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HomeMy WebLinkAboutContract 50094-T1 CSC No. 50094-T1 MUTUAL TERMINATION,SETTLEMENT,AND RELEASE AGREEMENT This Mutual Termination, Settlement, and Release Agreement ("Agreement") is made and entered into this 13th day of January ,2023,("Effective Date")by and between the City of Fort Worth,a home-rule municipality organized under the laws of the State of Texas,acting by and through its duly authorized Assistant City Manager, and Rolls-Royce Corporation, a Delaware Corporation, acting by and through its duly authorized representatives. A. Definitions In addition to the terms defined in the body of this Agreement,the following terms shall have the definitions ascribed to them as follows: "City"means the City of Fort Worth,Texas. "Rolls-Royce" means Rolls-Royce Corporation, a Delaware Corporation, and its partners, representatives, members, managing members, officers, managers, proprietors, directors, employees, representatives, agents, subsidiary organizations, parent organizations, successor entities, assigns, predecessors,stockholders,administrators,contractors,and related companies. "Lease"means collectively Facilities Lease Agreement identified under City Secretary Contract ("CSC") No. 50094 between the City and Rolls-Royce, as assigned by that certain Assignment and Assumption of Lease dated October 28,2021. "Parties"means the City and Rolls-Royce. B. Recitals WHEREAS,the City,as Lessor,and Rolls-Royce,as Lessee,are parties to the Lease which began on January 1,2018 for the lease of a certain tract of land and appurtenances situated in Denton County,Texas, more particularly described in the Lease together with all improvements thereon(the "Leased Premises") within the Alliance Fort Worth Maintenance Base; WHEREAS,under section 2.2 of the Lease,"Termination Options",Rolls-Royce was entitled to a"Year Five Termination Option"in which the lease could terminate after sixty months of the Effective Date as long as Rolls-Royce provided six-month notice to the City; WHEREAS,On June 30,2022,Rolls-Royce provided notice to the City of its intent to execute its Year Five Termination Option with the Lease terminating on December 31,2022; WHEREAS, in preparation of Rolls-Royce's departure, the Parties each conducted property condition assessments to determine if there were any outstanding obligations of Tenant to be met under the Lease; WHEREAS, while both Parties agree that Tenant has certain maintenance and restoration obligations under the Lease, the Parties have reached different conclusions with respect to the specifics, ©2023 Rolls-Royce OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX and extent,of Tenant's maintenance and restoration obligations under the Lease,and therefore are in dispute regarding same; WHEREAS, in addition to the maintenance and restoration obligations, the Lease also requires that certain improvements remain on the Leased Premises upon termination and that an environmental exit audit be conducted in accordance with the Lease; WHEREAS,the Parties dispute that certain improvements installed by the Tenant should remain on the Leased Premises upon termination of the Lease; WHEREAS, although the Parties are in dispute as to the correct maintenance and restoration obligations and as to whether certain improvements can be removed or not from the Leased Premises,both Parties desire to settle any and all such disputes under the Lease by entering into this Agreement to effectuate a smooth, quick and mutually acceptable termination of the Lease and transition of the Leased Premises back to the City; WHEREAS, to settle such disputes and in lieu of any claim for damages or any other rights and remedies that the City may have under the Lease up to the Effective Date of this Agreement for Tenant's obligations under the Lease, City has agreed to accept an amount of$860,000.00 from Tenant in full satisfaction of all maintenance and restoration obligations of Tenant under the Lease, and in turn Tenant has agreed that the items listed within Exhibit"A" attached hereto (the"Remaining Improvements")will remain on the Leased Premises and that an environmental exit audit will be conducted by Tenant before the termination date of the Lease; and WHEREAS, except as otherwise expressly provided below in this Agreement,the Parties hereby agree that the following terms and conditions shall constitute full and final settlement of any and all issues associated with above disputes under the Lease and that both Parties are released of any and all other obligations under or in connection with the Lease. C. Agreement,Release,&Covenants NOW,THEREFORE,the Parties hereto,in consideration of the mutual covenants set forth herein and intending to be legally bound hereby,stipulate and agree as follows: I. Incorporation of Recitals 1. The recitals set forth above are true and correct and form the basis upon which the Parties have entered into this Agreement and are incorporated herein by reference. H. Settlement and Release of Claims 1. Rolls-Royce does hereby agree to pay the City Eight Hundred Sixty Thousand Dollars ($860,000.00)in full satisfaction of all maintenance and restoration obligations of Tenant under the Lease. This sum, along with the Remaining Improvements listed in Exhibit "A"herein and performance of an 02022 Rolls-Royce Not Subject to Export Control Private Settlement Agreement and Release—Rolls-Royce Corporation 2 of 9 environmental exit audit as required under the Lease ("Tenant Obligations"), represents the combined agreed settlement between the City and Rolls-Royce for existing obligations under the Lease. 