GROUND LEASE AGREEMENT

EXHIBIT 10.2

This GROUND LEASE AGREEMENT WITH OPTION TO PURCHASE (“Ground Lease”) is and effective as of August 1, 2007, ( “Effective Date”) by and between PNK (LAKE CHARLES), L.L.C., a Louisiana limited liability company, federal tax identification number 02-0614452, (the “Tenant”), and LAKE CHARLES HARBOR & TERMINAL DISTRICT, a political subdivision of the State of Louisiana, located in Calcasieu Parish, Louisiana (the “District”).

WITNESSETH:

WHEREAS, the District is a deep water port and political subdivision of the State of Louisiana (the “State”) exercising governmental powers of the State as delegated and authorized pursuant to the Louisiana Constitution and other statutory supplemental authorities thereof, acting by and through the Port Director of the District, having its office and domicile at the Port of Lake Charles, Lake Charles, Louisiana; and

WHEREAS, the Tenant is desirous of leasing land owned by the District for development, construction, and operation of a resort, hotel, retail sales outlet, restaurant(s) , and casino (“Resort”) facilities; and

WHEREAS, the Tenant will obtain all licenses, permits and approvals from the Louisiana Riverboat Gaming Commission and the Louisiana Department of Public Safety and Corrections, Riverboat Gaming Enforcement Division of the Office of State Police, necessary to permit the Tenant to operate a casino riverboat at such land; and

WHEREAS, the District desires to lease such land to the Tenant in order to develop the land with such a facility and thereby create and provide employment opportunities for the inhabitants of the Parish of Calcasieu (the “Parish”), which will add to the welfare and prosperity of the persons residing within the geographic limits of the District and the Parish; and

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WHEREAS, the District is specifically authorized pursuant to La. R.S. 34:203C to “induce and encourage the location of enterprises which would have economic impact upon the area served by it and lease lands presently owned by it for the general development of tourism...”; and

WHEREAS, in accordance with the above, the Tenant has executed this Ground Lease and offers fair value to the District as consideration for this Ground Lease.

NOW, THEREFORE, in consideration of the above recitals and the mutual covenants hereinafter contained, the parties herein covenant and agree as follows:

1. Definitions. As used in this Ground Lease, the terms “District,” “Ground Lease,” “Parish,” “State,” and “Tenant” shall have the meanings indicated above, and the following terms shall have the respective meanings indicated below:

“Applicable Laws” shall mean all present and future laws, ordinances, orders, rules and regulations of all federal, state, parish, and municipal governments, departments, commissions, or offices, in each case having applicable jurisdiction over the Project Site, the District, or the Tenant.

“District-Created Lien” means any lien, charge, or encumbrance arising or resulting directly from acts or omissions of the District.

“Extended Term” means any ten (10) year extension(s) of this Ground Lease occurring after the Initial Term as provided in Section 3.1 hereof.

“Ground Lease Commencement Date” means the date that the Tenant obtains a gaming operations certificate authorizing riverboat casino operations at the Project Site.

“Ground Lease Rent Commencement Date” means that date that Tenant has obtained all of the following:

(a) All the required permits, licenses or approvals for the construction of the Resort.

(b) A multiple original of the Pinnacle Dual Head Tax Sharing Agreement among the District, City of Lake Charles, Calcasieu Parish School Board, McNeese State University, Sowela

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Technical Community College, and the Calcasieu Parish Police Jury has been entered into by all parties.

(c) Tenant has obtained a Leasehold Title Insurance Policy from a company acceptable to Tenant in an amount acceptable to Tenant showing, good, marketable and complete ownership to the Project Site in the District, subject to no exceptions except as to the ownership of the minerals by the District, as to which the District agrees not to use the surface of the Project Site for the investigation, exploration or production of minerals, and except those exceptions for which affirmative title insurance coverage has been provided that will enable the financing and construction of the Project.

(d) Tenant has commenced actual construction of the Improvements on the Project Site.

(e) The Ground Lease Rent Commencement Date shall be the earlier of December 31, 2007 or the date that all of the conditions in sub-paragraphs (a) through (d) above have been satisfied.

“Initial Term” means the first ten (10) years of the term of this Ground Lease, as provided in Section 3.1 hereof.

