HomeMy WebLinkAboutContract 23512 CITY SECRETARY
CONTRACT NO.
GROUND LEASE AGREEMENT 07-22-9t
This Ground Lease Agreement is made and entered into this 29th day of July, 1997 by and
between:
The CITY OF FORT WORTH, TEXAS, having offices at 1000 Throckmorton,
Ft. Worth, Tx. 76102, hereinafter referred to as the "CLtt '; and ALLIANCE
AVIATION INVESTORS, L.P., a Texas limited partnership (formerly known as
ALLIANCE AIR PARTNERS, LTD.), having an office at 2221 Alliance
Boulevard, Suite 100, Fort Worth, Texas 76177, hereinafter referred to as the
"Lessee." Lessee's Federal Tax Identification Number is 752521969.
WITNESSETH THAT
WHEREAS, the City is the owner of an airport consisting of approximately 680 acres of
land and facilities known as the Fort Worth Alliance Airport, located in the Counties of Denton
and Tarrant in the State of Texas, hereinafter, the"Airport"; and
WHEREAS, the City, as "Lessor", and Alliance Air Services, Inc,, as "Lessee", entered
into that certain Lease Agreement dated December 15, 1993, and designated as City Secretary
Contract No. 20061 (the "Original Lease")for the lease of certain unimproved real property at the
Airport (the "Oriszfinal L?,ased Prope "), which Original Lease was assigned from Alliance Air
Services, Inc. to Alliance Air Partners,Ltd. on February 22, 1994; and
WHEREAS, Lessee desires to lease a portion of the Airport from the City for the
purpose of constructing certain "Aviation Related Facilities" as defined in Section 4.4 below, and
WHEREAS, the City desires to lease a portion of the Airport to Lessee for the purpose
of constructing the Aviation Related Improvements.
NOW, THEREFORE, in consideration of the premises and of the rents, covenants, and
conditions herein contained, the City does hereby lease to Lessee approximately 6.639 acres of
unimproved land at the Airport as more particularly described in Article 2 hereof, which
unimproved land is hereinafter referred to as the "Leased Premises," during the term hereof for
the term and pursuant to the conditions hereinafter set forth.
ARTICLE I
TERM; NO CROSS DEFAULT
1.1 Except as provided in the next sentence,this Ground Lease shall be a binding obligation of
the parties as of the date it is "made and entered into" as shown on the first page hereof.
Notwithstanding the foregoing, however, the obligations of Lessee are expressly
conditioned upon Lessee entering into an agreement with Galaxy Aerospace Corporation,
(or its Affiliates, as hereafter defined) ("GaIM") for the design, construction, use and
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operation of the Aviation Related Improvements. The terms and conditions of the
agreement between Galaxy and Lessee must be acceptable to Lessee. If Lessee and
Galaxy are unable to so agree within 365 days after the "made and entered into" date
shown on the first page hereof, then either party shall have the right to terminate this
Ground Lease by giving written notice of termination to the other; whereupon, neither
party shall have any further rights, obligations or remedies under this Ground Lease. The
term of this Ground Lease shall begin on the"Effective Date," unless sooner terminated in
accordance with the provisions hereof, and shall terminate on the last day of the 366th
month following the month in which the Effective Date falls, The "Effective Date" is
defined to be the date on which the City issues a certificate of occupancy for the Aviation
Related Facilities.
1,2 Lessor and Lessee acknowledge and agree-
1.2.1 that the Leased Premises are not part of the Original Leased Property; and
1.2.2 that no provision of the Original Lease shall apply to this Ground Lease or to the Leased
Premises, and
12.3 that no event of default under the Original Lease shall be an event of default under this
Ground Lease(or any separate lease created pursuant to Article 32 hereof) or otherwise in
any way affect the rights, obligations, or remedies of the parties under this Ground Lease
(or any separate lease created pursuant to Article 32 hereof); and
1.2.4 that no event of default under any of the separate leases created pursuant to the Original
Lease or pursuant to Article 32 hereof shall be an event of default under this Ground
Lease or otherwise in any way affect the rights, obligations, or remedies of the parties
under this Ground Lease; and
1.2.5 that no event of default under this Ground Lease shall be an event of default under the
Original Lease or otherwise in any way affect the rights, obligations, or remedies of the
parties under the Original Lease;and
1.2.6 that no event of default under this Ground Lease shall be an event of default under any of
the separate leases created pursuant to the Original Lease or pursuant to Article 32 hereof
or otherwise in any way affect the lights, obligations, or remedies of the parties under any
such separate leases.
ARTICLE 2
LEASED PREMISES
2.1 The "Leased Premises" shall consist of Parcel No. 2 (approximately 2.921 unimproved
acres) and Parcel No. 5 (approximately 3.718 unimproved acres), being part of Alliance
Airport Lot 1, Block 1, Cabinet A, Slide 622 (as described on Exhibit A-1 attached
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hereto), together with all improvements (collectively, the "Leaschold Improvement
hereafter constructed thereon, including, but not limited to,the Aviation Related Facilities,
2.2 Lessee shall also have the non-exclusive use of that portion of the paved aircraft parking
apron (the "Transient Apron") that abuts the Leased Premises along the entire westerly
boundary of the Leased Premises. The Transient Apron area that abuts the Leased
Premises is shown on Exhibit A-2 attached hereto. If at any time during the term of this
Ground Lease, Alliance Air Services, Inc. (or any of its aftihates) is not the operator of the
Airport, then Lessee, as further consideration for Lessee's use of the Transient Apron,
shall keep and maintain the Transient Apron free of trash, debris, and other foreign objects
that result from the use of the Transient Apron by Lessee or anyone claiming a right by,
through, or under Lessee. The City or the Airport operator shall otherwise be responsible
at all times for the maintenance and reconstruction of the Transient Apron and shall
maintain and keep the Transient Apron free from snow and ice; all at the sole cost and
expense of the City or the Airport operator, The timing of such maintenance and
reconstruction shall be at the City's sole discretion,
2.3 The Transient Apron is not a part of the Leased Premises.
ARTICLE 3
USE OF LEASED PREMISES
Lessee shall occupy and use the Leased Premises for any lawful purpose and in a manner
which conforms to the City's Minimum Standards for Fixed Base Operators and Other
Airport Tenants, as may be amended from time to time.
ARTICLE 4
RENT AND USE FEES
4.1 For use and occupancy of the Leased Premises and privileges herein granted, Lessee
agrees to pay to the City during the period commencing on the Effective Date, an annual
rental equal to (i) 190 per square foot multiplied times the number of square feet within
Parcel No. 2, subject to adjustment pursuant to Section 4.2 below and pursuant to Article
19 hereof (upon partial termination) plus (ii)32t per scluare foot multiplied times the
number of square feet within Parcel No. 5, subject to the adjustment pursuant to Section
4.2 below and pursuant to Article 19 hereof(upon partial termination).