2. Rolls-Royce will have until January 27,2023 to fulfill its obligations under this Agreement. 3. In the event Rolls-Royce fails to fulfill the Tenant Obligations on or before January 27, 2023, except in case of a delay resulting from matters beyond the reasonable control of Rolls-Royce including without limitation the fault of City(an"Excusable Delay"),Rolls-Royce shall be liable for paying 150% of the $860,000.00 ($1,290,000.00) as a final agreed amount to satisfy all maintenance and restoration obligations under the Lease, and shall leave all Remaining Improvements on the Leased Premises,within 30 calendar days after receiving written notification by the City. If Rolls-Royce fails to meet the January 27, 2023 deadline due to an Excusable Delay, then the deadline will be extended for a period of time agreed upon by the parties. 4. Upon full receipt of all amounts due to the City under this Agreement the Parties hereby COMPROMISE, SETTLE, RELINQUISH, RELEASE, ACQUIT, and FOREVER DISCHARGE each other from and against any and all claims, demands, debts, liens, costs, expenses, actions, and causes of action of whatsoever nature, description of character, whether in tort or in contract, or by virtue of the common law, statute, or regulation,known or unknown, heretofore existing between the City and Rolls- Royce,whether known or unknown,which may have accrued or may accrue,on account of, arising from, or in any manner growing out of, relating to, resulting from, or in any way connected to the Tenant Obligations and any other portions of the Lease pertaining to the Tenant's maintenance,restoration and/or repair obligations, improvement notification requirements, exit audit requirements and any related transactions and occurrences including, but not limited to, any and all claims for exemplary damages, consequential damages, contractual damages, economic loss, attorney's fees, and any and all damages recoverable under the laws of the State of Texas and any and all other statutory or common law legal damages,known or unknown. 5. Notwithstanding anything to the contrary herein, the Lease shall not be affected by this Agreement and shall remain in full force and effect in accordance with the terms of the Lease,subject to the agreements set forth herein. 6. The Parties represent and warrant that no promise or inducement has been offered except as set forth herein;that this Agreement is executed without reliance upon any statement or representation of any person or Parry's release, or its representatives, concerning the nature and extent of the losses, injuries, damages, or legal liability therefore; and that the acceptance of the consideration set forth herein is in full accord and satisfaction of all claims set forth herein. 7. It is understood that this is a mutual compromise of claims. The Parties desire to compromise and settle those matters and things set forth herein to avoid the hazard, inconvenience, uncertainty,and expense of litigation. 02022 Rolls-Royce Not Subject to Export Control Private Settlement Agreement and Release—Rolls-Royce Corporation 3 of 9 8. The Parties represent and warrant that they are the sole owners of the claims, causes of actions, and rights-in-action being released herein, and they have not transferred, assigned, or otherwise encumbered said claims or any part thereto. 9. The Parties hereto shall not assign or transfer their interests and obligations of the settlement set forth in this Agreement without the prior written consent of the other Party,and any attempted assignment or transfer of all or any part hereof without such prior written consent shall be void. III. Termination of Lease 1. Both parties agree that the Lease is hereby terminated,effective as of December 31,2022. However, such termination shall not constitute (i) a release by one party or any liability accruing or obligation to indemnify under the Lease for any item not specifically addressed within this Agreement or (ii)a waiver of one party to enforce any unperformed duties or obligations of the other under the Lease not specifically addressed within this Agreement. IV. Assignment of Remaining Improvements 1. Rolls-Royce hereby sells, assigns,transfers and conveys to the City all of Rolls-Royce's right, title and interest in and to all of the Remaining Improvements, and the City hereby purchases and accepts all of Rolls-Royce's right,title and interest in and to all of the Remaining Improvements,effective as of December 31,2022(the"Assignment Date"),on the terms set forth in this Agreement. 