.5; or (ii) XXXX terminates this Agreement for cause and a court having
jurisdiction has determined that PRPA, at the time of such termination, was in
default of this Agreement beyond any applicable cure period) PRPA shall have the
option to purchase any one or more of the XXXX Cranes at their fair market
value and on other mutually agreeable
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terms. In the event PRPA elects to purchase one or more XXXX Cranes pursuant to
this Agreement, XXXX shall deliver good title to each such XXXX Crane, free and
clear of all liens, encumbrances and security interests. PRPA shall exercise
such option, if at all, by giving written notice thereof to XXXX not less than
one hundred fifty (150) days prior to the end of the initial Term or the last
Renewal Period as to which XXXX timely exercised its option to renew, or
simultaneously with any notice to terminate this Agreement given by PRPA, as
applicable. If XXXX and PRPA are unable to mutually agree upon the fair market
value of and other terms relating to any XXXX Crane(s) which PRPA has notified
XXXX of PRPA's desire to purchase in accordance with this Section 7.4, within
thirty (30) days of PRPA's delivery of such notice to XXXX, then PRPA's option
to purchase such XXXX Xxxxx(s) shall terminate. To the extent that PRPA elects
not to exercise its option to purchase any XXXX Crane, XXXX shall remove, at
its sole cost and expense, any of the XXXX Cranes that PRPA did not elect to
purchase. Immediately upon notification by PRPA of its election not to purchase
any one or more of the XXXX Cranes, XXXX shall commence and diligently conduct
the removal of any XXXX Xxxxx not purchased by PRPA in accordance with this
Section and Section 2.5. The parties shall cooperate with one another as
promptly as possible after the parties have determined that the XXXX Cranes will
be removed from the Terminal in arranging a mutually satisfactory schedule and
plan (the "Plan") for the dismantling and removal of the XXXX Cranes during the
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XXXX Crane Removal Period. Such Plan shall take into account the interest of
PRPA in operating the Terminal to the maximum extent commercially reasonable and
the interest of XXXX in removing the XXXX Cranes in as expeditious a manner as
possible without incurring premium or extra costs. In the event the XXXX Xxxxx
removal schedule included within such Plan extends past the last date of the
XXXX Crane Removal Period, such XXXX Xxxxx Removal Period shall be deemed
extended to the first day after the last work identified on such schedule is
scheduled to be completed. In the event a notice to terminate is given less than
one hundred fifty (150) days prior to the effective date of such termination,
the XXXX Crane Removal Period shall be extended by the number of days by which
the date of such notice was less than one hundred fifty (150) days prior to the
effective date of such termination. If the parties cannot agree upon such a Plan
within fifteen (15) days after it has been determined that one or more of the
XXXX Cranes is to be removed, then they shall submit the matter to the
Arbitrators, and the decision of the Arbitrators shall be final and binding upon
the parties.
7.5 Heavy Lift Crane. XXXX recognizes and acknowledges that the Xxxxx
heavy lift (385T) crane is a unique and valuable asset of PRPA and the Port of
Philadelphia. Accordingly, XXXX covenants that it shall accommodate all requests
to use such heavy lift crane at commercially reasonable rates comparable to
industry standards, to the extent that such requested use does not unreasonably
interfere with XXXX'x other
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operations at the Terminal. The heavy lift crane shall be used in the heavy lift
mode in only the area of the Terminal shown on Exhibit G attached hereto and
made a part hereof.
7.6 XXXX'x Improvements.
(a) Xxxx shall, at its costs and expense, subject to the provisions
of this Section 7.6, construct or reconstruct the capital improvements set forth
on Exhibit I (the "XXXX Capital Improvements") at the Terminal during the Term
of this Agreement.
(b) Approval of Plans. XXXX shall not construct any XXXX Capital
Improvement or construct, effect major repairs or restorations of, alter or
demolish any works, structures or other improvements upon the Terminal,
including a change in the grade or filling of a berth thereof, without first
submitting to PRPA a complete set of drawings, plans, and specifications and
contracts and obtaining PRPA's written approval thereof, which approval shall
not be unreasonably withheld, and any other approvals of the Commonwealth, to
the extent required, and any approvals required by law. PRPA shall have the
right to order charges in said drawings, plans and specifications for reasonable
cause and XXXX shall make such changes at its own expense. XXXX shall keep
records of all goods, material and labor employed in connection with any such
construction and shall make the same available to PRPA at reasonable times upon
prior written notice.
(c) Compliance with Applicable Laws. Every work, structure or
improvement constructed, or alteration or change of
83
grade made by XXXX shall conform with the plans and specifications as approved
by PRPA and any other entity or governmental agency whose approval is required,
and shall conform in all respects to the applicable federal, state, regional,
and local laws, statutes, ordinances, rules and regulations. The approvals given
as provided in this Section 7.6 shall not constitute a representation or
warranty as to such conformity and shall not relieve XXXX of its
responsibilities with regard thereto.
(d) Cost of Permits. XXXX, at its own expense, shall obtain all
permits necessary for such construction and shall require by contract that its
contractors and subcontractors comply with all applicable federal, state, and
local statutes, ordinances, rules and regulations, and with the provisions of
Section 22.1. PRPA shall cooperate with XXXX with respect to obtaining
necessary permits.
(e) Cost of Construction. All construction by XXXX pursuant to
this Section 7.6 shall be at XXXX'x sole expense. Notwithstanding anything to
the contrary contained in the preceding sentence, or in Section 7.6(d), PRPA
agrees to reimburse XXXX in regard to each XXXX Capital Improvement for the
actual costs incurred by XXXX in connection with such XXXX Capital Improvement
up to the following maximum amounts:
(i) as to the Gatehouse Booth Project (as defined in Exhibit
I), Forty-Five Thousand Dollars ($45,000);
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(ii) as to the Shed 1-1A Project and the PRPA Parcel Project
(both as defined in Exhibit I), an aggregate amount of Two Million and Two
Hundred Fifty Thousand Dollars ($2,250,000);
(iii) as to the Shop Heaters Project (as defined in Exhibit I),
Sixty Thousand Dollars ($60,000);
(iv) as to the Striping and Signage Project (as defined in
Exhibit I), Two Hundred Thousand Dollars ($200,000);
(v) as to the Shed 3A Project (as defined in Exhibit I), Three
Hundred Thousand Dollars ($300,000), provided, however, that to the extent that
the cost of the demolition of Shed 3A exceeds $300,000 as a result of
environmental conditions, PRPA shall reimburse XXXX for the actual differential
in costs attributable to such environmental conditions in an amount up to the
difference between the total cost of the demolition and $300,000;
(vi) as to the Existing Gatehouse Project (as defined in
Exhibit I), One Hundred Thousand Dollars ($100,000); and
(vii) as to the Canopy Project (as defined in Exhibit I), Four
Hundred Fifty Thousand Dollars ($450,000); provided, however, that PRPA shall
not be obligated to reimburse XXXX in any amount until the Canopy Project is
incorporated into the Container Capital Improvement relating to the Permanent
Gate
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House or XXXX delivers the site for the Permanent Gate House as discussed in
Exhibit H, whichever is earlier.
With respect to item (i) above, PRPA shall reimburse XXXX within ten (10)
business days of PRPA's receipt from XXXX of an invoice for the purchase by XXXX
of the booths. As to item (iii) above, PRPA shall reimburse XXXX within thirty
(30) days of the date on which the Shop Heaters Project is completed. In respect
to items (ii), (iv), (v), (vi), and, subject to (vii) above, PRPA shall
reimburse XXXX, from time to time, within ten (10) business days after PRPA's
receipt from XXXX of an advance request. As to item (ii) above, PRPA shall pay
to XXXX by check, within ten days after the Effective Date, $175,000 as an
initial reimbursement to XXXX for XXXX'x actual costs incurred to date in
connection with the Shed 1-1A Project. If any reimbursement due pursuant to this
Subsection has not been paid by PRPA within thirty (30) days of the date it is
due, XXXX may take a credit against the next payment of Base Compensation up to
the undisputed amount of such unpaid amount and may continue to do so until such
unpaid amount is paid in full. Each advance request shall delineate the item
against which the reimbursement shall be applied and shall be accompanied by (A)
a certificate from XXXX'x architect or consultant certifying that the work
relating to such advance request has been completed in accordance with the plans
therefor approved by PRPA; (B) copies of all invoices, statements and bills
relating to any labor, material or other cost or expense to
86
which such advance request relates and proof of payment thereof by XXXX; and (C)
an approval by PRPA's inspector of the requested advance. Reimbursement made by
PRPA to XXXX pursuant to XXXX'x request shall be limited to no more than one per
calendar month, except as PRPA in its discretion may otherwise permit. The
aggregate amount reimbursed by PRPA to XXXX in respect of any advance request
for a XXXX Capital Improvement shall not exceed, in PRPA's opinion, the value of
work done and materials physically incorporated into such XXXX Capital
Improvement or delivered to and securely stored on the Terminal in connection
with such XXXX Capital Improvement (except for the final reimbursement paid by
PRPA to XXXX in respect of such XXXX Capital improvement). For the purposes of
this Section 7.6(e) the phrase "actual costs" shall mean all out-of-pocket
expenses for labor, services, materials, and permits and an overhead fee equal
to ten percent (10%) of XXXX'x direct labor costs and materials associated with
such XXXX Capital Improvement. PRPA shall not be required to reimburse XXXX in
respect of any XXXX Capital Improvement in an amount greater than the maximum
amount therefor set forth above. PRPA agrees, however, if XXXX'x actual costs in
connection with a XXXX Capital Improvement exceed the maximum reimbursable
amount for such XXXX Capital Improvement, as set forth above, to increase the
reimbursement to XXXX up to the amount of the savings, if any, realized on other
XXXX Capital Improvements, for application by XXXX against its actual costs in
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excess of the maximum reimbursable amount incurred in connection with the XXXX
Capital Improvements.
XXXX shall keep the Terminal free and clear of liens for labor and materials and
shall hold PRPA and the Commonwealth harmless from any responsibility in respect
thereto.
(f) Notices. XXXX shall give written notice to PRPA, in advance, of
the date it will commence any construction. Immediately upon the completion of
the construction, XXXX shall notify PRPA of the date of such completion and
shall, within thirty (30) days after such completion, file with PRPA a
statement, verified by an appropriate officer of XXXX, setting forth the cost of
the labor and material used. XXXX shall also file with PRPA, in a form
acceptable to PRPA, a set of "as built" plans for such construction.
(g) Ownership. All improvements, works and structures made or
erected by XXXX upon the Terminal under this Section 7.6 shall be and become the
property of PRPA, except as provided in Section 6.2.
(h) Diligence. XXXX will proceed diligently to construct its
improvements upon the Terminal without delay, and in a good and workmanlike
manner, employing therefor workers and materials satisfactory in quantity and
quality to PRPA. PRPA shall not be responsible for any delay in any
construction schedule for any XXXX Capital Improvement except to the extent such
delay is caused by any action or inaction by PRPA and such
88
action or inaction is not remedied after notice and opportunity to cure as
provided herein.
(i) Inspections.
(i) XXXX will permit and assist PRPA or PRPA's representatives
to make inspections of the Terminal and XXXX'x improvements. Prior to the
commencement of any construction by XXXX, XXXX shall provide to PRPA a
construction schedule. XXXX and PRPA shall establish an inspection schedule
setting forth reasonable and appropriate times for PRPA to make such
inspections, although PRPA may choose to inspect more frequently. If upon any
such inspection PRPA in writing reasonably rejects as unsound or improper and
not in substantial compliance with the plans any portion of the improvements or
any materials used or to be used therein, XXXX will promptly commence to remove
from the Terminal or improvements (as the case may be) all rejected materials,
and will take down and replace (or, at PRPA's option, repair) any portion of
such improvements so rejected.
(ii) PRPA's inspections are solely for PRPA's benefit and no
action or inaction by PRPA shall constitute any representation that such
improvements comply with the respective plans or that such improvements are
sound or free from defects in material, design or workmanship.
