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Exhibit 10.1

 

Confidential Treatment Requested.  Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information. Omissions are designated as “[Redacted].”

 

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Execution Version

 

LEASE

 

between

 

ENERGY XXI GIGS SERVICES, LLC,

 

as Tenant,

 

and

 

GRAND ISLE CORRIDOR, LP

 

as Landlord

 

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TABLE OF CONTENTS

 

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EXHIBITS

 

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LEASE

 

This Lease (as amended, restated, replaced, supplemented, or otherwise modified from time-to-time, this “Lease”) is dated as of June 30, 2015 (the “Effective Date”) and is made by and between:

 

 

and

 

 

RECITALS

 

 

 

AGREEMENT

 

In consideration of the rents and the other terms, covenants and conditions set forth in this Lease, Landlord leases to Tenant and Tenant leases from Landlord all of Landlord’s rights, title, and interests in and to the Leased Property (defined below) upon the following terms and conditions:

 

ARTICLE I

DEFINITIONS AND INTERPRETIVE PROVISIONS

 

 

“Actual Knowledge” means (a) with respect to any EXXI Entity Person, as of any date, the then-current actual knowledge of the Chief Accounting Officer, Chief Operating Officer, Chief Financial Officer, and Senior Vice President (Legal) of EXXI Parent, or, if the title of any such officer changes, an officer of EXXI Parent with an equivalent title, as of such date, and not any implied, imputed or constructive knowledge of such individuals, and without any independent investigation or inquiry having been made or any implied duty to investigate, make any inquiries or review any information, (b) with respect to Grand Isle Corridor, as of any date, the then-current actual knowledge of the Chairman of the Board, Chief Executive Officer and Chief Accounting Officer of CorEnergy, or, if the title of any such officers changes, an officer of CorEnergy with an equivalent title, as of such date, and not any implied, imputed or constructive knowledge of such individuals, and without any independent investigation or inquiry having been made or any implied duty to investigate, make any inquiries or review any information, and

 

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 (c) with respect to any other Person, as of any date, the then-current actual knowledge of the Responsible Officers of such Person as of such date, and not any implied, imputed or constructive knowledge of such individuals, and without any independent investigation or inquiry having been made or any implied duty to investigate, make any inquiries or review any information.  The foregoing qualification of Actual Knowledge shall in no event give rise to any personal liability on the part of any such Person or any other officer or employee of such Party or its Affiliates on account of any breach hereunder.

 

“Actual Oil Price” means the average of the following price for each day (excluding weekends and holidays) of any calendar month or portion thereof during the Term:  the OIL-ICE-BRENT price per barrel of Brent crude oil published by the Intercontinental Exchange (“ICE”) of the “First Nearby Month Futures Contract” for delivery on such day, stated in U.S. dollars and rounded to three (3) decimal places, as published by ICE such day (or, if such price is not available for any particular trading day, an alternative reference price for Brent crude oil, as agreed upon by the Parties, acting reasonably).

 

“Actual Oil Revenue” means, for any calendar month or portion thereof during the Term, Actual Oil Volume multiplied by Actual Oil Price.

 

“Actual Oil Volume” means, for any calendar month or portion thereof during the Term, the total volume (bbls) of oil produced by or on behalf of Tenant or any of its Affiliates physically transported through the Liquids Transportation System, measured by the Lease Automatic Custody Transfer unit meter located at ExxonMobil Pipeline Company’s Grand Isle Station (or, if such meter is not available for such purpose, at such point as the Parties agree, acting reasonably).  For the avoidance of doubt, Actual Oil Volume shall include the oil physically transported through the Liquids Transportation System that is produced by or on behalf of Tenant or its Affiliates (but shall not include any volumes produced by or on behalf of owned by third parties), including any oil produced by or on behalf of by Tenant or its Affiliates received into the Liquids Transportation System from Additional Lines, if any, even if such Additional Lines do not become part of the Leased Property as provided in Section 10.1.

 

“Additional Lines” means such additional easements and rights of way and such additional pipelines (including gathering lines, distribution, or sales lines) and appurtenances that connect to the Leased Property but that are, in all cases, either upstream or downstream of the Liquids Transportation System, as Tenant may from time-to-time desire or be required to use, acquire or make.

 

“Additional Rent” means all amounts, costs, expenses, Losses, liabilities, indemnities and other monetary obligations (including Tenant’s obligation to pay any interest at the Default Interest Rate hereunder) which Tenant is required to pay pursuant to the terms of this Lease, other than Base Rent.

 

“Adverse Party” means, as of any date, (a) any Person who (i) is a substantial investor in Tenant or any Affiliate of Tenant, and (ii) has a pending proposal to merge with, acquire or takeover Tenant or any Affiliate of Tenant, which merger, acquisition or other takeover shall not have been approved by the board of directors of Tenant or such Affiliate, or otherwise be perceived by Tenant or such Affiliate to be hostile to the management of Tenant or such

 

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 Affiliate, (b) any Affiliate of each Person in subsection (a), and (c) any Person that has a net short position with respect to at least one-half of one percent (0.5%) of, or has, within the last twelve (12) months, made public adverse comments about, the stock of Tenant Guarantor or any Affiliate of Tenant.  Within ten (10) Business Days after written request therefor from Landlord, Tenant shall advise Landlord if a Person(s) named by Landlord in such notice is an Adverse Party within the scope of this definition.

 

“Affiliate” has the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act and, with respect to a Person, includes any Subsidiary of that Person.

 

“Aggregate Minimum Rent” has the meaning given in Section 23.2(a)(i)(E).

 

“Agreed FMV Rent” has the meaning given in Section 25.1(b).

 

“Applicable Legal Requirements” mean all statutes, ordinances, regulations, procedures and codes of any Governmental Authority having jurisdiction, including, without limitation, zoning, health, fire, safety and building codes, applicable to the Leased Property (or portion thereof at issue), applicable to Tenant (with respect only to Tenant’s (rather than Landlord’s) obligations hereunder regarding compliance with Applicable Legal Requirements), or applicable to Landlord (with respect only to Landlord’s (rather than Tenant’s) obligations hereunder regarding compliance with Applicable Legal Requirements).

 

“Auditor’s Report” means, with respect to financial statements or information of Tenant Guarantor or Tenant required to be delivered pursuant to Section 26.7(b)(ii), (a) the written report of the auditor for Tenant Guarantor or Tenant, as applicable, with respect to such financial statements or information (excluding any auditor’s report on internal controls), manually executed by such auditor, and (b) a manually executed consent of such auditor to the inclusion of such auditor’s report (and any auditor consent with respect thereto) in filings to be made by Landlord or Landlord Guarantor with the Securities and Exchange Commission.

 

“Base Oil Revenue” means for each calendar month during the Initial Term, the amount specified for such month on Exhibit A, prorated for any partial calendar month during the Initial Term.

 

“Base Rent” means (a) during the Initial Term, for any calendar month (or portion thereof) during the Initial Term, Minimum Rent plus Variable Rent for such calendar month (or portion thereof), and (b) during the Renewal Term, the amount determined pursuant to Section 25.1 hereof.

 

“Beneficial Owner” a Person (“such Person”) shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own” and have “beneficial ownership of,” any equity interests or other securities which:

 

 

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provided, however, that (A) if such Person is engaged in business as an underwriter of securities such Person shall not be deemed the “Beneficial Owner” of or to “beneficially own” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting, (B) the existence of rights of first bid, rights of first refusal, pre-emptive rights, drag-along rights, tag-along rights or other similar rights, if any, set forth in the Landlord’s Governing Documents shall not themselves cause such Person to be deemed the Beneficial Owner of Landlord Equity Interests held by one or more other Equity Investors, (C) such Person shall not be deemed the “Beneficial Owner” of or to “beneficially own” any securities solely by virtue of holding a lien on such securities to secure Indebtedness, and (D) such Person shall be deemed to be a “Beneficial Owner” of or to “beneficially own” any securities, whether or not publicly traded, only if such Person owns more than ten percent (10%) of all such securities outstanding.

 

“BOEM” means the Bureau of Ocean Energy Management, an agency within the U.S. Department of the Interior.

 

“BSEE” means the Bureau of Safety and Environmental Enforcement, an agency within the U.S. Department of the Interior.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York or Houston, Texas, are authorized or required by law to remain closed.  If the last day of any time period under this Lease, or the last day for performance of any obligation, or for giving any notice, or for taking any other action under this Lease falls on a day that is not a Business Day, then the last day of such time period shall be extended to the first day thereafter that is a Business Day.

 

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“Capital Improvements” means such alterations, additions and replacements to any of the Improvements or Personal Property as Tenant may from time-to-time desire or be required to make.

 

“Casualty Date” means the date fire or other casualty damages any portion of the Leased Property.

 

“Casualty Proceeds” means the insurance proceeds actually received by, or that the insurer has agreed in writing are payable to, Tenant with respect to a fire or other casualty of the Leased Property, but excluding from such insurance proceeds (a) Tenant’s reasonable third party costs and expenses (including reasonable attorneys’ fees and expenses) incurred in collecting same, (b) as of any date, proceeds previously paid to Tenant and used to repair, restore, replace, or remediate (as to environmental matters) the Leased Property as a result of such fire or other casualty, and (c) the proceeds of any business interruption or similar insurance with respect to such fire or other casualty.

 

“Casualty Response Notice” has the meaning assigned to such term in Section 15.1(c).

 

“Casualty Termination Date” has the meaning assigned to such term in Section 15.1(d).

 

“Code” means Title 11 of the United States Code, 11 U.S.C. Sec. 101 et seq., as amended.

 

“Competitor” means, as of any date, (a) any Person engaged in the business of exploration and/or production of oil or gas, and (b) any Affiliate of such Person.

 

“Confidential Information” means (a) all Proprietary Information, and (b) all other information furnished to Landlord by or on behalf of Tenant, Tenant Guarantor or any of their respective Affiliates prior to, on or after the Effective Date and designated as confidential.  Notwithstanding the foregoing, Confidential Information shall not include information that is publicly available other than as a result of actions in violation of Section 26.10 hereof.

 

“Control” or any derivation thereof has the meaning set forth in Rule 12b-2 under the Exchange Act.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“CorEnergy” means CorEnergy Infrastructure Trust, Inc., a Maryland corporation.

 

“Corrective Action” means any investigation, study, assessment, evaluation, sampling, testing, monitoring, containment, response or response action, removal or removal action, disposal, closure, corrective action, remediation or remedial action (regardless of whether active or passive), natural attenuation, restoration, bioremediation, response, repair, corrective measure, cleanup, or abatement that is required under any Environmental Law.

 “Current Lease Term End” means the end of the then-current Term assuming that this Lease will not be renewed at the end thereof.

 

“Debtor Relief Law” means the Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership,

 

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 insolvency, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions from time-to-time in effect and affecting the rights of creditors generally.

 

“Default Interest Rate” means, for any period, (a) with respect to any obligation of any Tenant, Tenant Guarantor, or their respective Affiliates hereunder, if, as of the date of such Tenant’s acquisition of the leasehold estate under this Lease, either such Tenant or Tenant Guarantor is an Investment Grade Person, the lesser of (A) the annual rate of two percent (2%) over the average base, non-default rate of interest for such period (and without imputation of any gross-up components or default interest), under such Person’s Indebtedness which is Material Debt and which is held by a third party not an Affiliate of such Person, or, if such Person does not have any such Material Debt, then the Prime Rate for such period, and (B) the highest rate permitted by Applicable Legal Requirements, and (b) with respect to any obligation of (i) Grand Isle Corridor, CorEnergy or any of their respective Affiliates, and (ii) any other Landlord or Landlord Guarantor hereunder or their respective Affiliates if, as of the date of such Landlord’s acquisition of the leasehold estate under this Lease, either such Landlord or Landlord Guarantor is an Investment Grade Person, the lesser of (A) the annual rate of two percent (2%) over the average base, non-default rate of interest for such period (and without imputation of any gross-up components or default interest), under the Landlord Indebtedness of such Person which is held by a third party not an Affiliate of such Person or, if such Person does not have any such Landlord Indebtedness, then the Prime Rate for such period, and (B) the highest rate permitted by Applicable Legal Requirements, and (c) with respect to any other Tenant, Tenant Guarantor, Landlord or Landlord Guarantor, and their respective Affiliates, with respect to their respective obligations under or related to this Lease, the lesser of (i) the annual rate of six percent (6%) over the Prime Rate for such period, and (ii) the highest rate permitted by Applicable Legal Requirements.

