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HomeMy WebLinkAboutContract 48570 CITY SECRETARY CONTRACT NO. 01Sd GROUND LEASE WITH OPTION TO PURCHASE BETWEEN CITY OF FORT WORTH AND TCSF16-D E FORT WORTH K8,LLC This GROUND LEASE WITH OPTION TO PURCHASE (hereafter referred to as the "Agreement"), is made and_ entered into as of January 17, 2017 ("Effective Date"), by and between the CITY OF FORT WORTH, a Texas home rule municipal corporation ("City"), and TCSF16-D E FORT WORTH K8,LLC,an Idaho limited liability company(hereafter referred to as "Athlos"). WITNESSETH: WHEREAS, City is the owner of unimproved real property located at 5901 and 5817 Boca Raton Boulevard,more particularly described in the attached Exhibit"A"(the"Property"),which Property Athlos desires to acquire from City for the purpose of constructing and operating a charter school thereon; and WHEREAS, a ground lease under the terms and conditions set forth herein is desired to ensure the completion of the construction of the Improvements (as defined herein) prior to the conveyance of the Property and to provide for the conveyance of the Property following the completion of the.Improvements; NOW THEREFORE, in consideration of the terms and conditions set forth herein, for the rents to be paid and other good and valuable consideration,City and Athlos covenant and agree as follows: I. Leased Premises 1.1 Lease. City hereby leases, lets, and demises to Athlos the Property (also referred to herein as the"Leased Premises"). 1.2 Mineral Estate Reserved. Notwithstanding anything in this Agreement to the contrary, City hereby reserves the exclusive right to any natural resources in, on or under the Leased Premises, including all oil, coal, natural gas and other hydrocarbons, minerals, aggregates and geothermal resources as well as a right to grant leases or to conduct and undertake surface or subsurface extraction of same; provided, however, that no extraction of such natural resources shall (i) be inconsistent or incompatible with the rights or privileges of Athlos under this Agreement, (ii) be permitted on the surface of the Leased Premises, or (iii) adversely affect the surface of the Leased Premises. Ground Lease and Option to Purchase CFW and Athlos Page 1 of 38 II. Agreement Term 2.1 Initial Term. The initial term of this Agreement (the "Initial Term") shall begin on the Effective Date and shall continue for a period of thirty (30)years. 2.2 Renewal Terms. Athlos may renew the lease for two additional ten (10)year terms (each being a"Renewal Term")by giving written notice to City of such intent no later than twelve (12) months prior to the expiration of the Initial Term or any Renewal Term. (The Initial Term and Renewal Term are sometimes referred to herein as the "Term".) III. Rent and Consideration 3.1 Rent for Initial Term. For the use and occupancy of the Leased Premises herein granted, Athlos contracts to pay to City, throughout the Term of this Agreement, monthly payments (collectively, the "Rent") as follows: Years 0-2 $1.00 per month Years 3-7 $8,225 per month Years 8-10 $5,875 per month Years 11-14 $5,994 per month Years 15- 19 $6,117 per month Years 20-24 $6,242 per month Years 25-30 $6,369 per month The first monthly rental payment shall be due upon execution of this Agreement. After that, all payments shall be payable in advance on the 1St of each month, without notice or demand, at the office of the City Manager or at such other offices as may be directed in writing by City. If Rent payments are not received by the 5th of each month, City may notify Athlos in writing of the delinquency. 3.2 Rent for Renewal Terms. Rent for each Renewal Term shall be the fair market rent based on an appraisal determined by a State licensed independent fee appraiser agreed to between City and Athlos, said appraisal to be obtained by Athlos at Athlos' sole cost and expense. However, in no instance will the rent for any Renewal Term be less than the monthly rent at the end of the Primary Lease Term or end of a previous Renewal Term. IV. Use And Occupancy of Leased Premises 4.1 Submittal of Schematic Plans. Prior to entering into any contract for the construction of the Improvements to the Leased Premises, Athlos shall submit to City the design plans for the charter school and associated improvements ("Improvements"). The Improvements constructed on the Leased Premises shall substantially conform to the submitted schematic plans. Ground Lease and Purchase Option CFW and Athlos Page 2 of 38 4.2 Permitted Uses. Athlos agrees that it shall use and occupy the Leased Premises solely for designing, developing, constructing, furnishing, marketing, leasing and operating the Improvements for an educational purpose,pursuant to the terms and conditions of this Agreement ("Permitted Use"). Athlos shall be responsible for all cost and expenses related to or in any way connected with or caused by the Improvements. 4.3 Prohibited Uses. Athlos shall not use nor permit the use of the Leased Premises for any other or additional purpose that is not, during the Term of this Agreement, a Permitted Use, without first obtaining the prior written consent of the City, which consent may be granted, withheld, conditioned or delayed in City's sole and absolute discretion. Athlos acknowledges that the use of the Leased Premises is subject to all statutes, laws, treaties, rules, codes, ordinances, regulations, permits, interpretations, certificates or orders of any governmental entity, or any judgments,decisions, decrees, injunctions,writes, orders or like actions of any court, arbitrator, or other Federal, State or local governmental entity (hereafter the "Governmental Rules") at any time applicable to the Leased Premises and improvements thereon and that nothing in this Article IV or elsewhere in this Agreement shall constitute or be deemed to constitute a waiver by the City of the performance of its governmental functions or of any such Governmental Rules or of the duty of Athlos to comply with such Governmental Rules. Athlos agrees that it shall not use, generate, manufacture, produce, store, treat or dispose of hazardous materials (other than the use, storage and disposal of hazardous materials customarily used,stored or disposed of in the operation or cleaning of facilities within a mixed-use development, so long as such hazardous materials are used, stored and disposed of in compliance with all applicable Governmental Rules). use or allow the Leased Premises to be used for the sale or display of any pornographic material or material which is obscene under standards set forth in any Governmental Rules or operate, or allow any person to operate, in, on or about the Leased Premises, any store or other facility a principal or significant portion of the business of which is a"sexually oriented business" as such term is defined in the City Codes or similar business. Athlos agrees that it shall not(collectively, the "Prohibited Uses"): (a) use, generate, manufacture, produce, store, treat or dispose of hazardous materials (other than the use, storage and disposal of hazardous materials customarily used, stored or disposed of in the operation or cleaning of facilities within a mixed-use development, so long as such hazardous materials are used, stored and disposed of in compliance with all applicable Governmental Rules); (b) cause or permit undue accumulations of garbage,trash, rubbish or any other refuse in, on or about the Leased Premises; and (c) create, cause, maintain or permit any public or private nuisance in, on or about the Leased Premises. V. Improvements 5.1 Ownership of Improvements. The Improvements constructed on the Leased Premises during the term of this Agreement will be the property of Athlos; provided, however, that upon any termination of this Agreement pursuant to Section 17.2, the Improvements shall become the property of the City, subject to any rights of the Leasehold Mortgagee. Further, if Athlos acquires the Property pursuant to the Option, Athlos shall continue to own the Improvements. Ground Lease and Purchase Option CFW and Athlos Page 3 of 38 5.2 Compliance with Regulatory Requirements. Athlos agrees that all improvements and alterations on or to the Leased Premises shall be constructed in accordance with Governmental Rules (as hereinafter defined). Athlos shall, at its sole cost and expense, procure or cause to be procured all necessary building permits, other permits, licenses and other authorizations required for the lawful and proper construction, use, occupation, operation, and management of the Leased Premises. 5.3 Taxes and Other Charges. Athlos shall pay prior to delinquency, in addition to the payment of Rentals, each and every lawful cost, expense and obligation of every kind and nature by reason of Athlos's estate or interest in the Leased Premises and the Improvements or by reason of or in any manner connected with or arising out of City's or Athlos's possession, operation, maintenance, alteration, repair, rebuilding, use or occupancy of the Improvements, or any part thereof. Athlos shall pay and discharge,prior to the delinquency thereof, all lawful assessments, ad valorem taxes, sales taxes, business and occupation taxes, occupation license taxes, water charges, or sewage disposal charges, and all other governmental taxes, impositions, and charges of every kind and nature, and all applicable interest and penalties, if any,which at any time during the Term becomes due and payable by Athlos because of its rights or obligations under this Agreement and which is lawfully levied, assessed or imposed on Athlos, the Leased Premises or the Improvements under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise(collectively, "Taxes")imposed on the Leased Premises and the improvements and Athlos's use and occupancy of the Leased Premises and the improvements or against personal property, furniture or fixtures placed or situated in or on the Leased Premises during the Term. Athlos, upon written notice to City, may contest in good faith any Taxes (other than water charges or sewage disposal charges), and in such event may permit such Taxes (other than water charges or sewage disposal charges)to remain unsatisfied during the period of such contest and any appeal. 5.4 Liens and Encumbrances. Athlos covenants and agrees that it will not create or suffer to be created any lien, encumbrance or charge upon the Leased Premises or Athlos's interest in this Agreement, except for mortgages permitted under Article IX, and any other encumbrance expressly permitted under this Agreement or which is necessary in order for Athlos to exercise its rights or perform its obligations under this Agreement. Athlos shall satisfy or cause to be discharged, or will make adequate provision to satisfy and discharge, within sixty (60) days after the same occurs, all claims and demands for labor, materials, supplies or other items which, if not satisfied, might by law become a lien upon the Leased Premises or any part thereof. If any such lien is filed or asserted against Athlos or the Leased Premises by reason of work, labor, services or materials supplied or claimed to have been supplied on or to Athlos or the Leased Premises at the request or with the permission of Athlos or of anyone claiming under it, Athlos shall, within sixty (60) days after it receives notice of the filing thereof or the assertion thereof against the Leased Premises,cause the same to be discharged of record,or effectively prevent the enforcement or foreclosure thereof, by contest, payment, deposit, bond, order of court or otherwise. Athlos hereby agrees to indemnify City for, from and against any damages that City may suffer or Ground Lease and Purchase Option CFW and Athlos Page 4 of 38 any liability imposed upon City for any such claims, demands, or liens as set forth in this Section 5.4. 