(j) Commonwealth. The Commonwealth, by joining in this Agreement
for the limited purposes set forth on the signature page hereof, as one of the
fee owners of part of the
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Commonwealth Area and Shed C, consents to the specific construction, repairs,
restorations, alterations, demolition and filling of berths by XXXX which PRPA
has approved pursuant to this Agreement, and such other matters as PRPA may from
time to time approve in the future under this Section 7.6, to the extent
required under the Commonwealth Sublease, the Commonwealth Leases or in any
other instrument, lease or agreement.
(k) Mechanics' and Materialmen's Lien Waivers. Prior to the
commencement of any construction or other performance by a contractor,
subcontractor or materialman under a contract with XXXX for improvements at the
Terminal, XXXX shall cause a waiver of mechanics' and materialmen's liens from
all such contractors, subcontractors and materialmen to be filed in accordance
with the Pennsylvania mechanics' lien law.
(1) Contractors. In addition to the foregoing requirements, XXXX
shall not construct, effect major repairs or restorations of, alter or demolish
any works, structures or other improvements upon the Terminal without first
obtaining PRPA's written approval of the identity of the contractor (unless XXXX
or a XXXX affiliate acts as the general contractor), which approval shall not be
unreasonably withheld. XXXX shall have the exclusive right to salvage any
structural steel and other materials from any demolition on the Terminal and use
such salvaged materials at that time or in the future in connection with
improvements on the Terminal. XXXX hereby releases PRPA from any and all claims
arising from or related to the condition
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of such salvaged materials or any contaminants or hazardous substances that may
be contained therein.
7.7 PRPA's Improvements.
(a) PRPA Constructed Improvements. Subject to the provisions of
this Section 7.7, the capital improvements set forth on Exhibit H (the "PRPA
Capital Improvements") shall be constructed or reconstructed by PRPA at the
Terminal during the Term of this Agreement. The provisions of Exhibit H,
including the Comments sections thereof, are incorporated herein by reference
and shall be given the same force and effect as if set forth in full in the main
body of this Agreement. The term "Container Capital Improvements" shall mean
those PRPA Capital Improvements designated as such on Exhibit X. XXXX shall not
be required to expend on any PRPA Capital Improvement more than the maximum cost
therefor set forth on Exhibit X. XXXX agrees, however, to use its best efforts
(i) to raise additional funds to complete the PRPA Capital Improvements if the
maximum costs set forth on Exhibit H are insufficient, and (ii) if the maximum
costs set forth on Exhibit H are exceeded in one or more of the PRPA Capital
Improvements, to cause the savings, if any, realized on the other PRPA Capital
Improvements to be made available to complete the PRPA Capital Improvements
where such maximum costs were exceeded. PRPA represents that it has requested
from the Commonwealth capital funds for its fiscal year 1990-1991 and 1991-1992
the total sum of Sixteen Million Seven Hundred Sixty-Seven Thousand Dollars
($16,767,000), which capital funds are to
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be used for the PRPA Capital Improvements. PRPA agrees that upon receipt of
said capital funds, to the extent required, PRPA shall use said capital funds
for the PRPA Capital Improvements. PRPA agrees that any portions of capital
funds available to it under the capital budget of the Commonwealth and
designated for the Terminal which are not spent in connection with the PRPA
Capital Improvements shall, to the maximum extent permitted by law, be applied
to other capital improvements at the Terminal. PRPA Capital Improvements and the
XXXX Capital Improvements are occasionally hereinafter collectively referred to
as the "Capital Improvements."
(b) Timing of Improvements. PRPA will use its best efforts to cause
the PRPA Capital Improvements to be constructed promptly and by the respective
target completion dates set forth in Exhibit H. Notwithstanding the preceding
sentence, PRPA shall not be obligated to commence the construction of the Third
Crane Rail Project (as defined in Exhibit H) until PRPA has been provided with
evidence satisfactory to PRPA that XXXX has obtained all necessary approvals and
has full authority to move the Gloucester Cranes to the Terminal. If PRPA
thereafter fails to proceed with due diligence to initiate and complete the
Third Crane Rail, then XXXX may install the Third Crane Rail and recover its
cost in connection therewith by credits against payments of Base Compensation
due hereunder, may seek specific performance of this Agreement, and/or may seek
any damages to which it may be legally
92
entitled. In the event that on or before August 31, 1991, XXXX has not provided
to PRPA such evidence, then thereafter the Third Crane Rail shall be deemed to
have been completed for purposes of Article III. In the event that XXXX elects
to move the Gloucester Cranes to PAMT after June 16, 1994 and provides to PRPA
notice of such intent and an opinion of its counsel as contemplated by Section
23.1, PRPA shall be obligated to complete the Third Crane Rail within one
hundred twenty (120) days after PRPA's receipt of such notice and opinion. In
the event XXXX fails to move the Gloucester Cranes to the Terminal within ninety
(90) days after PRPA's completion of the Third Crane Rail, as the same may be
extended by force majeure, whether before or after June 16, 1994, then XXXX
shall within ten (10) business days of notice from PRPA reimburse PRPA for its
actual costs incurred in connection with the Third Crane Rail. If XXXX elects to
transfer the Gloucester Cranes after June 16, 1994 and PRPA fails to complete
the Third Crane Rail Project within one hundred eighty (180) days, as the same
may be extended by force majeure, after its receipt of XXXX'x notice and the
required opinion, then PRPA shall pay to XXXX as liquidated damages Fifty
Thousand Dollars ($50,000).
(c) Effect on XXXX'x Operations. XXXX recognizes that its
operations will be affected during the time construction or reconstruction of
the Capital improvements is carried out. XXXX agrees that PRPA is not liable for
damages resulting from delays in construction or from inability to construct the
Capital
93
Improvements except to the extent such delay is caused by any action or inaction
by PRPA and such action or inaction is not remedied after notice and opportunity
to cure as provided herein. XXXX agrees the completion of the Capital
Improvements is not a condition precedent to this Agreement's becoming effective
or remaining in effect. PRPA shall use its best efforts to see that any work in
respect of the PRPA Capital Improvements does not unreasonably interfere with
any terminal operations; however, nothing in this Section 7.7(c) shall be deemed
to require PRPA to conduct such work at night or at times other than normal
business hours except on an occasional basis as necessary to prevent significant
interference with terminal operations.
(d) Supervision of Work. XXXX recognizes that PRPA and/or the
Commonwealth reserve total control over the design of the Capital Improvements,
award of any contracts, and supervision of contractors for work undertaken by
PRPA, provided that PRPA shall consult with and take into account the advice of
XXXX in the design of the Capital Improvements and the construction thereof. The
foregoing sentence shall not be deemed to require PRPA to accept XXXX'x advice.
During construction of the Capital Improvements, XXXX shall give no orders to
any contractors unless first requested or permitted in writing by PRPA to do so.
XXXX agrees to cooperate fully with contractors in providing all necessary
access to the Terminal and generally cooperating with contractors.
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(e) Commonwealth. The Commonwealth, by joining in this Agreement for
the limited purposes set forth on the signature page hereof, as one of the fee
owners of part of the Commonwealth Area and Shed C, consents to the
construction, reconstruction and demolition by PRPA of certain improvements
described in this Section 7.7, to the extent required under the Commonwealth
Sublease, or any other instrument, lease or agreement.
(f) Mechanics' and Materialmen's Lien Waivers. Prior to the
commencement of any construction or other performance by a contractor,
subcontractor or materialman under a contract with PRPA for improvements at the
Terminal, PRPA shall cause a waiver of mechanics' and materialmen's liens from
all such contractors, subcontractors and materialmen to be filed in accordance
with the Pennsylvania mechanics' lien law. To the extent that PRPA's properties
are exempt from mechanics' and materialmen's liens pursuant to applicable
statute, PRPA may, at its option, elect not to cause such waivers to be filed.
7.8 Building 2A. PRPA and XXXX acknowledge that it may be necessary in
the future to discuss the demolition of Building 2A. PRPA and Xxxx agree to
cooperate in assessing the need for such demolition and in accomplishing the
same if it is necessary.
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ARTICLE VIII
UTILITIES
8.1 Utilities. Utility costs including costs of water, electricity,
gas, propane, and sewer service and telephone service billed to the Terminal,
will be borne by XXXX. XXXX shall pay any such utility costs for which it is
responsible with respect to the Terminal when due and payable and prior to the
imposition of any late charge or penalty by the supplier of the utility. XXXX
shall be solely responsible for any such late charge or penalty.
ARTICLE IX
TAXES
9.1 Taxes. XXXX covenants and agrees to pay all lawful taxes,
assessments or charges which may be levied by any federal, state, county, city
or any tax or assessment levying agency imposed upon XXXX in connection with
XXXX'x activities at the Terminal (collectively "Imposition"). XXXX shall not
permit any tax lien, other than the lien of taxes not yet due and payable, to
attach to the Terminal, PRPA's interest therein, the XXXX Cranes or any other
property of XXXX on or about the Terminal.
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9.2 Appeals. XXXX shall have the right to contest or object to the
amount or validity of any such Imposition by appropriate legal proceedings, but
this shall not be deemed or construed in any way as relieving, modifying or
extending the covenants of XXXX to pay any such Imposition at the time and in
the manner provided in Section 9.1, unless XXXX shall have given prior written
notice to PRPA of intent to so contest or object to an Imposition, and unless,
at PRPA's sole option, (i) XXXX shall demonstrate to PRPA's satisfaction that
the legal proceeding shall operate conclusively to prevent the placing of a lien
on the Terminal, or any part thereof, to satisfy such Imposition prior to final
determination of such proceedings; or (ii) XXXX shall furnish a good and
sufficient bond or surety as requested by and satisfactory to PRPA; or (iii)
XXXX shall have provided PRPA with a good and sufficient undertaking as may be
required or permitted by law to accomplish a stay of such proceedings.
ARTICLE X
ENVIRONMENTAL MATTERS
10.1 Environmental Matters. XXXX represents, warrants and covenants
that it shall comply at all times with the following terms of this Agreement
relating to environmental matters. XXXX shall not, however, be responsible for
any noncompliance to the extent attributable to contamination already existing
on the applicable XXXX Possession Date; or (ii)
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contamination caused by PPC or PRPA after the applicable XXXX Possession Date.
Nothing herein shall be deemed to impair XXXX'x right to contest any
governmental agency's orders or directives with respect to environmental
matters.
10.2 Compliance With Law.
(a) XXXX shall conduct all of its activities at the Terminal in
compliance with all statutes, ordinances, regulations, orders, and requirements
of common law concerning (i) those activities, (ii) repairs or construction of
any improvements, (iii) handling of any materials, (iv) discharges to the air,
soil, the Delaware River, or other surface water or groundwater, and (v)
storage, treatment, or disposal of any waste at or connected with any activity
at the Terminal ("Environmental Statutes"). XXXX shall obtain all permits,
licenses, or approvals and shall make all notifications and registrations
required by Environmental Statutes with respect to operation of the Terminal and
its activities at the Terminal. PRPA shall cooperate with XXXX in obtaining such
permits, licenses or approvals; such cooperation shall include the provision to
XXXX of information in PRPA's control or possession. XXXX shall at all times
comply with the terms and conditions of any such permits, licenses, approvals,
notifications, or registrations.
(b) XXXX shall provide to PRPA copies of all of the following, to
the extent they pertain to XXXX'x operation of or its activities at the
Terminal:
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(i) applications or other materials submitted to any
governmental agency in compliance with Environmental Statutes;
(ii) any notification submitted to any person pursuant to
Environmental Statutes;
(iii) any permit, license, approval, or amendment or
modification thereto granted pursuant to Environmental Statutes;
(iv) any record or manifest required to be maintained
pursuant to Environmental Statutes; and
(v) any correspondence, notice of violation, summons, order,
complaint, or other document received by XXXX pertaining to
compliance with Environmental Statutes.