 

“Designation Notice” has the meaning given in Section 25.1(c).

 

“Discount Rate” means seven percent (7%).

 

“Disqualified Person” means, as of any date, each Competitor and each Adverse Party; provided, however, that (a) for so long as Landlord is owned, in whole or in part, by CorEnergy or by direct or indirect Subsidiaries of CorEnergy, then no direct or indirect wholly-owned Subsidiary of CorEnergy shall be a Disqualified Person for purposes of this Lease, and (b) a Disqualified Person shall not include any banking and lending company that (i) is a Landlord Lender (in its capacity as such, or as the holder of an Equity Investor Interest or Landlord Interest as a result of enforcing any Permitted Landlord Lien) and (ii) would, but for this clause (b), be a Disqualified Person because it is an Affiliate of another Disqualified Person.

 

“Due Date for Other Additional Rent” has the meaning given in Section 5.4.

 

“Easement Land” means the land underlying, subject to and covered by the Right of Use Agreements.

 

“Effective Date” has the meaning specified in the preamble.

 

“Effective Date Recorded Documents” means all restrictions and charges created or imposed pursuant to documents and instruments recorded in the Official Public Records against

 

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the Leased Property as of the time of conveyance of the Leased Property by EXXI USA to Landlord pursuant to the Purchase Agreement.

 

“Enhanced Response” has the meaning given in Section 22.2(a).

 

“Environmental Laws” means all applicable U.S. federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, and other legally enforceable requirements relating to (a) pollution or protection of the environment or natural resources or human health and safety (to the extent such health and safety relate to human exposure to Hazardous Substances), (b) any Release into the environment of, or any exposure to, any Hazardous Substances, or (c) the generation, manufacture, processing, distribution, use, treatment, storage, transport, disposal or handling of any Hazardous Substances; including the federal Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act, the Emergency Planning and Community Right-to-Know Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Oil Pollution Act of 1990, the Outer Continental Shelf Lands Act, the Federal Hazardous Substances Transportation Law, the Marine Mammal Protection Act, the Endangered Species Act, the National Environmental Policy Act, and the Occupation, Safety and Health Act, as each is amended during the Term.

 

“Equity Investor” means any Person that beneficially owns any Equity Investor Interest.

 

“Equity Investor Interest” means each beneficial ownership interest greater than ten 10% in the equity of the Landlord.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Estimates” has the meaning given in Section 25.1(c).

 

“Evaluation Period” has the meaning given in Section 10.1(d)(ii)(A).

 

“Excess Oil Revenue” means, for any calendar month (or portion thereof) during the Term, the greater of (a) zero or (b) Actual Oil Revenue for such month (or portion thereof) minus Base Oil Revenue for such month (or portion thereof).

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Excluded Matters” has the meaning given in Section 6.3.

 

“Exclusions from Tenant’s Indemnification Obligations” has the meaning given in Section 21.1(a).

 

“EXXI Entity Person” means EXXI GIGS and any Affiliate of or successor to EXXI GIGS so long as EXXI GIGS or such Affiliate or successor is Controlled, directly or indirectly, by EXXI Parent or a Permitted EXXI Parent Successor.

 

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“EXXI GIGS” means Energy XXI GIGS Services, LLC, a Delaware limited liability company, the initial Tenant under this Lease; however, the term EXXI GIGS shall not include any successor or assignee of the interest of EXXI GIGS hereunder.

 

“EXXI Parent” means Energy XXI Ltd, a Bermuda company, an initial Tenant Guarantor; however, the term “EXXI Parent” shall not include any successor Tenant Guarantor under this Lease.

 

“EXXI USA” means Energy XXI USA, Inc., a Delaware corporation.

 

“Fair Market Rent” means, with respect to the Leased Property during the proposed Renewal Term (or, for purposes of Landlord’s Lease termination remedy during the continuance of a Level 1 Tenant Default, during the portion of the Term which would have occurred after termination of this Lease as a result of such Level 1 Tenant Default), a rental rate that is a fair market value rental rate that would apply assuming that the Leased Property is offered on the open market as a rental property for the proposed Renewal Term (or, with respect to termination of this Lease by Landlord as a result of a Level 1 Tenant Default, during the portion of the Term which would have occurred after such termination of this Lease), taking into account all relevant factors.  The Fair Market Rent will be assumed to be a monthly rent payable in advance on the first day of each calendar month.  The Fair Market Rent may, but is not required to, follow the model of the current rent structure (i.e., using a Base Rent formulation).

 

“Fair Market Rent Determination Notice” has the meaning given in Section 25.1(c).

 

“Fair Market Value” or “fair market value” means the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.

 

“Federal ROWs” means the federal Outer Continental Shelf pipeline rights-of-way included in the Right of Use Agreements, as specified in Exhibit B.

 

“Financing Notice” has the meaning given in Section 10.1(d)(ii)(A).

 

“Flow and Volume Information” means the flow and volume information of the type to be furnished by Tenant pursuant to Section 26.7(b)(i).

 

“FMV Estimates” has the meaning given in Section 25.3(g).

 

“Force Majeure” has the meaning given in Section 26.2.

 

“GAAP” means generally accepted accounting principles in effect from time-to-time in the United States of America.

 

“Grand Isle Corridor” means Grand Isle Corridor, LP, a Delaware limited partnership, the initial Landlord under this Lease; however, the term Grand Isle Corridor shall not include any successor or assignee of the interest of Grand Isle Corridor hereunder.

 

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“Good Condition and Repair” means good condition and repair consistent with (a) Tenant’s past practices and industry standards, and (b) the condition and repair that a reasonably prudent operator would maintain for a system of a similar size, nature, use, age and location as the Liquids Transportation System.

 

“Governing Documents” means (a) with respect to a Person that is a limited partnership, its limited partnership agreement and certificate of limited partnership, (b) with respect to a Person that is a general partnership, its partnership agreement, (c) with respect to a Person that is a limited liability company, its limited liability company agreement, together with its certificate of formation and any operating agreement, regulations and similar agreements or documents of such Person, (d) with respect to a Person that is a corporation, its articles of organization and bylaws, together with any shareholders agreement and similar agreements and documents of such Person, (e) in the case of any other form of entity, its organizational agreements, certificates and documents, and (f) in each case, with respect to subsections (a)-(e), as such agreements, certificates and documents may be amended or restated from time-to-time, subject however to the limitations on amendments set forth herein.

 

“Governmental Authority” means any governmental authority, agency, department, commission, bureau, board, instrumentality, court or quasi-governmental authority having jurisdiction or supervisory or regulatory authority over any of the Leased Property, applicable to Tenant (with respect only to Tenant’s (rather than Landlord’s) obligations hereunder regarding compliance or interaction with Governmental Authority), or applicable to Landlord (with respect only to Landlord’s (rather than Tenant’s) obligations hereunder regarding compliance or interaction with Governmental Authority).

 

“Hazardous Substances” means (i) any substance that is regulated as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance under any Environmental Law (ii) any petroleum, petroleum hydrocarbons, petroleum products and petrochemical products, any crude oil or any components, fractions or derivatives thereof, any oil or natural gas exploration or production waste, and any natural gas, synthetic gas, and any mixtures thereof, as each is regulated under Environmental Law, and (iii) radioactive materials or polychlorinated biphenyls, as each is regulated under Environmental Law.

 

“Impositions” mean, collectively, all charges, fees and expenses imposed on the Leased Property under any Easement or any other Record Agreement during and accruing with respect to the Term, but excluding in any event all Excluded Matters.

 

“Improvements” means all of the improvements and fixtures used as part of the Liquids Transportation System, including: any and all surface or subsurface pipelines; surface or subsurface machinery and equipment, line pipe, pipe connections, fittings, flanges, welds, other interconnections, and valves (including subsea tie-in valves); control and monitoring equipment; cathodic or electrical protection units; by-passes; regulators; drips; brine pumps, salt water disposal pumps, and oil pumps; salt water filter systems; treating, dehydration, separation, processing equipment; crude oil and produced water storage tanks; gas compressors; vapor recovery units and associated gas lines; towers and storage sheds; gas and electric fixtures; electrical generators, fuel tanks, switchgear, transformers, and switches; and motor control center, in each case, that are downstream of the inlet flange to each pipeline pig launcher trap on

 

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oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, SP 93A, and MC 280A in the Gulf of Mexico to, and including, the Grand Isle terminal facility on the Land, including any of the foregoing described on the attached Exhibit C.  The term “Improvements” includes all of the improvements and fixtures which are a part of the Liquids Transportation System as described herein, regardless of whether they are included or properly described in Exhibit C.

 

“Inception Date Present Value” has the meaning given in Section 23.2(a)(i)(E).

 

“Indebtedness” means with respect to a Person, such Person’s (a) liabilities for borrowed money, (b) liabilities for the deferred purchase price of property acquired by it (excluding accounts payable arising in the ordinary course of businesses), (c) obligations that are required to be accounted for as capital leases on a balance sheet under GAAP (and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP), (d) agreements to mitigate interest rate risk in connection with other Indebtedness, and (e) guaranty obligations with respect to liabilities of another Person of the type described in the preceding subsections (a)-(d).

 

“Indemnified Party” means a Landlord Indemnified Party or a Tenant Indemnified Party, as applicable.

 

“Indemnifying Party” has the meaning given in Section 21.3.

 

“Independent Appraiser” means an independent valuation firm with at least five (5) years’ experience in undertaking valuations of oil or other commodity pipeline properties.

 

“Initial Term” means that period beginning on the day after the Effective Date and ending on the last day of the one hundred thirty-second (132^nd) full calendar month thereafter.

 

“Interconnection Agreements” means agreements pursuant to which the Liquids Transportation System, or any component thereof, is interconnected to other pipeline systems, facilities, or assets, including the agreements listed on Exhibit D.

 

“Investment Grade Person” means (a) a Person that has a long term issuer corporate credit rating or long-term unsecured debt rating of “BBB-” or higher from Standard & Poor’s or Fitch, or “Baa3” or higher from Moody’s Investor Service Inc., or (b) an Affiliate of such Person whose obligations under this Lease are guaranteed by such Person.

 

“Involuntary” means, with respect to a Transfer or Lien, any transaction, proceeding or action by or in which Landlord or an Equity Investor is involuntarily deprived or involuntarily divested of any right, title or interest in and to its applicable property, rights or interests (including any seizure under levy of attachment or execution, transfer in connection with bankruptcy or other court proceeding to a trustee or receiver or other officer or agency or any transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property).

 

“Landlord” has the meaning given in the preamble.

 

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“Landlord Environmental Liabilities” means Losses arising or resulting from any of the following: (a) the presence, use, storage, generation, transportation or Release of any Hazardous Substances on, under, from or at the Leased Property, or any portion thereof, or at any real property offsite the Leased Property where such Hazardous Substances from such Leased Property have been transported or disposed or arranged for transport or disposal, in each case during the Term and to the extent caused by or resulting from the negligence, gross negligence or willful misconduct of Landlord, any other Landlord Party or any Landlord Lender and for which Tenant or any other Tenant Party or Landlord, any other Landlord Party or any Landlord Lender has or may have any legal obligation, (b) allegations made in writing by a third party that is neither Tenant nor another Tenant Party (but only so long as neither Tenant nor any Tenant Party has voluntarily initiated contact with such third party and affirmatively caused such third party to raise such allegation unless such contact is required to be made by Tenant or any other Tenant Party under Environmental Law or such allegation is required to be made by such third party under Environmental Law) regarding the presence, use, storage, generation, transportation or Release of any Hazardous Substances on, under, from or at the Leased Property, or any portion thereof, or at any real property offsite the Leased Property where such Hazardous Substances from such Leased Property have been transported or disposed or arranged for transport or disposal, in each case, during the Term and for which Tenant or any other Tenant Party or Landlord, any other Landlord Party or any Landlord Lender has or may have any legal obligation, to the extent caused by or resulting from the negligence, gross negligence or willful misconduct of Landlord, any other Landlord Party or any Landlord Lender, or (c) any violation of Environmental Laws occurring during the Term at or affecting any portion of the Leased Property and for which Tenant or any other Tenant Party or Landlord, any other Landlord Party or any Landlord Lender has or may have any legal obligation, to the extent caused by or resulting from the negligence, gross negligence or willful misconduct of Landlord, any other Landlord Party or any Landlord Lender; provided, however, that the term “negligence” as used in this definition shall not include negligence imputed as a matter of law to Landlord solely by reason of Landlord’s failure to act in respect of matters to the extent such matters are or were the sole obligation of Tenant under this Lease or solely as a result of Landlord’s ownership of the Leased Property.