5.5 The following requirements shall apply to all construction on the Leased Premises: (a)Athlos shall include in all Athlos construction contracts for Improvements the following provisions: (1) Contractor does hereby contract to waive all claims, release, indemnify, defend and hold harmless the City of Fort Worth and all of its officials, officers, agents and employees, in both their public and private capacities,from and against any and all liability,claims,losses,damages,suits, demands or causes of action including all expenses of litigation and/or settlement, court costs and attorney fees which may arise by reason of injury to or death of any person or for loss of,damage to,or loss of use of any property occasioned by error, omission or negligent act of contractor, his officers, agents, employees, subcontractors, invitees or any other persons, arising out of or in connection with the performance of this contract, and contractor will at his or her own cost and expense defend and protect the City of Fort Worth from any and all such claims and demands. (2) Contractor does hereby contract to waive all claims, release, indemnify, defend and hold harmless the City of Fort Worth and all of its officials, officers, agents and employees, from and against any and all claims, losses, damages,suits, demands or causes of action, and liability of every kind including all expenses of litigation and/or settlement, court costs and attorneys' fees for injury or death of any person or for loss of, damages to, or loss of use of any property, arising out of or in connection with the performance of this contract. Such indemnity shall apply whether the claims, losses, damages, suits, demands or causes of action arise in whole or in part from the negligence of the City or Fort Worth, its officers, officials, agents or employees; provided, however, that in no event shall such indemnity apply to negligence or willful misconduct of the City of Fort Worth, its officers, officials, agents or employees. . (3) In any and all claims against any party indemnified hereunder by any employee of the contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, the indemnification obligation herein provided shall not be limited in any way by any limitation on the amount or for the contractor or any subcontractor under workers' compensation or other employee benefit acts. (b) Athlos agrees that all work to be performed by it or its contractor on the Leased Premises, including all workmanship and Ground Lease and Purchase Option CFW and Athlos Page 5 of 38 materials, shall be of first-class quality and shall be performed in full compliance and in accordance with the approved schematic drawings, and such work shall be subject to inspection during the performance thereof and after it is completed. Athlos shall assume the risk of loss or damage to all such work prior to the completion thereof. Athlos shall repair or replace any such loss or damage without cost to City. (c)Athlos shall deliver within five(5)business days of a request from City, written progress reports of the work performed and shall at all times during the term of this Agreement and any extension option periods thereof keep construction reports and drawings current showing any changes or modifications made in or to the improvements constructed on the Leased Premises. (d) Nothing in this Agreement shall be construed as an agreement by the City to waive any lien the City may have, constitutional, statutory or contractual, upon any leasehold improvements on the property. VI. Acceptance, Care, Maintenance and Repair 6.1 Athlos accepts the Leased Premises in their "as is" condition. City has not made and does not make and specifically disclaims any representations,guarantees,promises,covenants, agreements or warranties of any kind or character whatsoever unless otherwise provided for herein, whether express or implied, oral or written, past, present or future of, as to, concerning or with respect to the nature, quality or condition of the Leased Premises, the income to be derived, the suitability of the Leased Premises for uses allowed under this Agreement, or merchantability or fitness for a particular purpose. The City shall not be required to maintain nor to make any improvements, repairs or restorations upon or to the improvements located thereon. City shall never have any obligation to repair, maintain or restore, during the term of this Agreement or any extension option periods, any improvements on the Leased Premises. 6.2 Athlos,without limiting the generality hereof, shall keep at all times, in a clean and orderly condition and appearance, the Leased Premises and Improvements, and all of Athlos's fixtures, equipment and personal property which are located on any part of the Leased Premises and Improvements. Athlos shall repair any damage to the Leased Premises. VII. Inspections by City 7.1 Upon not less than 48 hours prior notice and in a manner so as to not unreasonably interfere with the development of the Improvements or the rights of tenants under any subleases of the Leased Premises, the City or its authorized agents may enter upon the Leased Premises, for any purpose connected with the performance of City's or Athlos's obligations hereunder, in order to inspect the performance of Athlos's obligations under this Agreement, or to inspect safety Ground Lease and Purchase Option CFW and Athlos Page 6 of 38 compliance or in order to determine compliance with all Governmental Rules. In case of an emergency or if necessary to ensure the health, safety and welfare of the public, City may enter upon the Leased Premises at any time and without notice,but in a manner so as to not unreasonably interfere with the development of the Improvements or the rights of tenants under any subleases of the Leased Premises. This shall not constitute a waiver by the City of the performance of its governmental functions and Athlos agrees that in the performance of its governmental functions, City representatives may enter onto the Leased Premises at any time. VIII. Subletting and Assignments 8.1 Athlos may not assign, transfer, sublet, or convey, or otherwise dispose of this Agreement or the rights, title, or interest in or to the same or any part thereof without the prior written consent of City, except Athlos may, without City's prior written consent, sublease the Leased Premises to a charter school operator who operates the charter school constructed on the Leased Premises("the"Operator Tenant"). Any sublease approved by City,whether to Operator Tenant or otherwise, shall not relieve Athlos of its obligations under this Agreement and Athlos shall remain liable for the performance of all obligations under this Agreement. If this Agreement is assigned,such assignment shall be upon and subject to all of the terms,covenants,and conditions contained in this Agreement. Within thirty (30) days after the execution and delivery of any such assignment Athlos shall furnish to City a duplicate original of the assignment which shall contain an assumption by the assignee of all of the obligations of Athlos under this Agreement. Any assignment without the City's consent shall be void. IX. Leasehold Mortgages 9.1 Athlos will be entitled, at any time and from time to time, without the City's consent, and on terms and conditions determined by Athlos to be appropriate,to mortgage,pledge, grant deed(s) of trust, or otherwise encumber all or any portion of the leasehold estate created hereby and all or any portion of the right, title, and interest of Athlos under this Agreement (including Athlos's interest in the Improvements), and to assign, hypothecate, or pledge it as security for the payment of any debt to any holder of a promissory note or other evidence of indebtedness(such notes, mortgages, deeds of trust,and other documents evidencing and securing such loans hereinafter referred to as a "Leasehold Mortgage" and a holder of a Leasehold Mortgage as a "Leasehold Mortgagee"), all of which shall be subordinate to the City's interest under this Agreement; provided, however, that the City shall subordinate its interest in the Property by executing and delivering a deed of trust in a form reasonably acceptable to Leasehold Mortgagee, if Jason Kotter and Ryan Van Alfen execute and deliver to the City a lease payment guaranty in the form attached as Exhibit"C" (the "Lease Guaranty"). 9.2 Athlos and City agree as follows regarding a Leasehold Mortgage: This Agreement shall not be modified or amended by agreement of the City and Athlos without the prior written consent of the Leasehold Mortgagee, such consent not to be unreasonably withheld, conditioned or delayed. Ground Lease and Purchase Option CFW and Athlos Page 7 of 38 If City shall give any notice of default, demand to cure a default, or other communication pertaining to an event of default(collectively, a "Default Message") to Athlos, City shall, at the same time, deliver a copy of each such Default Message to the Leasehold Mortgagee at the address designated by the Leasehold Mortgagee. Copies of Default Messages shall be sent by registered or certified mail, return receipt requested and shall be deemed delivered three (3) days after the date the Default Message is deposited with the United States Postal Service or a successor agency with postage charges prepaid. No Default Message given by City to Athlos shall be binding upon or affect the Leasehold Mortgagee unless a copy of the Default Message shall be delivered to the Leasehold Mortgagee pursuant to the terms of this Agreement. The Leasehold Mortgagee shall have the right to perform any term, covenant, condition or agreement and to remedy any breach or non-performance by Athlos under the Agreement, and City shall accept such performance by the Leasehold Mortgagee with the same force and effect as if furnished by Athlos. Athlos may delegate irrevocably to the Leasehold Mortgagee the authority to exercise any or all of Athlos's rights or responsibilities hereunder, but no such delegation shall be binding upon City, unless and until either Athlos or the Leasehold Mortgagee shall give to City a true copy of a written instrument effecting such delegation. Such delegation of authority may be effected by the terms of the lender documents. If City shall be entitled to exercise the remedies described in this Lease because Athlos commits an event of default under the Agreement, City shall, before exercising the remedies described in the Agreement, give to the Leasehold Mortgagee a notice that an event of default has occurred and that City is entitled to exercise the remedies described in this Agreement, and the Leasehold Mortgagee shall have the right to remedy such event of default within ten (10) days (if such event of default pertains to the payment of rent) or thirty (30) days (if such event of default pertains to any other covenant of this Agreement) after the receipt of such further notice. City shall certify to Leasehold Mortgagee as follows: (i) to the best of City's knowledge without any duty of investigation, there exist no events of default or events that, with notice or the passage of time or both, would be events of default under this Agreement on either the City's part or the Athlos. City certifies that this Agreement is in full force and effect as of the date of this Agreement, (ii) no rent or other sums payable under the Agreement have been paid in advance, except as provided in this Agreement, (iii) City has not received written notice of any litigation pending,proposed or threatened against or in connection with the Leased Premises or this Agreement. 