4.2 Commencing on the first anniversary of the Effective Date, and on each anniversary
thereof during the remainder of the term of this Ground Lease and any extension thereof,
the ground rental rates set forth in Section 4.1 above shall be adjusted based upon the
upward percentage change in the Consumer Price Index for the Dallas/Fort Worth
Metropolitan Area, as announced by the United States Department of Labor during any
preceding 12-month period or in accordance with the formula, index or other method, if
any, that is most favorable to Lessee of any of the formulas, indices, or methods being
used and actually applied by the City for the adjustment of any rental rates at the Airport,
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4.3 The annual rent payable hereunder shall be paid in equal monthly installments. Each
installment shall be made no later than the first day of that month for which payment is due
and shall be made at the office of the Airport operator or at such other office as may be
directed in writing by the City. The annual rental during the first year of the term of this
Ground Lease pursuant to Section 4.1 shall be $76,003.04 payable in monthly
installments of$6,333.59.
4-4 Lessee, as additional rent, shall construct on the Leased Premises the improvements more
particularly described on Exhibit A-3 attached hereto consisting of a corporate
headquarters office facility, an aircraft service and completion center, and a customer
service center(collectively, the "Aviation Related Eggilities"),
4.5 Lessee hereby agrees to pay all fuel flowage fees, landing fees and tie down fees imposed
by the City from time to time, provided such fees are not unjustly discriminatory.
ARTICLE 5
ACCEPTANCE, CARE, MAINTENANCE,IMPROVEMENTS AND REPAIR
5.1 Lessee warrants it has inspected the Leased Premises and accepts possession of the
Leased Premises "AS IS" in its present condition, and subject to all limitations imposed
upon the use thereof by the rules and regulations of the Federal Aviation Administration
and by ordinances of the City, and admits its suitableness and sufficiency for the uses
permitted hereunder. Except as may otherwise be provided for herein, the City shall not
be required to maintain nor to make any improvements, repairs, or restoration upon or to
the Leased Premises or to any of the Leasehold Improvements hereafter constructed
thereon. The City shall not have any obligation to repair, maintain, or restore, during the
term of this Ground Lease, any Leasehold Improvements placed upon the Leased Premises
by Lessee, its successors and assigns.
5.2 Lessee shall, throughout the term of this Ground Lease, assume the entire responsibility,
cost, and expense for all repair and maintenance whatsoever of the Leased Premises and
all Leasehold Improvements thereon in a good workmanlike manner, whether such repair
or maintenance be ordinary or extraordinary, structural or otherwise. Additionally,
Lessee, without limiting the generality hereof, shall:
5.2,1 Keep at all times, in a clean and orderly condition and appearance, the Leased Premises,
all Leasehold Improvements thereon and all of Lessee's fixtures, equipment and personal
property which are located on any part of the Leased Premises.
5.2.2 Provide and maintain on the Leased Premises all obstruction lights and similar devices and
safety equipment required by law.
5.2.3 Repair any damage caused by Lessee to paving or other surface of the Leased Premises
caused by any oil, gasoline, grease, lubricants or other flammable liquids and substances
having a corrosive or detrimental effect thereon.
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5.2,4 Take measures to prevent erosion, including, but not limited to, the planting and
replanting of grasses with respect to all portions of the Leased Premises not paved or built
upon; and in particular, shall plant, maintain and replant any landscaped areas.
5.2.5 Be responsible for the maintenance and repair of all utility services fines placed on the
Leased Premises and used by Lessee exclusively, including, but not limited to, water lines,
gas lines, electrical power and telephone conduits and lines, sanitary sewers and storm
sewers.
5.3 In the event Lessee fads: (a) to commence to maintain, clean, repair, replace, rebuild or
repaint within a period of thirty (30) days after written notice from the City to do any
maintenance or repair work required to be done under the provisions of this Ground
Lease, other than preventive maintenance; (b) or within a period of ninety(90) days if the
said notice specified that the work to be accomplished by Lessee involves preventive
maintenance only; (c) or to diligently continue to completion any repairs, replacement,
rebuilding, painting or repainting as required under this Ground Lease; then, the City may
enter the Leased Premises involved, without such entering causing or constituting a
termination of this Ground Lease or an interference with the possession of the Leased
Premises, and repair, replace, rebuild or paint all or any part of the Leased Premises or the
Leasehold Improvements thereon, and do all things reasonably necessary to accomplish
the work required, and the cost and expense thereof shall be payable to the City by Lessee
on demand. Provided, however, if in the opinion of the City, Lessee's failure to perform
any such maintenance endangers the safety of the public, the employees or property of the
City or other tenants at the Airport, and the City so states same in its notice to Lessee, the
City may elect to perform such maintenance at any time after the giving of such notice,
and Lessee agrees to pay to the City the cost and expense of such performance, on
demand, The City's costs and expenses shall include, but not be limited to, all direct and
indirect costs and expenses of the City, its agents, contractors, and employees, and all
financing charges, if any, and all allocations of fringe benefits, overhead, legal, and
administration charges the City deems appropriate. Furthermore, should the City, its
officers, employees or agents, undertake any work hereunder, Lessee hereby waives any
claim for damages, consequential or otherwise, as a result therefrom except for claims for
damages arising from the negligence of the City, its agents and contractors. The foregoing
shall in no way affect or alter the primary obligations of Lessee as set forth in this Ground
Lease and shall not impose or be construed to impose upon the City any obligations to
maintain the Leased Premises, unless specifically stated otherwise herein.
5.4 Final plans and specifications for all repairs, construction, alterations, modifications,
additions or replacements of the Leasehold Improvements shall be submitted to the City
by Lessee and be accompanied by the City's Building Permit Application. The plans shall
include landscaping, architectural details and color schemes. The Building Permit
Application must receive the written approval of the City, and no such work shall,be
commenced until such written approval is obtained from the City, which approval shall not
be unreasonably withheld or delayed, provided the architectural detail and aesthetics of the
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Leasehold Improvements are reasonably satisfactory to the City. The City shall advise
Lessee within thirty (30) days after receipt of the written request, together with copies of
the plans and specifications for the proposed Leasehold Improvements in sufficient detail
to make a proper review thereof, of its approval or disapproval of the proposed Leasehold
Improvements, and, in the event it disapproves, stating its reason therefor, In determining
whether to approve a major repair, construction, alteration, modification, addition or
replacement, the City shall be guided by the criteria set forth in Section 2 of Appendix A
to this Ground Lease.
5.5 If Lessee makes any Leasehold Improvements without City approval that are disapproved
by the City, then,upon reasonable notice to do so, Lessee shall remove the same, or at the
option of the City cause the same to be changed to the reasonable satisfaction of the City,
If Lessee fails to comply with such notice within thirty (30) days or to commence to
comply and pursue diligently to completion, the City may effect the removal or change
without any liability by the City for such removal or change, and Lessee shall pay the cost
thereof(as defined in Section 5.3 hereof)to the City.