“Impositions” means (i) all real or personal property taxes and assessments on the Improvements to be constructed on the Project Site (but not real property taxes on the Project Site itself, nor any income, transfer, gift, inheritance, estate, intangible personal property, corporation, or similar taxes imposed on the District by reason of its ownership of the Project Site or its interest in this Ground Lease), the personal property located on the Project Site and taxes, if any, imposed on the ground rent or other charges paid by the Tenant hereunder or on the Tenant’s interest in or under this Ground Lease, (ii) water and sewer rents, charges for public utilities, governmental excises, levies, license, impact and permit fees, and (iii) other governmental charges which at any time during the term of this Ground Lease may be assessed, levied, confirmed, imposed upon or become due and payable in respect of or become a lien on the Improvements to be constructed on the Project Site or any part thereof or any appurtenance thereto.

“Improvements” means the improvements as described in Exhibit “2” to this Ground Lease.

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“Lease Year” means a period of twelve (12) consecutive full calendar months. The first Lease Year shall begin on the Ground Lease Commencement Date; provided, however, if said Ground Lease Commencement Date shall occur on other than the first day of a calendar month, then the first Lease Year shall commence upon the first day of the calendar month next following the Ground Lease Commencement Date. Each succeeding Lease Year shall commence upon the anniversary of the beginning of the previous Lease Year.

“Person” means and includes natural persons, corporations, general partnerships, limited partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.

“Port” or “District” means the Port of Lake Charles or Lake Charles Harbor & Terminal District, as established by Louisiana Revised Statute 34:201, et seq., in the Parish.

“Project” means the construction and operation of resort facilities including riverboat casino operations as described on Exhibit “2”.

“Project Site” means the real property described specifically by the survey attached as Exhibit “1-A” and legal description on Exhibit “1” to this Ground Lease upon which the Project will be located and which real property is owned by the District and leased by the District to the Tenant pursuant to this Ground Lease.

“Tenant’s Property” means all machinery, vessels, equipment, furniture, furnishings, inventory and other personal property and all severable fixtures of any kind and at any time made, installed, fixed, or placed on, in, or to the Project Site, but shall not include docks, wharves, warehouses, buildings, or other structures or things deemed to be immovable. Tenant and Landlord acknowledge that the riverboat portion of the Project is deemed to be a movable and not an immovable, or a component part of an immovable or a component part of the Project Site.

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2. Ground Lease Premises.

2.1 Date. The date of this Ground Lease shall be the Effective Date.

2.2 District’s Agreement to Lease. Upon the terms and conditions hereinafter set forth, and in consideration of the payment of the rents and the prompt performance by the Tenant of the covenants and agreements to be kept and performed by the Tenant under this Ground Lease, the District does lease to the Tenant and the Tenant hereby leases from the District, the Project Site legally described and as shown in that survey attached hereto and made a part hereof as Exhibit “1-A”. Reasonable egress and ingress from and to the Project Site sufficient to permit the Tenant to accomplish its purposes in connection with the Project shall be made available by the District to the Tenant, provided that the exact route over waterways shall be subject to the reasonable control of the District.

2.3 Description of Contemplated Improvements. In consideration of, and as a material inducement to, the District’s execution of this Ground Lease, the Tenant hereby agrees and shall be obligated, at Tenant’s sole cost, to finance, construct, and maintain the Improvements, as provided in Section 6.

3. Term.

3.1 Initial Term and Extensions. The Initial Term of this Ground Lease shall be ten (10) years, commencing at 12:01 a.m. on the Ground Lease Commencement Date and, unless sooner terminated as hereinafter provided, ending at 11:59 p.m. on the tenth (10th) anniversary of the last day of the month immediately preceding the Ground Lease Commencement Date, provided that if the Ground Lease Commencement Date is not the first day of a calendar month, the Initial Term shall extend to 11:59 p.m. on the tenth (10th) anniversary of the last day of the month in which the Ground Lease Commencement Date occurs. The parties shall enter into a supplemental memorandum setting forth the Ground Lease Rent Commencement Date, the Ground Lease Commencement Date, and expiration date of the Initial Term.