(c) XXXX shall promptly comply with any request by PRPA that XXXX:
(i) provide information or access to the Terminal reasonably
necessary to enable PRPA to demonstrate to a third person or
governmental agency that no violation of Environmental Statutes
or contamination as defined in this Article X has existed or does
exist at the Terminal; or
(ii) provide signatures, acknowledgments, affidavits, or
otherwise cooperate in a reasonable manner to reasonable requests
by PRPA to obtain any governmental approvals necessary under
Environmental Statutes to transfer any interest in the Terminal
or to transfer any permit or approval held by PRPA under
Environmental Statutes.
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10.3 Site Contamination.
(a) XXXX shall not cause or suffer contamination of the Terminal,
provided, however, that nothing herein shall be deemed to create an obligation
on the part of XXXX with respect to (i) contamination already existing before
the applicable XXXX Possession Date; or (ii) contamination caused by PPC or PRPA
or their respective agents, licensees, lessees or invitees (other than XXXX and
Portside) after the applicable XXXX Possession Date. XXXX shall at all times
handle hazardous substances and cause hazardous substances to be handled in a
manner which will not cause an undue risk of contamination of the Terminal or
the surrounding waters.
(b) For purposes of this Article X and the Agreement, the term
"contamination" shall mean the uncontained presence of hazardous substances at
the Terminal, or arising from the Terminal which may require remediation under
any applicable law.
(c) For purposes of this Article X and the Agreement, "hazardous
substances" shall mean "hazardous substances" as defined pursuant to the federal
Comprehensive Environmental Response, Compensation and Liability Act, "regulated
substances" within the meaning of Title I of the federal Resource Conservation
Recovery Act, "hazardous substances" or "contaminants" as defined pursuant to
the Pennsylvania Hazardous Sites Cleanup Act, "hazardous waste" as defined
pursuant to the Pennsylvania Solid Waste Management Act,
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or any other substances which may be the subject of liability pursuant to the
Pennsylvania Clean Streams Law.
10.4 Other Hazardous or Toxic Material. XXXX shall not handle or permit
the introduction of polychlorinated biphenyls ("PCBs"), as defined pursuant to
the federal Toxic Substances Control Act, substances containing PCBs, asbestos,
or materials containing asbestos, on or onto the Terminal. Should XXXX discover
the presence of asbestos or PCBs which were not present prior to the applicable
XXXX Possession Date, XXXX shall take all steps necessary promptly to remove and
to dispose of those materials in compliance with law. Should XXXX discover the
presence of asbestos or PCBs on the Terminal which were present prior to the
applicable XXXX Possession Date, it shall notify PRPA and the parties shall
reach agreement on a remediation plan. PRPA shall bear the cost of implementing
any such remediation plan.
10.5 Disposal and Removal of Waste. XXXX shall, at its sole cost,
through its own forces (if no license is required or if XXXX is properly
licensed) or through contract with a reputable, private licensed refuse removal
firm, remove and dispose of any waste generated at the Terminal, and for which
XXXX is responsible under this Article X, in accordance with all Environmental
Statutes.
10.6 Indemnification by XXXX. XXXX hereby agrees to indemnify, defend
and hold PRPA and PPC harmless of, from, and against any and all expense, loss,
or liability suffered by PRPA
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or PPC by reason of (a) XXXX'x generation, manufacture, introduction, use,
handling, transportation or disposal of hazardous substances, or (b) XXXX'x
breach of any of the provisions of this Article X, including (but not limited
to) (i) any and all expenses that PRPA of PPC may incur to comply with any
Environmental Statutes; (ii) any and all costs that PRPA or PPC may incur in
studying or remedying any contamination at or arising from the Terminal; (iii)
any and all costs that PRPA or PPC may incur in studying, removing, disposing,
or otherwise addressing any materials which are the subject of this Article X;
(iv) any and all fines, penalties, judgments or other sanctions assessed upon
PRPA or PPC by reason of a failure of XXXX to have complied with Environmental
Statutes; (v) any and all loss of value of the Terminal by reason of (A) a
failure of XXXX to have ensured compliance with Environmental Statutes, (B)
contamination of the Terminal, or (C) the presence on the Terminal of any other
hazardous or toxic materials which are the subject of this Article X; and (vi)
any and all legal and professional fees and costs incurred by PRPA or PPC in
connection with the foregoing.
10.7 PRPA Responsibilities. PRPA hereby agrees to be responsible for
and, if required by the Environmental Statutes referred to in Subsections
10.2(a)(iii)-(v) or if it unreasonably interferes with XXXX'x use or operation
of the Terminal, to promptly remedy (a) any failure by any party to have
complied with any Environmental Statutes at or with respect to the Terminal
before the applicable XXXX Possession Date, (b) the
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disposal of hazardous substances by or on behalf of PRIPA or PPC, (c)
contamination of the Terminal which existed prior to the applicable XXXX
Possession Date, and (d) contamination of the Terminal caused after the XXXX
Possession Date by or on behalf of PRPA or PPC. In addition, PRPA agrees that in
connection with all new construction and all repairs for which it is
responsible, it shall comply with all Environmental Statutes. In the event PRPA
breaches the covenants set forth in the Section 10.7, XXXX may, in addition to
other damages to which it may be entitled, recover its reasonable attorney's
fees attributable to such breach.
10.8 Inspections. PRPA and the Commonwealth and their agents may, at
reasonable times but without the necessity of notice, enter the Terminal to
conduct reasonable inspections, tests, samplings, or other investigations to
satisfy itself that XXXX has complied with the provisions of this Article X.
10.9 Remedies.
(a) Upon material breach by XXXX of any provision of this Article X, or
upon a pattern of less significant breaches, PRPA may at its sole discretion
terminate this Agreement by written notice to XXXX, whereupon XXXX shall
immediately vacate the Terminal. No breach of any provision of this Article X
shall be grounds for termination of this Agreement unless (i) XXXX has received
notice of said breach and (ii) after such notice, XXXX is not proceeding in good
faith with all due
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diligence to bring itself into compliance with this Agreement and to cure any
past noncompliance.
(b) The parties recognize that no adequate remedy at law may exist for
a breach of this Article X. Accordingly, PRPA may obtain specific performance of
any provision of this Article X.
(c) This paragraph shall not be construed to limit any other remedies
which PRPA may have against XXXX hereunder, at law or in equity for a breach of
this Article X.
10.10 Survival. The provisions of this Article X shall survive the
expiration or termination of this Agreement. No subsequent modification or
termination of this Agreement by agreement of the parties or otherwise shall be
construed to waive or to modify any provisions of this Article X unless the
termination or modification agreement or other document expressly states in
writing.
ARTICLE XI
ASSIGNMENT AND LICENSING
11.1 Assignment and Subleasing: Transfers of Stock.
(a) XXXX shall not assign, hypothecate, encumber or transfer this
Agreement or any interest herein, in whole or in part, or sublease its interest
in the Terminal, in whole or in part (each a "Transfer"), to any person or
entity (each a
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Transferee"), nor shall XXXX effect or permit the shareholders of XXXX to
effect an issuance, trade, sale, pledge, hypothecation, assignment, or transfer
of the capital stock of XXXX (each such transaction is herein call a "Stock
Transaction") except as specifically permitted hereunder. Except as provided in
Section 11.1(d), no Transfer shall be permitted if the Transferee is, and no
Stock Transaction shall be permitted if, as a result thereof, the holder of any
capital stock of XXXX would be, one or more of the following:
(1) a reputed member of or associated with organized crime or a
criminal syndicate, a convicted felon, a racketeer, or similar disreputable
persons or entities which in PRPA's reasonable opinion would tend to cause
a substantial number of persons not to want to deal with PRPA or use the
Terminal;
(2) a party that has breached a material obligation with PRPA, PPC, or
the Commonwealth;
(3) a person or entity with which the Commonwealth declines to deal as
a matter of an authorized Commonwealth public policy as a result of such
person's or entity's affiliation with a foreign government; or
(4) in the reasonable opinion of PRPA, as to Transferees only:
(A) not financially and otherwise capable of carrying out in a
satisfactory and timely manner all of XXXX'x obligations hereunder,
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(B) suspect in its capability, willingness or desire to conduct
its operations at the Terminal in such a fashion as to maximize the
use of the Terminal as set forth in Section 1.6 hereof.
(b) XXXX shall not effect or permit to be effected any Transfer or
Stock Transaction without providing PRPA with prior written notice thereof. No
such Transfer or Stock Transaction may be effected during the twenty (20) day
period following the giving of such notice. If at or before the end of the
twenty (20) day period PRPA informs XXXX that, in PRPA's opinion, such Transfer
or Stock Transaction will not violate the requirements set forth above, or if
PRPA fails to notify XXXX at the end of such twenty (20) day period that such
Transfer or Stock Transaction, in PRPA's opinion, would violate such
requirements, then XXXX may close the Transfer or Stock Transaction within the
next one hundred twenty (120) or one hundred eighty (180) days, respectively. If
the Transfer or Stock Transaction is not closed within such one hundred twenty
(120) or one hundred eighty (180) day period, as the case may be, then XXXX
shall be required to comply in full with the provisions of this Section prior to
closing such Transfer or Stock Transaction. If PRPA notifies XXXX on or before
the end of the twenty (20) day period that the intended Transfer or Stock
Transaction, as the case may be, in PRPA's opinion, would violate such
requirements along with the reason therefor, then XXXX will not close or permit
the closing of the Transfer or Stock
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Transaction for an additional ten (10) days following such notice from PRPA.
Nothing herein contained shall be deemed to give PRPA the right to prohibit the
closing of any intended Transfer or Stock Transaction which satisfies all of the
requirements and other provisions of this Section 11.1.
(c) Notwithstanding that one or more permitted Transfers or Stock
Transactions may have occurred, if the Terminal shall cease to be managed by
Xxxx Management at any time during the Term hereof, such an event shall
constitute a material breach of this Agreement. As used in this Section "Xxxx
Management" shall mean:
(1) for so long as he is in good health and sixty-five (65)
years of age or less, Xxxxxx X. Xxxx; or
(2) one or more of Xxxxxx X. Xxxx, Xx. and Xxx Xxxx or such
other member of the immediate family of Xxxxxx X. Xxxx which
other member may be approved for such purpose by PRPA by entering
into a formal amendment to this Agreement; or
(3) an adequate, competent staff of other management
personnel which in PRPA's reasonable judgment is comparable in
knowledge and skill to the existing management personnel of XXXX
at the execution of this Agreement.
(d) The provisions of this Section 11.1 shall not apply to (i) any
Stock Transaction which is incident to a sale of any of the common stock of XXXX
to not less than 100 purchasers in a public offering pursuant to a registration
statement filed
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with the Securities and Exchange Commission and any subsequent resales of such
stock on a public market or exchange, or sales of common stock permitted by Rule
144 or any comparable rule of the Securities and Exchange Commission promulgated
under the Securities Act of 1933, as amended, or (ii) any Stock Transaction
involving securities which are non-voting (except as a class in matters required
by law to be voted upon by the class, and except for voting rights permitted
upon the occurrence of a certain event or set of facts which constitute a
failure of XXXX to meet certain financial obligations).
(e) XXXX has in formed PRPA that it contemplates assigning all of
its interest in, to and under this Agreement to Portside or another designee
selected by XXXX. In the event XXXX desires to so transfer its interest, XXXX
agrees that it shall, in addition to the other requirements of this Section
11.1, guarantee and become a surety to PRPA, under terms and conditions
acceptable to PRPA, for the performance by Portside or such other designee of
all of the agreements, covenants and obligations hereunder. Such guarantee by
XXXX of all obligations of Portside or such other designee shall be deemed to
satisfy the requirements of Subsection 1-1.1(a)(4)(A) with respect to such
party.
(f) XXXX has informed PRPA that it intends to sublease the
Refrigerated Warehouse to Portside effective as of the Effective Date. PRPA
consents to such sublease, provided
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that such sublease shall not diminish in any respect XXXX'x obligations
hereunder.
11.2 PRPA's Assignment and Successors. PRPA shall have the right to
assign, hypothecate, or transfer this Agreement, its interest in and to the
Terminal, or any interest in either of the foregoing in whole or in part.