2. The City hereby agrees to indemnify, defend and hold harmless Rolls-Royce from and against any and all losses, liabilities, damages, demands, claims, administrative or legal proceedings, judgments, causes of action, assessments, fines,penalties, costs of settlement, and other costs (including reasonable attorneys' fees) or expenses,of any and every kind or character suffered or incurred by Rolls- Royce to the extent accruing or arising under, in connection with or with respect to the Remaining Improvements from and after the Assignment Date, 3. THE REMAINING IMPROVEMENTS ARE HEREBY SOLD, ASSIGNED, TRANSFERRED AND CONVEYED TO LANDLORD ON AN "AS IS", "WHERE IS", "WITH ALL FAULTS"BASIS. LANDLORD HEREBY EXPRESSLY ACKNOWLEDGES THAT ROLLS-ROYCE HAS NOT MADE, AND LANDLORD IS NOT RELYING ON, ANY REPRESENTATION, WARRANTY, GUARANTY, PROMISE, PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO SUCH REMAINING IMPROVEMENTS,WHETHER ORAL OR WRITTEN,EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 4. The City accepts the Remaining Improvements in full satisfaction of Rolls-Royce's obligations under the Lease to leave any improvement or other item on the Leased Premises, and agrees 02022 Rolls-Royce Not Subject to Export Control Private Settlement Agreement and Release—Rolls-Royce Corporation 4 of 9 that any other improvements, fixtures or other items not listed on Exhibit "A" are the property of Rolls- Royce and can be removed. V. Miscellaneous 1. This instrument contains the entire agreement between the Parties as to the matters contained herein and the terms of this instrument are contractual and not merely recitals. There are no other agreements, either written or oral,and this Agreement supersedes all earlier representations,negotiations, or agreements about this matter. The Parties acknowledge that the covenants,promises,and representations made herein are binding on, and inure to,the benefit of each of the Parties. As a matter of clarification, nothing contained herein shall be construed to affect the enforceability or validity of the Lease. 2. The parties represent that they have consulted, or had the opportunity to consult, an attorney to seek legal counsel regarding the contents and effects of this Agreement. The Parties further represent that they have been informed of the content and effect of this instrument and that the instrument is executed as their act and deed and of their own free will. 3. In the event that any provision of this Agreement is held void,voidable,or unenforceable, the remaining portions shall remain in full force and effect. 4. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement,venue for such action shall lie in state courts located in Tarrant County,Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This Agreement,including any exhibits,shall be construed in accordance with the laws of the State of Texas. 5. The Parties represent and warrant that they are over the age of eighteen (18) years, competent to execute this Agreement,have carefully read the foregoing Agreement,and know the contents thereof and have signed the same of their own free will and with the advice of counsel,if applicable. 6. This Agreement may be executed in several counterparts,each of which will be deemed an original, but all of which together will constitute one and the same instrument. A signature received via facsimile or electronically via email shall be as legally binding for all purposes as an original signature. 7. It is understood that by execution of this Agreement,the City does not waive or surrender any of its governmental powers or immunities. [SIGNATURES ON FOLLOWING PAGE] 02022 Rolls-Royce Not Subject to Export Control Private Settlement Agreement and Release—Rolls-Royce Corporation 5 of 9 IN WITNESS HEREOF,the Parties hereto have executed this Agreement to be effective on the Effective Date. CITY OF FORT WORTH ROLLS-ROYCE CORPORATION 0alm &�e�R/ - 'L� "",U_ By, Dana Burgh doff(Ja v,202 z :11 CST) By: Dana Burghdoff Brian D.Crandall Assistant City Manager Sr. Corp.Real Estate Mgr.-Americas Date: Jan 17,2023 Date: January 13,2023 CONTRACT COMPLIANCE MANAGER By signing,I acknowledge that I am the person responsible for the monitoring and administration of this contract,including ensuring all erformance and reporting requirements. 1 Name: 'dark Bro n(Jan 17,202313:04 CST) Title: Lease Manager,Property Management Department APPROVED AS TO FORM AND LEGALITY: Thomas R.Hansen a444�on�� as Assistant City Attorney b AR F 0000 o°p> ,°p-1d0 _tig pv8 8 ATTESTED BY: °o� 1cr Jannette S.Goodall City Secretary M&C No.22-1060 Date: Jan. 13,2023 Form 1295:NA. OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME,the undersigned authority,a Notary Public in and for the State of Texas,on this day personally appeared Dana Burghdoff, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the City of Fort Worth for the purpose and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of ,2023. Notary Public in and for The State of Texas STATE OF INDIANA § COUNTY OF HENDRICKS § BEFORE ME,the undersigned authority a Notary Public in and for the State of Indiana ,on this day personally appeared Brian D.Crandall,Sir.Corp.RE Mgr.