 

“Landlord Equity Interests” means the equity interests issued by Landlord including, as applicable, any general or limited partnership interests, limited liability company membership interests, common or preferred stock, or other interest which would be classified as equity on Landlord’s balance sheet under GAAP and any right to acquire such equity interests in Landlord, including upon conversion or exercise of securities (but, for clarity, not including the right to acquire such equity interests by enforcing any pledge of Landlord Equity Interests to secure Landlord Indebtedness).  References herein to a percentage of Landlord Equity Interests means Landlord Equity Interests which confer on the holder thereof the right to vote the applicable percentage of votes for the election of directors or a similar governing body, or to receive the applicable percentage of dividends, distributions, including liquidating distributions or other payments with respect to the Landlord Equity Interests.

 

“Landlord Equity Interest Owner” means each owner of a Landlord Equity Interest.

 

“Landlord Event of Default” has the meaning given in Section 23.3.

 

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“Landlord Guarantor” means CorEnergy and any successor Landlord Guarantor (i) with a tangible net worth of $50,000,000 and (ii) that executes a Landlord Guaranty, until CorEnergy or any such successor Landlord is released from further liability upon a Permitted Sale as provided in Section 17.5(b).

 

“Landlord Guaranty” means that certain Landlord Guaranty executed by CorEnergy and dated as of the Effective Date and any subsequent Landlord Guaranty executed after the Effective Date and in substantially the form of Landlord Guaranty attached as Exhibit E unless and until the Landlord Guarantor under such Landlord Guaranty is released to the extent provided in Section 17.5(b) upon a Permitted Sale.

 

“Landlord Indebtedness” means Indebtedness (a) of Landlord (which, for clarity, may also be Indebtedness of one or more Affiliates of Landlord) or (b) secured by all or any portion of the Landlord Interests or the Landlord Equity Interests.

 

“Landlord Indemnified Parties” means Landlord, Landlord Guarantor and their respective Related Parties (solely in their capacity as such), and permitted successors and assigns of any of the foregoing, including any permitted successors by merger, consolidation or acquisition of all or substantially all of the Landlord’s rights under this Lease.

 

“Landlord Interests” means (a) all or any portion of Landlord’s right, title and interest in and to the Leased Property, and (b) all or any portion of Landlord’s right, title and interest under this Lease.

 

“Landlord Lease Transaction” means a transaction pursuant to which Landlord enters into a lease or other agreement or arrangement with respect to the use or occupancy by a third party of all or any portion of the Leased Property.

 

“Landlord Lender” means (a) any holder of Landlord Indebtedness (including any Lien on any of the Landlord Interests or Landlord Equity Interests) or (b) any agent or trustee for any such holder.

 

“Landlord Loan Documents” means the agreements and instruments evidencing or governing Landlord Indebtedness.

 

“Landlord Majority Owner” means any Person (a) that is not (i) an individual or (ii) a Disqualified Person; (b) whose tangible net worth, or the tangible net worth of an Affiliate providing an appropriate guarantee, both immediately before and after giving effect to the applicable transfer, is at least $50,000,000 determined in accordance with GAAP, provided, that, such Person or such Affiliate having such tangible net worth guarantees (i) all of Landlord’s obligations under this Lease, and (ii) the obligations, if any, of such Person under the SNDA to which such Person is subject; and (c) that owns or controls, at all times, over fifty percent (50%) of the Lease Rights.

 

“Landlord Observer” has the meaning given in Section 23.2(b)(vii).

 

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“Landlord Parent” means (a) for so long as Grand Isle Corridor is the Landlord, CorEnergy, and (b) for so long as any other Person is the Landlord, such Person’s ultimate parent company.

 

“Landlord Party” means Landlord, any Equity Investor, and their respective officers, employees, agents, servants, or assignees.

 

“Lease” has the meaning given in the preamble.

 

“Lease Assignment” means a Transfer by Tenant of its interest under this Lease or its interest in the Leased Property hereunder.

 

“Lease Rights” means the rights to vote on, consent to, or approve of decisions made by Landlord with respect to actions, decisions, approvals, waivers, consents, declarations of default, exercise of remedies or other matters under this Lease, whether through ownership of securities, the ability to exercise voting power, by contract, arrangement, understanding, course of conduct or otherwise, but not including veto rights held by passive minority investors.

 

“Leased Property” means the Liquids Transportation System, the Personal Property, and the Interconnection Agreements.

 

“Level 1 Landlord Default” means (a) any Landlord Event of Default under Sections 23.3(c), 23.3(f), 23.3(g), 23.3(i) or 23.3(j) and (b) any Landlord Event of Default arising out of a breach of Article XI or Section 26.10.

 

“Level 1 Tenant Default” means any Tenant Event of Default described in Sections 23.1(a), 23.1(b), 23.1(d), 23.1(g), 23.1(h), 23.1(j), 23.1(k), or 23.1(l). 

 

“Lien” means any mortgage lien, deed of trust lien, Tax lien, deed to secure debt, vendor’s lien, security interest, pledge, collateral assignment, mechanic’s or materialman’s lien, or other similar instruments and all restatements, modifications, amendments, consolidations, extensions, renewals or substitutions thereto or thereof.

 

“Liquids Transportation System” (a) means, generally, the system of pipelines, storage tanks, collection and separation facilities, salt water disposal wells and facilities, and related properties, facilities, equipment and rights, as highlighted or otherwise identified on Exhibit F, as such system exists as of the Effective Date and as it may be subsequently modified as permitted by this Lease, that is capable of (i) transporting, collecting, separating, storing, and delivering for sale or transport oil produced from oil wells located in the Gulf of Mexico, and (ii) transporting, collecting, separating, and disposing of salt water associated with the production of such oil, and (b) includes, specifically, the Land, the Right of Use Agreements, and the Improvements.  The Liquids Transportation System begins at the inlet flange to each pipeline pig launcher trap on oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, SP 93A, and MC 280A in the Gulf of Mexico, extends through an interconnected system of pipelines and subsea tie-in valves to the collection, separation equipment, storage tanks, disposal wells, and pipelines located at the Grand Isle terminal facility on the Land, and includes the pipeline from such terminal facility to the interconnection point under the Interconnection Agreement, dated

 

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December 17, 2010, with ExxonMobil Pipeline Company (as such agreement may be amended or replaced from time to time).

 

“Loss” or “Losses” means mean any actual losses, costs, expenses (including court costs, reasonable fees and expenses of attorneys, technical experts and expert witnesses and the cost of Corrective Action), liabilities, damages, demands, suits, claims, and sanctions of every kind and character (including civil fines) arising from, related directly or indirectly or reasonably incident to, matters indemnified against, excluding however all of the following:

 

 

 

 

 

 

“Louisiana ROW” means the State of Louisiana right-of-way included in the Right of Use Agreements, as specified in Exhibit B.

 

“Lowest Cost Response” shall mean the Corrective Action response required or allowed under Environmental Laws that addresses Hazardous Substances present at the lowest cost (considered as a whole taking into consideration any negative impact such response may have on the business conducted on the property and any potential additional costs or liabilities that may arise as a result of such response) as compared to any other response that is consistent with Environmental Laws.  Taking no action shall constitute the Lowest Response Cost if, after investigation, taking no action is determined to be consistent with Environmental Laws.  If

 

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taking no action is not consistent with Environmental Laws, the least costly non-permanent remedy (such as mechanisms to contain or stabilize Hazardous Substances including caps, dikes, encapsulation, leachate collection systems, etc.) shall be the Lowest Cost Response, provided that such non-permanent remedy is consistent with Environmental Laws and less costly than the least costly permanent remedy (such as excavation and removal of soil).

 

“LTS Land” is described in the attached Exhibit G.

 

“Material Adverse Event” means any event or circumstance resulting in a material adverse effect on (a) the ability of Tenant to perform the monetary and other material obligations under this Lease, or (b) the ownership, financial condition or operation of the Leased Property taken as a whole.

 

“Material Amendment” means (a) with respect to Section 25.3 hereof, (i) any decrease in the purchase price; (ii) any change in the identity of the direct or indirect owners of the proposed purchaser; (iii) any change in the Landlord Interests included in the Transfer that is the subject of such ROFR rights of Tenant, or (iv) any other change in the terms of the Transfer that, taken together with any other changes after the relevant ROFR Asset Sale Notice, results in economic or business terms of the relevant Transfer that are materially more favorable to the proposed purchaser than the terms first disclosed to Tenant, and (b) with respect to Section 25.4 hereof, (i) any decrease in the annual rent for the Leased Property; (ii) any change in the identity of the direct or indirect owners of the proposed tenant, licensee or subtenant; or (iii) any other change in the terms of the Landlord Lease Transaction that, taken together with any other changes after the relevant ROFR Lease Notice, results in economic or business terms of the relevant Landlord Lease Transaction that are materially more favorable to the proposed tenant, licensee or subtenant than the terms first disclosed to Tenant.

 

“Material Debt” means, (a) with respect to any Tenant who is an Investment Grade Person or whose Affiliate is a Tenant Guarantor that is an Investment Grade Person, in each case at the time such Person became the Tenant, Indebtedness of Tenant or Tenant Guarantor, the principal balance of which is in excess of $100,000,000, and (b) with respect to any other Tenant, Indebtedness of Tenant or Tenant Guarantor, the principal balance of which is in excess of $20,000,000.

 

“Minimum Rent” means (a) for each calendar month during the Initial Term, the amount of rent specified for such month on Exhibit A, prorated for any partial calendar month during the Term, and (b) during the Renewal Term, the amount determined pursuant to Section 25.1 hereof.

 

“Multi-Platform Access Agreement” means the Multi-Platform Pipeline Connection and Access Agreement by and between Landlord and Energy XXI GOM, LLC, dated as of the date hereof and attached hereto as Exhibit H in respect of (i) oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, and SP 93A in the Gulf of Mexico and (ii) the Connection Points specified therein.

 

“Non-Consent Matters” means a change of direct or indirect ownership of Tenant as a result of a merger, consolidation, reorganization, sale, distribution, contribution or other transfer of assets or equity interests, joint venture, or public offering of common stock or other equity

 

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interests, provided that following such change, Tenant and the Person that owns all or substantially all of the oil production assets and related rights in connection with which the Leased Property is used either are the same Person or are Affiliates.

 

“Non-Cash Consideration” has the meaning given in Section 25.3(g).

 

“Non-Cash Consideration Value” has the meaning given in Section 25.3(g).

 

“Non-Separable Addition” has the meaning given in Section 10.1(b).

 

“Notice” has the meaning given in Section 24.1.

 

“Notice of Lease” means the Notice of Lease in the form attached to this Agreement as Exhibit I.

 

“Notice of Non-Separable Addition” has the meaning set forth in Section 10.1(b).

 

“Notice of Separable Addition” has the meaning given in Section 10.1(c).

 

“O&M Agreement” means the Operation and Maintenance Services Agreement in the form attached hereto as Exhibit J.

 

“Offered Terms” has the meaning given in Section 10.1(d)(ii)(B).

 

“Official Public Records” means the mortgage or conveyance records of the Louisiana Parish (a) where the Leased Property is located or (b) with respect to Leased Property located on the Outer Continental Shelf, to which such Leased Property is adjacent.

 

“Other Recorded Document” means any easement agreement, restrictive covenant, declaration, right-of-way or any other similar agreement or document affecting, benefiting or burdening all or any portion of the Liquids Transportation System, but excluding Liens.

 

“Parts” has the meaning given in Section 10.2.