ARTICLE XII
SIGNS AND PUBLICITY
12.1 Signs. No signs or placards of an advertising or promotional
nature shall be painted, inscribed or placed in or on the Terminal or any
building or structure located thereon without the prior written consent of PRPA,
which shall not be unreasonably withheld. XXXX shall be permitted to paint, at
its cost and expense, the XXXX logo and corporate name, along with PRPA's logo
and corporate name, on the roofs of the sheds, on the gatehouse, and on the
Cranes. PRPA agrees promptly to remove or repaint at its cost any sign (other
than a sign painted on or attached to a roof of any building, the gatehouse or
any Crane at the Terminal) not painted over by XXXX. XXXX agrees to remove
promptly and to the satisfaction of PRPA, at the cost and expense of XXXX, upon
the expiration or the earlier termination of this Agreement, any and all signs
and placards placed by it upon the
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Terminal. PRPA agrees that XXXX may display the sign currently located on the
Gatehouse.
12.2 Publicity. XXXX and PRPA agree to cooperate with each other in
advertising, promotion and marketing activities for the Terminal and the Port of
Philadelphia.
ARTICLE XIII
DAMAGE TO THE TERMINAL
13.1 Damage and Destruction.
(a) In the event the Terminal or any part thereof, or any PRPA
Crane, is damaged or destroyed by fire or other casualty, provided that XXXX is
not in default of this Agreement and that no event, occurrence, action or
inaction which with the passage of time or giving of notice, or both, would
render XXXX in default of this Agreement has occurred and is continuing, PRPA
shall, promptly and diligently restore, rebuild and repair the Terminal or the
PRPA Crane, as the case may be, to the extent of available insurance proceeds,
as nearly as practicable to the condition existing immediately prior to such
casualty.
(b) Intentionally omitted.
(c) In the event one of the XXXX Cranes, or any part thereof is
damaged or destroyed by fire or other casualty, XXXX shall, with reasonable
promptness and diligence, restore,
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rebuild and repair the damaged XXXX Xxxxx to the extent of available insurance
proceeds in such a manner to enable the XXXX Crane to operate substantially the
same as it operated immediately prior to such damage or destruction.
(d) and (e) Intentionally omitted.
(f) XXXX shall be entitled to an equitable reduction of the Base
Compensation during any period in which the Cranes or the Terminal or any
portion thereof is not useable by XXXX due to damage or destruction caused by a
fire or casualty to which this Article XIII applies.
ARTICLE XIV
CONDITION OF TERMINAL AND PRPA CRANES
14.1 Condition and Surrender of Terminal. Except to those items of
repair and construction that PRPA herein expressly agrees to undertake, and
except as to latent structural defects, XXXX accepts PAMT in its "as is"
condition, without any representation or warranty by PRPA. XXXX has conducted
such inspections of the Additional Parcels and the DRPA Parcel as XXXX deems
necessary or advisable and PRPA has provided to XXXX a copy of a report
regarding the Additional Parcels, and XXXX has elected to occupy and accept the
Additional Parcels and the DRPA Parcel in their "as is" condition without any
warranty or representation whatever by PRPA with respect to the condition
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thereof (including but not limited to warranties or representations with respect
to latent structural defects, as to which XXXX agrees that PRPA shall have no
liability or responsibility). PRPA represents and warrants as of April 1, 1989
that there had been no material adverse changes to the condition of PAMT
(excluding the Refrigerated Warehouse and Berth 6) from that condition shown in
the report prepared by Day and Xxxxxxxxx, Inc. and previously delivered to XXXX.
PRPA agrees to complete the deferred maintenance items to the Terminal set forth
on Exhibit N hereto, within the times set forth therein. XXXX and PPC caused to
be completed a joint survey of PAMT (other than the PRPA Cranes, Berth 6 and the
Refrigerated Warehouse) on April 1 and 2, 1989, which survey reflects the state
and condition of such portions of PAMT, including the improvements, at the
inception of the PPC-Xxxx Agreement. Xxxx and PPC caused a videotape of such
survey to be prepared by Lawyers' Video Service Inc. XXXX covenants and agrees
that at the expiration of the Term or earlier termination of this Agreement, it
will quit and surrender the Terminal with all the improvements thereon in as
good state and condition as the same were on the applicable XXXX Possession
Date, excepting reasonable wear and tear.
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ARTICLE XV
WAIVER
15.1 Waivers. No waiver by either party at any time of any of the
terms, conditions, covenants or agreements of this Agreement shall be deemed or
taken as a waiver at any time thereafter of the same or any other term,
condition, covenant or agreement herein contained, nor of the strict and prompt
performance thereof by the proper party. No delay, failure or omission of either
party to exercise any right, power, privilege or option arising from any
default, nor subsequent acceptance of guarantee then or thereafter accrued,
shall impair any such right, power, privilege or option, or be construed to be a
waiver of any such default or relinquishment thereof, or acquiescence therein,
and no notice by either party shall be required to restore or revive time as of
the essence hereof after waiver by the other party of default in one or more
instances. No option, right, power, remedy or privilege of either party shall be
construed as being exhausted or discharged by the exercise thereof in one or
more instances. It is agreed that each and all of the rights, powers, options or
remedies given to PRPA or XXXX by this Agreement are cumulative, and no one of
them shall be exclusive of the other or exclusive of any remedies provided by
law, and that the exercise of one right, power, option or remedy by PRPA or XXXX
shall not impair its rights to any other right, power, option or remedy.
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ARTICLE XVI
WAIVER OF CLAIMS; TERMINATION BY
REGULATORY AGENCY OR COURT DECREE
16.1 Waiver of Claims. XXXX hereby waives any claim against PRPA, the
Commonwealth, PPC and their officers, attorneys, agents or employees for damage
or loss caused by any suit or proceedings initiated by any third parties
directly or indirectly attacking the validity of the PPC-Xxxx Agreement or this
Agreement, or any part thereof, or by any judgment or award in any suit or
proceedings declaring the PPC-Xxxx Agreement or this Agreement null, void or
voidable, or preventing or delaying the same, or any part thereof, from being
carried out. PRPA and XXXX agree to cooperate in good faith in the defense of
any such suit or proceeding. Nothing contained in the foregoing shall be deemed
to permit any breach by PRPA of its representation and warranty in the first two
sentences of Section 1.7.
16.2 Termination by Regulatory Agency or Court Decree. If a regulatory
agency or a court of competent jurisdiction renders a decision which has become
final and which will prevent the performance by PRPA or by XXXX of their
respective material obligations under this Agreement (other than any obligation
of XXXX relating to the Gloucester Cranes or to XXXX'x customers currently
calling at the Gloucester Terminal), then either PRPA
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or XXXX may terminate this Agreement by written notice; thereafter all rights
and obligations hereunder (with the exception of any undischarged rights and
obligations that accrued prior to the effective date of termination and except
as otherwise stated herein) shall terminate.
ARTICLE XVII
FORCE MAJEURE
17.1 Force Majeure.
(a) Neither party hereto shall be deemed to be in breach of this
Agreement by reason of failure to perform any of its obligations hereunder, if
and to the extent that such failure is caused by a force majeure, which is a
cause beyond the control of such party, such as an act of God, fire, flood,
explosion, acts of war, riot, civil disorder, casualty caused by third parties
not under the control of the party seeking to invoke the application of this
Section, strikes or work stoppages (except such strikes or work stoppages
resulting from such party's "unfair labor practices," as that term is used in
the National Labor Relations Act) or governmental action. (Strikes or work
stoppages shall be deemed not to have resulted from a party's unfair labor
practices until such time, if any, that there is a final administrative or
judicial determination, and no appeal is pending and the time for any such
appeal has expired, that the
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conduct that caused such strike or work stoppage was an unfair labor practice,
in which event any reduction in Base Compensation pursuant to Subsection 17.1(b)
attributable to the strike or work stoppage caused by such unfair labor practice
shall be paid by XXXX to PRPA within thirty (30) days of such determination. If
the parties cannot agree upon the amount due pursuant to the preceding sentence,
the matter shall be submitted to the Arbitrators, whose decision shall be
binding.)
(b) The amount of Base Compensation payable by XXXX hereunder and
XXXX'x Container Pick Guarantees and Breakbulk Guarantee shall not be affected
by an event of force majeure except that if and to the extent that an event of
force majeure materially adversely affects the ability of XXXX to conduct
maritime operations at the Terminal or the ability of a normal volume of vessels
to use the Terminal, the Container Pick Guarantees and the Breakbulk Guarantee
shall be equitably reduced and, in recognition of PRPA's reliance on the payment
of such sums to meet its operating budget, the Base Rent and Base Rent Surcharge
shall be reduced by fifty percent (50%) of what would, in the absence of this
Subsection, be an equitable reduction. If the parties cannot agree upon the
reductions, if any, pursuant to this Subsection, the matter shall be submitted
to the Arbitrators, whose decision shall be binding.
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ARTICLE XVIII
XXXX'X COVENANTS
18.1 XXXX'x Further Covenants. XXXX further covenants that XXXX shall:
(a) Conduct all operations of XXXX at the Terminal in accordance
with Section 1.4, including without limitation, the guidelines of the United
States Coast Guard, if any, and the Fire Department of the City of Philadelphia;
(b) Cause a boiler and machinery inspection service approved by the
agency having jurisdiction over same, to make such inspections and
certifications as are required by the Boiler and Unfired Pressure Vessel
Regulations of the Pennsylvania Department of Labor and Industry, and furnish
all reports of such inspections and all certifications resulting therefrom to
PRPA;
(c) Not remove, attempt or manifest any intention to remove any
property from the Terminal other than in the ordinary course of business;
(d) Not vacate or permit the Terminal (other than the Additional
Parcels pending approval of a Proposed Master Plan) to be abandoned, nor cease
operation of its business at the Terminal (other than the Additional Parcels
pending approval of a Proposed Master Plan); and
(e) Not permit to remain, and promptly discharge (in no event later
than thirty (30) days following the earlier of
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notice of filing by lien or any notice from PRPA), at its cost and expense, all
liens and charges upon the Terminal or any part thereof arising by reason of any
labor or materials furnished or claimed to have been furnished to or on behalf
of XXXX (except if furnished by PRPA), its employees, agents, contractors,
invitees or licensees (except other stevedoring companies) or by reason of any
construction, alteration, addition, repair or demolition of any part of the
Terminal by or at the direction of XXXX, its employees, agents, contractors,
invitees, or licensees. PRPA shall have, and is hereby given, authority to enter
upon the Terminal at any reasonable time to post any notices in a reasonable
manner and at reasonable places which in its opinion shall be necessary to hold
PRPA and the Commonwealth harmless from any claim or liability arising out of
any work done on the Terminal by XXXX or at XXXX'x direction. Notice is hereby
given that PRPA and the Commonwealth will not be liable for any labor, services
or materials furnished or to be furnished by XXXX, or to any one holding the
Terminal through or under XXXX, and that no mechanic's or other such lien for
any such labor or materials shall attach to or affect the interest of PRPA in
and to the Terminal.
18.2 Conditions. All of XXXX'x covenants, agreements and provisions
contained in this Agreement shall be deemed to be conditions of this Agreement,
subject to applicable periods of grace and for cure.