9.3 City and Athlos will cooperate in suitable amendments to any provision which may reasonably be requested by any proposed Leasehold Mortgagee for the purpose of implementing mortgage protection provisions that will be contained in the Agreement and allowing a mortgagee Ground Lease and Purchase Option CFW and Athlos Page 8 of 38 reasonable means to protect or preserve the lien of the Leasehold Mortgage on the occurrence of a default by Athlos under the terms of the Agreement. If any such amendments or agreements vary the substantive rights of the parties as set forth in the Lease, then such amendments or agreements must be approved by the City Council of the City of Fort Worth. 9.4 If this Agreement is terminated for any reason, City will agree that the Leasehold Mortgagee shall have the right, for a period of 90 days subsequent to such termination of this Agreement, to deliver to City written notice of the Leasehold Mortgagee's election to execute a new lease of the Premises with City (the "New Lease"). All rents, covenants, conditions and provisions of the New Lease shall be the same as the terms, conditions and provisions of this Agreement. The New Lease shall have the same priority as this Agreement and shall contain the same terms and provisions as contained herein including, but not limited to, the same provisions and rights in favor of and for the benefit of Leasehold Mortgagee as are contained in this Agreement and the right to obtain an additional new lease in the event of the termination of said New Lease, and the right to receive notices of default, and to cure the same, in the same manner as provided in this Agreement. The following terms and provisions shall apply to the New Lease: the New Lease shall be effective as of the date of termination of this Agreement (the "New Lease Effective Date"), and shall be effective for the remainder of the term of this Agreement at the rent and upon all of the terms and provisions of this Agreement. following the termination of this Lease and until Leasehold Mortgagee has failed within ninety (90) days thereafter to demand in writing a New Lease, City shall not alter or in any way demolish any of the Improvements. City during the same period shall not remove, replace or change any furniture, furnishings, fixtures or equipment located on the Leased Premises. Notwithstanding the above, City reserves the right to perform mitigation, abatement, or any other necessary alterations or demolition of the Improvements if the Improvements have violations defined as a"hazard to the public health, safety and/or welfare"under Chapter 7 of the Minimum Building Standards Code (as it may be amended from time-to-time) of the City of Fort Worth Code of Ordinances, as determined by the Code Compliance Director or Building Official. X. Damage or Destruction 10.1 In the event of damage or destruction during the Term to any of the improvements upon the Leased Premises, Athlos shall have the obligation to utilize insurance proceeds as and when available to rebuild or repair the improvements unless otherwise agreed by Athlos, Leasehold Mortgagee and the City. City shall have no obligation to repair or rebuild the improvements or any fixtures, equipment or other personal property installed by Athlos pursuant to this Agreement; however, upon the failure of Athlos to repair or rebuild as required by this Ground Lease and Purchase Option CFW and Athlos Page 9 of 38 Agreement, the City may, as agent of Athlos, repair or rebuild such damage or destruction at the expense of Athlos, and such expense shall be due and payable on demand. 10.2 Upon completion of all repair or rebuilding work as a result of damage or destruction, Athlos shall certify by a responsible officer or authorized representative that such rebuilding and repairs have been completed. Nothing herein contained shall be deemed to release Athlos from any of its repair, maintenance or rebuilding obligations under this Agreement. 10.3 In no event shall Athlos be obligated to provide improvements, equipment and fixtures in excess of those existing prior to such damage or destruction or as required by City Code, whichever is greater. Athlos agrees that such work will promptly commence and proceed to completion with due diligence. 10.4 Athlos shall not be entitled to any abatement, allowance, reduction, or suspension of the rent payments as a result of or in connection with the partial or total destruction of the improvements on the Leased Premises.No such damage or destruction shall affect in any way the obligation of Athlos to pay Rent and any other charges contained herein. XI. Insurance and Bonds 11.1 Athlos's Insurance. Athlos represents that it currently has in effect, and Athlos further covenants that it, or its subtenant, shall maintain in effect at all times during the Term of this Agreement, insurance coverages with limits not less than those set forth below with insurers licensed to do business in the State of Texas and reasonably acceptable to City and under commercially reasonable forms of policies. Athlos, or its subtenant, shall maintain such insurance coverages at its sole cost and expense. City shall be under no obligation to maintain any such insurance coverage should Athlos be found to be in default under this Article XI. None of the requirements contained herein as to types, limits or City's approval of insurance coverage to be maintained by Athlos are intended to and none shall in any manner limit,qualify or quantify the liabilities and obligations assumed by Athlos under this Agreement or otherwise provided by law. 11.1.1. Schedule of Insurance Coverages. COVERAGE MINIMUM AMOUNTS AND LIMITS Workers' Compensation. Workers' Compensation, Employers' Liability, or alternative work-place injury or non-subscription plan as may be permitted under applicable law Statutory Limits: $100,000 This policy shall include a waiver of subrogation in favor of the Indemnitees. Ground Lease and Purchase Option CFW and Athlos Page 10 of 38 Commercial General Liability. Bodily Injury/Property Damage (Occurrence Basis): $1,000,000 each occurrence or equivalent;subject to a $2,000,000 aggregate Such commercial general liability policy shall be on an occurrence form, endorsed to include the Indemnitees as additional insureds, contain cross-liability and severability of interest endorsements, state that this insurance is primary insurance as regards any other insurance carried by any Indemnitee, and shall include the following coverages: (a) Leased Premises/Operations; (b) Independent Contractors; (c) Broad Form Contractual Liability specifically in support of, but not limited to,the Indemnification section of this Agreement;and (d) Personal Injury Liability with the employee and contractual exclusions removed. Comprehensive Automobile Liability. Bodily Injury/Property Damage: $1,000,000 combined single limit of liability This policy shall be on a standard form written to cover all owned,hired and non-owned automobiles. Gara eg keeper's Liability. Physical Damage to Parked Vehicles: $100,000 combined single limit each occurrence This policy shall be endorsed to include the Indemnitees as additional insureds and include a waiver of subrogation in favor of the Indemnitees. Umbrella Excess Liability Insurance. Bodily Injury/Property Damage (Occurrence Basis): $5,000,000 per occurrence, $5,000,000 aggregate Ground Lease and Purchase Option CFW and Athlos Page 11 of 38 This policy shall be written on a following form umbrella excess basis above the coverages described in Sections 11.1.1.2, 11.1.1.3, and 11.1.1.4 above and shall include the Indemnitees as additional insureds. Property Insurance. Such property insurance as Athlos, in its sole discretion, deems appropriate. 11.2 Bonds. DELETED BY AGREEMENT OF THE PARTIES. 11.3 Letter of Credit. Prior to commencement of any construction work or site work related to any Improvements, Athlos shall provide City with a Letter of Credit in favor of City in the full amount of the estimated cost of all such Improvements. The Letter of Credit must be issued by a financial institution in the corporate limits of the City of Fort Worth and in a form acceptable to City. This Letter of Credit shall serve as security to City for the faithful performance by Athlos of all its obligations under any construction contracts for the Improvements and for completion of the Improvements. The Letter of Credit shall provide that City may draw down an amount necessary to complete the Improvements by presenting the issuer with (i) a written statement, signed by City's City Manager, that states that Athlos has failed to complete the Improvements and that Athlos has been notified of such failure and has failed to cure such failure pursuant to and in accordance with the Agreement and (ii) a copy of the Letter of Credit. Athlos shall keep in effect and maintain this Letter of Credit at the amount specified herein at all times until the Improvements receive a certificate of occupancy. The Letter of Credit shall provide that the Letter of Credit shall not expire and that the issuer shall not cancel the Letter of Credit unless the issuer provides written notice both to City and Athlos at least 30 days prior to such expiration or termination, in which event Athlos shall be obligated to provide City with a substitute Letter of Credit that complies with the requirements of this Section 11.3. Notwithstanding the foregoing, if Jason Kotter and Ryan Van Alfen execute and deliver the Lease Guaranty, the City shall not require the Letter of Credit. 11.4 ATHLOS AND CITY EACH HEREBY RELEASES, AND SHALL CAUSE ITS INSURERS, CONTRACTORS, THEIR SUBCONTRACTORS, AND EACH OF THEIR RESPECTIVE INSURERS TO RELEASE, THE INDEMNITEES (AS DEFINED IN SECTION 12.1) FROM ANY AND ALL CLAIMS OR CAUSES OF ACTION WHATSOEVER THAT THE INSURED, ITS INSURERS, ITS CONTRACTORS, THEIR SUBCONTRACTORS, AND/OR ANY OF THEIR RESPECTIVE INSURERS MIGHT OTHERWISE POSSESS RESULTING IN OR FROM OR IN ANY WAY CONNECTED WITH ANY LOSS COVERED OR WHICH SHOULD HAVE BEEN COVERED BY INSURANCE, INCLUDING THE DEDUCTIBLE PORTION THEREOF, MAINTAINED AND/OR REQUIRED TO BE MAINTAINED BY THE INSURED AND/OR ITS CONTRACTORS OR THEIR SUBCONTRACTORS PURSUANT TO THIS LEASE, EVEN IF SUCH CLAIMS OR CAUSES OF ACTION ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNITEE. THE Ground Lease and Purchase Option CFW and Athlos Page 12 of 38 FOREGOING WAIVER, HOWEVER, WILL NOT APPLY TO ANY CLAIMS OR CAUSES OF ACTION WHICH ARE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNITEE. 11.5 Survival; Right to Enforce. The provisions of Section 11.4 shall survive the termination of this Agreement. In the event that Athlos shall fail to maintain full insurance coverage required by this Agreement and such failure continues for thirty (30) days after Athlos's receipt of written notice from City, City may (but shall be under no obligation to) take out the required policies of insurance, pay the required premiums or otherwise comply with the covenants set forth in this Article X 1. All amounts advanced by City in payment of the required premiums for such insurance or otherwise to comply with the covenants set forth in this Article XI shall be paid by Athlos to City, together with interest thereon at the prime rate of interest charged its commercial customers from time to time by Chase Bank- Fort Worth. XII. Liabilities and Indemnities 12.1 Indemnitv. ATHLOS SHALL INDEMNIFY, PROTECT, DEFEND, AND HOLD HARMLESS CITY, CITY'S OFFICERS, DIRECTORS, AFFILIATES, EMPLOYEES, AGENTS, AND COUNCIL MEMBERS (COLLECTIVELY, THE "INDEMNITEE" OR "INDEMNITEES") FOR, FROM, AND AGAINST ANY AND ALL DAMAGES, LOSSES, LIABILITIES (JOINT OR SEVERAL), PAYMENTS, OBLIGATIONS, PENALTIES, CLAIMS, LITIGATION, DEMANDS, DEFENSES, JUDGMENTS, SUITS, PROCEEDINGS, COSTS, DISBURSEMENTS OR EXPENSES (INCLUDING, WITHOUT LIMITATION, FEES, DISBURSEMENTS AND REASONABLE EXPENSES OF ATTORNEYS, ACCOUNTANTS, AND OTHER PROFESSIONAL ADVISORS AND OF EXPERT WITNESSES AND COSTS OF INVESTIGATION AND PREPARATION) OF ANY KIND OR NATURE WHATSOEVER (COLLECTIVELY, THE "DAMAGES"), DIRECTLY OR INDIRECTLY RESULTING FROM,RELATING TO OR ARISING OUT OF: (a) THE DESIGN, INSTALLATION, CONSTRUCTION, DEVELOPMENT, MAINTENANCE, OPERATION, USE, OCCUPANCY, OR OWNERSHIP OF THE IMPROVEMENTS, INCLUDING, WITHOUT LIMITATION ANY DAMAGES WITH RESPECT TO CONTRACTS OR ATTRIBUTABLE TO BODILY INJURY, SICKNESS, DISEASE OR DEATH, TO PERSONAL INJURY, OR TO INJURY OR DESTRUCTION OF PROPERTY, INCLUDING LOSS OF USE RESULTING THEREFROM; (b) THE FORMATION, ORGANIZATION AND OPERATION OF ATHLOS, OR ANY SUBSIDIARIES OF ATHLOS; Ground Lease and Purchase Option CFW and Athlos Page 13 of 38 (e) ANY BREACH OF OR INACCURACY IN ANY REPRESENTATION OR WARRANTY MADE OR GIVEN BY ATHLOS OR ANY OF ITS AGENTS, OFFICERS, OR EMPLOYEES CONTAINED IN THIS LEASE; OR (d) ANY BREACH OR NON-PERFORMANCE, PARTIAL OR TOTAL, BY ATHLOS OF ANY COVENANT OR AGREEMENT OF ATHLOS CONTAINED IN THIS LEASE. 