 

“Party” means either Tenant or Landlord individually, and “Parties” means Tenant and Landlord collectively.

 

“Permitted Capital Improvements and Additional Lines” means Capital Improvements and Additional Lines which (a) will not materially and adversely affect the structural integrity of the then existing Improvements, (b) will not materially and adversely affect the use or functionality of the Leased Property,  and (c) will not adversely affect the value of the Leased Property in any material respect.

 

“Permitted Equity Transfer” has the meaning given in Section 17.5(c).

 

“Permitted EXXI Parent Successor” means any successor to EXXI Parent so long as no change in control has occurred with respect to EXXI Parent.  As used in this defined term, “change in control” means an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any

 

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employee benefit plan, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the Beneficial Owner, directly or indirectly, of 50% or more of the equity interests of EXXI Parent entitled to vote, on a fully diluted basis, for members of the board of directors or equivalent governing body of EXXI Parent.

 

“Permitted Landlord Contest” has the meaning given in Section 27.1(e).

 

“Permitted Landlord Liens” means (a) Liens on the Leased Property or Landlord’s right, title and interest under this Lease but only if (i) such Liens secure only Landlord Indebtedness, (ii) Landlord and each Landlord Lender with respect to such Liens have executed and delivered to Tenant an SNDA, and (iii) Landlord has complied with Section 20.1 with respect to such Liens, and (b) Liens on any Landlord Equity Interest but only if (i) such Liens secure only Landlord Indebtedness and (ii) Landlord and each Landlord Lender with respect to such Liens have executed and delivered to Tenant an SNDA.

 

“Permitted Lease Assignment” has the meaning given in Section 17.1(a).

 

“Permitted Liens” means (a) Liens placed on the Tenant’s interest in the Leased Property by, through, or under Tenant, (b) Liens placed on the Leased Property prior to the Effective Date, (c) Liens securing obligations for which Tenant is responsible hereunder, (d) Liens recorded in the Official Public Records as of the Effective Date, (e) Liens imposed by law for taxes, assessments, or similar charges, incurred in the ordinary course of business that are not yet due and payable, or that are subject to a Permitted Landlord Contest, Tax Challenge or Permitted Tenant Contest, (f) Liens of mechanics, materialmen, warehousemen, carriers, landlords or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable, or that are subject to a Permitted Landlord Contest and that do not attach to Landlord’s interest in the Leased Property, (g) the exercise or enforcement by Governmental Authorities or other Persons of eminent domain or condemnation rights, or any other rights or restrictions under Applicable Legal Requirements on or with respect to the use of real property in effect on the Effective Date or that are imposed after the Effective Date, including zoning restrictions and requirements under permits, (h) Permitted Landlord Liens, (i) inchoate Liens in respect of royalty owners, and (j) any other Liens that would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Event.

 

“Permitted Sale” has the meaning given in Section 17.5(b).

 

“Permitted Sublease” has the meaning in Section 17.1(b).

 

“Permitted Tenant Contest” means any contest made in accordance with Section 26.12.

 

“Permitted Tenant Transferee” means, with respect to any Tenant, (a) any EXXI Entity Person, (b) any Affiliate of a Tenant, (c) any Person who purchases or otherwise accepts a transfer or assignment of all or substantially all of the interest of such Tenant or its Affiliates in the oil production assets and related rights in connection with which the Leased Property is used, (d) any Affiliate of the Person acquiring such oil production assets, if such Person guarantees the obligations of such Affiliate under this Lease, (e) any Investment Grade Person approved by Landlord, which approval shall not be unreasonably withheld and which approval shall be based solely on the following: (i) a review of such Investment Grade Person’s experience in the oil

 

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exploration and production business or midstream energy transportation business, and (ii) the proposed use of the Leased Property by such Investment Grade Person would not (A) constitute a breach of Article IX, or (B) in Landlord’s reasonable judgment, impair the structural integrity, functionality or value of the Leased Property in any material respect, and (f) any other Person approved by Landlord, which approval shall not be unreasonably withheld and which approval shall be based solely on the following: (i) such other Person’s current and future projected financial strength and creditworthiness, management style, financial philosophy and reputation, (ii) such other Person’s experience in the oil exploration and production business, (iii) such other Person’s ability to recover costs or pass them on to its customers and other Persons, and (iv) the proposed use of the Leased Property by such other Person would not (A) constitute a breach of Article IX, or (B) in Landlord’s reasonable judgment, impair the structural integrity, functionality or value of the Leased Property in any material respect. For the avoidance of doubt, any Permitted Tenant Transferee must provide, or have a Guarantor that can provide, audited financials to satisfy the requirements of Sections 4.2(d) and 26.7(b).

 

“Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, Governmental Authority or any other entity of any kind.

 

“Personal Property” means (a) the monitoring equipment located in or on the Liquids Transportation System, (b) the computer hardware and software used in respect of the Liquids Transportation System, (c) the wires and other connectors between such computer hardware and such monitoring equipment, (d) all office furnishings, computers and associated hardware located at the Grand Isle terminal facility, (e) spare parts and stores for the Liquids Transportation System, and (f) the Records, all as of the Effective Date and as such personal property may be modified or replaced as permitted or required by this Lease.

 

“Planned Additional Line” has the meaning given in Section 10.1(d)(ii).

 

“Prime Rate” means the prime rate of interest as reported in The Wall Street Journal or, if The Wall Street Journal is no longer published or no longer reports such prime rate, the prime rate of interest as reported in another authoritative publication or news retrieval service.

 

“Proprietary Information” means (a) the business concept, operating techniques, marketing methods, financial information, plans, site and system renderings, schedules, itemized costs, development plans and all related trade secrets or confidential or proprietary information treated as such by Tenant, whether by course of conduct, by letter or report or by use of any appropriate proprietary stamp of legend designating such information item to be confidential or proprietary, by communication to such effect made prior to or at the time any such Proprietary Information is disclosed to Landlord, or otherwise, (b) all financial statements and financial information that relates to the Liquids Transportation System delivered to Landlord by an EXXI Entity Person pursuant to Section 26.7(b) and similar financial statements and financial information that relates to the Liquids Transportation System delivered to Landlord by an EXXI Entity Person prior to the Effective Date, and (c) all Flow and Volume Information and similar information that relates to the Liquids Transportation System delivered to Landlord by an EXXI Entity Person prior to the Effective Date.  Notwithstanding the foregoing, Proprietary

 

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Information shall not include information that is publicly available other than as a result of actions in violation of Section 26.10 hereof.

 

“Protective Mortgage” has the meaning given in Section 2.1(e).

 

“Protective UCCs” has the meaning given in Section 2.1(e).

 

“Purchase Agreement” means the Purchase and Sale Agreement dated as of June 22, 2015, between EXXI USA, as Seller, and Grand Isle Corridor, as Buyer, with respect to the transfer of the Leased Property to Landlord.

 

“Record Agreements” shall mean the agreements constituting (a) the Effective Date Recorded Documents (and including, without limitation, those evidencing the Right of Use Agreements), (b) any Other Recorded Document executed by Tenant after the Effective Date other than in violation of this Lease, and (c) any Other Recorded Document executed by Landlord other than in violation of this Lease.  In no event shall any Lien or document that creates, or may create, an interest that could ripen into a Lien, constitute a “Record Agreement”.

 

“Records” means the following, to the extent acquired by Landlord (a) from Tenant under the Purchase Agreement or (b) in connection with the making or constructing of Permitted Capital Improvements and Additional Lines paid for by Landlord and made or constructed by Tenant for Landlord hereunder: all engineering drawings or plans and specifications of or covering the Liquids Transportation System or any component thereof, site assessments and environmental reports regarding or covering the Liquids Transportation System or any component thereof, manuals relating to the operation of the Leased Property, and “as-built” surveys of the pipelines and drawings of the Liquids Transportation System.

 

“Related Parties” of a Person means such Person’s directors, officers, employees, agents, trustees, administrators, managers, advisors, accountants, attorneys and representatives.

 

“Release” (a) any leaking, spilling, pouring, pumping, emitting, injecting, escaping, leaching, dumping, discharging, depositing or disposing of any Hazardous Substances into the environment (including the air, soil, groundwater or surface water) in sufficient quantity or concentration such that notification to a Governmental Authority is required under Environmental Laws or permitting is required under Environmental Laws, or (b) any presence or discovery of Hazardous Substances in soils, surface waters or groundwater on or under the Assets that exceeds screening standards under the Louisiana Risk Evaluation and Corrective Action Program, as may be modified or amended from time to time.

 

“Renewal Notice Date” has the meaning given in Section 25.1(b).

 

“Renewal Option” has the meaning given in Section 25.1(a).

 

“Renewal Term” has the meaning given in Section 25.1(a).

 

“Repairs” means any repairs, restoration, replacement, or rebuilding, on or at the Leased Property due to any damage to the Leased Property under Articles XV or XVI of this Lease.

 

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“Responsible Officer” means (a) with respect to any EXXI Entity Person, the Chief Accounting Officer, Chief Operating Officer, Chief Financial Officer, and Senior Vice President (Legal) of EXXI Parent or, if the title of any such officer changes, an officer of EXXI Parent with an equivalent title, (b) with respect to any other Tenant, any of the chief executive officer, chief operating officer, chief financial officer, principal accounting officer, chief legal officer, treasurer and controller of Tenant or its Tenant Guarantor, if applicable, and (c) with respect to Landlord, any of the chief executive officer, chief operating officer, chief financial officer, principal accounting officer, chief legal officer, treasurer and controller of Landlord or its Landlord Guarantor, if applicable.

 

“Right of Use Agreements” means the easements, servitudes, rights of way, and similar agreements and instruments listed in Exhibit B, including all rights of the grantee thereunder.

 

“ROFR Asset Acceptance Notice” has the meaning given in Section 25.3(e).

 

“ROFR Asset Election Period” has the meaning given in Section 25.3(e).

 

“ROFR Asset Offer” has the meaning given in Section 25.3(d).

 

“ROFR Asset Sale Notice” has the meaning given in Section 25.3(c).

 

“ROFR Asset Transfer Deadline” has the meaning given in Section 25.3(e).

 

“ROFR Lease Election Period” has the meaning given in Section 25.4(e).

 

“ROFR Lease Notice” has the meaning given in Section 25.4(c).

 

“ROFR Lease Offer” has the meaning given in Section 25.4(d).

 

“ROFR Lease Period” means the period beginning at the end of the Term and ending two (2) years later.

 

“ROFR Lease Transfer Deadline” has the meaning given in Section 25.4(e).

 

“ROFR Transfer Period” means (a) the period during the Term, and (b) the period beginning at the end of the Term and ending two (2) years thereafter.

 

“Separable Addition” has the meaning given in Section 10.1(c).

 

“SNDA” means each Subordination, Non-Disturbance and Attornment Agreement, in the form of Exhibit K hereto, (a) entered into as of the Effective Date among each of Landlord’s Lenders, Landlord and Tenant, and consented to by the Landlord Guarantor and the Tenant Guarantor and (b) entered into after the Effective Date between each Landlord Lender, Landlord and Tenant, and consented to by the Landlord Guarantor and the Tenant Guarantor, and in each case as the same may be subsequently amended, supplemented or restated.

 

“Solvent” means, with respect to any Person on a particular date, that on such date, (i) the present fair salable value of the property and assets of such Person exceeds the debts and

 

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liabilities, including contingent liabilities, of such Person, (ii) the present fair salable value of the property and assets of the such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured in the ordinary course, (iii) such Person does not intend to incur, or believe that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured in the ordinary course, and (iv) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.  For purposes of this definition, the amount of a Person’s contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability

 

“Specified Discount Rate” has the meaning given in Section 23.2(a)(i)(E).

 

“Sublease” means a sublease by Tenant of a portion of or less than all of Tenant’s rights under this Lease or in the Leased Property hereunder.

 

“Subsidiaries” means, with respect to any parent company at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Taking” means acquisition of all or any portion of the Leased Property for any public or quasi-public use through taking by condemnation, eminent domain or any like proceeding, or purchase in lieu thereof.