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ARTICLE XIX
REMEDIES: ARBITRATION
19.1 PRPA's Remedies. If XXXX fails to pay in full when due any
installment of Base Compensation or any other charge, expense or cost to be paid
by XXXX under this Agreement, or otherwise fails to perform, violates or
otherwise breaches any covenant or condition of XXXX in this Agreement, or fails
to comply with any notice given under the terms of this Agreement, then, subject
to Section 19.1(d) below:
(a) This Agreement, and the term hereby created, shall at the
option of PRPA terminate and become absolutely void without any right on the
part of XXXX to save the forfeiture by payment of Base Compensation due, or by
other performance of the condition violated. When the Agreement shall be so
determined, and also, when and as soon as the term hereby created shall have
expired, shall be lawful for any attorney, as attorney for XXXX, to sign an
agreement for entering in any competent court an amicable action and judgment in
ejectment, without any stay of execution or appeal, against XXXX and all persons
claiming under XXXX for the recovery by PRPA of possession of the Terminal, for
which this Agreement or a copy hereof shall be a sufficient warrant, whereupon,
if PRPA so desires a writ of possession may issue forthwith without any prior
writ or proceedings whatsoever. And, if for any reason after such action has
been commenced, the
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same shall be discontinued and possession of the Terminal remain in or be
restored to XXXX, PRPA shall have the right in any subsequent defaults to bring
one or more further amicable actions in the manner and form as hereinbefore set
forth, to recover possession of the Terminal for such subsequent default. No
such termination of this Agreement nor recovering possession of the Terminal
shall deprive PRPA of any remedies or action against XXXX for all arrears of
Base Compensation or for damages for the breach of any covenant herein
contained, nor shall the bringing of any such action for Base Compensation, or
breach of covenant, nor the resort to any other remedy herein provided for the
recovery of Base Compensation and of other monies due hereunder or for damages
for breach of covenant be construed as a waiver of the right to insist upon the
forfeiture and to obtain possession in the manner herein provided.
(b) PRPA may, at its option, sublease the Terminal as agent of XXXX
for the balance of the Term of this Agreement and receive the Base Compensation
therefor and apply the same to the payment of any Base Compensation or damage
for breach of covenant due by XXXX to PRPA under the terms hereof.
(c) In addition to the foregoing remedies, PRPA cumulatively shall
have all rights, remedies, powers and privileges afforded from time to time by
law or in equity.
(d) in the event of any default or breach of covenant by XXXX, PRPA
shall, except as provided in the following sentence, give written notice thereof
to XXXX, and XXXX shall
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have a period of ten (10) days after receipt of such written notice to cure any
monetary breach, including but not limited to replenishment of the Letter of
Credit or the Security Deposit, and XXXX shall have a period of thirty (30) days
after receipt of such written notice to cure any other alleged default or breach
of this Agreement. PRPA agrees that it will not exercise any remedy for default
or breach hereunder, including applying any portion of the Letter of Credit or
the Security Deposit described in Section 3.2 hereof in respect thereof, until
after the expiration of the appropriate period, and further agrees that it will
not exercise any such remedy against XXXX if within the appropriate period XXXX
(i) cures the default or breach, or (ii) with respect to defaults or breaches
other than the nonpayment of Base Compensation and the failure to replenish the
Letter of Credit or the Security Deposit, commences action in good faith within
said thirty (30) day period to cure the default or breach of covenant and
proceeds diligently and within a reasonable period of time to effect and
complete a cure; provided, however, that PRPA shall not be required to provide
any notice or cure period for monetary default more than three (3) times in any
twelve (12) month period.
(e) In exercising any power conferred under this Agreement, either
by the entry of an appearance, amicable action or by the entry of judgment in
ejectment by confession, XXXX agrees that if a true and correct copy of this
Agreement be filed in such proceeding, it shall not be necessary to file the
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original as a warrant of attorney, any law or rule of court to the contrary
notwithstanding.
(f) Any power herein given to enter an amicable action or to appear
for and confess and enter judgment in ejectment against XXXX shall be
exercisable any number of times and shall not, under any circumstances, be
exhausted by one or more uses thereof. Such power may be exercisable on behalf
of any assignee of PRPA.
(g) XXXX hereby waives, to the extent any such right may be
applicable, the right to three (3) months and fifteen (15) or thirty (30) days
notice required under certain circumstances by the Pennsylvania Landlord and
Tenant Act of 1951, as amended, and the benefit of all laws now or hereafter in
force with respect to notices to be provided under this Agreement and hereby
agrees that the respective notice periods provided for in this Agreement shall
be sufficient in any such case.
(h) In creating the warrant of attorney to confess judgment in
ejectment, XXXX represents and warrants that it knowingly, intentionally and
voluntarily, and on the advice of its separate counsel, has agreed to such
remedy and any rights granted thereby to PRPA.
(i) For purposes of the remedies under this Agreement, the term
"amicable action" shall include the procedure for complaint in confession of
judgment in ejectment and other procedures for entering judgment by confession
in ejectment under Pennsylvania Rules of Civil Procedure.
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(j) If at such time, if any, that PRPA elects to exercise any right
that it may have to terminate this Agreement PRPA owes to XXXX any reimbursement
amounts pursuant to Section 7.6(e), PRPA shall, as a condition to XXXX'x
vacating (either voluntarily following such termination or as a result of
judicial process) the Terminal as a result of such termination, at PRPA's option
either pay XXXX such reimbursement amounts, less any amounts due to PRPA
hereunder, or deliver to XXXX a letter of credit issued by a bank and in a form
reasonably acceptable to XXXX in an amount equal to the reimbursement amounts
outstanding and owing by PRPA to XXXX, less any amounts due to PRPA hereunder.
In the event that the parties cannot agree on a bank or the form of the letter
of credit, the issue shall be submitted for decision to a commercial arbitrator
selected by the American Arbitration Association under the then prevailing rules
of such Association. Following PRPA's termination of this Lease and XXXX'x
vacation and surrender of the Terminal, PRPA, if it has delivered a letter of
credit rather than paying in cash the reimbursement amounts discussed above,
shall pay to XXXX the Section 7.6(e) reimbursement amounts outstanding and owing
by PRPA to XXXX, less any amounts due to PRPA hereunder, in twelve equal
consecutive monthly installments. In the event PRPA fails to make such a monthly
installment by the tenth day of any month, then XXXX, after notice and
opportunity to cure, may draw on the letter of credit referred to in first
sentence of this Subsection 19.1(j) to the extent of such missed installment.
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19.2 Remedies Cumulative. All of the remedies herein given to PRPA and
all rights and remedies given to it by law, shall be cumulative and concurrent.
No termination of this Agreement or the taking or recovering of the Terminal
shall deprive PRPA of any of its remedies or actions against XXXX for all
arrears of Base Compensation or for damages, or for the breach of any covenant
herein contained, nor shall the bringing of any action for arrears of Base
Compensation or breach of covenant, or the resort to any other remedy herein
provided for the recovery of arrears of Base Compensation be construed as a
waiver of the right to obtain possession of the Terminal.
19.3 Expedited Proceedings. Each of PRPA and XXXX agree that, if any
action is commenced under this Agreement, it will join with the other party in a
motion for the imposition of expedited schedules, including without limitation
expedited discovery not subject to the customary time periods for responding to
discovery requests and for an expedited hearing on the merits, and that it will
not oppose any motion by the other party for the imposition of expedited
schedules for the disposition of the action, provided that all substantive
rights shall be retained.
19.4 Notice and Grace Period.
(a) In the event of any default or breach of covenant or condition
of this Agreement by PRPA, XXXX shall give written notice thereof to PRPA, and
PRPA shall have a period of ten (10) days after receipt of such written notice
to cure any
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monetary breach, and PRPA shall have a period of thirty (30) days after receipt
of such written notice to cure any other alleged default or breach of this
Agreement. XXXX agrees that it will not exercise any remedy for default or
breach of this Agreement by PRPA until after the expiration of the appropriate
period, and further agrees that it will not exercise any remedy against PRPA if
within the appropriate period PRPA (i) cures the default or breach, or (ii) with
respect to defaults or breaches other than the nonpayment of money, commences
action in good faith within said thirty (30) day period to cure the default or
breach and proceeds diligently and within a reasonable period of time to effect
and complete a cure; provided, however, that XXXX shall not be required to
provide any notice or cure period for monetary default more than three (3) times
in any twelve (12) month period, and provided further that, notwithstanding
anything to the contrary in this Section 19.4(a), notices to PRPA and
opportunities to cure in the event of certain wrongful evictions of XXXX by PRPA
shall be governed by Section 19.4(b).
(b) In the event of wrongful eviction of XXXX from all or a portion
of the Terminal by reason of (i) the willful act of PRPA, or (ii) the quality of
PRPA's title in and to the Terminal being other than as set forth in this
Agreement, notices to PRPA and opportunities to cure shall be governed by this
Section 19.4(b). In the event of such a wrongful eviction, XXXX agrees that it
shall not terminate this Agreement unless PRPA, within thirty days after notice,
fails to cure or, in the
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event of a wrongful eviction that does not materially interfere with XXXX'x
operations at the Terminal, commence and proceed diligently and within a
reasonable period of time to effect and complete a cure. In the event PRPA
willfully and wrongfully evicts XXXX from the entire Terminal or substantially
the entire Terminal, XXXX may pursue all remedies available to it (other than
termination, which is subject to the second sentence of this Section 19.4(b)),
provided XXXX has given PRPA prior or concurrent telephonic notice. In the event
of any other wrongful eviction described in the first sentence of this Section
19.4(b), XXXX may pursue all remedies available to it (other than termination,
which is subject to the second sentence of this Section 19.4(b)), provided XXXX
has given PRPA not less than two (2) hours prior telephonic notice.
19.5 Arbitration.
(a) For disputes subject to arbitration under this Agreement that
are not resolved by the parties within five (5) days after either party gives
notice to the other of its desire to arbitrate such dispute, the dispute shall
be submitted to a panel of three independent individuals knowledgeable in the
operation of a marine terminal facility (the "Arbitrators"). Within thirty (30)
days of the Effective Date XXXX and PRPA shall each submit to the other the name
and address of the person designated by it to act as an Arbitrator. The two
Arbitrators so chosen shall promptly following the submission of a dispute to
them select a third Arbitrator. In the event that they are
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unable to agree upon such appointment within thirty (30) days, or in the case of
a dispute which must be decided within thirty (30) days of its submission
pursuant to the terms of this Agreement, within five (5) days after the
submission of such dispute, then either party, on notice to the other, may
request such appointment by the American Arbitration Association (or any
organization successor thereto) in accordance with its rules then prevailing, or
if the American Arbitration Association (or such successor organization) shall
fail to appoint said third arbitration within fifteen (15) days after such
request is made, then either party may apply, on notice to the other, to the
president judge of the Court of Common Pleas of Philadelphia (or any other court
having jurisdiction or exercising functions similar to those now exercised by
said court) for the appointment of such third Arbitrator. Any dispute submittee
to the Arbitrators shall be settled by binding arbitration in accordance with
the then prevailing rules of the American Arbitration Association. The decisions
and determinations of the Arbitrators shall be binding upon the parties, and may
be enforced by appropriate judicial action. Neither party shall challenge any
decision or determination of the Arbitrators in any judicial or administrative
forum, including without limitation the FMC, either by complaint, petition for
investigation or otherwise.
(b) In deciding any issues presented to them, the Arbitrators shall
obtain such information as they deem necessary to determine the question at
issue, pursuant to such rules and
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procedures as the Arbitrators shall determine with respect to such question
(provided that such rules and procedures are not inconsistent with the then
prevailing rules of the American Arbitration Association), on a case by case
basis. In addition, the Arbitrators shall obtain such information and consider
such factors as required pursuant to other provisions of this Agreement which
discuss specific issues being submitted to the Arbitrators. In deciding any
issues presented to them, the Arbitrators shall consider the positions of both
parties, and may hear such testimony and argument as they deem advisable and may
request written submissions from the parties. The Arbitrators shall determine
each such questions submitted to them with all possible speed, and in any event
within thirty (30) days following submission to them of such dispute or, within
such shorter period of time as may be required pursuant to other provisions of
this Agreement, and shall give written notice to the parties of such
determination. The arbitration hearings shall be held in Philadelphia,
Pennsylvania as frequently as necessary to arrive at a decision within thirty
(30) days from the date on which such dispute is submitted to the Arbitrators
(or such shorter period as may be required under this Agreement).
(c) Each party shall pay the fees and expenses of the Arbitrator
appointed by such party and the fees and expenses of the third Arbitrator and
all other expenses (not including attorney fees, witness fees and similar
expenses of the parties
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which shall be borne separately by each of the parties) of the arbitration shall
be borne by the parties equally.
(d) Either party may appoint a successor or replacement Arbitrator
for such party upon ten days prior written notice to the other party; provided,
however, that unless the Arbitrator such replacement Arbitrator replaces has
resigned or is unable to participate, no such successor or replacement
Arbitrator shall participate in any matter or dispute which is then currently
before the Arbitrators for decision. In the event the third appointed Arbitrator
resigns or is otherwise unable to participate in future arbitrations, a
replacement third Arbitrator shall be selected in the same manner as provided
for the selection of the initial third Arbitrator. Any arbitrator shall be an
independent party not affiliated in any way with either XXXX or PRPA.
(e) Any fee, obligation or determination of fact dispute decided by
the Arbitrators shall relate back to the date determined by the Arbitrators.
ARTICLE XX
CONDEMNATION
20.1 Condemnation.
(a) If the entire Terminal is permanently taken under the power of
eminent domain, each of PRPA and XXXX shall be
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entitled to that portion of payment or award, whether in condemnation or
amicable proceeding in lieu of condemnation, allocated to their respective
leasehold interests, and each shall be entitled to its respective relocation
benefits. Subject to the preceding sentence, either party may terminate this
Agreement upon a total taking of the Terminal.
(b) If a portion of the Terminal is permanently taken under the
power of eminent domain, and upon such partial taking, the Terminal is
unsuitable for use as a marine terminal, either party may terminate this
Agreement upon such taking. if neither party terminates under the immediately
preceding sentence, or if upon such partial taking the Terminal remains suitable
for use as a marine terminal, then the Base Compensation shall be equitably
adjusted by XXXX and PRPA and XXXX and PRPA shall further modify this Agreement
as appropriate. Disputes under this Subsection 20.1(b) shall be submitted to the
Arbitrators.
(c) Promptly after the execution of this Agreement, PRPA and XXXX
agree to use their best efforts to have the Commonwealth agree to value for
purposes of condemnation XXXX'x leasehold interest under this Agreement
independent and separate from PRPA's leasehold interest in the Commonwealth Area
and Shed C, as though XXXX'x leasehold interest under this Agreement had been
created pursuant to a direct lease between the fee owners of the Terminal and
XXXX, and that upon any
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condemnation XXXX shall be entitled to an award based upon such value.
(d) PRPA hereby waives its right to condemn XXXX'x interest in the
Terminal.
ARTICLE XXI
RAILROADS
21.1 Railroad Tracks.
(a) XXXX and PRPA agrees that any railroad tracks upon the Terminal
shall be operated on the Belt Line principle, i.e., all railroads shall have the
right to deliver and receive cars to and from the Terminal.
(b) XXXX shall permit railroad service to and from any adjacent or
proximate intermodal container transfer terminal ("ICTF") over and through the
Terminal; provided, however, that (i) XXXX shall cooperate in the scheduling of
such service with shippers and the operator of the ICTF, and (ii) no such
railroad service shall unreasonably interfere with XXXX'x operations on the
Terminal.
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ARTICLE XXII
EMPLOYMENT PRACTICES: INTEGRITY
22.1 Fair Employment Practices.
(a) XXXX agrees to provide equal employment opportunities in
connection with the operation of the Terminal. XXXX further agrees to comply
with PRPA's nondiscrimination and integrity policies attached hereto and made a
part hereof as Exhibit J.
(b) XXXX agrees that any failure to comply with any of the
foregoing requirements shall constitute a substantial breach of this Agreement.
ARTICLE XXIII
OPINION OF COUNSEL
23.1 Opinion of XXXX'x Counsel. At the time of the execution of this
Agreement, and as a condition to PRPA's obligations hereunder, XXXX shall
deliver to PRPA an opinion of Xxxx Xxxxx, Esquire, or other counsel acceptable
to PRPA, stating that XXXX is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, is duly qualified and
in good standing to do business in the Commonwealth of Pennsylvania, and that
this Agreement has been duly authorized, executed and delivered by XXXX. In
addition, at the
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request of PRPA XXXX shall deliver to PRPA an opinion of Xxxx Xxxxx, Esquire, or
other counsel acceptable to PRPA, to the effect that any sale of equipment to
PRPA or transfer of equipment to the Terminal as contemplated herein shall not
violate any agreement, other instrument, judgment, or decree to which XXXX is a
party or by which it or such equipment is bound, and that XXXX'x performance in
connection therewith shall not in any way interfere with the performance of its
obligations hereunder.
23.2 Opinion of PRPA's Chief Counsel. At the time of the execution of
this Agreement, and as a condition to XXXX'x obligations hereunder, PRPA shall
deliver to XXXX an opinion of counsel stating that PRPA is a body politic and
instrumentality of the Commonwealth of Pennsylvania, and that this Agreement has
been duly authorized, executed and delivered by PRPA.
ARTICLE XXIV
ADDITIONAL PROPERTY
24.1 Delaware Avenue Parcel. PRPA will support the efforts of Railport
Inc. ("Railport"), a Pennsylvania corporation, to lease certain land along
Delaware Avenue in the City of Philadelphia (the "Delaware Avenue Parcel"),
owned by the Commonwealth (Department of Transportation), the City and others,
in connection with Railport's construction thereon of an interim
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regional intermodal transfer facility, provided that such lease will provide
access acceptable to PRPA in its reasonable discretion over and across the
Delaware Avenue Parcel for ingress and egress by all transportation modes to and
from the Terminal and other maritime facilities by PRPA, its lessees, licensees,
the owners and occupiers of such other maritime facilities, and its and their
invitees. PRPA agrees to consult with XXXX concerning the adequacy of such
access. In no event shall PRPA have any obligations as to the lease,
construction, maintenance or repair of such interim regional intermodal transfer
facility, and nothing contained in this Agreement shall prohibit PRPA from
participating in the development, construction or operation of an intermodal
transfer facility. If PRPA develops such a facility, PRPA shall provide Railport
with an opportunity to negotiate with PRPA concerning the operation of such
facility on an equal basis with other prospective operators. PRPA acknowledges
and agrees that in no event shall its participation in the development,
construction or operation of any such facility cause a delay or reduction in any
financial commitment by PRPA with respect to the Capital Improvements or
deferred maintenance items described on Exhibits H, I or X. XXXX agrees that
during the ten-year period commencing on the Effective Date it shall not lease
or attempt to lease the Delaware Avenue Parcel without the prior written consent
of either XXXX or Railport. The Delaware Avenue Parcel refers to that area of
land extending generally from the southerly boundary of the Packer Avenue Marine
Terminal north to
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the boundary of the northerly side of Xxxxxx Street and extending one hundred
fifty (150) feet west from the existing fence lines of those properties along
Old Delaware Avenue for the entire length of the area as described.
24.2 Additional Parcels.
(a) (i) As of the Effective Date, Xxxx 00 Xxxxx, Xxxx 00 South, and
Pier 100 South (the "Additional Parcels"), as described on Exhibit M hereto,
shall be included in and shall become a part of the Terminal, subject to the
terms and conditions of this Agreement and subject to PRPA's termination rights
as to the Additional Parcels as set forth below in Section 24.2(b).
(ii) XXXX acknowledges that PRPA has advised XXXX that the
Additional Parcels are subject to the leases and other agreements set forth on
Exhibit K, copies of which have been provided to XXXX. XXXX agrees that all rent
and other payments due to PRPA under such agreements shall continue to be paid
to PRPA directly, that XXXX shall not attempt to exercise any rights of landlord
under any of such agreements, that XXXX shall conduct all of its operations on
the Additional Parcels in conformity with and so as not to violate any of the
provisions of any of such agreements or the rights of any tenants or licensees
thereunder, and that XXXX shall indemnify, defend and hold PRPA harmless from
and against any and all expense, loss, claim, suit or liability suffered by PRPA
as a result of XXXX'x failure to comply with the covenants contained in this
Section.
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(iii) During the Term hereof, PRPA may lease to third parties all
or part of any Additional Parcel for a term of six (6) months or less (assuming
that all rights to renew or extend are exercised), upon XXXX'x prior consent,
which such consent may not be unreasonably withheld, and for a term of more than
six (6) months (assuming that all rights to review or extend are exercised),
upon XXXX'x prior written consent, which such consent XXXX may grant or deny in
its sole discretion. Any rents or other revenues generated by any such lease
shall be for the account of PRPA.
(iv) Upon XXXX'x request and the demonstration by XXXX to PRPA of a
commercial need by XXXX to have any part of the Additional Parcels free of any
leasehold or licensed interests (other than XXXX'x), PRPA shall terminate each
lease, license or other arrangement affecting such part of the Additional
Parcels (other than this Agreement) to the extent permitted thereby or, if
permitted by such lease, license or arrangement, relocate such tenant. In the
event PRPA relocates any tenant under any such lease, license or arrangement, or
terminates any such lease, license or arrangement at XXXX'x request, then XXXX
shall pay to PRPA an annual fee (the "Additional Parcel Fee") equal to the
difference between yearly rent that the tenant under such lease, license or
arrangement, would have been obligated to pay to PRPA as provided in such lease,
license or arrangement and the yearly rent, if any, that PRPA will receive from
such tenant. XXXX shall not be liable for
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any damages or injury to or caused by the Mummers using the shed located on Pier
98 ("Shed 98") unless caused by XXXX'x negligence.
(v) PRPA shall not have any maintenance or repair obligations
whatsoever to XXXX in respect of the Additional Parcels. PRPA has informed XXXX
that PRPA intends to close Shed 98. XXXX may not enter or use Shed 98 or the
shed on Pier 96 ("Shed 96") unless, prior to any such entry or use thereof by
HOLT, HOLT, at its sole cost and expense and in accordance with the provisions
of Section 7.6, shall have caused such shed or sheds to be brought into full
compliance with all applicable governmental laws, rules, codes, ordinances,
orders and regulations (other than the Environmental Statutes referred to in
Subsections 10.2(a)(iii)-(v)). In the event any remediation of any environmental
condition present in Shed 98 or Shed 96 is required under the Environmental
Statutes referred to in Subsections 10.2(a)(iii)-(v) as a condition to the use
thereof by XXXX, XXXX shall perform such remediation and PRPA shall reimburse
XXXX for fifty percent (50%) of the actual costs incurred by XXXX in connection
therewith up to a maximum reimbursement of One Hundred Thousand Dollars
($100,000), whereupon PRPA shall not have any other obligation whatsoever in
respect thereto.
(vi) Any fees or revenues received by XXXX in connection with the
use of the Additional Parcels shall be for the account of XXXX. Cargo, either
breakbulk or container,
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handled at the Additional Parcels shall not be counted toward the fulfillment by
XXXX of the Container Pick Guarantee or the Breakbulk Guarantee, nor shall
Container Pick Fees or Breakbulk Fees be charged with respect thereto unless
such charges are due with respect to the handling of such cargo at portions of
the Terminal other than the Additional Parcels.
(vii) PRPA and XXXX agree to consult concerning any funds available
to PRPA through the capital budget of the Commonwealth with respect to the
Additional Parcels.
(b) (i) PRPA grants to XXXX, as of the Effective Date, and
continuing during the initial Term, subject to the provisions of Section 7.6
hereof, the exclusive right to develop Pier 98 South and Pier 100 South in
accordance with the provisions of this Agreement. PRPA shall grant to XXXX,
subject to the provisions of Section 7.6, the exclusive right during the
initial Term, and the non-exclusive right thereafter, to develop Pier 96
South at such time that Pasha Auto Warehousing, Inc. ("PASHA") either has
consented to such grant or no longer has any rights with respect to Pier 96
South. During the Term, PRPA shall not, as to Pier 96, extend the term of
PASHA's lease beyond the term under PASHA's current lease, increase the size of
the property demised to PASHA or permit any use not currently permitted under
PASHA's current lease without XXXX'x prior written consent. During the Renewal
Periods XXXX shall have and enjoy, subject to the provisions of Section 7.6 and
this Subsection 24.2(b), a non-exclusive right to develop the
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Additional Parcels. In consideration of the foregoing development rights, XXXX
shall pay to PRPA on the Effective Date of and on each anniversary of the
Effective Date, until such time as XXXX and PRPA enter into a Lease and
Development Agreement with respect to the Additional Parcels or XXXX'x rights
with respect thereto are terminated, a development fee equal to Twenty-Five
Thousand Dollars ($25,000) (the "Development Fee"). In the event XXXX is
substantially unable to use Pier 96 South due to the rights enjoyed by PASHA,
the Development Fee shall be reduced to and be $8,333.33 until such time that
XXXX can so use Pier 96 South. The amount of the Development Fee for each
Renewal Period may be determined by the Arbitrators, subject to Section 2.3(c).
(ii) During the Renewal Periods PRPA, if it has not previously
approved a Proposed Master Plan (as hereinafter defined), may terminate XXXX'x
interests in and to the Additional Parcels and XXXX'x non-exclusive development
rights with respect thereto upon ninety (90) days prior written notice, provided
that at such time that PRPA intends either by itself or by a third party to
develop and use the Additional Parcels for a use other than the then current
use.
(c) (i) XXXX may, at its sole cost and expense, and subject to the
provisions of Section 7.6, fill the water area between Pier 98 South and Pier
100 South, and, subject to the immediately following sentence, the water area
between Pier 96 South and Xxxx 00 Xxxxx. XXXX shall not fill the water area
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between Pier 96 South and 98 South until PRPA has advised XXXX in writing that
all required consents relating thereto, if any, have been obtained from Pasha
Auto Warehousing, Inc. PRPA will cooperate with and support XXXX with respect to
such fill projects at no cost or expense to PRPA.
(ii) In the event that PRPA exercises its termination rights set
forth in Section 24.2(b), PRPA shall, on or before the date on which XXXX'x
rights to the Additional Parcels terminate ("Additional Parcels Termination
Date"), reimburse XXXX for XXXX'x actual costs incurred to such date in
obtaining the governmental permits necessary for, and, to the extent that it has
done so, in undertaking and constructing, the fill project, up to a maximum of
Eight Million Dollars ($8,000,000) if the fill project encompasses Piers 96-100
and up to Four Million Dollars ($4,000,000) if the fill project encompasses only
Pier 00 Xxxxx xxx Xxxx 000 Xxxxx (xxx "Fill Project Reimbursement Amount"). PRPA
agrees and acknowledges that any Fill Project Reimbursement Amount may include
the cost of remediating environmental problems affecting the fill project and of
constructing retaining walls related thereto. The Fill Project Reimbursement
Amount shall be paid by PRPA to XXXX as follows: (A) on the Additional Parcels
Termination Date PRPA shall pay to XXXX the sum of Five Million Dollars
($5,000,000) or, if the Fill Project Reimbursement Amount is less than
$5,000,000, the total amount thereof; and (B) if the Fill Project Reimbursement
Amount is greater than $5,000,000, the remaining
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portion thereof in fifty-nine (59) equal consecutive monthly installments of
principal (based upon a ten year amortization schedule), together with interest
thereon at a rate that is equal to and changes with the prime rate of interest
(the "Interest Rate") published from time to time by Provident National Bank, or
its successor, in Philadelphia, Pennsylvania, and a final monthly payment on the
next succeeding month of all outstanding and unpaid principal and interest. PRPA
shall be permitted to pay the unpaid portion of the Fill Project Reimbursement
Amount in full at any time without penalty.
(iii) If on the Additional Parcel Termination Date aggregate future
Base Compensation projected to be owed by XXXX to PRPA over the remaining length
of the then current Renewal Period is less than the amount of the Fill Project
Reimbursement Amount remaining to be paid by PRPA (after PRPA has reimbursed
XXXX $5,000,000), then PRPA shall not later than and as a condition to XXXX'x
surrender of the Additional Parcels cause a letter of credit (the "PRPA Letter
of Credit" ) to be issued by a bank acceptable to XXXX, in form and substance
reasonably acceptable to XXXX, naming XXXX as beneficiary, in an amount equal at
all times to an amount not less than the difference from time to time between
the projected aggregate future Base Compensation and the Fill Project
Reimbursement Amount remaining to be paid by PRPA to XXXX. Upon payment in full
by PRPA to XXXX of the Fill Project Reimbursement Amount, XXXX shall return to
PRPA the PRPA Letter of Credit.
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(iv) XXXX shall provide to PRPA quarterly statements certified by
XXXX'x architect or engineer and an officer of XXXX as to the progress and
status of the fill project and the itemized costs incurred to such date by XXXX
in connection therewith. On the Additional Parcel Termination Date XXXX shall,
if requested by PRPA and if PRPA has complied with Subsections 24.2(c)(ii) and
(iii) with respect to the Fill Project Reimbursement Amount, assign and transfer
to PRPA all of XXXX'x right, title and interest in and to any permits, contracts
or warranties relating to the fill project.
(d) (i) At any time prior to PRPA's notice of its election to
exercise its termination rights, XXXX may, at its cost, submit to PRPA for its
approval five (5) copies of XXXX'x plan for the Major Development of the
Additional Parcels (the "Proposed Master Plan") which shall be prepared by a
registered architect and shall include a detailed description of the
improvements to be constructed by XXXX on the Additional Parcels (the "Major
Improvements") and all of the following (all scales shown are minimal):
(A) illustrative Site Plan (1" = 100') showing various levels,
the locations of all proposed structures, and maximum height and bulk of all
proposed structures and all proposed land uses;
(B) Area Tabulation for each use type;
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(C) Schematic Drawings of each proposed structure including
exterior elevations and sketches of the proposed structures;
(D) A North-South Section (1" = 100') for each proposed
structure and the overall site;
(E) An East-West Section (1" = 100') for each proposed
structure and the overall site;
(F) A written statement describing all proposed structures and
the intended uses thereof;
(G) A proposed schedule of construction, including a completion
date, for each proposed Major Improvement; and
(H) Such other plans, drawings or designs that PRPA may
reasonably require.
(ii) PRPA agrees to examine the Proposed Master Plan promptly upon
receipt and to notify XXXX in writing within sixty (60) days thereafter of
PRPA's approval or disapproval of the Proposed Master Plan. Any notice of
disapproval by PRPA shall set forth PRPA's reasons for not approving the
Proposed Master Plan. If PRPA has notified XXXX of PRPA's disapproval of any
aspect of the Proposed Master Plan, and XXXX elects to submit a revised Proposed
Master Plan in order to meet PRPA's stated objection, then PRPA agrees to
examine such revised Proposed Master Plan promptly upon receipt thereof and
within thirty (30) days thereafter to notify XXXX of PRPA's approval or
disapproval thereof. Any notice of disapproval by
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PRPA shall set forth PRPA's reasons for not approving the Proposed Master Plan.
XXXX shall have the right to continue this procedure until the earlier of the
date PRPA's approval is obtained and the date on which XXXX received PRPA's
notice of its election to exercise its termination rights set forth in Section
24.2(b). If not approved by PRPA in whole, no Proposed Master Plan shall be
deemed approved. (The Proposed Master Plan as ultimately approved by PRPA is
hereinafter called the "Master Plan").
(iii) Notwithstanding anything to the contrary contained herein,
PRPA may disapprove any aspect of any Proposed Master Plan which PRPA in its
sole discretion determines does not promote the goals and objectives of PRPA or
will conflict with or compete with any existing or planned PRPA facility. Any
proposed Major improvement must be for an intended use that is permitted under
Section 1.4 of this Agreement.
(iv) As a condition to PRPA's approving any Proposed Master Plan,
PRPA and XXXX (or an entity designated by XXXX provided that XXXX guarantees
such entity's obligations thereunder and that XXXX would be permitted to
undertake a Transfer to such entity pursuant to the provisions of Section 11.1
shall have executed a separate lease and operating agreement for the Additional
Parcels providing for: (A) the construction by XXXX of the Major Improvements in
accordance in all material respects with the Master Plan; (B) a preliminary
lease term (the "Preliminary Lease Term") to terminate upon the substantial
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completion of the Major Improvements; (C) a lease term to commence immediately
following the termination of the Preliminary Lease Term, for a duration equal to
the length of the remaining Term of this Agreement; (D) two ten (10) year
renewal options, each exercisable only if XXXX is not in default at such time
and only if XXXX concurrently exercises its option to renew under this
Agreement; (E) cross-defaulting between this Agreement and such lease; (F) the
termination of the lease upon XXXX'x failure to construct the Major Improvements
in accordance with the Master Plan and the terms of such Lease; and (G) such
other terms and conditions agreed to by PRPA and XXXX, including but not limited
to the compensation to be paid by XXXX to PRPA with respect thereto. Upon
entering into such new lease and operating agreement, the parties shall execute
an amendment to this Agreement effective as of the effective date of such new
lease and operating agreement, and the parties shall cause such new lease and
operating agreement and such amendment to be filed with the FMC.
(e) XXXX shall be granted additional rights to renew this Agreement
pursuant to Section 2.3(b) hereof at such time that a Master Plan is approved by
PRPA. For the purposes of this Agreement, the "Major Development" is a
development (other than the fill project referred to in Section 24.2(c))
proposed by XXXX and approved by PRPA as set forth above which, in the
reasonable opinion of PRPA, will require XXXX to expend not less than Eighteen
Million Dollars ($18,000,000) of which up to Eight
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Million Dollars ($8,000,000) may be attributable to the fill project, or, in the
event XXXX is unable to develop Pier 96 South due to the rights thereto enjoyed
by PASHA, Six Million Dollars ($6,000,000) of which up to Two Million Six
Hundred Sixty-Six Thousand Dollars ($2,666,000) may be attributable to the fill
project, and which, in the reasonable opinion of PRPA, will, when completed,
substantially enhance the ability of the Terminal to attract and service
additional cargoes.
ARTICLE XXV
PRPA'S RIGHT OF ACCESS TO THE TERMINAL
25.1 Visitors. PRPA shall have the right of access to the Terminal for
the purposes of showing the Terminal to visitors and invitees upon reasonable
notice to XXXX; provided, however, that such entry shall not unreasonably
interfere with XXXX'x operations and that PRPA shall take reasonable precautions
in order to protect the safety of such visitors and invitees.
25.2 Property and Cargo Under XXXX'x Control. PRPA reserves the right,
but shall have no responsibility or obligation, to inspect the Terminal as to
fire hazards and other hazards of a like kind or nature. PRPA assumes no
responsibility or liability for loss or damage to the property of XXXX or
property under the control of XXXX, whether caused by fire, water or otherwise
except as otherwise provided by this Agreement, nor
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does PRPA assume responsibility for any shortages of cargo handled by XXXX at
the, as to which XXXX hereby releases PRPA. The right of inspection reserved to
PRPA hereunder shall impose no obligation on PRPA to make inspections to
ascertain the condition of the Terminal, and shall impose no liability upon PRPA
for failure to make such inspections, but nothing contained in this sentence
shall reduce PRPA's obligations under other provisions hereof.
25.3 Utility Lines and Easements. Subject to the giving of reasonable
written notice to XXXX, PRPA reserves to itself and others the right to locate,
construct, install and maintain sewers, utilities and pipelines upon or across
the Terminal at locations which do not unreasonably interfere with XXXX'x use of
the Terminal, provided that the work related thereto shall not unreasonably
interfere with XXXX'x use of the Terminal, and that PRPA shall cause the
Terminal to be restored following such work. With respect to any such work, PRPA
shall consult with XXXX as to the location of such sewers, utilities and
pipelines. XXXX shall cooperate with PRPA or its designees in order that the
work can be accomplished in the shortest possible time.
25.4 Commonwealth. The Commonwealth, its contractors, agents, and
employees shall have the right, but no obligation, of access to the Terminal to
inspect the Terminal to determine the state of maintenance, repair and condition
of the Terminal, provided, however, that such entry shall not unreasonably
147
interfere with XXXX'x operations and that the Commonwealth take reasonable
precautions in order to protect its safety.
ARTICLE XXVI
PUBLICKER PROPERTY
26.1 Publicker Site. XXXX shall not construct any improvements or
perform any operations which integrate or connect the Terminal and the Publicker
Property adjacent to the Terminal without the prior written consent of PRPA,
which PRPA may grant or deny in its sole discretion. PRPA shall support any
application made or filed by XXXX to repair or restore or fill-in the river
bounded edge of the Publicker Property by landfill.
ARTICLE XXVII
REPRESENTATIONS AND WARRANTIES OF XXXX AND PRPA
27.1 Authorization. Each party hereby represents and warrants to the
other that it has the requisite power and authority to make and perform its
obligations under this Agreement, and the execution of this Agreement has been
duly authorized by all requisite corporate action.
27.2 Non-Conflict. Each party hereby represents and warrants to the
other that, except as set forth in the following
148
sentence, the execution, delivery and performance of this Agreement will not
violate any provision of, nor conflict with, nor result in a breach of, any of
the terms, conditions, or provisions of, nor constitute a default under, any
agreement, indenture or instrument to which it is a party. XXXX has advised PRPA
that consents from the New Jersey Economic Development Authority, bondholders,
trustees, credit facility issuers and/or providers of other financing for the
benefit of XXXX for certain project costs associated with the Gloucester
Terminal may be required in order for XXXX to move the Gloucester Cranes.
27.3 Crane Relocation. Xxxx hereby represents and warrants that,
except as set forth in the last sentence of Section 27.2: (i) no legal or other
impediment exists which may prevent XXXX from causing the Gloucester Cranes to
be moved from the Gloucester Terminal to the Terminal; (ii) it has all legal
right, power and authority necessary to cause the Gloucester Cranes to be moved
from the Gloucester Terminal to the Terminal; and (iii), it has provided to
PRPA, prior to the date hereof, access to true, accurate and complete copies of
all agreements, documents and instruments relating to or affecting the
Gloucester Cranes.
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ARTICLE XXVIII
MISCELLANEOUS
28.1 Notices. Any notice permitted or required to be sent hereunder by
either party to the other party shall be in writing, and shall be deemed to have
been given when served in person on the addressee, or sent by certified mail,
return receipt requested, or by overnight delivery service, postage prepaid,
addressed as follows:
If to PRPA:
Philadelphia Regional Port Authority
000 X. Xxxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. XxXxx, Executive Director
with a copy to:
Chief Counsel
Philadelphia Regional Port Authority
000 X. Xxxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
If to XXXX:
Xxxx Cargo Systems, Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxx, President
with a copy to:
Xxxxxx Xxxxxxxx, Esquire
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx
00xx xxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
150
and with a further copy to:
Xxxx Xxxxx, Esquire
Xxxx Cargo Systems, Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxxxxx Xxxx, XX 00000
or at such other place and to such other persons as the parties hereto may from
time to time designate. In the event of an emergency requiring prompt attention
in order to prevent danger to life or serious property damage which does not
occur during traditional business hours, in addition to the foregoing notice
requirements, notice shall be in writing and sent via telephonic transmission
and hand delivery to such telecopier numbers and non-office addresses as the
parties may provide to one another from time to time.
28.2 Captions. The use of "Article" or "Section" headings or captions
in this Agreement is solely for the purpose of convenience, and the same shall
be entirely disregarded in construing any portion of this Agreement.
28.3 Terms Binding on Successors. All the terms, covenants and
conditions of this Agreement shall inure to the benefit of and be binding upon
the successors, assigns and Transferees of the parties hereto. The provisions of
this Section 28.3 shall not be deemed as a waiver of any of the conditions
limiting Transfers by XXXX set forth herein.
28.4 Applicable Law. This Agreement and all questions arising
thereunder shall be construed according to the laws of
151
the Commonwealth of Pennsylvania, except with respect to the requirements of the
Shipping Act of 1984 and any other federal laws or procedures which may be
applicable.
28.5 Consent to Jurisdiction. Service and Venue. For the purpose of
enforcing payment of the compensation due hereunder and performance of its
obligations hereunder or otherwise in connection herewith, XXXX hereby consents
to the jurisdiction and venue of the Court of Common Pleas for Philadelphia
County and the Commonwealth Court (to the extent each may have subject matter
jurisdiction) or of the United States District Court for the Eastern District of
Pennsylvania, and appoints and constitutes Messrs. Wolf, Block, Xxxxxx and
Xxxxx-Xxxxx as its agent for all service of process in connection with any such
matter; provided, however, that nothing contained herein shall be or deemed to
be a waiver of any right XXXX may have to remove any action from state court to
an appropriate federal court as long as any such removal will not operate to
prevent PRPA from exercising and enjoying any of its remedies set forth in
Section 19.1, including without limitation, the remedy of confession of judgment
in ejectment. The provisions of this Section 28.5 shall not limit or otherwise
affect the right of PRPA to institute and conduct action in any other
appropriate manner, jurisdiction or court.
28.6 Limit on PRPA's Liability. Notwithstanding anything to the
contrary contained herein, the liability of the PRPA hereunder shall be limited
to its interest in and to the
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Terminal and to the revenues and other intangible assets of the PRPA. Any
judgment against PRPA hereunder shall be enforceable solely against the
foregoing assets of PRPA, and any such judgment shall contain a specific
notation that such judgment is not a lien upon and may not be enforced against
any real property interests, including leaseholds, of PRPA other than its fee
and leasehold interests with respect to the Terminal.
28.7 Certain Certificates. Upon XXXX'x request, made in connection with
any loan to be secured by any equipment owned or leased by XXXX for use at the
Terminal, including without limitation the XXXX Cranes, PRPA will deliver to
XXXX or the lender making such loan, such certificates, instruments and
documents as the lender reasonably may request, which certificates, instruments,
and documents shall confirm that PRPA has no landlord's lien on, security
interest in, distress or distraint right or any other right whatsoever with
respect to any such equipment, and agree not to assert any claim against or
permit any lien in favor of PRPA to be filed against any such equipment, other
than PRPA's option to purchase the XXXX Cranes as provided herein. XXXX shall
pay any costs incurred by PRPA (including reasonable attorneys' fees) in
connection with any such certificates, instruments and documents.
28.8 Time of Essence. Time shall be of the essence of this Agreement.
28.9 Severability. If any provision hereof is found by a court of
competent jurisdiction or by a regulatory agency to be
153
prohibited or unenforceable, it shall be ineffective only to the extent of
such prohibition or unenforceability, and such prohibition or unenforceability
shall not invalidate the balance of such provision to the extent it is not
prohibited or unenforceable, nor invalidate the other provisions hereof.
28.10 Entire Agreement. This Agreement sets forth all the promises,
agreements, conditions and understandings between PRPA and XXXX relative to the
Terminal, and there are no promises, agreements, conditions or understandings,
either oral or written, between them other than are herein set forth. Except as
otherwise provided herein, no subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon PRPA or XXXX unless made in
writing and signed by both parties hereto and filed with the FMC.
28.11 No Third Party Beneficiaries. This Agreement and all of the
provisions hereof are for the benefit of the parties executing this Agreement,
PPC for the limited extent set forth in Article X and Section 28.13, and the
Commonwealth to the limited extent set forth on the signature page, only, and no
provisions of this Agreement shall be deemed or construed to grant to any other
person or entity any right, power or privilege, or any entitlement to any
benefit, claim or interest under this Agreement, and no other person or entity
is to have any right of action hereunder, except only as set forth in Section
28.3.
28.12 Certain Payments at End of Term. At the expiration or termination
of this Agreement, including any
154
Renewal Periods, either party may set off amounts owed to it hereunder against
amounts owed by it hereunder.
28.13 Releases. (a) The parties acknowledge that the PPC-Xxxx Agreement
remains in full force and effect in its current form and governs and controls
the duties and obligations of the parties with respect to the subject matter
thereof until the amendment thereof on the Effective Date by this Amended and
Restated Lease and Operating Agreement. XXXX and PRPA acknowledge and agree that
XXXX has paid to PRPA all base compensation due and payable under the PPC-Xxxx
Agreement through and including December 15, 1990. Payments of base compensation
due and payable under the PPC-Xxxx Agreement which are based on activity levels
of XXXX during the current lease year thereunder through the Effective Date
hereof shall be paid by XXXX to PRPA on or before the thirtieth (30) day
following the Effective Date. Effective as of the Effective Date and subject to
XXXX'x payments to PRPA as provided in the preceding sentence, PRPA and PPC
(which shall join in this Agreement for the limited purpose of this Section
28.13) hereby release XXXX, and, effective as of the Effective Date, XXXX
hereby releases PRPA and PPC, from any and all liabilities and obligations
arising under the PPC-Xxxx Agreement through the date hereof, except for such
party's indemnification obligations thereunder, and for any and all other
contractual, common law or statutory claims, including but not limited to claims
arising under the Shipping Act of 1984. Such release shall not prevent or
preclude XXXX from impleading PRPA
155
or PPC, filing a cross-claim against PRPA or PPC, or joining or seeking
contribution from PRPA or PPC, in any action or suit brought by a third party,
nor prevent or preclude PRPA or PPC, as the case may be, from impleading XXXX,
filing a cross-claim against XXXX, joining or seeking contribution from XXXX,
in any action brought by a third party.
(b) Immediately prior to the filing of this Agreement with the FMC,
the parties shall cause to be filed with the FMC a Termination of License
Agreement terminating the Portside License.
28.14 Review of Operations. Not less frequently than quarterly, on such
dates and at such times and locations as PRPA may reasonably designate,
representatives of PRPA and XXXX shall meet to review the operations at the
Terminal, the need for the dredging of the berths to particular depths, and the
performance of both parties hereunder.
28.15 Transfer Taxes. XXXX shall pay any and all realty transfer taxes
that may be due and payable in connection with the execution and delivery of
this Agreement.
28.16 Refrigerated Warehouse Release. XXXX hereby releases and agrees
to indemnify, defend and hold PRPA harmless from any and all liability arising
from or caused by a breakdown of the refrigeration system of the Refrigerated
Warehouse or such system's being out of service for any reason whatsoever,
except for willful misconduct by PRPA, its agents or employees.
156
28.17 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute one and
the same instrument. This Agreement shall become binding when any one or more
counterparts hereof individually or taken together shall bear the signatures of
PRPA and XXXX.
156(a)
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
[Corporate Seal] XXXX CARGO SYSTEMS, INC.
Attest: /s/ Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxx
------------------------- ---------------------------------
[Seal] PHILADELPHIA REGIONAL PORT AUTHORITY
Attest: /s/ [illegible] By: /s/ Xxxx X. XxXxx
------------------------- ---------------------------------
Approved as to Form and Legality
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx, Chief Counsel
Philadelphia Regional
Port Authority
Title:
---------------------------------
Office of the Attorney General
of the Commonwealth of
Pennsylvania
Approved as to Propriety and
Sufficiency of Funds
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx X. Xxxxxxx, Comptroller
Philadelphia Regional
Port Authority
157
JOINDER BY PHILADELPHIA PORT CORPORATION
The Philadelphia Port Corporation joins in this Agreement solely for
the purpose of granting to XXXX a release pursuant to Section 28.13.
PHILADELPHIA PORT CORPORATION
By:
---------------------------------
JOINDER BY COMMONWEALTH OF PENNSYLVANIA
The Commonwealth of Pennsylvania joins in this Agreement solely for
the purpose of granting non-disturbance to XXXX pursuant to Section 1.8,
consenting to repairs, restorations, alterations and demolition by XXXX which
PRPA may from time to time approve under Section 7.6 and filling of berths by
XXXX which PRPA may from time to time approve under Section 24.2, consenting to
the construction, reconstruction and demolition by or on behalf of PRPA of
certain improvements described in Section 7.7, and consenting to the
reconstruction and rehabilitation of the Terminal and the Cranes upon a
casualty, and to the use of insurance proceeds for such purpose, as set forth in
Section 13.1.
THE COMMONWEALTH OF PENNSYLVANIA
---------------------------------
---------------------------------