12.2 Negligence of Indemnitee. THIS INDEMNIFICATION REMAINS IN FULL FORCE AND EFFECT EXCEPT TO THE EXTENT ANY CLAIM DIRECTLY OR INDIRECTLY RESULTS FROM, ARISES OUT OF, OR RELATES TO OR IS ASSERTED TO HAVE RESULTED FROM, ARISEN OUT OF, OR RELATED TO THE NEGLIGENCE OR CONCURRENT NEGLIGENCE OF AN INDEMNITEE. 12.3 Survival; Right to Enforce. The provisions of this Article XII shall survive the termination of this Agreement. In the event of failure by Athlos to observe the covenants, conditions and agreements contained in this Article XII, any Indemnitee may take any action at law or inequity to collect amounts then due and thereafter to become due, or to enforce performance and observance of any obligation agreement or covenant of Athlos under this Article XII. The obligations of Athlos under this Article XII shall not be affected by any assignment or other transfer by the City of its rights, titles or interests under this Agreement and will continue to inure to the benefit of the Indemnitees after any such transfer. The provisions of this At XII shall be cumulative with and in addition to any other agreement by Athlos to indemnify any Indemnitee. XIII. Environmental and Hazardous Materials 13.1 For purposes of this Agreement, the following terms shall have the following meanings: (1) "Hazardous Materials" shall mean (i) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers, or other equipment that contain dielectric fluid containing polychlorinated biphenyls, and radon gas; (ii) any chemicals or substances now or hereafter defined as or included in the definition of "hazardous materials", hazardous wastes", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants" or '�pollutants% or words of similar import, under any applicable Environmental Law; and (iii) any other chemical, material, or substance, exposure to which is now or hereafter prohibited, limited, or regulated, by any applicable Environmental Law or governmental authority; and (2) "Release" or 'Released" means disposed, discharged, injected, spilled, leaked, leached, migrated, dumped, emitted, escaped, emptied, seeped, or placed, in, on, or under any land, water, or air, or otherwise entered into the environment, and as otherwise more broadly d e f i n e d i n applicable Environmental Law. Ground Lease and Purchase Option CFW and Athlos Page 14 of 38 13.2 Athlos covenants and agrees with City as follows: (1) the construction and installation of all improvements and the use and operation of the Leased Premises shall at all times be in material compliance with applicable Environmental Law; (2) Athlos will obtain prior to the Expiration Date all environmental permits, licenses. and approvals that are necessary or required by applicable Environmental Law to conduct its business and operations on the Leased Premises, and Athlos shall at all times comply with such environmental permits, licenses,and approvals; (3) neither Athlos nor any person claiming by, through, or under Athlos shall bring onto, use, store, generate, treat, process, dispose of, recycle, incinerate or transport any Hazardous Materials in, on, or under the Leased Premises except in compliance with applicable Environmental Law and in a reasonable and prudent manner so as to prevent the Release or threat of Release of any Hazardous Material on, onto or from the Leased Premises; (4) Athlos shall regularly inspect the Leased Premises to monitor and ensure that the Leased Premises are at all times in material compliance with applicable Environmental Law; (5) Athlos shall use reasonable efforts to protect the Leased Premises against intentional or negligent acts or omissions of third parties which might result, directly or indirectly, in the Release of Hazardous Materials on the Leased Premises in violation of applicable Environmental Law; and (6) if Athlos has actual knowledge that any Hazardous Materials are Released in, on, or under the Leased Premises during the Term of this Agreement: a. Athlos shall immediately notify all applicable governmental agencies having competent jurisdiction of the occurrence of the Release of Hazardous Materials in accordance with the requirements of applicable Environmental Law; b. Athlos shall immediately notify City of the occurrence of the Release of the Hazardous Materials and shall immediately furnish or make available to the City such information, documents, and other communications as City shall reasonably request; c. Athlos shall promptly and timely commence or cause to be commenced appropriate actions required by applicable Environmental Law to clean up the Hazardous Materials that have been Released on the Leased Premises (collectively referred to as "Response Action") and shall conduct and perform all appropriate Response Action in accordance with applicable Environmental Law; and d. Athlos, at its sole cost, shall contract for or perform all Response Action in the Athlos's own name or cause the violator to do so in the violator's name. 13.3 ATHLOS HEREBY COVENANTS AND AGREES THAT IT SHALL BE RESPONSIBLE FOR, AND WAIVES, RELEASES, AND FOREVER DISCHARGES THE INDEMNITEES FROM, AND AGREES TO INDEMNIFY, DEFEND, AND HOLD THE INDEMNITEES HARMLESS FROM AND AGAINST, ALL EXPENSES, COSTS (INCLUDING REASONABLE ATTORNEYS' FEES AND COURT COSTS), LOSSES, DAMAGES, PENALTIES, FINES, AND OTHER EXPENDITURES OF ANY NATURE ARISING FROM OR IN CONNECTION Ground Lease and Purchase Option CFW and Athlos Page 15 of 38 WITH ANY CLAIMS, DEMANDS, LIENS, INVESTIGATIONS, NOTICES OF VIOLATION, GOVERNMENTAL DIRECTIVES, CAUSES OF ACTION OR ANY OTHER ADMINISTRATIVE OR LEGAL PROCEEDINGS OF ANY NATURE WHICH RESULT FROM,RELATE TO, OR ARISE OUT OF (1)THE BREACH OF ANY COVENANT OR AGREEMENT OF ATHLOS IN THIS SECTION 13.3, (2) THE PRESENCE OR ALLEGED PRESENCE OF HAZARDOUS MATERIALS IN, ON, OR UNDER THE LEASED PREMISES IN VIOLATION OF ANY ENVIRONMENTAL LAW WHICH AROSE DURING THE TERM OF THIS LEASE, OR (3) THE VIOLATION OF ANY APPLICABLE ENVIRONMENTAL LAW WITH RESPECT TO THE LEASED PREMISES DURING THE TERM OF THIS LEASE; SO LONG AS, IN EACH INSTANCE, THE PRESENCE OF THE HAZARDOUS MATERIAL OR THE VIOLATION OF ANY ENVIRONMENTAL LAW WAS NOT CAUSED DIRECTLY OR INDIRECTLY BY CITY OR AN INDEMNITEE. THIS RELEASE AND INDEMNITY SPECIFICALLY INCLUDES (A) ALL COSTS OF "REMOVAL" AND/OR 'REMEDIAL ACTION" AND ALL OTHER COSTS OF 'RESPONSE", AS THOSE TERMS ARE DEFINED AND USED IN APPLICABLE ENVIRONMENTAL LAW, AND (B) ALL OTHER COSTS AND EXPENSES OF ANY NATURE INCURRED BY, ASSESSED AGAINST, IMPOSED UPON, OR CHARGED TO THE INDEMNITEES RELATING TO COMPLIANCE WITH OR ENFORCEMENT OF APPLICABLE ENVIRONMENTAL LAW. IF ANY INDEMNITEE INCURS COSTS OR EXPENSES DESCRIBED IN THIS INDEMNITY, ATHLOS SHALL REIMBURSE THE INDEMNITEE FOR THOSE REASONABLE COSTS OR EXPENSES WITHIN THIRTY (30) DAYS OF THE DATE OF RECEIPT BY ATHLOS OF NOTICE FROM THE INDEMNITEE, INCLUDING COPIES OF INVOICES OR OTHER VERIFICATION, THAT THE COSTS OR EXPENSES HAVE BEEN INCURRED. THE FOREGOING RELEASE AND INDEMNITY SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE. 13.4 If(i) there exists any uncorrected violation by Athlos of an Environmental Law or any condition, caused directly or indirectly by Athlos, which requires a cleanup, removal or other remedial action by Athlos under any Environmental Law, and such cleanup, removal or other remedial action is not initiated within the time period required by Environmental Law or (ii) City reasonably determines that (A) such uncorrected violation or condition poses an imminent threat to the safety orwellbeing ofany other users ofthe Leased Premises,the citizens of the City of Fort Worth or the County, or other persons, or (B) the Leased Premises is likely to be further damaged or contaminated or other land on or in the vicinity of the Leased Premises is likely to be damaged or contaminated by virtue of the continued failure to correct such violation or condition; and such cleanup, removal or other remedial action is not initiated within ninety (90) days from the date of written notice from City to Athlos, and diligently pursued to completion, the same shall, at the election of City, constitute an Event of Default as described in Section 17.1(d) hereof; and provided, further, that City will not consider any failure to initiate such cleanup, removal or other remedial action within the aforesaid ninety (90) day period an Event of Default if such cleanup,removal or other remedial action is of such a nature Ground Lease and Purchase Option CFW and Athlos Page 16 of 38 that it cannot readily be initiated within the ninety (90) days and so long as Athlos commences in good faith to cure such uncorrected violation or condition and diligently pursues the cure continuously thereafter. 13.5 Athlos hereby grants to City, its agents, employees, consultants, contractors, successors, and assigns, an irrevocable license and authorization, upon reasonable notice, to enter upon and inspect the Leased Premises (but not any facilities or improvements thereon), and perform such tests, including without limitation, subsurface testing, soils and groundwater testing, and any other tests thereon, as the City, in its sole discretion, determines is necessary to protect its interest in the Leased Premises. 13.6 During the term of the Agreement, Athlos agrees to provide City with copies of any environmental reports Athlos obtains (without Athlos being obligated to obtain any such reports) relating to the Leased Premises. XIV. Utilities 14.1 Athlos will bear costs, expenses and fees of extension connections and tapping charges for water and sanitary sewer facilities in accordance with the ordinances of the City on the Leased Premises. Athlos acknowledges that City is not responsible for providing utility service to Athlos. Any construction performed by Athlos within any drainage or utility easement area must meet utility company and City criteria for design and construction in such easement area. Any and all connections to water and sewer lines must occur at the existing utility connection points,unless otherwise agreed to in writing by City. All costs incurred with any relocation of existing utility lines or facilities or installation of additional utility lines or facilities on the Leased Premises shall be entirely at Athlos's expense, whether on or off the Leased Premises. Athlos shall also provide the City legal descriptions for any required utility easements and City shall reasonably cooperate with Athlos on the granting of any necessary easements, subject to all required Council approvals. XV. Non-Discrimination. 