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In consideration of and conditioned upon Tenant being in full compliance with all terms and conditions set forth herein, the District hereby grants unto Tenant the option to lease the Project Site for six (6) additional ten (10) year terms; the first of said terms commencing upon the expiration of the Initial Term and extending for a period of ten (10) years, (hereinafter referred to as “first option term”), and the second of said terms commencing upon the expiration of the first option term for a period of ten (10) years, (hereinafter referred to as “second option term”), and the third of said terms commencing upon the expiration of the second option term for a period of ten (10) years, (hereinafter referred to as “third option term”), and the fourth of said terms commencing upon the expiration of the third option term for a period of ten (10) years, (hereinafter referred to as “fourth option term”) and the fifth of said terms commencing upon the expiration of the fourth option term for a period of ten (10) years, (hereinafter referred to as “fifth option term”) and the sixth of said terms commencing upon the expiration of the fifth option term for a period ten (10) years, (hereinafter referred to as the “sixth option term”).

Each option to extend the lease of the Project Site as set forth above shall automatically occur unless the Tenant elects to terminate this Ground Lease and communicates such election by written notice from the Tenant to the District on or before six (6) months prior to the expiration of the current lease term.

All the terms and conditions of this Ground Lease shall be applicable to the first option term, the second option term, the third option term, the fourth option term, the fifth option term, and the sixth option term, if any, and the rental shall be determined in accordance with the provisions outlined in Exhibit “3” attached hereto and made a part hereof.

4. Rent.

4.1 Rent. Commencing on the Ground Lease Rent Commencement Date and until the Ground Lease Commencement Date, Tenant shall pay to the District as rental one-half (  ¹ / 2 ) of the amount of rental on Exhibit “3”. Commencing with the Ground Lease Commencement Date, Tenant shall pay to the District as rent the full amount of the rental provided on Exhibit “3”. Rent for any period of less than one month shall be apportioned based on the number of days in that month.

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4.2 Due Date. All rental payments payable after the Ground Lease Commencement Date shall be made annually in advance and on or before the fifth working day of the first month of each Lease Year during the entire term of this Ground Lease commencing upon the Ground Lease Commencement Date.

All rental payments due from the Ground Lease Rent Commencement Date until the Ground Lease Commencement Date shall be due monthly in advance on or before the fifth working day of each month following the Ground Lease Rent Commencement Date. The initial rent shall be due on the Ground Lease Rent Commencement Date and shall be a pro rata amount of such monthly rent as provided in paragraph 4.1 in the event the Ground Lease Rent Commencement Date is a date other than the first of a calendar month.

4.3 Place of Payment. Rent shall be payable at such place as the District may specify, by written notice to the Tenant, as hereinafter provided, from time to time.

5. Net Lease; Taxes and Utility Expenses.

5.1 Net Lease. This Ground Lease is a net lease and it is agreed and intended that the Tenant shall pay or cause to be paid all operating costs and Impositions of every kind and nature whatsoever relating to the Project Site except as expressly otherwise provided in this Ground Lease. The Tenant shall pay to the District absolutely net throughout the term of this Ground Lease, the rent and other payments hereunder, free of any charge, assessments, Impositions, expenses, or deductions of any kind, and without abatement, deduction or set off, except as expressly otherwise provided in this Ground Lease.

5.2 Taxes and Utility Expenses.

(a) Subject to Section 5.2(b) hereof, the Tenant shall pay or cause to be paid, before any fine, penalty, interest, or cost may be added thereto for the nonpayment thereof, all Impositions.

(b) The Tenant shall bear the burden of and shall make timely remittances of all Impositions and shall file timely, with appropriate governmental units, all returns, statements, and reports legally required with respect thereto. The Tenant shall promptly remit to any governmental unit any such Imposition, unless the Tenant shall in good faith, with due

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diligence, and by appropriate judicial or administrative proceedings, contest the validity, applicability, or amount thereof. The Tenant shall give the District 10 days’ prior written notice of the Tenant’s intent to contest such Imposition. Any such contest shall be at the Tenant’s sole cost and expense.

(c) The Tenant, upon the request of the District, shall furnish to the District, within thirty (30) days after the date when an Imposition becomes delinquent if not paid, official receipts of the appropriate taxing authority or other evidence satisfactory to the District evidencing the payment thereof. The certificate, advice or bill of non-payment of such Imposition issued by the proper official designated by law to make or issue the same or to receive payment of an Imposition shall be prima facie evidence that such Imposition is due and unpaid at the time of the making of such certificate, advice, or bill.