 

“Taking Proceeds” means damages and proceeds accruing and paid by or on behalf of the applicable Governmental Authority on account of any Taking of the Leased Property, save and except (a) the reasonable third party costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Tenant in connection with the collection of same, (b) the amount incurred by Tenant prior to the date of payment of such Taking Proceeds to repair, restore, replace or remediate (as to environmental matters) the Leased Property, and (c) any Tenant Condemnation Proceeds.

 

“Taking Response Notice” has the meaning assigned to such term in Section 16.2(c).

 

“Taking Termination Date” has the meaning assigned to such term in Section 16.2(d).

 

“Tax Challenge” has the meaning given in Section 6.6.

 

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“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments, levies, duties, imposts, customs or charges of any kind whatsoever, together with any and all interest, additions or penalties thereon, and including the costs of any contest or appeal pursued by Tenant with respect to any of such taxes, fees, assessments, levies, duties, imposts, customs or charges, but excluding in all cases all Excluded Matters.

 

“Tenant” has the meaning given in the preamble.

 

“Tenant Casualty Termination Notice” has the meaning given in Section 15.1(b).

 

“Tenant Condemnation Proceeds” has the meaning given in Section 16.1.

 

“Tenant Environmental Liabilities” means Losses arising or resulting from (a) the presence, use, storage, generation, transportation or Release of any Hazardous Substances on, under, from or at the Leased Property, or any portion thereof, or at any real property offsite the Leased Property where such Hazardous Substances from such Leased Property have been transported or disposed or arranged for transport or disposal, in each case, prior to or during the Term and for which Tenant or any other Tenant Party or Landlord, any other Landlord Party or any Landlord Lender has or may have any legal obligation, (b) allegations made in writing by a third party not Landlord, another Landlord Party or a Landlord Lender (but only so long as neither Landlord, any Landlord Party nor any Landlord Lender has voluntarily initiated contact with such third party and affirmatively caused such third party to raise such allegation unless such contact is required to be made by Tenant or any other Tenant Party under Environmental Law or such allegation is required to be made by such third party under Environmental Law) regarding the presence, use, storage, generation, transportation or Release of any Hazardous Substances on, under, from or at the Leased Property, or any portion thereof, or at any real property offsite the Leased Property where such Hazardous Substances from such Leased Property have been transported or disposed or arranged for transport or disposal, in each case, prior to or during the Term and for which Tenant or any other Tenant Party or Landlord, any other Landlord Party or any Landlord Lender has any legal obligation, or (c) any violation of Environmental Laws occurring prior to or during the Term or affecting any portion of the Leased Property, or at any real property offsite the Leased Property where such Hazardous Substances from such Leased Property have been transported or disposed or arranged for transport or disposal, in each case, and for which Tenant or any other Tenant Party or Landlord, any other Landlord Party, or any Landlord Lender has or may have any legal obligation, but (x) in any case with respect to subsections (a), (b) and (c), subject to Section 22.2(a) and (y) excluding in any case with respect to subsections (a), (b) and (c), all Landlord Environmental Liabilities, all Excluded Matters and the matters described in Section 21.1(a)(A)-(I) and Section 21.1(b).

 

“Tenant Event of Default” has the meaning given in Section 23.1.

 

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“Tenant Guarantor” means EXXI Parent and any successor Tenant Guarantor executing a Tenant Guaranty until any such Person is released from further liability upon a Lease Assignment as provided in Section 17.4.

 

“Tenant Guaranty” means that certain Tenant Guaranty executed by EXXI Parent and dated as of the Effective Date and any subsequent Tenant Guaranty executed after the Effective Date and in substantially the form of Tenant Guaranty attached as Exhibit L unless and until the Tenant Guarantor under such Tenant Guaranty is released to the extent provided in Section 17.4.

 

“Tenant Indemnified Parties” means Tenant, Tenant Guarantor, and their respective Related Parties (solely in their capacity as such), and permitted successors and assigns of any of the foregoing, including any permitted successors by merger, consolidation or acquisition of all or substantially all of Tenant’s rights under this Lease.

 

“Tenant Other Activities” has the meaning given in Section 3.3.

 

“Tenant Party” means Tenant, any direct or indirect owner of Tenant, and their respective officers, employees, agents, servants or assignees.

 

“Tenant Property” means (a) the Permitted Capital Improvements and Additional Lines which Landlord does not purchase and which, accordingly, do not become a part of the Leased Property during the Term as provided in Section 10.1, and (b) the other real and personal property now or hereafter owned or used by Tenant or its Affiliates upstream or downstream of the Liquids Transportation System in connection with operation of the Leased Property by Tenant or its Affiliates or in connection with Tenant Other Activities.

 

“Tenant Taking Termination Notice” has the meaning given in Section 16.2(b).

 

“Term” means the Initial Term, as it may be extended by Tenant’s exercise of the extension and renewal rights set forth in Section 25.1, or as it may be sooner terminated as provided in this Lease.

 

“Third Party Asset Offer” means a bona fide outstanding offer or binding contract (that is subject to Section 25.3 of this Lease) that Landlord receives with respect to Landlord’s proposed Transfer of all of Landlord’s interest in the Leased Property and the Lease from a Person that is not an Affiliate of Landlord which Landlord intends to accept and which complies with the following requirements:

 

 

 

 

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“Third Party Lease Offer” means a bona fide outstanding offer or binding contract for a Landlord Lease Transaction that is subject to Section 25.4 of this Lease, which Landlord receives from a Person that is not an Affiliate of Landlord, which Landlord intends to accept and which complies with the following requirements:

 

 

 

 

 

“Transfer” means with respect to any property or rights, the sale, conveyance, transfer, exchange, gift, contribution or assignment, in whole or in part, of any right, title or interest in and to such property or rights, whether voluntary or Involuntary.  As to an Equity Investor Interest or a Landlord Equity Interest, Transfer shall also include (i) a change in the Person or Persons who have beneficial ownership of a Landlord Equity Interest and (ii) a transfer to a Person or Persons that, upon such transfer, becomes the Landlord Majority Owner. The granting, attachment or creation of any Lien on all or any portion of such property or rights shall not constitute a voluntary or Involuntary Transfer of such property or rights.

 

“Uniform Commercial Code” means The Uniform Commercial Code as adopted in the State of Louisiana (La. R.S. Title 10).

 

“Variable Rent” means, for any calendar month (or portion thereof) during the Term, the lesser of (a) 10% of Excess Oil Revenue for such month (or portion thereof) and (b) 28% of Base Rent (i.e., 38.9% of Minimum Rent) for such month (or portion thereof).

 

 

As used in this Lease:  (a) the word “or” is not exclusive and the words “include,” “includes,” and “including” are not limiting, (b) references to a law include any rule or

 

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regulation issued under the law and any amendment to the law, rule or regulation, (c) whenever the words “include,” “includes,” or “including” appear, they shall be deemed to be followed by the words “without limitation,” (d) personal pronouns shall be deemed to include the other genders and the singular shall include the plural and vice versa, (e) the words “herein,” “hereof’ and “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or other subdivision, and (f) any reference to “$” or “dollars” shall refer to U.S. dollars.  Wherever a period of time is stated in this Lease as commencing or ending on specified dates, such period of time shall be deemed (i) inclusive of such stated commencement and ending dates, and (ii) to commence at 12:00 A.M. Central Time on such stated commencement date and to end at 11:59 P.M. Central Time on such stated ending date.  Unless the context otherwise requires, (A) any definition or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time-to-time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (B) subject to the restrictions on Transfers, Liens and assignments in this Lease, any reference herein to any Person shall be construed to include such Person’s successor and assigns, and (C) any reference to any law shall include all statutory and regulation provisions consolidating, amending, replacing or interpreting such law and reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time-to-time. Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other document executed in connection herewith.

 

ARTICLE II

LEASE CHARACTERIZATION

 

 

 

 

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or arrangement, security interest or the like, (iv) stipulates that Landlord is the legal and beneficial owner of the Leased Property for legal, accounting and all other purposes and waives any claim or defense to the contrary, and (v) shall support, at such Party’s sole cost and expense, the intent of the Parties that (A) the lease of the Leased Property pursuant to this Lease is a true lease and does not create a joint venture, partnership (either de jure or de facto), equitable mortgage, trust, financing device or arrangement, security interest or the like, if, and to the extent that, any challenge occurs, and (B) Landlord is the legal and beneficial owner of the Leased Property for legal accounting and all other purposes and waives any claim or defense to the contrary.

 

 

 

 

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Landlord in the Official Public Records, and (ii) Tenant hereby authorizes, and shall cause EXXI USA to authorize, Landlord, to file with the Delaware Secretary of State and such other places as Landlord deems necessary or advisable, one or more UCC financing statements describing the Leased Property as collateral (the “Protective UCCs”).

 

ARTICLE III

LEASED PROPERTY

 

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

 

 

 

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Tenant Guarantor or any of their respective material assets, and is not subject to any judgment, order, decree, rule or regulation of any Governmental Authority having jurisdiction over Tenant or Tenant Guarantor which would, in the aggregate, otherwise materially and adversely affect Tenant’s or Tenant Guarantor’s condition, financial or otherwise, or Tenant’s interests in the Leased Property.  There are no bankruptcy proceedings pending, being contemplated by, or to Tenant’s Actual Knowledge, threatened against Tenant or Tenant Guarantor.  Tenant has determined, and Tenant has not taken any action or made any statement inconsistent with the position, that Tenant is receiving “reasonably equivalent value” and “fair consideration” in exchange for each of its obligations (including any contingent obligations) under or in connection with this Lease.

 

 

 

ARTICLE V

RENT

 

 

 

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Landlord provided to Tenant at least ten (10) Business Days before the date any accrued Base Rent or Additional Rent is payable.

 

 

 

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ARTICLE VI

TAXES AND IMPOSITIONS

 

 

 

 

 

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ARTICLE VII

CONDITION OF LEASED PROPERTY; MAINTENANCE

 

 

 

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ARTICLE VIII

UTILITIES; INTERCONNECTION AGREEMENTS

 

 

 

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ARTICLE IX

USE

 

 

 

ARTICLE X

PERMITTED CAPITAL IMPROVEMENT AND ADDITIONAL LINES, PARTS AND TENANT OTHER ACTIVITIES

 

 

 

 

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Notice of Non-Separable Addition shall (i) describe the Non-Separable Addition in reasonable detail, (ii) provide a good faith estimate of the total cost of making the Non-Separable Addition, (iii) offer Landlord the option to both (A) pay for such Non-Separable Addition, and (B) engage the services of Tenant as construction agent for Landlord with respect to the making of such Non-Separable Addition, and (iv) specify an increase in the Base Rent if Landlord elects to pay for and engage Tenant as Landlord’s construction agent for such Non-Separable Addition. Landlord shall not have the option to pay for such Non-Separable Addition unless Landlord also engages the services of Tenant as construction agent for such Non-Separable Addition.  Landlord shall consider such offer as set forth in such Notice of Non-Separable Addition in good faith and use commercially reasonable efforts to obtain financing for such Non-Separable Addition. Landlord shall, by written notice delivered to Tenant within ten (10) Business Days after receipt of the Notice of Non-Separable Addition, elect in writing either to pay for and engage Tenant as Landlord’s construction agent for such Non-Separable Addition or to refrain from paying for such Non-Separable Addition. Failure to give such timely notice shall constitute Landlord’s election not to pay for such Non-Separable Addition.  If Landlord accepts such offer, (a) Landlord shall pay for such Non-Separable Addition and engage Tenant as Landlord’s construction agent for such Non-Separable Addition and (b) Landlord and Tenant shall (1) execute the documents required to evidence such amendment to this Lease or a new lease for such Non-Separable Addition, as applicable, and (2) execute documents, reasonably satisfactory to each of them, governing advances by Landlord to pay the costs of such Non-Separable Addition. Non-Separable Additions that Landlord elects to pay for shall become a part of the Leased Property under this Lease, with an increase in Base Rent as proposed by Tenant in the Notice of Non-Separable Addition, unless Landlord and Tenant instead agree that such Non-Separable Addition shall be the subject of a separate lease, upon substantially the same terms as this Lease, but with Base Rent as proposed by Tenant in the Notice of Non-Separable Addition.  If Landlord elects not to pay for such Non-Separable Addition and Tenant elects to proceed with making the Non-Separable Addition, then subject to subsection (e) below, such Non-Separable Addition shall remain the sole property of Tenant, and this Lease shall continue in full force and effect unaffected by the Non-Separable Addition.