15.1 Athlos agrees that for itself, its personal representatives, successors in interest and assigns, no person shall be excluded from participation in or denied the benefits of Athlos' use of the Leased Premises on the basis of race, color, national origin, religion, handicap, gender, sexual orientation, familial status, gender identity, gender expression, or transgender. XVI. Option to Purchase 16.1 Athlos's Option to Purchase. City grants to Athlos an option (the "Option"), pursuant to and subject to the conditions of this Article XVI, to purchase the Leased Premises (excluding the Improvements thereon, which are owned by Athlos), from City for the Purchase Price (defined below). Athlos may assign its rights and obligations under this Option to the Operator Tenant, provided Athlos provides written notice of such assignment to the City. Athlos shall have the right to exercise the Option at any time after the issuance Ground Lease and Purchase Option CFW and Athlos Page 17 of 38 of a certificate of occupancy for the Improvements (the "Option Period"). Athlos shall give notice of the exercise of the Option in writing to City. 16.2 Purchase Price. The Purchase Price for the Leased Premises shall consist of a Base Payment plus a Closing Fee. If Athlos purchases the Leased Premises on or before the fifth anniversary of the Effective Date, the Base Payment shall be $1,175,000; thereafter, commencing on the fifth anniversary of the Commencement Date, and each anniversary of the Commencement Date thereafter, the Base Payment shall be increased 2% each year from the prior lease year's adjusted Base Payment. In addition to the Base Payment, at closing Athlos will pay to City a Closing Fee, which shall be an amount equal to (i) 6% of the then- current Base Payment fninus (ii) the sum of all rental payments paid by Athlos since the beginning of the then-current lease year. By way of example only, if Athlos were to acquire the Leased Premises at the end of month three of lease year four after having paid rental fees for the first three months of the lease year, the total amount due would be $1,220,825, which represents the then-current Base Payment of$1,175,000 plus a Closing Fee of$45,825 (6% of the current Base Payment ($70,500) less three months of rental payments actually made ($8,2250=$24,675)). 16.3 Terms and Conditions of Purchase/Put. In the event that the Leased Premises are to be acquired by Athlos pursuant to Athlos's exercise of the Option: (a) the closing of such acquisition shall occur in such place as City and Athlos mutually determine; (b) the closing shall occur on a date designated by Athlos (by at least ten (10) days' advance written notice to City) (the " Closing Date"); (c) the Leased Premises shall be conveyed to Athlos pursuant to a special warranty deed, subject only to the permitted exceptions, the form of which is attached hereto as Exhibit"B"; (d) City and Athlos shall terminate this Agreement; (e) City shall execute and deliver such other documentation as shall be necessary to vest title to the Leased Premises and all appurtenances owned by City in Athlos; (f) any utility or right-of-way easements required by City shall be retained by City and (g) all expenses of closing shall be paid as follows: (i) title policy premiums for the owner's policy shall be paid by City, (ii) survey costs, and recording fees shall be paid by Athlos, (iii)attorneys' fees, shall be borne by the party incurring such fees),(iv) escrow fees shall be shared equally by City and Athlos. XVII. Default and Termination 17.1 The following events shall be deemed to be events of default by Athlos under this Agreement: (a)Athlos shall fail to pay any installment of Rent, and such failure shall continue for a period of thirty (30) business days after written notice of such delinquency is delivered to Athlos. (b) Athlos shall fail to obtain and/or provide insurance in accordance with this Agreement and such failure shall continue for Ground Lease and Purchase Option CFW and Athlos Page 18 of 38 a period of ten (10) business days after written notice of such is delivered to Athlos. (c)Athlos shall fail to commence construction of the Improvements within twelve months following the Effective Date. (d) Athlos shall fail to comply with any term,provision, clause, sentence, covenant or any other item of this Agreement, other than the payment of Rent or provision of insurance, and shall not cure such failure within thirty(30)calendar days after written notice thereof to Athlos; provided, however, that if such performance or observance cannot be reasonably accomplished within such thirty (30) day period, then Athlos shall have up to an additional one hundred eighty (180) days so long as Athlos is diligently pursuing such performance or observance; provided further, that if Athlos is diligently pursuing the eviction of a subtenant due to the failure of the subtenant to comply with the provisions of 10.1 hereof and the eviction process cannot be reasonably accomplished within such one hundred eighty (180) day period,then Athlos shall have such additional time as is needed for the eviction. (e)Athlos shall abandon, desert, or vacate any substantial portion of the premises. In the event that the City believes a substantial portion of the Leased Premises has been abandoned, vacated or deserted,the City shall notify Athlos of such. If Athlos fails to respond within thirty (30) calendar days to such notice, Athlos shall be deemed to have abaondoned, deserted or vacated a substantial portion of the Leased Premises under this Section. (f)It is recognized that if Athlos is adjudged a bankrupt, or makes a general assignment for the benefit of creditors, or if a receiver is appointed for the benefit of its creditors (and same is not discharged within 60 days thereafter), or if a receiver is appointed on account of its insolvency (and same is not discharged within 60 days thereafter), such could impair or frustrate Athlos's performance of this Agreement. Accordingly, it is agreed that upon the occurrence of any such event, City shall be entitled to request of Athlos or its successor in interest adequate assurance of future performance in accordance with the terms and conditions hereof. Failure to comply with such request within ten (10)calendar days of delivery of the request shall be an event of default by Athlos hereunder. (g) Athlos has repeated defaults, whether cured or not. In order to be in default under this provision, Athlos must be given notice of default 3 times over a consecutive 12 month period for the same event of default. In that event, City shall have the right to pursue the remedies in Section 17.2. Ground Lease and Purchase Option CFW and Athlos Page 19 of 38 17.2 Upon the occurrence of any event of default specified above in Section 17.1, City shall have the option to pursue any one or more of the following remedies without any notice or' demand whatsoever: (a)Terminate this Agreement in which event Athlos shall immediately surrender the Leased Premises and the Improvements (subject to all rights of the Leasehold Mortgagee) to the City; and if Athlos fails to do so, the City may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession and expel or remove Athlos and any other person who may be occupying the Leased Premises or any part thereof, by force if necessary,without being liable for prosecution or any claim of damages therefor; and Athlos agrees to pay to the City on demand the amount of all loss and damages which the City may suffer by reason of such termination, whether through inability to relet the Leased Premises on satisfactory terms or otherwise. (b) Enter upon and take possession of the Leased Premises and expel or remove Athlos and any other person who may be occupying the premises or any part thereof, by force if necessary, without being liable for prosecution or any claim of damages therefor; and if the City so elects, relet the Leased Premises on such terms as the City shall deem advisable and receive the rent thereof; and Athlos agrees to pay to the City on demand any deficiency that may arise by reason of such reletting. (c)Enter upon the Leased Premises, by force if necessary, without being liable for prosecution or any claim of damages therefor and do whatever Athlos is obligated to do under the terms of this Agreement;and Athlos agrees to reimburse the City on demand for any expenses which the City may incur, thus effecting compliance with Athlos's obligations under this Agreement; and Athlos further agrees that the City shall not be liable for any damages resulting to Athlos from such action. 17.3 No reentry or taking possession of the premises by the City shall be construed as an election on its part to terminate this Agreement, unless a written notice of such intention shall be given to Athlos. Notwithstanding any such reletting or reentry or taking possession, the City may at any time thereafter elect to terminate this Agreement for a previous default. Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law, nor shall the pursuit of any remedy herein provided constitute a forfeiture or waiver of any payments due to the City hereunder or of any damages accruing to the City by reason of the violation of any of the terms,provisions and covenants herein contained. The City's acceptance of payments following an event of default hereunder shall not be construed as the City's waiver of such event of default. No waiver by the City of any violation or breach of any of the terms, provisions and covenants herein contained shall be deemed or constitute a waiver of any other violation or breach of any of the terms, provisions and covenants Ground Lease and Purchase Option CFW and Athlos Page 20 of 38 herein contained. Forbearance by the City to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default. The loss or damage that the City may suffer by reason of termination of this Agreement or the deficiency from any reletting as provided for above shall include the expense of repossession and any repairs or remodeling undertaken following possession. Should the City at any time terminate this Agreement for any default, in addition to any other remedy the City may have, the City may recover from Athlos all damages the City may incur by reason of such default, including cost of recovering the premises and reasonable attorney's fees expended by reason of default. XVIII. The City's Default 18.1 The occurrence of the following shall be an event of default by the City: The failure of the City to substantially perform or substantially observe any of the obligations, covenants or agreements to be performed or observed by the City under this Agreement within sixty (60) days` notice after notice from Athlos of such failure; provided, however, that if such performance or observance cannot be reasonably accomplished within such sixty (60) day period, then no event of default shall occur unless the City fails to commence such performance or observance within such sixty (60)day period and fails to diligently prosecute such performance or observance within such sixty (60) day period and such performance or observance is not completed within one hundred eighty (180) days of such notice of default. 18.2 Upon the occurrence of any event of default specified above in Section 18.1,Athlos shall have the option to pursue any one or more of the following remedies: (a) Terminate this Agreement; and (b) Athlos may exercise any and all remedies available to Athlos at law or in equity. 