(d) Except as expressly otherwise provided herein, nothing contained herein shall modify, amend, or constitute a waiver of, expressly or by implication, any applicable taxes or Imposition with respect to all or any portion of the Project or the operation thereof.

5.3 Utility Connections. The Tenant shall be responsible for obtaining, at its own cost, electricity, telephone, water, sewerage, and other utility service to the Project Site.

6. Tenant Improvements.

The Tenant shall have the right and obligation to finance, construct, and install on the Project Site (in conformity with Section 6.1 hereof), at Tenant’s sole cost, the Improvements and such related improvements as are incidental thereto, all of which shall remain the property of the Tenant during the term of this Ground Lease.

6.1 Conformity to Preliminary Description and Building Code. A preliminary description of the Improvements is attached hereto as Exhibit “2”. The Improvements shall be constructed and completed in substantial conformity with such preliminary description and conformity with all applicable building codes, laws, rules and regulations.

6.2 (This section intentionally left blank.)

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6.3 Commencement and Completion of Improvements. The Tenant shall commence construction of the Improvements within twelve (12) months from the Effective Date of this Ground Lease. The Tenant shall proceed with due diligence to construct and build the Improvements, without any cost, expenses, charge, liability, or obligation to be borne by the District and shall complete the Improvements. Tenant shall expend on the Improvements an amount equal to the estimated costs set forth in Exhibit “2”, however, Tenant and District acknowledge that such costs are preliminary estimates and actual expenditures may vary by as much as ten (10%) percent or more. All Improvements shall be completed within thirty-six (36) months from commencement of construction or as specified in Exhibit “2”, except for delays caused not by the actions of Tenant; but primarily by strike, lock-outs, labor disputes, wars, insurrections, riots, fires, weather interference, acts of God, inability to obtain construction materials, governmental regulations or interference, rationing, or other restrictions or conditions or causes unavoidable or reasonably beyond the control of the Tenant.

6.4 Failure to Complete. Failure to complete construction of the Improvements as set forth in Exhibit “2” prior to 36 months after the commencement of construction shall, at the option of the District, constitute an Event of Default under Section 15.1, provided that no such Event of Default shall be deemed to have occurred if the delay was primarily caused by the acts or omissions of a third party. Any delays in the completion of construction of the Improvements caused primarily by strike, lock-outs, labor disputes, wars, insurrections, riots, fires, weather interference, acts of God, inability to obtain construction materials, governmental regulations or interference, rationing, or other restrictions or conditions or causes unavoidable or reasonably beyond the control of the Tenant shall be deemed reasonable delays, and the time within which the Tenant shall complete the construction of said Improvements and the construction completion date shall be extended by the length of such delay(s).

However, in the event that: (a) the United States of America or the State of Louisiana or any federal, state or local political body, agency or instrumentality, takes any action(s) that prohibits or materially affects riverboat casino gaming at the Project Site; or (b) a local option referendum is adopted by the populace of the City of Lake Charles and/or the Parish of

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Calcasieu prohibiting riverboat gaming by Tenant at the Project Site; or, (c) the State of Texas adopts legislation which authorizes casino type gaming (including riverboat gaming) within its borders (as opposed to outside the territorial limits of the United States), Tenant, at its sole option, shall have the right to terminate this Ground Lease and all of its obligations hereunder upon thirty (30) days written notice, but at the option of the District, Tenant shall, at its expense, demolish and remove any partially complete building on the Project Site. The Tenant shall be entitled to a credit against the penalty for liquidated damages as provided in paragraph 17.4 of this Ground Lease for the cost of such demolition.

6.5 District’s Right to Inspect. Provided that the District shall not unreasonably interfere with the construction of the Improvements, the District, its officers, representatives, agents, and employees shall have the right, at reasonable times and upon reasonable advance notice to the Tenant, to examine and inspect the Improvements in order that the District, its officers, representatives, agents, and employees may be able to determine that same substantially conform to applicable laws, rules, regulations or building codes, including without limitation, the right to observe or conduct reasonable tests of the Improvements to the extent necessary to determine such substantial conformity. If any test conducted by the District, its officers, representatives, agents, or employees under this Section 6.5 reveals that the Improvements are not in such substantial conformity, the Tenant shall pay the reasonable costs of such test; otherwise, the cost of all such tests shall be at the District’s expense.

6.6 Tenant’s Property. All Tenant’s Property shall at all times be and remain the sole property of the Tenant. The Tenant shall be entitled to remove Tenant’s Property from the Project Site at any time during or within 60 days after the termination of this Ground Lease provided the Tenant repairs any damage caused by such removal.

6.7 Maintenance of Improvements. During the continuance of this Ground Lease, the Tenant will keep in reasonably good state of repair any and all property, open areas, sea walls, bulkheads, moorings, buildings, fixtures and building equipment that are brought or constructed or placed upon the Project Site by the Tenant, and the Tenant will repair such property as often as may be necessary in order to keep the Improvements in reasonably good repair and condition.

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6.8 Signs. The Tenant shall be permitted to place reasonable signs and other means of identification of its business on the Project Site so long as the same comply with applicable statutes, laws, and ordinances.

6.9 Alterations. The Tenant shall be permitted to make improvements or alterations of the Project Site during the Initial or Extended Term without the District’s approval or consent as long as such alterations and improvements do not result in any change of the uses of the Project Site permitted by this Ground Lease.

7. Tenant’s Surrender of Project Site.

7.1 Surrender at End of Ground Lease. The Tenant shall and will on the last day of the Initial Term hereof, or if extended, on the last day of any Extended Term hereof, or upon any early termination of this Ground Lease for any reason, surrender and deliver the Project Site and the Improvements thereon to the District and, except as provided in Section 13, in good condition and repair (in light of the age, construction, and nature thereof), less normal wear and tear, free and clear of any liens or encumbrances, except for District-Created Liens, and without any payment by the District to the Tenant of any amounts for the Improvements, or at the option of the District, remove, at the cost of Tenant, all or part of any uncompleted Improvements as may be reasonably determined by the District. The Tenant shall remove the Tenant’s Property. The Tenant shall not be required to restore the Project Site to its condition prior to construction of the Improvements or to restore any alterations of the Project Site.

7.2 District Not Liable. The District shall not be responsible for any loss or damage occurring to any real or personal property owned, leased, or operated by the Tenant, its agents, or employees, prior to or subsequent to the termination of this Ground Lease, other than, to the extent permitted by law, for such loss or damage occurring as a result of the negligent conduct or the willful misconduct of the District, its officers, representatives, agents, or employees or the District’s misrepresentations or its breach of or default under this Ground Lease.

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8. Use.

8.1 No Unlawful Activities. The Tenant agrees not to make any unlawful use of the Project Site and the Improvements, including without limitation, any use constituting a nuisance of the Project Site or to adjoining or neighboring property.

8.2 Permitted Uses; Compliance with Laws; Permits. The Project Site shall be used by the Tenant to construct and operate a riverboat gaming vessel in association with a hotel, retail and entertainment complex. No other use of the Project Site shall be permitted without the consent of the District which consent will not be unreasonably withheld. Tenant’s use of the Project shall at all times be in compliance with all applicable rules, laws and regulations and Tenant shall obtain and maintain, at its cost, all applicable permits for the construction and maintenance of the Improvements or for Tenant’s use or activities on the Project Site.

8.3 Waste. The Tenant shall not cause, allow, or suffer to exist any waste of the Project Site or the Improvements.

9. Indemnification.

9.1 Tenant’s General Agreement to Indemnify. The Tenant releases the District, its officers, representatives, employees, agents, successors and assigns, (individually and collectively, “District Indemnitee”) from, assumes any and all liability for, and agrees to indemnify the District Indemnitee against all claims, liabilities, obligations, damages, penalties, litigation, costs, charges, and expenses (including, without limitation, reasonable attorney’s fees, engineers’ fees, architects’ fees, and the costs and expenses of appellate action, if any), imposed on, incurred by or asserted against the District Indemnitee or its interest in real property in the Project Site arising out of (i) the use or occupancy of the Project Site by the Tenant, its officers, representatives, agents, and employees, (ii) the construction or operation of the Project by the Tenant, its officers, representatives, agents, and employees, (iii) any claim arising out of the use, occupancy, operation, or construction of the Project Site by the Tenant, its officers, representatives, agents, and employees, and (iv) activities on or about the Project Site by the Tenant, its officers, representatives, agents, and employees, of any nature, whether foreseen or unforeseen, ordinary, or extraordinary, in connection with the construction use,

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occupancy, operation, maintenance, or repair of the Project, the Improvements, or the Project Site by the Tenant, its officers, representatives, agents, and employees; provided, however, that any such claim, liability, obligation, damage or penalty arising as a result of the negligence or willful misconduct of the District Indemnitee shall be excluded from this indemnity. The indemnity provided in this section shall include within its scope any liability imposed by law on the District on a strict liability theory as landowner for physical defects in the Project Site (except for environmental contamination), it being the intention of the parties for Tenant to assume liability for such defects in the Project Site during the term of this Ground Lease. This section shall include within its scope, but not be limited to, any and all claims or actions for wrongful death, but any and all claims brought under the authority of or with respect to any local, state, or federal environmental statute or regulation shall be covered by Section 9.2 and not this Section 9.1.

9.2 Tenant’s Environmental Indemnification. The Tenant agrees that it will comply in all material respects with all environmental laws and regulations applicable to the Tenant, including without limitation, those applicable to the use, storage, and handling of hazardous substances in, on, or about the Project Site. The Tenant agrees to indemnify and hold harmless each of the District Indemnitee against and in respect of any and all damages, claims, losses, liabilities, and expenses (including, without limitation, reasonable attorneys, accounting, consulting, engineering, and other fees and expenses), which may be imposed upon, incurred by, or assessed against any of the District Indemnitee by any other party or parties (including, without limitation, a governmental entity), arising out of, in connection with, or relating to the subject matter of: (a) the Tenant’s breach of the covenant set forth above in this Section 9.2 or (b) any environmental condition of contamination on the Project Site or any violation of any federal, state, or local environmental law with respect to the Project Site first occurring after the Effective Date of the Ground Lease and caused by the Tenant’s operations or facilities.

9.3 Burden of Proof. The Tenant, at its own cost, shall cause to be conducted a Phase I and Phase II environmental assessment of the Project Site prior to the commencement of construction of the Improvements and a copy of all written reports issued in connection with such assessment shall be given

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to the District within five (5) days of completion. If, as a result of such assessments, environmental contamination of the Project Site is discovered, such contamination shall be deemed to have existed prior to the date of the Ground Lease. Any condition of environmental contamination discovered on the Project Site after the completion of the environmental assessments (Phase I and Phase II) shall be presumed, for purposes of the Tenant’s agreement to indemnify the District Indemnitee, to have been caused by the Tenant’s operations or facilities, unless the Tenant can demonstrate, by a preponderance of the evidence, that (i) such condition originated off the Project Site, or (ii) such condition was not caused by the Tenant’s operations or facilities. The provisions of this Section 9.3 are intended only to allocate the burden of establishing causation between the Tenant and the District with respect to environmental contamination discovered before and after the date of the Ground Lease. In no event shall any third party other than the District Indemnitee and the Tenant be entitled to any benefit, reliance, or presumption based on the provisions of causation or liability of either party with respect to any environmental contamination of the Project Site.

9.4 Survival of Indemnities. The foregoing indemnities shall survive the term and shall be in addition to any of the District’s or the Tenant’s obligations for breach of a representation or warranty.

10. Insurance.

10.1 Public Liability. The Tenant agrees to carry or cause to be carried public liability insurance with respect to the Project Site and the uses and activities of the Tenant thereon in the minimum combined single limit amount of One Million Dollars ($1,000,000) for the death of or personal injury to one or more persons and for property damage for each occurrence in connection with the Project Site and the use thereof or activities of the Tenant thereon, and same shall include the District as an additional insured with respect to any matters arising out of this Ground Lease or arising out of the District’s ownership of the Project Site. Such requirement may be satisfied by Tenant or its parent corporation maintaining blanket public liability insurance covering all of its operations. Such insurance policy shall contain a provision or be accompanied by a certificate or endorsement to the effect that the insurance company shall not cancel or materially modify such policy without first giving written notice thereof to the

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District at least thirty (30) days in advance of such cancellation or material modification. At the District’s request, the Tenant shall promptly provide to District certificates evidencing such insurance and shall furnish copies of such policies to the District. The District may change by reasonable amounts, consistent with prevailing commercial practices in the Port of Lake Charles, the limits of insurance coverage required by this Section 10.1 upon ninety (90) days written notice to the Tenant stating such changed limits of coverage and the reasons for the change.