 

 

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Addition.  If Landlord accepts such offer, (a) Landlord shall pay for such Separable Addition on the terms in the Notice of Separable Addition and engage Tenant as Landlord’s construction agent for making such Separable Addition, and (b) Landlord and Tenant shall (1) execute the documents required to evidence such amendment to this Lease or a new lease for such Separable Addition, as applicable, and (2) execute documents, reasonably satisfactory to each of them, governing advances by Landlord to pay the costs of such Separable Addition.  Separable Additions that Landlord elects to pay for shall become a part of the Leased Property under this Lease, with an increase in Base Rent as proposed by Tenant in the Notice of Separable Addition, unless Landlord and Tenant instead agree that such Separable Addition shall be the subject of a separate lease, upon substantially the same terms as this Lease, but with Base Rent as proposed by Tenant in the Notice of Separable Addition.  If Landlord elects not to pay for such Separable Addition and Tenant elects to proceed with making the Separable Addition, then subject to subsection (e) below, such Separable Addition shall remain the sole property of Tenant, and this Lease shall continue in full force and effect unaffected by the Separable Addition.

 

 

 

 

 

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shall promptly provide Landlord with such additional information about the Planned Additional Line as Landlord may reasonably request.

 

 

 

 

 

 

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Landlord at the end of the Term pursuant to subsection (i) above, (A) shall be made on an AS IS WHERE IS basis, without any express or implied warranties from Tenant other than special warranties of title (except as otherwise expressly agreed between the Parties at the time of such transfer), provided, however, that such conveyance shall in any event be made by Tenant to Landlord free and clear of (I) any Liens placed on the Leased Property by, through or under Tenant, and (II) any Other Recorded Documents executed by, through or under Tenant in violation of this Lease, and (B) shall be evidenced by Tenant’s execution of such deeds, bills of sale, or other appropriate documents conveying title to such Non-Separable Additions as Landlord and Tenant may reasonably agree, consistent with subsection (A) of this sentence.

 

 

 

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ARTICLE XI

REGULATORY ISSUES

 

 

 

 

 

 

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agent for purposes of BOEM and BSEE regulatory matters (including matter relating to the Federal ROWs), designate with BOEM and BSEE an Affiliate of Tenant selected by Tenant, or named representatives of Tenant or of such Affiliate, and approved by Landlord (such approval not to be unreasonably withheld) to serve as such agent, in which case Tenant shall cause such Affiliate to perform all obligations of Tenant as such agent under Sections 11.1(a) and 11.1(c)(i).  During the Term, all fees and other payments due under or in respect of the Right of Use Agreements shall be paid by Tenant or, if paid by Landlord, shall be reimbursed to Landlord by Tenant as Additional Rent.

 

 

 

 

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ARTICLE XII

MECHANIC’S LIENS

 

 

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Liens arising from Landlord’s failure to advance payments for Non-Separable Additions or Separable Additions for which Landlord has engaged Tenant as Landlord’s construction agent as provided in Section 10.1.

 

 

ARTICLE XIII

TENANT PROPERTY

 

 

 

 

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Landlord acknowledges and agrees, following a default by Tenant under any Tenant mortgage, to allow Tenant’s lender access to the Leased Property to seize and remove all or any of the Tenant Property and Landlord agrees to execute an SNDA with Tenant’s lender to evidence such right as provided in Section 13.1.

 

ARTICLE XIV

INSURANCE

 

 

 

 

ARTICLE XV

FIRE AND OTHER CASUALTY

 

 

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Lease arising from and after the Casualty Termination Date, (iii) no further Base Rent or Additional Rent shall accrue with respect to the period after the Casualty Termination Date, (iv) Tenant shall have no Repair obligations with respect to the fire or other casualty giving rise to the Tenant Casualty Termination Notice and no obligation to pay for such Repair, (v) neither Landlord nor any other Landlord Indemnified Party shall have any claim against Tenant with respect to the Repair of the Leased Property or Losses arising from termination of this Lease or Tenant’s purchase of the Leased Property pursuant to this Section 15.1, (vi) each Tenant Guarantor shall be released from liability and obligations under its Tenant Guaranty, and each Landlord Guarantor shall be released from liability and obligations under its Landlord Guaranty,  it being understood and agreed, however, that Tenant Guarantors and Landlord Guarantors shall remain liable with respect to matters or claims (x) arising or accruing prior to the Casualty Termination Date and (y) in respect of obligations that survive the termination of this Lease, and (vii) all Casualty Proceeds shall be paid to Tenant.

 

 

 

 

 

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ARTICLE XVI

CONDEMNATION

 

 

 

 

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permitted under this Lease).  Notwithstanding the foregoing or anything to the contrary in this Article XVI or otherwise, if this Lease is terminated under this Article XVI as a result of such Taking, (i) this Lease shall remain in effect following such Taking and Tenant waives the right to terminate this Lease pursuant to articles 2714 and 2715 of the Louisiana Civil Code and other Applicable Legal Requirements (ii) Tenant shall not be obligated to Repair the Leased Property after such Taking or to pay for such Repairs, and (iii) neither Landlord nor any other Landlord Indemnified Party shall have any claim against Tenant with respect to such Repairs of the Property or Losses arising from termination of this Lease or Tenant’s purchase of the Leased Property pursuant to this Section 16.2.  Unless this Lease is terminated pursuant to this Section 16.2 in connection with such Taking, (A) this Lease shall remain in effect following such Taking and Tenant waives the right to terminate this Lease pursuant to articles 2714 and 2715 of the Louisiana Civil Code and other Applicable Legal Requirements, (B) the rights and obligations of Landlord and Tenant shall remain in effect without abatement, (C) all Base Rent shall continue unabated, and (D) all Tenant Condemnation Proceeds and, subject to Section 16.3, below, Taking Proceeds recovered on account of such Taking shall be paid to Tenant.

 

 

 

 

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from termination of this Lease or Tenant’s purchase of the Leased Property pursuant to this Section 16.2, (vi) each Tenant Guarantor shall be released from liability and obligations under its Tenant Guaranty, and each Landlord Guarantor shall be released from liability and obligations under its Landlord Guaranty,  it being understood and agreed, however, that Tenant Guarantors and Landlord Guarantors shall remain liable with respect to matters or claims (x) arising or accruing prior to the Taking Termination Date and (y) in respect of obligations that survive the termination of this Lease, and (vii) all Taking Proceeds shall be paid to Tenant.

 

 

 

 

 

 

 

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Landlord and Landlord Lender such reasonable documentation related to Repairs as Landlord and Landlord Lender may reasonably request to confirm that such Repairs have been made in the manner required by this Lease, (B) if such Repairs have not been completed within ninety (90) days following the date of such Taking, Tenant shall pay to Landlord (or, if requested in writing by Landlord, to a Landlord Lender) the amount by which the total cost of such Repairs exceeds the sum of (i) $2,000,000 and (ii) the cost of the Repairs completed and paid by Tenant or its Affiliates as of such date, which amounts shall be held and disbursed by Landlord (or such Landlord Lender) to Tenant as such Repairs progress, and (C) Landlord (and, if requested in writing by Landlord, Landlord Lenders) will have the right to inspect the Leased Property during normal business hours and after prior reasonable written notice, with Tenant’s representative present and upon the condition that Landlord and, if applicable, Landlord Lenders comply with Tenant’s reasonable rules, including with respect to health, safety and security, (I) to inspect the damage, and (II) to confirm that such Repairs are being or have been made in the manner required by this Lease; provided, that no such inspection shall unreasonably interfere with the normal operation of the Leased Property or the business of Tenant or its Affiliates.

 

 

ARTICLE XVII

LIMITS ON TRANSFERS, ASSIGNMENTS, LEASES AND LIENS

 

 

 

 

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Sublease other than a Permitted Sublease shall be null and void ab initio.  Renewals of any Permitted Sublease shall be deemed to be a new Sublease for purposes of this Section 17.1(b) and shall not constitute a Permitted Sublease unless such renewal otherwise qualifies as a Permitted Sublease at the time of such renewal.

 

 

 

 

 

 

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Sublease does not breach the provisions of Article IX and would not, in Landlord’s reasonable judgment, impair the structural integrity, functionality or value of the Leased Property in any material respect, and (v) the proposed subtenant or assignee enters into an agreement in a form reasonably satisfactory to Landlord recognizing that such Lease Assignment or Sublease, and any renewals or extensions thereof, are subordinate and subject to the terms of this Lease.  Landlord shall approve or deny Tenant’s request for consent to a Lease Assignment or a Sublease as and to the extent required by Sections 17.1(a)(ii) or 17.1(b)(ii), above, as soon as practicable but no later than fifteen (15) Business Days after receipt of Tenant’s notice to Landlord requesting consent with such information as may be reasonably requested by Landlord (by notice given to Tenant within five (5) days after receipt of Tenant’s aforesaid notice) to evaluate the proposed transaction and the proposed assignee or subtenant.  Landlord shall be deemed to have rejected any such Lease Assignment or Sublease if a written request for approval is delivered to Landlord, and Landlord does not respond in writing within fifteen (15) Business Days after Landlord’s receipt of such written request for approval and all information timely requested by Landlord as provided in the immediately preceding sentence.  If Landlord does not approve such proposed Lease Assignment or Sublease in writing within such fifteen (15) Business Day period, Landlord agrees to provide Tenant with a reasonably detailed written explanation as to the reasons for withholding such approval to such proposed Lease Assignment or Sublease on or before the end of such fifteen (15) Business Day period.  This subsection (d) shall not in any event be deemed to give Landlord approval rights as to any Sublease or Lease Assignment except as expressly provided in Sections 17.1(a)(ii) and 17.1(b)(ii), above, nor shall this subsection (d) be deemed to expand the scope or basis for any such approval under such Sections 17.1(a)(ii) and 17.1(b)(ii) beyond the issues set forth in the first sentence of this subsection (d).

 

 

 

 

 

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Section 17.4), upon the occurrence of an event or circumstance which would, with the giving of notice or passage of time, or both, constitute a Tenant Event of Default, Landlord shall not declare a Tenant Event of Default or exercise any rights or remedies on account of such Tenant Event of Default unless and until Landlord gives notice of such default to all prior Tenants and their respective Tenant Guarantors (other than any Tenants and their respective Tenant Guarantors that have been released from liability under this Lease in accordance with Section 17.4) and provides an opportunity to cure such default, within the period of time permitted under Section 23.1 of this Lease for curing such event or circumstance, but with such cure period as to such prior Tenant and such prior Tenant Guarantor beginning only upon receipt by such prior Tenant(s) or its Tenant Guarantor(s), as applicable, of such notice.

 

 

 

 

 

 

 

 

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Permitted Equity Transfer shall be null and void ab initio and Tenant will not recognize any such Transfer.

 

 

 

 

 

 

 

 

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Upon a Permitted Sale in compliance with the terms of this Section 17.5, the transferring Landlord and its Landlord Guarantor shall be released and relieved of further liability or obligation under this Lease and its applicable Landlord Guaranty, in each such case only with respect to matters arising or accruing from and after the date of such Permitted Sale, but for greater certainty, neither Landlord nor Landlord Guarantor shall be released from their obligations under the indemnities described in Section 17.5(b)(xi).

 

 

 

 

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Landlord Equity Interest or to be the Landlord Majority Owner, and provide reasonably sufficient information to enable Tenant to notify, within ten (10) Business Days of Tenant’s receipt of such notice, whether such Person(s) is/are Disqualified Person(s) and to verify within such ten (10) Business Day period that such Transfer complies with the requirements of Section 17.5(c)(i); and

 

 

 

 

 

 

Upon a Permitted Equity Transfer in compliance with the terms of this Section 17.5(c), and only if the transferee is the Landlord Majority Owner, the Landlord Guarantor shall be released and relieved of further liability or obligation under this Lease and its applicable Landlord Guaranty, in each such case only with respect to matters arising or accruing from and after the date of such Permitted Equity Transfer, but for greater certainty, neither Landlord nor Landlord Guarantor shall be released from their obligations described in Section 17.5(c).