18.3 The parties acknowledge that all references to "City" herein shall refer only to City in its capacity as landlord under this Agreement. The term"City"and the duties and rights assigned to it under this Agreement, thus exclude any action,omission or duty of the City when performing its governmental functions. Any action, omission or circumstance arising out of the performance of the City of its governmental functions may prevent City from performing its obligations under this Agreement and shall not cause or constitute a default by City under this Agreement or give rise to any rights or claims against the City in its capacity as landlord, it being acknowledged that Athlos's remedies for any injury, damage or other claim resulting from any such action, omission or circumstances arising out of the governmental functions of the City shall be governed by the laws and regulations concerning claims against the City as a charter city and a governmental authority. XIX. Condemnation 19.1 If during the term of this Agreement, all of the Leased Premises and Improvements should be taken for any public or quasi-public use under any governmental law or by right of eminent domain, or should be sold to the condemning authority under threat of condemnation,this Ground Lease and Purchase Option CFW and Athlos Page 21 of 38 Agreement shall terminate and Athlos, its heirs, successors and assignees shall be fairly compensated for the fair market value of their leasehold interests and the Improvements. Rent shall be abated during the unexpired portion of this Agreement effective as of the date of the taking of the premises by the condemning authority. 19.2 Should the City or any other governmental authority take a portion of the Leased Premises or the Improvements (including but not limited Athlos's leasehold estate in and to the Leased Premises or Improvements), under any governmental law or by right of eminent domain, and Athlos can demonstrate that such a taking has a material financial impact on its operations of the Improvements, Athlos may terminate this Agreement by giving written notice to the City within thirty(30) days after possession of the condemned portion is taken by the entity exercising the power of condemnation. 19.3 Regardless of any other provision of this section, no condemning authority shall be required to pay more than the then current fair market value of the Leased Premises. XX. Surrender and Right of Re-entry 20.1 Upon the cancellation or termination of this Agreement, Athlos agrees peaceably to surrender the Leased Premises to the City in good condition and repair, ordinary wear and tear excepted. Upon any such cancellation or termination, the City may re-enter the Leased Premises together with all improvements and additions thereto at City's election. So long as Athlos is not in default,Athlos shall have a reasonable time thereafter(not exceeding thirty [30] days after such cancellation or termination) to remove its personal property, and trade equipment which it may have on the Leased Premises, provided the removal thereof does not impair, limit or destroy the utility of said Leased Premises. Any damage caused by such removal will be repaired by Athlos at its sole cost and expense. 20.2 If Athlos fails to remove its property within thirty (30) days after the termination of or expiration of this Agreement, the City may remove such property to a public warehouse for deposit or retain the same in its own possession. If Athlos fails to take possession and remove such property, after paying any appropriate rental fees, within sixty (60) days after termination of the Agreement, the property shall be deemed to be abandoned and the City may sell the same at public auction. XXI. Notices , 21.1 All notices, consents and approvals required or desired to be given by the parties hereto shall be sent in writing,and shall be deemed sufficiently given when same is hand delivered or deposited in the United States mail, sufficient postage prepaid, registered or certified mail, return receipt requested, addressed to the recipient at the address set forth below: Ground Lease and Purchase Option CFW and Athlos Page 22 of 38 To City: Director of Property Management City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76028 with a copy to: City Attorney 1000 Throckmorton Fort Worth, Texas 76028 To Athlos: TCSF16-D E FORT WORTH K8, LLC c/o Athlos Academies PO Box 1598 Boise, ID 83701 Attention: Jason Kotter or Ryan Van Alfen with a copy to: Lake & Cobb, PLC 1095 W. Rio Salado Plcwy, Suite 206 Tempe, AZ 85281 Attention: J. Gregory Lake, Esq. XXII. HoldinLy Over 22.1 A holding over by Athlos after the termination of this Agreement and after written notice by the City to vacate such premises, and continued occupancy thereof by Athlos shall constitute Athlos a trespasser. 22.2 Any holding over by Athlos beyond the thirty(30)day period permitted for removal of property without the written consent of the City shall make Athlos liable to the City for rent at one hundred fifty percent (150%) of the rent amount in effect at the time of the holdover, and damages, costs and attorneys' fees which may arise due to Athlos holding over. 22.3 All insurance coverage that Athlos is required to maintain shall continue in effect for so long as Athlos, or any of Athlos's subtenants occupy the Leased Premises or any part of the Leased Premises. Ground Lease and Purchase Option CFW and Athlos Page 23 of 38 XXIII. Invalid Provisions 23.1 If any of the terms, sections, subsections, sentences, clauses, phrases, provisions, covenants, conditions or any other portion of this Agreement are for any reason held to be invalid, void or unenforceable, the remainder of the terms, sections, subsections, sentences, clauses, phrases,provisions,covenants or conditions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. XXIV. Miscellaneous Provisions 24.1 All remedies provided in this Agreement shall be deemed cumulative and additional and not in lieu of, or exclusive of, each other, or of any other remedy available to the City, or Athlos, at law or in equity, and the exercise of any remedy, or the existence herein of other remedies or indemnities shall not prevent the exercise of any other remedy. 24.2 No failure or delay by a party hereto in exercising any right,power or remedy under this Agreement, and no course of dealing between the parties hereto, will operate as a waiver of any such right, power or remedy of the party. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. 24.3 Notwithstanding any other provision of this Agreement,Athlos shall not be entitled to claim or receive any compensation as a result of or arising out of any delay, hindrance, disruption, force majeure, impact or interference, foreseen or unforeseen. 24.4 Athlos assumes the risk of all suspensions of or delays in performance of this Agreement, regardless of length thereof, arising from all causes whatsoever, whether or not relating to this Agreement, and Athlos shall bear the burden of all costs, expenses and liabilities which it may incur in connection with such suspensions or delays,and all such suspensions,delays, costs, expenses and liabilities of any nature whatsoever, whether or not provided for in this Agreement, shall conclusively be deemed to have been within the contemplation of the parties. 24.5 Upon full execution of this Agreement,the City and Athlos will execute and record a Memorandum of Agreement in a form acceptable to both parties. Athlos will pay all recording fees due upon recordation of the Memorandum of Agreement. 24.6 Notwithstanding anything to the contrary set forth in this Agreement, Athlos recognizes and agrees that any contracts, agreements or amendments contemplated to be entered into by the City under the terms of this Agreement which are entered into after the Effective Date of this Agreement will be subject to the prior approval of the Fort Worth City Council other than the approvals, consents and confirmations expressly permitted in this Agreement. 25.6 Athlos, on paying the Rent and performing the covenants and provisions hereof on Athlos' part to be performed, shall peacefully and quietly have and enjoy the Leased Premises and Ground Lease and Purchase Option CFW and Athlos Page 24 of 38 all such existing rights, easements, privileges, appurtenances and hereditaments belonging or pertaining thereto, during the Term, subject only to those permitted exceptions identified on Exhibit"D" attached hereto. XXV. General Provisions 25.1 This Agreement shall be performable and enforceable in the City of Fort Worth and County of Tarrant, Texas,and shall be construed in accordance with the laws of the State of Texas. 25.2 This Agreement is made for the sole and exclusive benefit of the City and Athlos. 25.3 In the event of any ambiguity in any of the terms of this Agreement, it shall not be construed for or against any party hereto on the basis that such party did not author the same. 25.4 Nothing contained in this Agreement will be deemed or construed, either by the parties hereto or by any third party, to create any partnership,joint venture or other association between the City and Athlos except that of City and Athlos. 25.5 The titles of the sections of this Agreement are inserted herein for convenience only, and are not intended and shall not be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. XXVI. Amendments 26.1 This Agreement may not be changed, modified, discharged or extended except by written instrument duly executed by the City and Athlos or as otherwise provided herein. XXVIL Force Maieure 27.1 In the event that City or Athlos shall be delayed,hindered in, or prevented from the performance of any act required hereunder by reason of an act of God, strike, lockout, labor trouble, inability to procure materials, unseasonable weather affecting construction or operation, failure of power, riot, insurrection, or war, then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equal to the period of such delay; provided, however, that this Section 27.1 shall have no application to Athlos's obligation to pay the Rent or any other monetary obligations hereunder once Athlos begins to pay such amounts. [Signature Page to Follow.] Ground Lease and Purchase Option CFW and Athlos Page 25 of 38 IN WITNESS WHEREOF,the parties hereto have executed this Agreement on the day and year written above. LANDLORD /CITY: CITY OF FORT WORTH, TEXAS, a Texas municipal corporation Attest: s Chapa, Assistant dity Manager Mary J. Kayser, City Secretary a City of Fort Worth Contract Compliance ManaA� By signing I acknowledge that I am the person responsible for the monitoring and administration of this contract, including en *mance and reporting requirements. N mj o mpoye Title App roved as to form and legality: 0!U�,� Assistant City Attorney TENANT: TCSF16-D E FORT WORTH K8, LLC, an Idaho limited liability company By: TCSF16-D, LLC, an Idaho limited liability compa its sole member, By: Name: — Its: r' Error!Unknown document property name. Exhibit "A" Leased Premises Legal Description Tract 1; Lot 1, Block 14-A of Woodhaven Country Club Estates, 3-13 Filing, an addition to the City of Fort Worth, Tarrant County,Texas, according to the plat thereof recorded in Volume 388-97, Page 25, Plat Records, Tarrant County,Texas, Tract 2: LOT 1, BLOCK 1 OF SPANISH OAKS APARTMENTS ADDITION,an Addition to the City of Fort Worth, Tarrant County,Texas, according to the revised plat thereof recorded in Volume 388-90, Page 36,Real Property Records of Tarrant County,Texas, Page 27 Exhibit "B" SPECIAL WARRANTY DEED THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF § THAT (referred to herein as "Grantor"), for and in consideration of the sum of Ten Dollars($10.00)and other good and valuable consideration to it in hand paid by (hereinafter referred to as "Grantee"), whose mailing address is , the receipt and sufficiency of which consideration are hereby acknowledged and confessed, does hereby GRANT, BARGAIN, SELL and CONVEY, unto Grantee, and its heirs, legal representatives, successors and assigns forever, all of the real property situated in County, Texas, described on Exhibit A attached hereto and made a part hereof for all purposes (the "Land"), together with all and singular the estate, interests, reversions, remainders, licenses, contracts, permits,approvals, authorities, consents, bonds,rights, benefits,privileges, easements,tenements, entitlements, hereditaments, privileges and appurtenances thereon or in anywise appertaining thereto(whether surface,subsurface or otherwise),together with all improvements situated thereon and any right, title and interest of Grantor in and to adjacent streets, alleys and rights-of-way (all of the foregoing being referred to collectively herein as the"Property"). This conveyance is made subject to those exceptions to title identified on Exhibit B attached hereto and made a part hereof,to the extent and only to the extent that the same are valid and subsisting and affect the Land (such matters being referred to herein as the "Permitted Exceptions"). TO HAVE AND TO HOLD the Property, subject to the Permitted Exceptions, together with all and singular the rights and appurtenances thereto in anywise belonging to Grantor, unto Grantee and its heirs, legal representatives, successors and assigns, forever; and Grantor does hereby bind itself and its heirs, legal representatives, successors and assigns, to WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee, its heirs, legal representatives, successors and assigns, against every person whomsoever lawfully claiming or to claim the same, or any part thereof, except as to the Permitted Exceptions, by, through or under Grantor, but not otherwise. Page 28 IN WITNESS WHEREOF, this Special Warranty Deed has been executed by Grantor to be effective as of the day of 20 GRANTOR: THE STATE OF § COUNTY OF § This instrument was acknowledged before me on , 20 , by , as the of on behalf of said [SEAL] Notary Public in and for the State of My commission expires: Page 29 EXHIBIT A LEGAL DESCRIPTION Tract 1: Lot 1, Block 14-A of Woodhaven Country Club Estates,3-B Filing, an addition to the City of Fort Worth, Tarrant County,Texas, according to the plat thereof recorded in Volume 388-97, Page 25, Plat Records, Tarrant County,Texas, Tract 2: LOT 1, BLOCK 1 OF SPANISH OAKS APARTMENTS ADDITION,an Addition to the City of Fort Worth,Tarrant County,Texas,according to the revised plat thereof recorded in Volume 388-90,Page 36,Real Property Records of Tarrant County,Texas. Exhibit "C" Lease Payment Guarantee THIS LEASE PAYMENT GUARANTY (this "Guaranty") is made as of January , 2017,by JASON KOTTER,an individual,and RYAN VAN ALFEN,an individual(collectively, the"Guarantor"), for the benefit of the CITY OF FORT WORTH, a Texas home rule municipal corporation ("Lessor"). RECITALS A. Lessor and TCSF 16-D E FORT WORTH K8, LLC, an Idaho limited liability company("Lessee"),have entered into that certain Ground Lease with Option to Purchase of even date herewith (as the same may be amended from time to time, the "Lease"), pursuant to which Lessor leases to Lessee the real property described therein and the improvements located thereon (the"Property"). B. As a condition to Lessor entering into the Lease, Guarantor has agreed to execute and deliver this Guaranty for the benefit of Lessor. C. Guarantor will derive substantial benefit from execution of the Lease. In consideration of the premises and other good and valuable consideration, the receipt of and sufficiency of which are hereby acknowledged, and in order to induce the Lessor to enter into the Lease, Guarantor hereby agrees as follows: Guaranty. Guarantor unconditionally,absolutely and irrevocably guarantees the punctual and complete payment when due to Lessor of all rental amounts which may or at any time be due to Lessor under or pursuant to the Lease(the matters which are guaranteed pursuant to this section are hereinafter collectively referred to as the "Obligations"). The obligations of Guarantor under this Guaranty are primary,joint and several and independent of the obligations of Lessee and any and every other guarantor of the Obligations, and a separate action or actions may be brought and executed against Guarantor or any other such guarantor, whether or not such action is brought against Lessee or any other such guarantor and whether or not Lessee or any other such guarantor be joined in such action or actions. References in this Guaranty to Guarantor are to each Guarantor signing this Guaranty, and the liability of each such Guarantor is joint and several. Waivers. This is an absolute and unconditional guaranty of payment and not of collection and Guarantor unconditionally(a)waives any requirement that Lessor first make demand upon, or seek to enforce or exhaust remedies against, Lessee or any other person (including any other guarantor) or any of the collateral or property of Lessee or such other person before demanding payment from, or seeking to enforce this Guaranty against, Guarantor; (b) waives all rights of subrogation, all rights of indemnity and any other rights to collect reimbursement from Lessee; (c) waives any right to participate in any security now or hereafter held by Lessor or in any claim or remedy of Lessor or any other person against Lessee with respect to the Obligations; (d) waives 31 diligence, presentment, protest, demand for performance, notice of nonperformance, notice of intent to accelerate,notice of acceleration,notice of protest,notice of dishonor,notice of execution of any Documents,notice of extension, renewal, alteration or amendment, notice of acceptance of this Guaranty, notice of defaults under any of the Documents and all other notices whatsoever; (e) covenants that this Guaranty will not be discharged until all of the Obligations are fully satisfied; and (f) agrees that this Guaranty shall remain in full effect without regard to, and shall not be affected or impaired by, any invalidity, irregularity or unenforceability in whole or in part of any of the Documents, or any limitation of the liability of Lessee or Guarantor thereunder, or any limitation on the method or terms of payment thereunder which may now or hereafter be caused or imposed in any manner whatsoever. Continuing Guaranty. This Guaranty is a continuing guaranty, and the obligations, undertakings and conditions to be performed or observed by Guarantor under this Guaranty shall not be affected or impaired by reason of the happening from time to time of the following with respect to the Documents,all without notice to, or the further consent of, Guarantor: (a) the waiver by Lessor of the observance or performance by Lessee or Guarantor of any of the obligations, undertakings, conditions or other provisions contained in any of the Lease, except to the extent of such waiver; (b)the extension; in whole or in part, of the time for payment of any amount owing or payable under the Lease; (c) the modification or amendment(whether material or otherwise) of any of the obligations of Lessee under, or any other provisions of the Lease, except to the extent of such modification or amendment; (d) the taking or the omission of any of the actions referred to in any of the Lease(including,without limitation,the giving of any consent referred to therein); (e) any failure, omission, delay or lack on the part of Lessor to enforce, assert or exercise any provision of the Lease, including any right, power or remedy conferred on Lessor in any of the Lease or any action on the part of Lessor granting indulgence or extension in any form; (f)the assignment to or assumption by any third party of any or all of the rights or obligations of Lessee under all or any of the Lease; (g) the release or discharge of Lessee from the performance or observance of any obligation, undertaking or condition to be performed by Lessee under any of the Lease by operation of law, including any rejection or disaffirmance of any of the Lease in any bankruptcy or similar proceedings; (h) the receipt and acceptance by Lessor or any other Person of notes, checks or other instruments for the payment of money and extensions and renewals thereof, (i) any action, inaction or election of remedies by Lessor which results in any impairment or destruction of any subrogation rights of Guarantor,or any rights of Guarantor to proceed against any other Person for reimbursement;0) any setoff,defense,counterclaim,abatement,recoupment, reduction, change in law or any other event or circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor, indemnitor or surety under the laws of the State of Texas or any other jurisdiction; and (k) the termination or renewal of any of the Obligations or any other provision thereof. Representations and Warranties. Guarantor represents and warrants to Lessor that: (a) neither the execution nor delivery of this Guaranty nor fulfillment of nor compliance with the terms and provisions hereof will conflict with, or result in a breach of the terms or conditions of, or constitute a default under, any agreement or instrument to which Guarantor is now a party or by which Guarantor may be bound, or result in the creation of any lien, charge or encumbrance 32 upon any property or assets of Guarantor, which conflict, breach, default, lien, charge or encumbrance could result in a material adverse change in the financial condition of Guarantor; (b) no further consents, approvals or authorizations are required for the execution and delivery of this Guaranty by Guarantor or for Guarantor's compliance with the terms and provisions of this Guaranty; (c) this Guaranty is the legal, valid and binding agreement of Guarantor and is enforceable against Guarantor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, liquidation, reorganization and other laws affecting the rights of creditors generally and subject to general principles of equity; (d) Guarantor has the full power, authority, capacity and legal right to execute and deliver this Guaranty, and, to the extent Guarantor is a corporation, partnership, limited liability company or other form of entity, the parties executing this Guaranty on behalf of Guarantor are fully authorized and directed to execute the same to bind Guarantor;(e) Guarantor is not,and if Guarantor is a"disregarded entity," any owner of the disregarded entity is not, a "nonresident alien," "foreign corporation," "foreign partnership," "foreign trust," "foreign estate," or any other "person" that is not a "United States person," as those terms are defined in the U.S. Internal Revenue Code and the regulations promulgated thereunder; and (f) Guarantor is not a party with whom a citizen of the United States is prohibited from engaging in transactions by any trade embargo, economic sanction or other prohibition of United States law, regulation or Executive Order of the President of the United States. Guarantor understands that Lessor is relying on the representations and warranties of Guarantor, and Guarantor represents that such reliance is reasonable. Nature of Guaranty. This Guaranty shall commence upon execution and delivery of any of the Lease and shall continue in full force and effect until the full and final satisfaction of the Obligations. The Obligations shall not be considered fully paid,performed and discharged unless and until all payments by Lessee to Lessor are no longer subject to any right on the part of any Person whomsoever, including but not limited to Lessee, Lessee as a debtor-in-possession and/or any trustee in bankruptcy, to disgorge such payments or seek to recoup the amount of such payments or any part thereof. This Guaranty shall remain in full force and effect and continue to be effective upon an Insolvency Event. This Guaranty shall continue to be effective or be reinstated, as applicable, if at any time payment of the Obligations, or any part thereof, are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by Lessor, whether as a"voidable preference,""fraudulent conveyance" or otherwise, all as though such payment or performance had not been made. In the event that any payment of the Obligations, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid to Lessor and not so rescinded, reduced, restored or returned. Subordination. Notwithstanding any provision contained in this Guaranty, in the event that Guarantor shall have any claims against Lessee, any indebtedness of Lessee now or hereafter held by Guarantor is hereby subordinated to the indebtedness of Lessee to Lessor, including, without limitation, any and all amounts due to Lessor under the Lease. Any such indebtedness of Lessee to Guarantor, if Lessor so requests, shall be collected, enforced and received by Guarantor as trustee for Lessor and be paid over to Lessor on account of the Obligations,but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. 