-Americas ,]mown to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of ROLLS-ROYCE CORPORATION, for the purpose and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this Jday of fan u a+'�I ,2023. Notary Public in and for The State of 5 ,h e b a Q a, LAURA ROZZEL moo?• e��Notary Public,State of Indiana 'z SEAL r'E Hendricks County Commission Number NP0741602 "vP My Commission Expires un,u1�� June 05,2030 Exhibit"A" Improvements to remain at the Lease Premises Fuel leak detections and tank monitoring system f i { I i i Two Air compressors 407 f.7 17 v •� Remote Oil Fill i i i i CCTV system l M&C Review Page 1 of 2 Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA FURT I' RT1I Create New From This M&C REFERENCE **M&C 22- 21 ROLLS ROYCE DATE: 12/13/2022 NO.: 1060 LOG NAME: TERMINATION AND SETTLEMENT AGREEMENT CODE: C TYPE: CONSENT PUBLIC NO HEARING: SUBJECT: (CD 7) Authorize the Execution of a Lease Termination and Settlement Agreement with Rolls-Royce North America Inc. Who Will Pay City an Amount of$860,000.00 to Settle all Potential Claims Related to Maintenance and Repair Obligations Due Under City Secretary Contract Number 50094, a Facilities Lease Agreement for Space Located at 2100, 2104, and 2112 Eagle Parkway, Fort Worth Texas 76177 at the Alliance Fort Worth Maintenance Facility RECOMMENDATION: It is recommended that the City Council authorize the execution of a lease termination and settlement agreement with Rolls-Royce North America Inc. who will pay City an amount of$860,000.00 to settle all potential claims related to maintenance and repair obligations under City Secretary Contract Number 50094, a Facilities Lease Agreement for space located at 2100, 2104, and 2112 Eagle Parkway, Fort Worth Texas 76177 at the Alliance Fort Worth Maintenance Facility. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to recommend that the City Council authorize the execution of a termination and settlement agreement where Rolls-Royce North America Inc. (Rolls-Royce) will pay to the City of Fort Worth (City) the amount of$860,000.00 as a settlement for unfulfilled maintenance obligations. A Facilities Lease Agreement was entered into by the parties on December 19, 2017 under City Secretary Contract Number 50094 (the Lease). Rolls-Royce has properly exercised its option to terminate the Lease, effective December 31, 2022, having provided written notice of such termination on June 30, 2022. In preparation of Rolls-Royce's departure, the City conducted an assessment to determine if there were any outstanding obligations of Rolls-Royce to be met under the Lease including necessary maintenance to the Leased Premises required by Rolls-Royce. Additionally, the City required that certain improvements made during the term to the Leased Premises by Rolls-Royce remain on the Leased Premises upon termination and that an environmental exit audit be conducted in accordance with the Lease. Rolls-Royce has conducted their own maintenance assessment which conflicts in some instances with the City's and there is a genuine disagreement as to the final maintenance costs necessary and as to which improvements are to remain on the Leased Premises. After discussions between the parties, the City has agreed to accept $860,000.00 from Rolls-Royce for unfulfilled maintenance obligations and Rolls-Royce will leave behind specific improvements installed on the Leased Premises identified by the City. Rolls-Royce will also complete the required environmental exit audit under the Lease before the term of the Lease expires. By coming to a resolution on these items through this settlement agreement, the City will be able to move forward more quickly with a new Lease for the Leased Premises which has been in the works and already negotiated with a new tenant which is set to begin in 2023. The City intends to use the revenue and equipment from this termination and settlement agreement to http://apps.cfwnet.org/council_packet/mc_review.asp?ID=3 0612&councildate=12/13/2022 1/18/2023 M&C Review Page 2 of 2 offset future tenant improvements associated with the Alliance Fort Worth Maintenance Facility. FISCAL INFORMATION/CERTIFICATION: The Director of Finance certifies that upon approval of the above recommendations, funds will be deposited into the Alliance Maintenance Facility Fund. The Property Management Department (and Financial Management Services) is responsible for the collection and deposit of funds due to the City. Prior to any expense being incurred, the Property Management Department has the responsibility to validate the availability of funds. TO Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year (Chartfield 2) FROM Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year (Chartfield 2) Submitted for City Manager's Office bv: Dana Burghdoff(8018) Originating Department Head: Steve Cooke (5134) Additional Information Contact: Marilyn Schoening (7581) Mark Brown (5197) ATTACHMENTS 21 ROLLS ROYCE TERMINATION AND SETTLEMENT AGREEMENT Updated FID.XLSX (CFW Internal) RR SETTLEMENT AGREEMENT M AND C MAP.pdf (Public) http://apps.cfwnet.org/council_packet/me_review.asp?ID=3 0612&councildate=12/13/2022 1/18/2023