 

 

ARTICLE XVIII

TENANT’S SURRENDER OF LEASED PROPERTY

 

 

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reasonable and ordinary wear and tear, and subject to the provisions of Article XV and Article XVI.  Any removal of all or any of the Tenant Property by Tenant shall be done in material compliance with Environmental Laws and other Applicable Legal Requirements, including Tenant’s obligation to file all reports and documentation required to be filed with any Governmental Authority in connection with the removal of Tenant Property, and in accordance with the requirements of Article X hereof.  Tenant shall repair any material damage to the Leased Property caused by the removal of Tenant Property.  After the expiration of the Term or the earlier termination of this Lease, neither Tenant nor Landlord shall have any rights, liabilities or obligations hereunder (except for any that survive the expiration or any earlier termination of this Lease, including the terms and provisions of Sections 25.2, 25.3 and 25.4 if and to the extent applicable).

 

ARTICLE XIX

ASSIGNMENT OF LEASE

 

 

ARTICLE XX

MORTGAGE SUBORDINATION AND NON-DISTURBANCE

 

 

 

 

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ARTICLE XXI

INDEMNIFICATION

 

 

Provided, however, to the extent and in the proportion such Losses also arise out of any of the following (collectively, and together with the matters described in Section 21.1(b), below, the “Exclusions from Tenant’s Indemnification Obligations”), Tenant’s indemnification under this subsection shall, to such extent, not apply:

 

 

 

 

 

 

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Property or the SNDA, (iii) any Landlord Event of Default, or (iv) the fraud, negligence or willful misconduct of any Landlord Party or Landlord Indemnified Party in connection with the Leased Property or the transactions contemplated by this Lease, or in connection with the SNDA; and

 

 

Provided, however, that in the case of subsections (a) and (b) above, to the extent and in the proportion such Losses also arise out of (A) any breach of this Lease by Tenant, or of the Purchase Agreement by EXXI USA, (B) the fraud, negligence or willful misconduct of Tenant or any other Tenant Party with respect to the Leased Property, this Lease or the SNDA, or (C) Taxes for which Tenant is responsible pursuant to this Lease, then Landlord’s release and indemnification under this subsection (b) shall not apply.

 

 

 

 

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additional liability on such Indemnifying Party’s part.  The Indemnifying Party shall be entitled, at its expense, acting through counsel selected by it (and reasonably satisfactory to such Indemnified Party), to participate in or to assume and control (if it promptly so elects upon notice of the Losses) the negotiation, litigation or settlement of any such Losses.  Such Indemnified Party may (but shall not be obligated to) participate at its own expense and with its own counsel in any proceeding conducted by the Indemnifying Party in accordance with the foregoing, in which case the Indemnifying Party shall keep such Indemnified Party and its counsel fully informed of all proceedings and filings.  Notwithstanding the foregoing, but subject to Article XI and the right of Tenant to pursue Tax Challenges and Permitted Tenant Contests and the right of Landlord to pursue Permitted Landlord Contests, the Indemnifying Party shall not be entitled to assume and control the defense of any Losses if (a) Tenant is the Indemnifying Party, a Level 1 Tenant Default has occurred and is continuing, or, if Landlord is the Indemnifying Party, a Level 1 Landlord Default has occurred and is continuing, (b) the proceeding involves the possible imposition of any criminal liability or penalty or unindemnified civil penalty on the Indemnified Party, or (c) the proceeding involves the granting of injunctive relief against the Indemnified Party not related to this Lease.

 

ARTICLE XXII

ENVIRONMENTAL LAWS

 

 

 

 

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costs and other liabilities under Environmental Law for such pursuit of the Enhanced Response that exceed the monetary costs and other liabilities under Environmental Law if the Corrective Action proposed by Tenant were instead pursued, shall be the responsibility of, incurred by, and paid in full by Landlord (for avoidance of doubt, in no event shall any of such monetary costs or any other liabilities under Environmental Law arising from the pursuit of the Enhanced Response (to the extent exceeding the monetary costs and other liabilities under Environmental Law if the Corrective Action proposed by Tenant at the Lowest Cost Response were instead pursued) be the responsibility or obligation of, or be incurred, reimbursed, indemnified or paid by, Tenant).

 

 

 

 

 

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equity, against Tenant for Tenant Environmental Liabilities, violations of, or liabilities under, Environmental Law by Tenant or any other Tenant Party or Releases of Hazardous Substances by, or Corrective Actions required of, Tenant or any other Tenant Party are the remedies in this Section 22.3 and no other rights or remedies shall be applicable thereto, except that Tenant’s failure to perform the Corrective Actions required by Tenant under Section 22.2(a) shall, if not cured within the notice and cure periods provided in Section 23.1(f), or such earlier date as such Corrective Action must be completed to comply with applicable Environmental Law (but subject to any pending Permitted Tenant Contests with respect to same), entitle Landlord to exercise its self-help remedies under Section 23.2 for so long as Tenant is not reasonably performing such Corrective Action and such Corrective Action remains incomplete.

 

 

 

 

 

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in any proceeding conducted by the Indemnifying Party in accordance with the foregoing, in which case the Indemnifying Party shall keep such Indemnified Party and its counsel reasonably informed of all proceedings and filings.  Notwithstanding the foregoing, but subject to Article XI and Tenant’s right to pursue Tax Challenges and Permitted Tenant Contests and Landlord’s right to pursue Permitted Landlord Contests, the Indemnifying Party shall not be entitled to assume and control the defense of any Losses if (a) Tenant is the Indemnifying Party, a Level I Tenant Default has occurred and is continuing, or, if Landlord is the Indemnifying Party, a Level 1 Landlord Default has occurred and is continuing, (b) the proceeding involves possible imposition of any criminal liability or penalty or unindemnified civil penalty on the Indemnified Party, or (c) the proceeding involves the granting of injunctive relief against the Indemnified Party not related to this Lease.

 

 

ARTICLE XXIII

DEFAULTS AND REMEDIES

 

 

 

 

 

 

 

 

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(or if the cure of that failure reasonably requires more than sixty (60) days to complete, if Tenant fails to commence the cure within such sixty (60) day period and thereafter to diligently pursue such cure to completion), but with respect to the foregoing, no such uncured failure shall constitute a Tenant Event of Default unless individually or in the aggregate with each other such uncured failure, such failure is material; or

 

 

 

 

 

 

 

 

 

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Variable Rent payable during the one-year period prior to the termination of this Lease (and provided that if this Lease is terminated prior to the time when Variable Rent has been payable for a full year prior to such termination, such Variable Rent component shall be calculated based on the average Variable Rent payable during the entire period prior to the termination of this Lease, extrapolated to represent a full year).

 

Notwithstanding the foregoing or anything to the contrary set forth in this Lease, the amount required to be paid by Tenant pursuant to Sections 23.2(a)(i)(A), (B), (C), (D) and (E) shall be limited as follows:  The Inception Date Present Value of the amount paid by Tenant pursuant to Sections 23.2(a)(i)(A), (B), (C), (D) and (E) plus the Inception Date Present Value of the Aggregate Minimum Rent shall not in any event exceed $218,000,000. As used herein, (I) “Aggregate Minimum Rent” means the Minimum Rent paid by Tenant during the period beginning on the Effective Date and continuing through the date of termination of the Lease, (II) “Inception Date Present Value” of an amount means the present value of such amount as of the Effective Date, calculated using the Specified Discount Rate, and (III) “Specified Discount Rate” means twenty percent (20%).

 

In addition, and notwithstanding the foregoing, in the event that as of the Lease termination date specified in Landlord’s notice to Tenant such Level 1 Tenant Default has been cured, such termination notice shall be deemed to have been rescinded, this Lease shall remain in effect and Landlord shall only be entitled to Base Rent and Additional Rent which has accrued under the Lease under subsections (A) and (B), above, and Landlord’s reasonable out-of-pocket expenses under subsection (D) above.

 

 

 

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basis.  Tenant shall take such actions as may be necessary to reasonably accommodate the Landlord Observer on-site at the LTS Land, including by (A) providing office space and supplies for the Landlord Observer, (B) providing full, accurate, and reasonably prompt answers to questions by the Landlord Observer about the Leased Property and the operation and use thereof, (C) responding in a full, accurate, and reasonably prompt way to information requests from the Landlord Observer concerning the Leased Property and the operation and use thereof, and (D) providing the Landlord Observer with reasonable access to the Leased Properties and records relating to the operation and use thereof; provided, however, that the Landlord Observer shall abide by Tenant’s reasonable rules, including those governing matters of health, safety and security.

 

 

 

 

 

 

 

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failure reasonably requires more than sixty (60) days to complete, if Landlord fails to commence the cure within such sixty (60) day period and thereafter to diligently pursue such cure to completion); or

 

 

 

 

 

 

 

 

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Landlord Event of Default, in which event, Landlord shall reimburse Tenant for all reasonable costs, expenses and disbursements incurred by Tenant in doing so, plus together with interest thereon at the Default Interest Rate from the date which is ten (10) Business Days after Tenant makes a demand of Landlord for payment of same, but in any event without duplication for amounts for which Landlord seeks damages or indemnification under this Lease;

 

 

 

 

 

ARTICLE XXIV

NOTICE

 

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Tenant:

Energy XXI GIGS Services, LLC

1021 Main Street, Suite 2626

Houston, TX 77002

Attn: Bo Boyd

Email Address: bboyd@energyxxi.com

With a copy to:

Energy XXI GIGS Services, LLC

1021 Main Street, Suite 2626

Houston, TX 77002

Attn: Hugh Menown

Email Address: hmenown@energyxxi.com

Landlord:

Grand Isle Corridor, LP

1100 Walnut, Suite 3350

Kansas City, MO 64106

Attn: Richard C. Green

Email Address: rick.green@corridortrust.com

With a copy to:

Husch Blackwell LLP

4801 Main Street, Suite 1000

Kansas City, MO 64112

Attn:  Steve Carman

Email Address: steve.carman@huschblackwell.com

The addresses to which notices and demands shall be delivered or sent may be changed from time-to-time by notice served by either Party upon the other as provided above.

 

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ARTICLE XXV

RENEWAL AND END OF TERM OPTIONS, RIGHT OF FIRST REFUSAL, AND OTHER PREFERENTIAL PURCHASE RIGHTS

 

 

 

 

 

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Tenant’s delivery of such Fair Market Rent Determination Notice and no later than thirty (30) Business Days after Tenant’s delivery of such Fair Market Determination Notice, (i) its good faith estimate of the Fair Market Rent during the Renewal Term (collectively referred to as the “Estimates”), and (ii) the name of the Independent Appraiser appointed by it to determine which of the two (2) Estimates most closely reflects the Fair Market Rent for the Leased Property during the Renewal Term, and Fair Market Rent shall be determined as follows:

 

 

 

 

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and the total Base Rent actually paid to the date of such payment.  If the amount due by Landlord to Tenant or Tenant to Landlord, as the case may be, under the foregoing sentence is not paid within such twenty (20) Business Day period, such amount shall thereafter bear interest from the Due Date for Other Additional Rent (with respect to payments by Tenant) or ten (10) Business Days following written demand from Tenant to Landlord (with respect to payments by Landlord) at a rate equal to the Default Interest Rate.

 

 

 

 

 

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restrictions on Transfers by Landlord under Section 17.5 shall not be applicable to any Transfer of Landlord’s right, title and interest in and to the Leased Property and in and under this Lease after the Term, although the prohibition on partial Transfers as set forth in subsection (a), above, shall remain applicable during the remaining ROFR Transfer Period, and (iii) this Section 25.3 shall not be applicable, and Landlord shall not be required to comply with this Section 25.3 with respect to a proposed Transfer by Landlord of all or any portion of its right, title and interest in and to the Leased Property and in and under this Lease after the Term if this Lease has been terminated by Landlord pursuant to Section 23.2(a)(i) as a result of a Level 1 Tenant Default or if a Level 1 Tenant Default has occurred and is continuing.  Tenant’s rights under this Section 25.3 are absolute, appurtenant and shall run with the land with respect to the Leased Property and shall survive termination of this Lease for the ROFR Transfer Period.