33 Attorneys' Fees and Costs. In addition to the amounts guaranteed under this Guaranty, Guarantor agrees to pay (a) interest (including postpetition interest to the extent a petition is filed by or against Lessee under the Bankruptcy Code) at the Default Rate on any Obligations not paid when due. The agreement to indemnify Lessor contained in this Section shall be enforceable notwithstanding the invalidity or unenforceability of the Lease or any of them or the invalidity or unenforceability of any other paragraph contained in this Guaranty. All moneys available to Lessor for application in payment or reduction of the liabilities of Lessee under the Lease may be applied by Lessor to the payment or reduction of such liabilities of Lessee, in such manner, in such amounts and at such time or times as Lessor may elect. Notice. All notices, demands, designations, certificates, requests, offers, consents, approvals,appointments and other instruments given pursuant to this Guaranty(collectively called "Notices")shall be in writing and given by any one of the following: (a) hand delivery; (b) express overnight delivery service; (c) certified or registered mail, return receipt requested; or (d) electronic mail message, and shall be deemed to have been delivered upon (i)receipt, if hand delivered, (ii)the next Business Day, if delivered by a reputable express overnight delivery service; (iii) the third Business Day following the day of deposit of such notice with the United States Postal Service, if sent by certified or registered mail, return receipt requested; or (iv) transmission, if delivered by electronic mail. Notices shall be provided to the parties and addresses (or electronic mail addresses) specified below: If to Guarantor: Ryan Van Alfen and Jason Kotter c/o Athlos Academies PO Box 1598 Boise, ID 83701 With a copy to: Lake &Cobb, PLC 1095 W. Rio Salado Pkwy, Suite 206 Tempe,Arizona 85281 Attn: J. Gregory Lake Esq. Email: lakena,lakeandcobb.com If to Lessor: At the address set forth in the Lease. or to such other address or such other Person as either party may from time to time hereafter specify to the other party in a notice delivered in the manner provided above. Governing Law. This Guaranty is delivered in the State of Texas, and it is the intent of Guarantor and Lessor that this Guaranty shall be deemed to be a contract made under and governed by the internal laws of the State of Texas, without regard to its principles of conflicts of law. 34 Final Agreement. This Guaranty represents the final agreement between Lessor and Guarantor and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. Guarantor covenants and agrees that there are no unwritten oral agreements between Lessor and Guarantor and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Guaranty. Neither this Guaranty nor any provision hereof may be waived, modified, amended, discharged, or terminated except by an agreement in writing signed by the party against which the enforcement of such waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in such agreement. Recourse. Jason Kotter's personal residence which is located at 430 E. Clearvue ID, located in the Clearvue Estates Subdivision of Meridian, Block 1, of Meridian,Ada County, Idaho shall be excluded from recourse for this Guaranty. Ryan Van Alfen's personal residence which is located at 2411 Biscayne Place, Eagle, ID 83616, located in the Vizcayn Subdivision, Lot 22, Block 1 of Eagle, Ada County, Idaho shall be excluded from recourse for this Guaranty. [Remainder of page intentionally left blank; signature page to follow] 35 IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty effective as of the date set forth in the introductory paragraph of this Guaranty. GUARANTOR: Jason o er Ryan Van Alfen Exhibit "D" Permitted Exceptions 1. The following easements and/or building lines per plat recorded in Volume 388-97, Page 25, Map Records of Tarrant County, Texas: i) 35' building setback lines; ii) 5' utility easement iii) variable width easement iv) 20' drainage easement v) 15' sanitary sewer easement vi) 26' emergency access and drainage easement; vii) 20'x 20'public open space easement viii)20' visibility easements Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016. 2. Easement(s) and rights incidental thereto, as granted in a document: Granted to: Texas Electric Service Company Purpose: As provided in said document Recording Date: May 21, 1975 Recording No:in Volume 5825, Page 238, Real Property Records, Tarrant County, Texas Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016. 3. Easement(s) and rights incidental thereto, as granted in a document: Granted to: Southwestern Bell Telephone Company Purpose: As provided in said document Recording Date: August 13, 1975 Recording No:in Volume 5869, Page 187, Real Property Records, Tarrant County, Texas Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016 4. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated October 3, 2011, by and between City of Fort Worth, as Lessor, and Chesapeake Exploration, LLC, as Lessee, as evidenced by Memorandum recorded October 28, 2011 at under Clerk's File No(s). D211261892 of the Official Records of Tarrant County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016. 5. The following easements and building setback lines as shown on plat in Volume 388-90, Page 36, Plat Records, Tarrant County, Texas 10 foot utility easement 26 foot emergency access and utility easement 26 foot by 90 foot emergency access and utility easement 20 foot by 20 foot sight distance easement 35 foot building setback line Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016. 6. Easement(s) and rights incidental thereto, as granted in a document: Granted to: Texas Electric Service Company Purpose: As provided in said document Recording Date: April 17, 1974 Recording No:in Volume 5630, Page 745, Real Property Records, Tarrant County, Texas. Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016. 7. Easement(s) and rights incidental thereto, as granted in a document: Granted to: Texas Electric Service Company Purpose: As provided in said document Recording Date: March 6, 1975 Recording No:in Volume 5786, Page 556, Real Property Records, Tarrant County, Texas. Shown and Noted on survey prepared by Daniel Chase O'Neal, Registered Professional Land Surveyor Number 6570, Project No. 16167.00, dated October 23, 2016. L-15981 C CERTIFICATE OF INTERESTED PARTIES FORM 1295 101`1 Complete Nos.1-4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos.1,2,3,5,and 6 if there are no interested parties. CERTIFICATION OF FILING 1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number: of business. 2016-142579 TCSF16-D E Fort Worth K8, LLC Boise, ID United States Date Filed: 2 Name of governmental entity or state agency that is a party to the contract for which the form is 12/05/2016 being filed. City of Fort Worth Date Acknowledlged: Ca ((q l (� 3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a description of the services,goods,or other property to be provided under the contract. Boca Raton-Ground Lease Ground lease Nature of interest 4 Name of Interested Party City,State,Country(place of business) (check applicable) Controlling Intermediary Van Alfen, Ryan Boise, ID United States X Kotter,Jason Boise, ID United States X 5 Check only if there is NO Interested Party. ❑ 6 AFFIDAVIT I swear,or affir r penalty of perjury,that the above disclosure is true and correct. BRITTANY TALIK NOTARY PUBLIC STATE OF IDAHO S' nature of Aithorized agent of contracting business entity AFFIX NOTARY STAMP/SEAL ABOVE Sworn to and subscribed before me,by the said San1 % this the C� day of D, 20 �l� to certify which,witness my hand and seal of office. MAI ki mftfilur-61i N k,yuj L)(A,61 I Signature of office nistering oath Printed name of offfcer administering oath Title of office administering oath Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.277 M&C Review Page 1 of 2 Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA FoRTIVORT11 COUNCIL ACTION: Approved on 12/13/2016 REFERENCE 21 LEASE W/OPTION TO DATE: 12/13/2016 NO.: L-15981 LOG NAME: PURCHASE 5817 AND 5901 BOCA RATON BLVD CODE: L TYPE: NON- PUBLIC CONSENT HEARING: NO SUBJECT: Authorize the Execution of a Ground Lease with Option to Purchase Agreement with TCSF16-D E Fort Worth K8, LLC, for the Property Located at 5817 and 5901 Boca Raton Boulevard for the Purpose of Constructing and Operating a Charter School (COUNCIL DISTRICT 4) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the execution of a Ground Lease with Option to Purchase Agreement with TCSF16-D E Fort Worth K8, LLC, for the property being all of Lot 1, Block 1, Spanish Oaks Addition, and Lot 1, Block 14A, Woodhaven Country Club Estates, Fort Worth, Tarrant County, Texas, located at 5817 and 5901 Boca Raton Boulevard, respectively, for the purpose of constructing and operating a charter school. 2. Authorize the City Manager or his designee to execute the appropriate documents concerning the Ground Lease with Option to Purchase Agreement. DISCUSSION: On October 12, 2016, the Mayor and City Council received an Informal Report relative to the City's intent to lease with the option to sell the City-owned properties located at 5817 and 5901 Boca Raton Boulevard to Athlos, LP, for the purpose of developing an International Leadership of Texas Charter School. A Ground Lease with Option to Purchase Agreement (Agreement) with TCSF16-D E Fort Worth K8, LLC (the specific entity created by Athlos for this project) is being proposed to ensure the property is developed with the education facility prior to allowing the sale of the properties to Athlos. Under the terms of the proposed Agreement, Athlos would be granted the option to the purchase the property any time after the issuance of a Certificate of Occupancy. The purchase price of$1,175,000.00 is fixed during for the first five years of the Agreement and is based on a recent fair market value appraisal of the property; thereafter, the purchase price would increase two percent annually. During the initial 24- month term of the Agreement, rent in the amount of$5,875 per month would be deferred and collected in years three through five in addition to the base rent obligation. The term of the Agreement is 30 years with two 10-year renewal options. The annual base rent of$70,500.00 will be increased two percent every five years during the term of the Agreement. The lease will be subordinate to construction financing, with sufficient lease guarantees. The properties are located in COUNCIL DISTRICT 4. FISCAL INFORMATION/CERTIFICATION: The Director of Finance certifies that the Property Management Department is responsible for the collection of future lease revenue and for funds received from the sale of the property at closing. http://apps.cfwnet.org/council_packet/mc_review.asp?ID=24052&councildate=12/13/2016 1/23/2017 M&C Review Page 2 of 2 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 by: Jay Chapa (5804) Originating Department Head: Steve Cooke (5118) Additional Information Contact: Roger Venables (6334) ATTACHMENTS Athlos Form 1295.pdf MC MAP for BOCA RATON.Pdf http://apps.cfwnet.org/council_packet/mc_review.asp?ID=24052&councildate=l2/13/2016 1/23/2017