10.2 Workers’ Compensation. The Tenant further covenants and agrees, at its expense, to take out and maintain at all times, all necessary workers’ compensation insurance covering all persons employed by the Tenant in and about the Project Site to the extent required by Applicable Laws.

10.3 Qualification for Insurer. The Tenant may elect to be self-insured subject to the approval of the District, which approval shall not be unreasonably withheld.

10.4 Waiver of Subrogation. As a part of the consideration of this Ground Lease, each of the parties hereby releases the other from all liability for damage due to any act or neglect of the other party which is the result of fire or other casualty to the extent covered by any insurance policy; provided, however, the releases herein contained shall not affect the rights of either party under this Ground Lease to be paid insurance proceeds received by the other or apply to loss or damage resulting from the willful or premeditated acts of either of the parties hereto, their agents or employees; and provided further, nothing in this Section shall be interpreted as or have the effect of relieving or modifying any obligation of any insurance company and shall be void if and to the extent it would have such effect. Any party required by this Ground Lease to maintain any casualty insurance shall make reasonable attempts to obtain the written consent to this waiver of subrogation from its insurer.

11. Liens and Mortgages.

11.1 Prohibition of Liens and Mortgages. The Tenant shall not create or permit to be created or to remain in connection with the Project, the Project Site, or the Tenant’s activities thereon, any liens or mortgages against any property interest of the District, and the Tenant shall discharge any lien,

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encumbrance, or charge (levied on account of any Imposition or any mechanics’, laborers’, or materialmen’s lien or security agreement) which might be or become a lien, encumbrance, or charge upon the District’s interest in the Project Site or any part thereof in accordance with Section 11.2 hereof.

11.2 Discharge of Liens. If any mechanics’, laborers’, or materialmen’s lien (other than a District-Created Lien) shall at any time be filed against the District’s interest in the Project Site or any part thereof in connection with the Project or the Tenant’s activities thereon, the Tenant, within 30 days after notice of the filing thereof, shall elect to contest the same or cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If the Tenant does not contest such lien and shall fail to cause such lien to be discharged within the period aforesaid, then, in addition to any other right or remedy of the District hereunder, the District may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings, and in any such event the District shall be entitled, if the District so elects, to compel the prosecution of an action for the foreclosure of such lien by the lienor with interest, attorneys’ fees, costs, and allowances. Any amount so paid by the District and all costs and expenses incurred by the District in connection therewith, including reasonable attorneys’ fees together with interest thereon at one percent (1%) per annum above the prime rate of interest quoted from time to time by Bank of America, New York, as Bank of America’s Prime Rate, from the respective dates of the District’s making of the payment or incurring of the cost and expense, shall constitute additional rent payable by the Tenant under this Ground Lease and shall be paid by the Tenant to the District within fifteen (15) days of written demand therefor.

11.3 District Not Liable For Mechanic’s Liens. Nothing herein contained shall be deemed or construed in any way to constitute the consent of or request by the District, express or implied, to a contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to or repair of the Project Site, the Improvements or any part thereof. NOTICE IS HEREBY GIVEN THAT THE DISTRICT SHALL NOT BE LIABLE FOR ANY LABOR OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE TENANT UPON CREDIT AND THAT NO MECHANIC’S OR OTHER LIEN FOR ANY SUCH LABOR OR MATERIALS SHALL ATTACH TO OR AFFECT THE

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REVERSIONARY OR OTHER INTEREST OF THE DISTRICT IN AND TO THE PROJECT SITE AND THE IMPROVEMENTS THEREON.

11.4 Rights of Ground Leasehold Mortgages. The District agrees that it shall execute such agreements and certificates with the holder or prospective holder of any mortgage or similar lien instrument (a “Mortgage”) encumbering the Tenant’s interests in the Project Site (a “Ground Leasehold Mortgage”) as the Tenant or such Mortgagee may from time to time reasonably require. As a condition precedent to the District’s obligations under this Section 11.4, the Tenant must notify the District in writing of any Mortgagee that holds a Ground Leasehold Mortgage, and such notice shall include the name of the Mortgagee and its address for the purpose of all communications required