 

 

 

 

 

 

 

 

 

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Asset Offer only if such Transfer is completed prior to the later to occur of (i) sixty (60) days after the last day of the ROFR Asset Election Period and (ii) the date on which all regulatory approvals required to consummate such Transfer have been obtained (such dates in subsections (i) and (ii), as applicable, the “ROFR Asset Transfer Deadline”).  If the terms of such Transfer are modified pursuant to a Material Amendment or such Transfer is not completed by the ROFR Asset Transfer Deadline, then Tenant shall again have the opportunity to be the buyer under any Third Party Asset Offer, and Landlord must send Tenant a new ROFR Asset Sale Notice and comply again with this Section 25.3 upon receipt of any Third Party Asset Offer.  At no time during the Term (i) may Landlord elect to Transfer all or any portion of the Landlord Interests or any interest therein except pursuant to a Permitted Sale, whether or not Tenant has elected or rejected the ROFR Asset Offer, nor (ii) may any direct or indirect owner of any Landlord Equity Interest (which direct or indirect ownership interest in such Landlord Equity Interest constitutes such owner’s sole material asset) Transfer such direct or indirect ownership interest if the result of such Transfer would be that the Landlord Majority Owner would be a different Person (unless, with respect to such proposed Transfer, Tenant is afforded a right of first refusal substantially consistent with the right of first refusal in favor of Tenant under this Section 25.3 with respect to proposed Transfers of the Leased Property), and in either case, any such Transfer by Landlord in violation of this Section 25.3 or Section 17.5 shall be void ab initio. This restriction on Transfer and Tenant’s right of first refusal under this Section 25.3 are absolute, appurtenant, and shall run with the land with respect to the Leased Property and this Lease.

 

 

 

 

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Non-Cash Consideration Value within thirty (30) Business Days following the end of the ROFR Asset Election Period, and the FMV Estimate so chosen shall be binding on both Landlord and Tenant as the Non-Cash Consideration Value.

 

 

 

 

 

 

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following:  (A) rescind the ROFR Asset Acceptance Notice (in which event Landlord may proceed under Section 25.3(e) as if the ROFR Asset Acceptance Notice has not been given except that the sixty (60) day period referred to in Section 25.3(e) shall commence as of the date that Tenant elects to rescind the ROFR Asset Acceptance Notice), (B) not rescind the ROFR Asset Acceptance Notice but elect to not pay the Non-Cash Consideration to Landlord and instead pay the Non-Cash Consideration Value to Landlord, or (C) not rescind ROFR Asset Acceptance Notice and pay the Non-Cash Consideration (in addition to the cash consideration as specified in the Third Party Asset Offer) to Landlord.  Such election shall be made within ten (10) Business Days after the date the Independent Appraiser(s) advises Tenant and Landlord in writing of the Non-Cash Consideration Value, and if not timely made, Tenant shall be a deemed to have made an election under clause (A) above.

 

 

 

 

 

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unless as and to the extent required by the ROFR Lease Notice or the form of lease in the ROFR Lease Notice.

 

 

ARTICLE XXVI

MISCELLANEOUS PROVISIONS

 

 

 

 

 

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125% of the Base Rent applicable as of the end of the Term, and such tenancy may be terminated at the end of any month thereafter by either Party giving at least sixty (60) days’ notice to the other Party.

 

 

 

 

 

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any offshore platforms covered by the Multi-Platform Access Agreement, Landlord agrees, and shall cause each Landlord Lender to agree, that such access will be subject to the Multi-Platform Access Agreement. Landlord acknowledges and stipulates that Tenant may suffer irreparable harm in the event of a breach of the provisions of this Section 26.7(a) for which Tenant has no adequate remedy at law.  Therefore, in addition to all other remedies available pursuant to the terms of this Lease or at law, Tenant shall have the right to obtain immediate injunctive or other equitable relief upon a breach of this Section 26.7(a).

 

 

 

 

 

 

 

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by Landlord or Landlord Guarantor with the Securities and Exchange Commission, then Tenant Guarantor shall cause its auditor to provide the Auditor’s Report at the sole cost and expense of Landlord and Landlord Guarantor (which costs and expenses will be reimbursed by Landlord and Landlord Guarantor within thirty (30) days of receiving an invoice for such costs and expenses from Tenant or Tenant Guarantor);

 

 

 

 

 

 

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its obligations under this Lease and (B) that Variable Rent was correctly determined for each month during the Term, and (ii) permit Landlord or its designees or representatives, during normal business hours and upon at least five (5) Business Days’ prior notice, to audit such books and records for such purpose.  The cost of the audit will be reimbursed by Tenant if the audit uncovers any material breach of this Lease by Tenant or any material error or inaccuracy in the determination of Variable Rent.

 

 

 

 

 

 

 

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Landlord may disclose to a prospective or actual successor operator of the Liquids Transportation System and its advisors and consultants the Records and such other portions of the Proprietary Information and other Confidential Information as are necessary or prudent to permit them to safely and effectively manage and operate the Leased Property, provided, that in the case of both subsections (i) and (ii), Landlord shall be responsible for the compliance by each such Person to whom disclosure is made with the confidentiality provisions of this Section 26.10 (including the acknowledgments and stipulations under subsection (c) of this Section), and Landlord shall remain liable for any breach of the provisions of this Section by any such Person.  Neither Landlord nor any Person to whom disclosure is made pursuant to this subsection (a) may disclose Proprietary Information or other Confidential Information to any other Person or entity except  (A) to the extent required by any regulatory authority, (B) to the extent required by applicable laws or regulations or by subpoena or similar legal process, in each case after adequate notice to Tenant in order to allow Tenant to seek a protective order or other protection therefor, (C) with the prior written consent of Tenant, (D) to the extent such information becomes publicly available other than as a result of a breach of this Section, or (E) to the extent disclosure of such Proprietary Information or other Confidential Information by CorEnergy (or any successor Landlord Parent) is necessary or appropriate pursuant to the provisions of the federal securities laws or the rules or regulations promulgated thereunder.  For the avoidance of doubt, nothing contained in this Section 26.10 shall limit the ability of Tenant or any of its Affiliates to disclose Proprietary Information or other Confidential Information.

 

 

 

 

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withheld, conditioned, or delayed and Tenant’s consent to any request of Landlord shall not be unreasonably withheld, conditioned, or delayed.

 

 

 

 

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two constructions, one of which would render the provision void and the other of which would render the provision valid, the provision shall have the meaning which renders it valid.  This Lease shall be interpreted and enforced without the aid of any canon, custom or rule of law requiring or suggesting construction against the Party drafting or causing the drafting of the provision in question.

 

 

 

 

 

 

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ARTICLE XXVII

OTHER AGREEMENTS OF LANDLORD

 

 

 

 

 

 

 

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 Section 11.1) a Landlord contest of (A) an Applicable Legal Requirement, or (B) a Lien on Landlord’s right, title or interest in this Lease, in either case in good faith and at its own expense by appropriate proceedings which shall operate to prevent the immediate application of such Applicable Legal Requirements or Lien and the sale, foreclosure or forfeiture of the Leased Property or the Landlord’s interest in this Lease or Tenant’s leasehold estate therein or hereunder or Tenant’s use or operation of the Leased Property, or any part thereof, and Landlord shall have furnished any security as may be required in the applicable proceeding and in accordance with the remainder of this subsection (e).  In no event shall any Permitted Landlord Contest be undertaken in violation of Article XI.  Further, in no event shall the manner in which Landlord pursues any such contest exacerbate in any material respect the risk to Tenant of civil or criminal liability, penalty or sanction, in addition to such risks as may exist for the matters that are the subject of such contest prior to such contest, and except for liabilities, penalties or sanctions for which Landlord may, and in fact does, post a bond.  Further, the manner in which Landlord pursues any such contest shall not exacerbate in any material respect the risk to Tenant of defeasance of its interest in the Leased Property or impair its use or operation thereof in addition to the risk of such defeasance or impairment as may exist for the matters that are the subject of such contest prior to such contest and except for such risk which Landlord may, and in fact does, bond around.  Landlord shall use commercially reasonable efforts to diligently prosecute any such contest to a final conclusion, except that Landlord shall have the right to attempt to settle or compromise such contest through negotiations and to discontinue any such contest at any time.  Landlord shall promptly after the final determination of such contest, fully pay any amounts determined to be payable thereon or fully perform any obligations to be performed thereon, together will all penalties, fines, interest, costs and expenses resulting from such contest.  Landlord shall prosecute any such Permitted Landlord Contest at no cost or expense to Tenant other than de minimis costs and expenses.  Upon reasonable request of Tenant at any time or from time-to-time, Landlord shall provide a written report to Landlord regarding the status of any such contests.

 

 

ARTICLE XXVIII

OTHER AGREEMENTS OF TENANT

 

 

 

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[Remainder of Page Intentionally Blank. Signature Pages Follow]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Lease to be duly executed as of the date first above written.

 

 

[Signature page to Lease]

 

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	TENANT:
	ENERGY XXI GIGS SERVICES, LLC,
	a Delaware limited liability company
	/s/ Antonio de Pinho
	Name: Antonio de Pinho
	Title: President

 

Segment	Origin Platform	Termination Platform	Pipe Size O.D.	Length (miles)	Pipe Material	Line Fill (bbls)
8216	South Timbalier 54	Grand Isle 22 L	10.75"	32.8	Grade B/Sml/ERW X/35/52	16,886
(9402) 19190	Mississippi Canyon 397	Mississippi Canyon 268	8.625"	13.1	X60/X52	3,900
5034	Mississippi Canyon 268	West Delta 73A	8.625"	21.2	Grade B/X52/X60	6,924
6639	Mississippi Canyon 280	South Pass 93A	12.75”	15.7	SML X60/X56/X46	6,291
6364	South Pass 93A	West Delta 73A	12.75”	27.0	X60/X46	19,401
18245/ 7791	West Delta 30J	West Delta 73A	12.75"	13.6	Grade B Seamless	9,470
4259/ 5284	West Delta 73A	Grand Isle 22L	12.75"	19.8	Grade B Seamless	13,697
4840 (State #1716)	Grand Isle 22L	Grand Isle Terminal	12.75"	10.7	Grade B Seamless	7,422

Description	ID Number	Type	Size	Volume (barrels)
Oil Tank	T 2283	Production Receiving/ Swing	140’ diam x 35’ H	95,000
Oil Tank	T 2095	Oil Sales	114’ diam x 30’ H	55,000
Oil Tank/Brine Skimming	T 2052	Production Receiving/ Swing	100’ diam x 32’ H	45,000
Produced Water Tank	T 2100	Produced Water	114’ diam x. 30’ H	55,000
Oil Circulating Pumps (2)	PC1, PC2	50HP Mission Single Stage Centrifugal
Brine Pumps (3)	ABH-101, ABH-400, ABH-402	125hp AFTON Single Stage Centrifugal Pump	Two 2’-9” diam x 6’; One 4’ diam x 4’	Two 6.3, one 9
Degassing Boot	MBD-200		10’ diam x 4’ SS	560
Mycom Oil Separator (VRU)	T-3	150 HP Rotary Screw Type Compressor	-	1.2
LeRoi Separators (VRUs)	T-1/T-2	LiRoi 100 HP Rotary Screw Type Compressor	-	0.8
Brine Filters	MAJ-1/2/3/4	4 filter pods with 25,000 bbls/d capacity per pod; contains 12 cartridge filters	60” OD x 4’ SS	77
Saltwater Disposal Wells (3)	SWD-001/2/3		-	Current 45,000 bbl/d, increasing to 100,000 bbl/d.
SWD Pumps (3)		350 HP Sulzer Binghan Single Stage Pump		2 installed; 1 to be installed late 2015
Motor Control Center		Logic control center	336 sq. ft.
Backup Emergency Generator
Diesel Tank for Generator	T-108
Fire Suppression System: Tank, Pumps/Engines, and Piping

	CorEnergy Infrastructure Trust, Inc.,
	a Maryland corporation
	By:
	Name:
	Title:

	OWNER:
	[GRAND ISLE CORRIDOR, LP,
	a Delaware limited partnership]
	[By: GRAND ISLE GP, INC., a Delaware
	corporation, its sole general partner]
	Name:
	Title: