SECOND AMENDMENT TO PERMIT NO. 827 BETWEEN THE CITY OF LOS ANGELES AND APM TERMINALS PACIFIC LTD. PERMIT NO. 827 between THE CITY OF LOS ANGELES, a municipal
corporation ("City"), acting by and through its Board of Harbor Commissioners ("Board'),
and APM TERMINALS PACIFIC LTD., formerly known as MAERSK PACIFIC, LTD.,
("Tenant"), is hereby amended a second time as follows:
WHEREAS, compensation under the Permit is subject to adjustment under Section 3(h) of the Permit and Section 607 of City's Charter; and ~Perm"it
WHEREAS, City wishes to undertake improvements of certain areas of the
premises, and Te-naht Wishes to receive such improvements; and
WHEREAS, City and Tenant mutually desire to make other necessary and beneficial modifications and amendments to the Permit; NOW, THEREFORE, the Permit is amended as follows:
1. --~~'""Section 1(a), Effective Dateand-=Ferm, is hereby amended to add-{he- ~ following: "The Effective Date of the Second Amendment is the date that it
is executed by the Executive Director following approval by the
Los Angeles City Council. The terms of this Second Amendment shall be
deemed operative as of August 1,2007."
2.
Section 2, Premises. The copy of the Chief Harbor Engineer's drawing
thatis presently attached to Permit No. 827 as Exhibit "A" is deleted and the drawing
attached hereto as Exhibit "A-1" is substituted in its place. For purposes of clarity, on
the effective date of this Second Amendment, the area of the premises is 441.74 acres,
and the MAG (as defined in Section 3(e) of the Permit) is $135,582 per acre of
premises.
3.
Section 3, Compensation, is hereby amended by adding a subsection (q),
which states as follows:
"3(q) TEU Rate, MAG and IRF Compensation Before and After
August 1,2011. Notwithstanding the provisions of Section 3{d)(1), 3{e)(3),
3(f) and 3(h) of this Permit, commencing as of August 1,2007 and
terminating on July 31, 2011, there shall be no increase in the TEU Rates,
per acre MAG or per acre IRF Compensation as detailed on the schedule
attached hereto as Exhibit "B-1."
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"Commencing on August 1, 2011, the TEU Rates, per acre IRF
. Compensation and per acre MAG adjustments shall be increased 7.5% as
detailed on the schedule attached hereto as Exhibit "B-2."
4.
A new Section 3(d)(6) is hereby added, which states:
"3(d)(6) Temporary Conditional Credit for Third-Party Business.
Commencing on May 1, 2008 and terminating on April 30, 2011, Tenant shall
receive a conditional 1.923% credit (the equivalent of 1/52) applicable to the TEU
charges otherwise due and owing to City pursuant to Section 3(d) of this Permit
on TEUs which were caused to be transported to or from the Premises by the
following vessel owner/operators known as: CMA CGM and MSC
(Mediterranean Shipping Company S.A), Orient Overseas Container Line,
Nippon Yusen Kabushiki Kaisha and Hapag-Lloyd AG. The eligibility of TEUs to
receive such credit shall be within the sole and absolute discretion of Executive
Director, and confirmed by bills of lading or other transportation documents
provided by Tenant which identify such TEUs. Within fifteen (15) days following
the end of each compensation year that follows the effective date of this Second
Amendment (and, for compensation years to which this temporary conditional
credit applies which precede the effective date of this Second Amendment, within
fifteen (15) days following such effective date), Tenant shall provide to City a
written list, signed and certified as true and correct by an officer of Tenant
author1zeC:.Ho contractually-bind Tenant~"'·setting forth the container numbef~-~­
vessel arrival date, vessel name, and vessel/owner operator applicable to each
container identified on such list. Such credit shall be rendered by City in .
connection with the reconciliation at the end of each compensation year that
occurs pursuant to Section 3(d)(3).
.
"Tenant acknowledges its obligation, in any andall events, to pay City the
amount of money represented by the applicable MAG in each and every
compensation year under this Permit or any holdover. Tenant further
acknowledges that the amount of money represented by the applicable MAG is
not subject to reduction through ~pplication of offsets, credits or discounts,
including but not limited to those credits and discounts set forth in this Second
Amendment, and that such Second Amendment neither waives nor alters
Tenant's obligation to pay and City's right to receive the full amount of the
applicable MAG in each and every compensation year. As such, as a first
condition, Tenant shall be entitled to take the credits and discounts authorized by
Section 3(d)(6) and otherwise, only to the extent that its actual payments to City,
once such credits and discounts have been applied, exceed the MAG for the
applicable compensation year. For purposes of determining Tenant's entitlement
to any credits or discounts, City, in its sole and absolute discretion, shall
determine whether Tenant's actual payments to City, once such credits and
discounts have been applied, have exceeded the applicable MAG and, if so, the
monetary amount of such excess. Additionally, as a second condition, the credit,
if any, arising under this Section 3(d)(6) must be applied to the compensation
year in which it accrues. If, through application of the foregoing condition or any
other reason, such credit cannot be applied to the compensation year in which it
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accrued, it shall be irrevocably cancelled and forfeited.
"The terms of this Section 3(d)(6) and the Second Amendment that
implements it shall neither be deemed nor treated as a limitation or waiver of any
terms or obligations set forth in this Permit, or any rights or remedies of City
provided in this Permit, in equity, or atlaw."
5.
Section 12(1), Notices, is amended by deleting the phrase "and notice to
Tenant shall be addressed to it at the address set forth above" and inserting in its place
the phrase "and notice to the Tenant shall be addressed to Senior Vice President, APM
Terminals Pacific Ltd., 2500 Navy Way, Building 100, Terminal Island, CA 90731."
6.
Section 6(c), City Improvements, is hereby amended to add the following:
City may make any neces$ary repair or replacement of the
pavement in the event of any failure of such pavement during the first
twenty (20) years of the term of this Permit. City shall not be responsible
for nor required to make any repair or replacement made necessary by
ordinary wear and tear, or required by normal maintenance and repair
activities. A "Pavement Failure" is defined as a pavement condition of
rating level 1 to 3 in the Pavement Elevation Rating System contained in
Exhibit "G-1." Exhibit "G-1 ," Pavement Maintenance Specification,
attached·ta-this Amendment is herebyadded"to and"incorporated by
reference into Permit No. 827 as supplementing, and not replacing,
Exhibit "G." Whether a "Pavement Failure" exists shall be determined by .
the Executive Director in his or her sole and absolute discretion.
"Upon the effective date of this Second Amendment, City shall
immediately commence completion of project design, bid and award of a
construction contract, and construction activities,. based on the scope of
work referenced in Exhibit "G-2". Prior to commencement of construction,
City and Tenant shall agree on a phasing schedule that will take into
consideration the need to maintain terminal operations during
construction. City shall proceed diligently to complete the work by June
30, 2011, however, the parties recognize that the completion date will be
dependent on the permittee's preferences with respect to maintaining
terminal operations. Tenant acknowledges and agrees that it has
reviewed and has approved attached Exhibit "G-2" without objections."
7.
Section 9(a), Maintenance and Restoration, is hereby amended to
re~d:
"Maintenance. City shall institute a harbor-wide maintenance
program outlining all of required minimum maintenance and
documentation requirements that, when published, will provide specific
criteria as to standards of maintenance for specific items referenced in this
Section. Tenant shall fully comply with such maintenance program."
8.
Section 11 (b), Conditions on Assignment. is hereby amended as follows:
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a. In the first sentence, delete "fifteen (15)" and replace with "nine (9)".
b. The following phrase shall be added following the semicolon at the end of
Section 11 (b)( 1): "or for a proposed sublease of a portion of 50% or less of
the premises, the proposed sublessee shall demonstrate to the satisfaction of
City that its financial strength and net worth are of comparable 'risk toTenant
at the time of the proposed sublease;!!
c. The following phrase shall be added following the semicolon at the end of
Section 11 (b)(2): "or for a proposed sublease of a portion of 50% or less of
the premises, the proposed sublessee has sustained a container throughput
volume in average TEUs per acre for the most recent three (3) year period
which is comparable to Tenant's average TEUs per acre for the same three
(3) year period immediately prior to the proposed sublease;"
Except as amended herein, all remaining terms and conditions of Permit No. 827
and the written Guaranty of Permit No. 827 remain in full force and effect. In the event
of any conflict between the terms of Permit No. 827 and this Second Amendment, the
provisions of this Second Amendment shall prevail.
IN WlpNE-SS~WHEREOF, the'parties hereto-have executed this Second· ..... -.~..-"..
Amendment to Permit No. 827 between the City of Los Angeles and APM Terminals
Pacific Ltd. on the dates to the left of their respective signatures.
THE CITY OF LOS ANGELES, by its
Board of Harbor Commissioners
Dated: _ _ _ _ _ _ _, 2010
By _ _ _ _ _ _ _ _ _ _ _ _ ____
Executive Director
Attest _________________
Secretary
APM TERMINALS PACIFIC LTD. (formerly
known as MAERSK PACIFIC, LTD.)
Dated: _ _ _ _ _ _ _, 2010
By _______________________
(Print/type name and title)
Attest ________________
(Print/type name and title)
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APPROVED AS TO FORM
_ _ _ _ _ _ _ _ _, 2010
CARMEN A. TRUTANICH, City Attorney
By _ _ _ _ _ _ _ __
STEVEN Y. OTERA, Deputy
SYO/JMC/dls
7/28/10
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