5.6 Upon the completion of construction or installation, title to all Leasehold Improvements
located on the Leased Premises shall remain in Lessee until the expiration or earlier
termination of this Ground Lease, at which time title shall immediately vest in the City free
and clear of any and all claims by any Leasehold Mortgagee, free and clear of any and all
claims on the part of Lessee, and free and clear of any mechanics' and materialmen's liens
0 by any person on account of any repair or improvement work done or to be done under
the terms hereof by Lessee. This vesting of title in the City at the time specified is a part
of the consideration for this Ground Lease. The City shall not be liable(i)to assume, take
subject to, or otherwise be responsible for the payment or performance under any
Leasehold Mortgage (as hereinafter defined) or (ii) to Lessee or Lessee's contractors,
Sublessees, or anyone else, for the value of any Leasehold Improvements constructed or
located on the Leased Premises.
53 Lessee agrees to secure its obligations to maintain and repair the Leased Premises through
the execution and delivery of a "Pledge Agreement" in the form attached hereto as
Exhibit B. A separate pledge agreement will be executed for each improvement
constructed pursuant to this Ground Lease. The value of the collateral held pursuant to
each pledge agreement shall equal or exceed $2.00 per net rentable square foot of the
applicable improvement.
ARTICLE 6
ADDITIONAL OBLIGATIONS OF LESSEE
6.1 Lessee shall conduct its operations hereunder in an orderly and proper manner,
considering the nature of such operation, so as not to unreasonably annoy, disturb,
endanger or be offensive to others.
6.2 Further, Lessee shall take all reasonable measures:
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6.2.1 To reduce to a practicable minimum vibrations tending to damage any equipment,
structure, buildings or portions of buildings.
6.2.2 Not to produce on the Airport, through the operation of machinery or equipment, any
electrical, electronic or other disturbance that interferes with the operation by the City or
the Federal Aviation Administration of air navigational, communication or flight
equipment on the Airport or on aircraft using the Airport or with ground transportation
communications.
6.3 Lessee shall control the conduct and demeanor of its officers, agents, employees, invitees
and, upon objection from the City concerning the conduct or demeanor of any such
person, Lessee shall immediately take all lawful steps necessary to remove the cause of the
objection. If the City shall so request, Lessee agrees to supply and require its employees
to wear badges or other suitable means of identification, which shall be subject to the prior
and continuing approval of the Airport operator.
6.4 Lessee shall comply with all health and safety laws and requirements and any other federal,
state or municipal laws, ordinances, rules, regulations and requirements applicable to the
Leased Premises and the Leasehold Improvements thereon and its operations at the
Airport hereunder.
6.5 Lessee shall comply with all written instructions of the City in disposing of its trash and
refuse at Lessee's expense. Lessee shall be responsible for removal from the Airport, or
otherwise disposing of in a manner approved by the City, all garbage, debris and other
waste materials (whether solid or liquid) arising out of its occupancy of the Leased
Premises or out of its operations. Lessee shall provide and use suitable covered metal or
other rigidly and sturdily constructed receptacles, suitably screened from public view, for
all garbage, trash and other refuse created on or arising in connection with the activities
conducted on the Leased Premises. Piling of boxes, cartons, barrels or other similar items,
in an unsightly or unsafe manner, on or about the Leased Premises is forbidden. The
manner of handling and disposing of trash, garbage and other refuse and the frequency of
removal thereof from the Airport shall at all times be subject to the rules, regulations and
approval of the City. Lessee shall use extreme care when handling, disposing of, and
removing all such waste to prevent littering the Airport.
6.6 Lessee shall cause no nuisance, waste or injury on or to the Leased Premises and shall not
do, or permit to be done, anything which may result in the creation, commission or
maintenance of such nuisance, waste or injury on or to the Leased Premises.
6.7 Lessee shall not do, nor permit to be done, anything which may interfere with the
effectiveness or accessibility of the drainage system, sewer system, fire protection system,
sprinkler system, alarm system and fire hydrants and hoses, if any, installed or located on
the Leased Premises.
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6,8 Lessee shall take measures to insure security in compliance with Federal Aviation
Regulations and the Airport Security Plan.
6.9 Lessee shall not overload any floor, structure, structural member or paved area on the
Leased Premises, or paved area elsewhere on the Airport, and shall repair at Lessee's
expense any floor, structure, structural member, or any paved area damaged by
overloading without limiting Lessee's obligations pursuant to Article 5 above.
6.10 Lessee shall not do,nor permit to be done, any act or thing upon the Leased Premises:
6.10A which will invalidate or conflict with any fire insurance policies or regulations applicable to
the Leased Premises or any part thereof;or,
6.10.2 which may constitute a hazardous condition that increases the risks attendant upon the
operations permitted by this Ground Lease.
6.11 Lessee shall not use any flammable liquids within any covered or enclosed portion of the
Leased Premises, except those oils, solvents and fuels and other liquids used to
manufacture, repair and maintain aircraft and ground equipment (or otherwise used in the
day-to-day use and operation of the Aviation Related Facilities), as long as such liquids
are kept only in working supply quantities. Any other supplies of such liquids shall be
kept and stored in safety containers of a type approved by the Underwriters Laboratories.
The term"working supply" as used in this Section 6.11 shall mean the amount consumed
by Lessee and other parties using the Leased Premises during any normal work day.
6,12 From time to time, the City may conduct pressure, water flow, and other appropriate tests
of the fire extinguishing system and apparatus, if installed, which constitutes a part of the
Leased Premises, and Lessee's proportionate share of the cost of such tests shall be paid
to the City by Lessee upon demand.
6.13 Except for uses permitted under Article 3 hereof to be performed by Lessee or Lessee's
subcontractors, Lessee shall provide prompt written notice to the City of any person, firm
or corporation performing flight instruction of any sort, air taxi, aircraft charter, or any
ground taxi services and any other ground transportation for hire on the Leased Premises
for commercial purposes without a valid permit from the City.
6.14 It is the intent of the parties hereto that noise, including, but not limited to, noise caused
by aircraft engine operation, shall be held to a reasonable minimum. To this end, Lessee
will conduct its operations in such a manner as to keep the noise produced by aircraft
engines and component parts thereof or any other noise, to a reasonable minimum by such
methods as are practicable considering the extent and type of the operations of Lessee. In
addition, Lessee will employ noise arresting and noise reducing devices that are available
and economically practicable, considering the extent of the operations of Lessee, but in no
event less than those devices required by federal, state or local law, In its use of the
Leased Premises, Lessee shall take all reasonable rare, caution and precaution, and shall
use all reasonable efforts, to minimize prop or jet blast interference to aircraft operating on
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taxiways or to buildings, structures and roadways, now located on or which in the future
may be located on areas adjacent to the Leased Premises. In the event the City determines
that Lessee has not used all reasonable efforts to curb the prop or jet blast interference,
Lessee hereby covenants and agrees to erect and maintain, at its own expense, such
structure or structures as may reasonably be necessary to prevent prop or jet blast
interference, subject, however to the prior written approval of the City as to type, manner
and method of construction, which approval shall not be unreasonably withheld.
6.15 In the event of any product spills or other environmentally polluting discharges arising
from Lessee's equipment or caused by Lessee, its employees, agents or servants, clean up
of such spills or discharges and the payment of all fines and penalties(including the cost of
such cleanup) shall be the sole responsibility of Lessee. Lessee shall immediately
commence containment and clean up operations as necessary for operational or safety
consideration and shall notify the City and the appropriate state and federal authorities
immediately of the spill and such cleanup operation. Such cleanup shall be to the
standards required by the U.S. Environmental Protection Agency and any other agency
with jurisdiction over the Leased Premises. A spill or discharge means a discharge of any
petroleum or hazardous substance which is in such quantity or concentration as may be
harmful or which poses a foreseeable risk of harm to public health or welfare or to natural
resources or which is defined as a spill or discharge by federal, state, or local laws, or
ordinances. All costs of containment or clean up for such spill or discharge shall be borne
by Lessee. Lessee shall comply with all applicable federal and state laws, regulations and
rules regarding aboveground and underground storage tanks. The obligations of Lessee
under this Section 6.15 shall survive the termination of this Ground Lease.
ARTICLE 7
LESSEE'S USE OF THE AIRPORT
7.1 General Use of the_Airport. The City hereby grants to Lessee the right to use, on a
nonexclusive basis, including the unobstructed right of ingress, the public areas of the
Airport and runways, taxiways, aprons, lighting, navigation aids, and other facilities
necessary for the operation of aircraft, for all lawful purposes related to Lessee's aviation-
related activities, including but not limited to-
7.1.1 landing, taking off, flying over, taxiing, pushing, towing, parking, loading, and unloading
of aircraft;
7.1.2 testing of aircraft and other equipment;
7.13 purchase at the Airport or elsewhere, from any person or company, of aviation fuel,
ground vehicle fuel, lubricating oil, grease, solvents, and other materials, supplies and
services, and
7.1.4 installation, operation, and maintenance of directional and identification signs approved in
writing by the City.
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07515.0092-0273045.12
7.2 The City or the Airport operator will at all times maintain and operate with adequate and
efficient personnel and keep in good repair, the Airport and specifically the runways and
taxiways, and the appurtenances, facilities, and services now or hereafter connected
therewith, and keep the Airport and its approaches free from obstruction, congestion, and
interference, including snow removal, for the safe, convenient, and proper use thereof by
Lessee; will maintain the Airport in accordance with FAA certification requirements; and
will maintain adequate rescue and firefighting equipment and personnel to meet such FAA
certification requirements. The Airport will be operational 24 hours per day, 365 days per
year (366 days per year during leap years), unless Lessee agrees in writing to a reduced
operating schedule. There will be no restrictions placed on Lessee's night operations.
73 To the maximum extent permitted by law, and notwithstanding any term or provision of
this Lease to the contrary, the City will not during the term of this Lease adopt ordinances,
laws, rules, or regulations of any type (collectively, a "Material Operating Restriction")
that would be materially more restrictive on flight operations, or the sale, completion,
service or maintenance of aircraft (collectively, "Aircraft Operations") performed by
Galaxy in or from the Leased Premises, then those applicable to other entities engaged in
Aircraft Operations at the Airport,including, without implied limitation, limitations on 24-
hours per day, seven day per week aircraft flight, maintenance, and service operations at
the Airport and noise or vibration abatement procedures or restrictions. For purposes of
this Section 7.3, the City shall not be responsible to Lessee or to Galaxy for violation of
this section if the City is mandated by federal, state or county governmental agencies or
authorities having jurisdiction over the City to take such action.
7.4 The use of any such roadway, taxiway and public landing areas shall be subject to the
Rules and Regulations of the Airport which are now in effect or which may hereafter be
promulgated. The City may, at any time, temporarily or permanently, close or consent to,
or request the closing of, any such roadway or taxiway and any other way at, in or near
the Leased Premises presently or hereafter used as such, so long as a reasonable means of
ingress and egress as provided above remains available to Lessee. Lessee hereby releases
and discharges the City, its officers, employees and agents, and all other governmental
authorities and their respective successors and assigns, of and from any and all claims,
demands, or causes of action which Lessee may now or at anytime hereafter have against
any of the foregoing, arising or alleged to arise out of the closing of any street, roadway or
other area, provided that a reasonable means of access to the Leased Premises remains
available to Lessee. Lessee shall not do or permit anything to be done which will interfere
with the free access and passage of others to space adjacent to the Leased Premises or in
any streets or roadways on the Airport.
ARTICLE 8
INSURANCE, DAMAGE OR DESTRUCTION
8.1 To safeguard the interest and property of the City, Lessee, at its sole cost and expense,
shall procure and maintain through the term of this Ground Lease insurance protection for
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all risk coverage on the Leasehold Improvements located on the Leased Premises to the
extent of one hundred percent (100%) of the actual replacement cost thereof. Such
insurance shall be written by insurers of recognized financial standing and authorized to
conduct business in the State of Texas. If said insurers become financially incapable of
performing under the terms of said policy, Lessee shall promptly obtain a new policy
issued by a financially responsible and authorized carrier and shall submit such new policy
as previously provided.
&L I The property insurance shall provide for thirty (30) days notice of cancellation or material
change, by registered mail, to the City, Attention: City Manager, and to the Airport
operator.
8.1.2 Lessee shall settle all losses with the insurance carrier and shall consult with the City and
use all reasonable efforts to obtain a settlement that covers the cost of repairing or
rebuilding.
8.1.3 Lessee shall provide certificates of insurance, marked "premium paid," evidencing
existence of all insurance required to be maintained prior to the commencement of this
Ground Lease. Upon the failure of Lessee to maintain such insurance as above provided,
the City, at its option, may take out such insurance and charge the cost thereof to Lessee,
or City may give notice of default hereunder pursuant to Article 18 herein.
8.2 In the event any Leasehold Improvements, insurable or uninsurable, on the Leased
Premises are damaged or destroyed, the use of all insurance proceeds and Lessee's
obligations, if any, to rebuild shall be governed solely by any Leasehold Mortgage(s) that
covered the Leasehold Improvements at the time of the damage or destruction. If the
damaged or destroyed Leasehold Improvements are not covered by any Leasehold
Mortgages (or if covered by a Leasehold Mortgage, the Leasehold Mortgagee does not
require Lessee to rebuild), Lessee shall have the election of repairing or reconstructing the
Leasehold Improvements substantially as they were immediately prior to such casualty or
in a new or modified design, subject to the provisions of Section 8.3 and 8.4 below,
Article 5 hereof, and applicable building codes existing at the time of repairing or
rebuilding; or, notwithstanding the provisions of Article 5 hereof not to reconstruct the
Leasehold Improvements, in which case the provisions of Section 8.5 below shall apply,
Lessee shall give the City written notice of its election hereunder within sixty (60) days
after the occurrence of such casualty or the adjustment of the claim, whichever is later. In
the event of damage or destruction to any of the Leasehold Improvements upon the
Leased Premises, the City shall have no obligation to repair or rebuild the Leasehold
Improvements or any fixtures, equipment or other personal property installed by Lessee
pursuant to this Ground Lease.
8.3 If the damaged or destroyed Leasehold Improvements are not covered by any Leasehold
Mortgages, the insurance proceeds shall be paid to an escrow agent (the"Escr Agent w Q ,)
mutually agreed upon by Lessee and the City. If Lessee elects to repair or reconstruct the
damaged Leasehold Improvements, to the extent that any loss is recouped by payment to
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the Escrow Agent of the proceeds of the insurance, the amount of such proceeds, together
with any interest thereon, will be paid to Lessee to the extent necessary to cover its costs
of rebuilding or repairing the portion or all of the Leased Premises which have been
damaged or destroyed. Such payments will be made by the Escrow Agent to Lessee,
subject to the prior written approval of the City, in installments as work progresses,
provided that as to each request for payment Lessee shall certify to the Escrow Agent and
the City, by a responsible officer or authorized representative, that the amounts requested
are due and payable to its contractors for work completed. Upon completion of all the
work, Lessee shall certify to the Escrow Agent and the City, by a responsible officer or
authorized representative, that such rebuilding and repairs have been completed, that all
costs in connection therewith have been paid by Lessee and said costs are fair and
reasonable, and said certification shall also include an itemization of costs. If the insurance
proceeds are not sufficient, Lessee agrees to bear and pay the deficiency, If the insurance
proceeds are in excess of all costs incurred, the Escrow Agent shall pay such excess
proceeds to Lessee. Nothing herein contained shall be deemed to release Lessee from any
of its repair, maintenance or rebuilding obligations under this Ground Lease.
8.4 In the event Lessee elects to repair or reconstruct as provided in Section 8.3 above,
Lessee, if it elects to continue its operation on the Airport, shall, at its expense, replace
and repair any and all fixtures, equipment and other personal property necessary to
properly and adequately continue its airport business on the Airport, but in no event shall
Lessee be obligated to provide equipment and fixtures in excess of those existing prior to
such damage or destruction, except for requirements of construction codes existing at the
time of repair or replacement. During such period of repair or replacement the rentals
provided for elsewhere herein shall be proportionately abated during the period from the
date of such damage, destruction or loss until the same is repaired, replaced, restored or
rebuilt, according to the portion of the Leasehold Improvements on the Leased Premises
that are used only for repair or rebuilding of same and not for the uses described in Article
3. Such abatement shall not exceed the actual time required for arranging for and the
doing of such work. The proportional amount of reduction of rentals will be reasonably
determined by the City. Lessee agrees that such work will be promptly commenced and
prosecuted to completion with due diligence; subject to delays beyond Lessee's control.
8.5 If the damaged or destroyed Leasehold Improvements are not covered by any Leasehold
Mortgages (or if covered by a Leasehold Mortgage, the Leasehold Mortgagee does not
require Lessee to rebuild), and if Lessee shall elect not to repair or to reconstruct the
damaged Leasehold Improvements, Lessee shall, at its own cost and expense, remove all
debris resulting from such damage to the Leased Premises, including foundations, concrete
piers, pavement, etc., and shall stub up utilities and restore the surface to a level condition
at its original elevation, and the Escrow Agent shall deliver the balance of the insurance
proceeds to the City. Upon completion of such debris removal and restoration, and the
insurance proceeds payment by the Escrow Agent to the City, Lessee may elect to
terminate this Ground Lease or continue to use the Leased Premises for other aeronautical
purposes. There shall be no obligation on the part of the City or the Escrow Agent to
reimburse Lessee from the insurance proceeds for the loss or damage to fixtures,
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07515.0092:0273045.12
equipment or other personal property of Lessee. Lessee, for its own protection, may
separately insure such fixtures, equipment or other personal property as its interests may
appear.
ARTICLE 9
LIABILYIY, INSURANCE AND INDEMNMCATION
9.1 THE CITY SHALL IN NO WAY, NOR UNDER ANY CIRCUMSTANCES, BE
RESPONSIBLE FOR ANY PROPERTY BELONGING TO LESSEE, ITS
OFFICERS, AGENTS, EMPLOYEES, LICENSEES, INVITEES, TENANTS,
GUESTS, PATRONS, CONTRACTORS AND SUBCONTRACTORS, WHICH MAY
BE STOLEN, DESTROYED OR IN ANY WAY DAMAGED, AND LESSEE HEREBY
COVENANTS AND AGREES TO INDEMNIFY, HOLD HARMLESS, AND
DEFEND THE CITY, AND ITS OFFICERS, AGENTS AND EMPLOYEES, FROM
AND A GAINST ANY AND ALL SUCH CLAIM.
9.2 LESSEE HEREBY COVENANTS AND AGREES TO (1) INDEMNIFY, HOLD
IIAR1iLESS, AND DEFEND THE CITY, AND ITS OFFICERS, AGENTS AND
EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR
PROPERTY DAMAGE ANDIOR PERSONAL INJURY, INCLUDING DEATH, TO
ANY AND ALL PERSONS, OF K"TSOEVER KIND OR CHARACTER,
WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN CONNECTION
WITH THE OPERATION, MAINTENANCE, USE, OR OCCUPANCY OF THE
LEASED PREMISES BY LESSEE, ITS OFFICERS, EMPLOYEES,
CONTRACTORS, SUBCONTRACTORS, LICENSEES, OR TENANTS, AND (II)
PROVIDE SUCH INSURANCE, AS REQUIRED IN SECTION 9.3 HEREOF,
COVERING THE ACTS AND OMISSIONS OF ALL NAMED INSUREDS,
INCLUDING THE CITY; AND LESSEE HEREBY ASSUMES ALL LIABILITY
AND RESPONSIBILITY FOR SUCH CLAIMS OR SUITS LESSEE LIKEWISE
SHALL ASSUME ALL RESPONSIBILITY AND LIABILITY FOR, AND SHALL
INDEMNIFY AND HOLD HARMLESS THE CITY, FOR ANY AND ALL INJURY
OR DAMAGE TO THE AIRPORT, THE LEASED PREMISES OR THEIR
FACILITIES, ARISING OUT OF OR IN CONNECTION WITH THE OPERATION,
.MAINTENANCE, USE OR OCCUPANCY OF THE LEASED PREMISES, BY
LESSEE, ITS OFFICERS, EMPLOYEES, CONTRACTORS, SUBCONTRACTORS,
LICENSEES, OR TENANTS
Upon the filing with the City of a claim for damages or injuries arising out of or in
connection with the incidents for which Lessee herein agrees to indernnify and hold the
City harmless, the City shall immediately notify Lessee of such claim, and in the event
Lessee does not settle or compromise such claim, then Lessee shall provide, at Lessee's
expense, the legal defense for the City should any litigation or arbitration result from such
claim.
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07515.0092:0273045.12
9.3 In addition to Lessee's undertaking, as stated in this Article, and as a means of further
protecting the City, its officers, agents, servants and employees, Lessee shall at all times
during, the term of this Ground Lease obtain and maintain in effect insurance coverage
consistent with the requirements of Section 9.2 hereof and Schedule A attached hereto
and made a part hereof. In this connection, Lessee agrees to require its contractors doing
work on the Airport, and Lessee's tenants and Sublessees, to carry adequate insurance
coverage.
9.3.1 Lessee shall review its coverage annually and increase the minimum liability insurance set
forth in Schedule A to an amount when, in Lessee's opinion, the risks attendant to
Lessee's operations hereunder have increased. The City shall not be liable for any shortfall
in Lessee's coverage or the coverage of Lessee's tenants or Sublessees. In no event shall
Lessee allow such insurance coverage to be below the minimum requirements set forth in
Schedule A. Failure to maintain such insurance in the types and amounts specified herein
shall constitute a material and substantial breach of this Ground Lease,
9A Lessee represents that it is the owner of or fully authorized to use any and all services,
processes, machines, articles, marks, names or slogans used by it in its operations under or
anywise connected with this Ground Lease. Lessee agrees to save and hold the city, its
officers, employees, agents and representatives, free and harmless of and from any loss,
liability, expense, suit or claim for damages in connection with any actual or alleged
infringement of any patent, trademark or copyright, or arising from any alleged or actual
unfair competition or other similar claim, arising out of the operations of Lessee under or
in anywise connected with this Ground Lease.
ARTICLE 10
RULES AND REGULATIONS AND MUM NTANDARDJ
10.1 From time to time the City may adopt and enforce Rules and Regulations and Minimum
Standards with respect to the occupancy and use of the Airport. Lessee agrees to observe
and obey any and all such Rules and Regulations and Minimum Standards and all other
Federal, State and municipal rules, regulations and laws in effect from time to time and to
require its officers, agents, employees, tenants, Sublessees, contractors, and suppliers, to
observe and obey the same. This provision will include compliance with the Airport's
Noise Abatement Plan, as promulgated. The City reserves the right to deny access to the
Airport and its facilities to any person, firm or corporation that fails or refuses to obey and
comply with such Rules and Regulations, laws and Minimum Standards. Notwithstanding
anything to the contrary contained in this Article 10, however, the City acknowledges and
agrees that the Aviation Related Facilities shall, from the "made and entered into" date set
forth on the first page of this Ground Lease until the Effective Date of this Ground Lease,
only have to comply with the Rules and Regulations, Minimum Standards, and other
Airport-related municipal rules and regulations that were in effect on said "made and
entered into" date.
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07515 OO92:0273045.12
ARTICLE 11
SIGNS
Lessee shall have the right to install and maintain one or more signs on the Leased
Premises identifying it and its operations, provided, however, the subject matter, type,
design, number, location and elevation of such signs, and whether lighted or unlighted,
shall be subject to and in accordance with the written approval of the City. No sign will be
approved which, in the City's opinion, may be confusing to aircraft pilots or automobile
drivers or other traffic or which fails to conform to the architectural scheme of the Airport
or meet the requirements of the City.
ARTICLE 12
LEASEHOLD M12RTfaAGES.,-SUJJLETTMG.An ASSIGNMENT
12.1 Lessee shall have the fight, at any time and from time to time, without the City's consent,
and on terms and conditions determined by Lessee 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 Lessee hereunder
(including Lessee's interest in the Leasehold Improvements and each Sublessee's interest
in a Sublease and in and to the Leasehold Improvements hereunder), and to assign,
hypothecate, or pledge the same 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 shall be referred to as a
"Leasehold Mortgage"; and a holder of a Leasehold Mortgage as a "Leasehold
Mortgagee"). No Leasehold Mortgagee, trustee, or other person claiming by, through, or
under any Leasehold Mortgagee shall by virtue thereof acquire any liens on the fee interest
of the City in the Leased Premises or any greater right in the Leased Premises than Lessee
then had under this Ground Lease, except for the rights expressly granted to such
Leasehold Mortgagee, trustee, or other person under the terms of this Ground Lease. All
Leasehold Mortgages shall be subject to all of the conditions, covenants, and obligations
of this Ground Lease and to all of the rights of the City hereunder.
Lessee shall also have the right to finance any Leasehold Improvements (or any additions,
alterations, or improvement thereof)through the issuance of bonded indebtedness secured,
in whole or in part, by the Leased Premises, the Leasehold Improvements, or any rents or
other revenues resulting therefrom.
After the execution and recordation of any Leasehold Mortgage, Lessee or the Leasehold
Mortgagee shall notify the City in writing that such Leasehold Mortgage has been given
and executed by Lessee and shall furnish the City with the address to which copies of
notices should be mailed, The City agrees that it will thereafter give to the Leasehold
Mortgagee, at the address so given, duplicate copies of any and all notices in writing
which the City may from time to time give or serve upon Lessee under and pursuant to the
terms and provisions of this Ground Lease. Such Leasehold Mortgagee shall have the
same cure rights available to Lessee with respect to any alleged failure by Lessee to
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07515.0092:0273045-12
perform under this Ground Lease, and if the alleged failure is cured, the City will accept
such cure tendered by such Leasehold Mortgagee.
In addition to the cure rights of a Leasehold Mortgagee as described above, each
Leasehold Mortgagee shall also have the right to partially cure any alleged default by
Lessee under this Ground Lease to the extent that such default affects any portion of the
Leased Premises or Leasehold Improvements covered by its Leasehold Mortgage
(including, but not limited to, a prorated payment of rent and use fees as set forth in
Article 4 hereof). In the event of such a partial cure by a Leasehold Mortgagee, the City
agrees that this Ground Lease shall continue in full force and effect with respect to the
portion of the Leased Premises and Leasehold Improvements covered by the Leasehold
Mortgage of such Leasehold Mortgagee; provided, however, all reasonable and necessary
City costs related to such documentation, including reasonable and necessary attorneys
fees, shall be paid to the City by Lessee. The City agrees to reasonably cooperate with
Lessee and any prospective Leasehold Mortgagee in documenting these partial cure rights
in a manner reasonably requested by such Leasehold Mortgagee.
No Leasehold Mortgagee shall be or become liable to the City as an assignee of this
Ground Lease or otherwise until it expressly assumes such liability in writing, and no
assumption shall be inferred or result from foreclosure or other appropriate proceedings in
the nature thereof or as the result of any other action or remedy provided for by any
Leasehold Mortgage or other instrument executed in connection with such Leasehold
Mortgage or from a conveyance from Lessee pursuant to which the purchaser at
foreclosure(or grantee or transferee in lieu thereof] shall acquire the rights and interests of
Lessee under the terms of this Ground Lease.
12.2 Lessee may enter into agreements (collectively, "Subleases') with sub-lessees, licensees,
and concessionaires(collectively, "Sublessees") for the right to use or occupy the Leased
Premises or the Leasehold Improvements or any part thereof without the consent of the
City; provided, however, all Sublessees must still obtain FBO permits or commercial
operating permits, as applicable, from the City in accordance with the Minimum Standards
in effect from time to time. All Subleases shall be subordinate to all the terms, conditions,
and covenants of this Ground Lease and shall contain a written provision to that effect (or
otherwise be null and void), and no such Sublease shall extend beyond the term of this
Ground Lease.
12.3 Except as provided in Sections 12.1 and 12.2 above, Lessee covenants and agrees that it
will not sell, convey, transfer, mortgage, pledge, or assign this Ground Lease, or any part
hereof or any interests herein, or any rights created hereby, without the prior written
consent of the City. The foregoing notwithstanding, the City, in consideration of the
investments by Lessee, agrees that (i) Lessee may, without the consent of the City, assign
all or any portion of its interest in this Ground Lease, the Leased Premises, or the
Leasehold Improvements to any"Affiliate" (i.e., any entity that controls, is controlled by,
or is under common control with Lessee) of Lessee and (H) the City will consent to the
assignment of this Ground Lease by Lessee to a responsible third party, provided, that the
cw-xy Gmund L,=.-R-vised-i migs Page 16
075 1 5.DO92!0273D4 5.12
request for the City's consent is in writing and presented at least sixty days prior to the
date of assignment and provided further,that the City determines, in its sole discretion and
to its satisfaction, that the prospective assignee is financially and operationally responsible
to fulfill the duties and responsibilities prescribed by this Ground Lease. The City shall not
unreasonably delay action on Lessee's request for its consent; provided, however, that any
such consent shall be given only by formal action of the City Council of the City of Fort
Worth.
12A Except as provided in Section 12.1 and Section 12.2 above, any attempted assignment or
transfer of this Ground Lease, or any rights of Lessee hereunder, without the prior written
consent of the City, shall be void.
12.5 Any assignment of this Ground Lease shall be on the condition that the assignee accepts
and agrees to all of the terms, conditions and provision of this Ground Lease and agrees to
accept and discharge all of the covenants and obligations of Lessee hereunder, including,
but not limited to, the payment of all sums due and to become due by Lessee under the
terms hereof.
12.6 No Sublease shall in any way relieve Lessee of any of its obligations to the City set forth
or arising from this Ground Lease. Any termination of Lessee's rights hereunder shall
only give the City the right to terminate"below-market" Subleases with Affiliates(defined
in Section 12.3 above) of Lessee. All other Subleases, however, shall survive any
termination of Lessee's rights hereunder, and the rights of such Sublessees shall not be
0 disturbed so long as they perform in accordance with their respective Subleases; provided,
however, that if any provision of such Subleases conflicts with or is ambiguous in relation
to the terms and provisions of this Lease, the Sublessee, shall be bound by the more
restrictive provision or the provision that is more beneficial to the City, at the City's sole
election. Under any surviving Sublease, sublessee shall be deemed to have agreed to
attom to the City, and from that time the City shall have all of the rights and remedies of
Lessee under all such Subleases. So long as Sublessee is not in default (beyond any period
given tenant in the Sublease to cure such default) in the payment of rent or in the
performance of any of the terms, covenants or conditions of the Sublease on Sublessee's
part to be performed (i) Sublessee's possession of the Leased Premises shall not be
diminished or interfered with by the City in the exercise of any of its rights under this
Lease, and (ii) the City will not join Sublessee as a party defendant in any action or
proceeding for the purpose of terminating Sublessee's interests and estate under the
Sublease because of any default under this Lease. The rights, duties and obligations of the
City and Galaxy under the Galaxy Sublease surviving the termination of Lessee's rights
hereunder and under this Lease shall be in accordance with the following:
12.6.1 Galaxy shall be deemed to have agreed to attorn to the City under this Lease as of the date
the Lessee's rights under this Lease are terminated (the "Rights Termination Date"). Such
attornment shall be effective and self-operative without the execution of any further
instrument. Galaxy shall be deemed to have agreed, however, to execute and deliver at
any time and from time to time, upon the request of the City, any instrument or certificate
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07515.0092:0273045,12
which, in the reasonable judgment of the City may be necessary or appropriate to evidence
such attornment.
116.2 From and after the Rights Termination Date, the City shall have all of the rights and
remedies as landlord under this Lease and shall be bound to Galaxy under all of the terms,
covenants and conditions of this Lease, and Galaxy shall, from and after Galaxy's
succession to the interest of Lessee under this Lease, have the same remedies against the
City for the breach of this Lease that Lessee had against the City if the Galaxy had not
succeeded to the interest of the Lessee under this Lease, provided, however, that the City
shall not in any event be: (a) liable for any act or omission occurring prior to the Rights
Termination Date; (b) subject to any offsets or defenses which Lessee might have against
the City by reason of any act or omission occurring prior to the Rights Termination Date;
or(c) obligated to perform any duty set forth in the Sublease greater than its duties under
the terms and conditions of this Lease; and Galaxy shall not in any event be: (i) Gable for
any act or omission of any prior tenant(including Lessee); or(ii) subject to any offsets or
defenses which the City might have against any prior tenant (including Lessee); or (i5)
bound by or liable for any obligation of any prior tenant (including Lessee) to pay arty
sums of money to or for the benefit of the City for concessions or inducements granted to
any prior tenant (including Lessee)except as expressly set forth in the Lease or(iv)bound
by any amendment or modification of this Lease made without Galaxy's consent.
12.7 If Lessee assigns, sells, conveys, transfers, mortgages, or pledges this Ground Lease in
violation of the foregoing provisions of this Article, the City may collect from such
assignee, or anyone else who claims a right to this Ground Lease or who occupies the
Leased Premises, any charges or fees payable by it and may apply the net amount collected
to the rents hereunder, and no such collection shall be deemed a waiver by the City of the
agreements contained in this Article nor of acceptance by the City of any assignee,
claimant, or occupant, nor as a release of Lessee by the City from the further performance
by Lessee of the agreements contained herein.
12.8 The rights of the Lessees set forth in this Article 12 shall inure to the benefit of a
Sublessee if, but only if, such Sublessee shall have secured the prior written consent of
City to the mortgage, pledge, deed(s) of trust, encumbrances, sublease, assignment, or
other actions set forth in this Article 12 which the Sublessee proposes to undertake, which
consent the City agrees will not be unreasonably withheld or delayed.
ARTICLE 13
CONDEMNATION
13.1 In the event that the Leased Premises or any part thereof shall be condemned and taken by
authority of eminent domain for any purpose during the term of this Ground Lease or sold
to such authority in lieu of a taking (collectively, a "condemnation"), any award which
shag be made as a result of such condemnation (i) if for the fee interest in the Leased
Premises, shall be paid to the City and (ii) if for the leasehold interest in the Leased
Premises or for any interest in any Leasehold Improvements placed, located, or
Galaxy Ground Lease-Revised-1/21/98 Page 18
07515,0092-.0273045.12
constructed thereon, shall be paid to Lessee and any Leasehold Mortgagees in accordance
with the rights under any Leasehold Mortgages., it being understood that the City has fee
title to the real property and title to all Leasehold Improvements thereon is vested in
Lessee until the expiration or earlier termination of this Ground Lease. Either party,
consistent with its rights under applicable law, may appear in any such condemnation
proceeding and present its claims for damages, if any, arising from such condemnation.
13.2 Rentals for that portion of the Leased Premises condemned shall be abated from the date
that Lessee is dispossessed therefrom; provided, however, if all of the Leased Premises are
condemned, or if a portion of the Leased Premises are condemned and in Lessee's
judgment, the remaining portion of the Leased Premises is insufficient for Lessee's
operations authorized hereunder, Lessee may terminate this Ground Lease, and all of its
rights and unaccrued obligations hereunder effective as of the date of the taking of the
condemned portion by giving the City written notice of its desire to terminate.
13.3 Lessee shall be entitled to the award made for a temporary taking of possession of all or
part of the Leased Premises for any period of time within the term of this Ground Lease.
Such award shall be full compensation to Lessee for such temporary taking and no claims
for damages arising out of the temporary taking shall be made against the City.
ARTICLE 14
NON-DISCRIMINATION
141 Lessee, for itself and on behalf of its heirs, personal representatives, successors in interest,
and assigns, as a part of the consideration hereof, does hereby covenant and agree, as a
covenant running with the land, that in the event facilities are constructed, maintained, or
otherwise operated on the Leased Premises for a purpose for which a United States
Government program or activity is extended, Lessee shall maintain and operate such
facilities and services in compliance with all other requirements imposed pursuant to Title
49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the
Secretary,Part 21,Nondiscrimination in Federally-assisted programs of the Department of
Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as said
Regulations may be amended.
14.2 Lessee, for itself and on behalf of its personal representatives, successors in interest and
assigns, as a part of the consideration hereof, does hereby covenant and agree as a
covenant running with the land that (i) no person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the benefits of, or be otherwise
subjected to discrimination in the use of the Leased Premises; (ii) that in the construction
of any Leasehold Improvements on, over, or under such land and the furnishing of services
thereon, no person on the grounds of race, color, or national origin shall be excluded from
participation in, denied the benefits of, or otherwise be subjected to discrimination, (iii)
that Lessee shall use the Leased Premises in compliance with all other requirements
imposed by or pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in
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07515-0092:0273045.12
Federally assisted programs of the Department of Transportation-Effectuation of Title VI
of the Civil Rights Act of 1964, and as said Regulations may be amended.
14.3 In this connection, the City reserves the right to take whatever action it might be entitled
by law to take in order to enforce this provision. This provision is to be considered as a
covenant on the part of Lessee, a breach of which, continuing after notice by the City to
cease and desist,will constitute a material breach of this Ground Lease and will entitle the
City, at its option, to exercise its right of termination as provided for herein, or take any
action that it deems necessary to enforce compliance herewith.
14.4 Lessee shall include the foregoing provisions in every agreement or concession pursuant to
which any person or persons, other than Lessee, operates any facility at the Leased
Premises providing service to the public and shall include therein a provision granting the
City a right to take such action as the United States may allow or direct to enforce such
covenant.
14.5 Lessee shall indemnify and hold harmless the City from any claims and demands of third
persons, including the United States of America, resulting from Lessee's noncompliance
with any of the provisions of this Section and Lessee shall reimburse the City for any loss
or expense incurred by reason of such noncompliance.
14.6 To the extent legally required and applicable, Lessee assures that it will undertake an
affirmative action program as required by 14 CFR Part 152, Subpart E and 49 CFR Part
23, Subparts E & F, if applicable, to insure that no person shall on the grounds of race,
creed, color, national origin, or sex be excluded from participation in any employment
activities covered in 14 CFR Part 152, Subpart E and 49 CFR Part 23, Subparts E & F, if
applicable. Lessee assures that no person shall be excluded on these grounds from
participating in or receiving the services or benefits of any program or activity covered by
this subpart. Lessee assures that it will require that its tenants and Sublessees and its
covered suborganizations provide assurances to Lessee that they similarly will undertake
affirmative action programs and that they will require assurances from their
suborganizations, to the extent required by 14 CFR Part 152, Subpart E and 49 CFR Part
23, Subparts E&F, if applicable, to the same effect.
ARTICLE 15
GOVERNMENTAL REQUIREMENTS
15.1 Lessee shall procure all licenses, certificates, permits, or other authorizations from all
governmental authorities, if any, having jurisdiction over Lessee's operations at the Leased
Premises which may be necessary for Lessee's operations thereat.
15.2 Lessee shall pay all taxes, license, certification, permit and examination fees, and excise
taxes which may be assessed, levied, exacted, or imposed on the Leased Premises or
operation hereunder or on the gross receipts or gross income to Lessee therefrom, and
shall make all applications, reports and returns required in connection therewith.
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07515.0092'.0273045.12
15.3 In addition to compliance by Lessee with all laws, ordinances, governmental rules,
regulations, and orders now or at any time in effect during the term hereunder adopted in
accordance with Section 7.3 of this Lease and which, as a matter of law, are applicable to
the operation, use or maintenance by Lessee of the Leased Premises or the operations of
Lessee under this Ground Lease, L4ssee agrees that it shall conduct all its operations
under this Ground Lease and shall operate, use, and maintain the Leased Premises in such
manner that there will be at all times a practicable minimum of air pollution or any other
type of pollution, and in accordance with Section 6,14, a practicable minimum of noise
emanating from, arising out of, or resulting from the operation, use, or maintenance of the
Leased Premises by Lessee and from the operations of Lessee under this Ground Lease.
153.1 The City hereby reserves the right from time to time and at any time during the term of
this Ground Lease to require Lessee,and Lessee agrees, to design and construct at its sole
cost and expense such reasonable structures, fences, equipment, devices, and other
facilities as may be necessary or appropriate to accomplish the objective as set forth in
Section 15.3 hereof. All locations, the manner, type, and method of construction and the
size of any of the foregoing shall be determined by the City.
15,3,2 Lessee shall submit for City approval an application together with its plans and
specifications covering the required work or any other work and, subject to receiving such
approval, shall proceed diligently to construct the same,
ARTICLE I§
RIGHTS OF ENTRY RESERVED
16.1 The City, by its officers, employees, agents, representatives, and contractors, shall have
the right at all reasonable times to enter upon the Leased Premises for any and all
reasonable purposes not inconsistent with this Ground Lease.
16.2 Without limiting the generality of the foregoing, the City, by its officers, employees,
agents, representatives contractors, and ftirnishers of utilities and other services, Shall have
the right, at its own cost and expense, whether for its own benefit or for the benefit of
others than Lessee at the Airport,to maintain existing and future underground mechanical,
underground electrical and other underground utility systems and to enter upon the Leased
Premises at all reasonable times, and upon notice to Lessee, to make such repairs,
replacements, or alterations thereto, as may, in the opinion of the City, be deemed
necessary or advisable, and from time to time(with the prior written approval of Lessee,
which approval will not be unreasonably withheld)to construct or install under the Leased
Premises such underground systems or parts thereof and, in connection with such
maintenance, use the Leased Premises for access to such underground systems. The City
agrees that in the event it exercises the rights reserved in this Section 16.2, the City, at its
costs and expense, shall repair any damage to the Leased Premises that result therefrom
(including damage caused by the City or its employees, agents, representatives,
contractors, Or any other person to whom such rights have been assigned). It is
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specifically understood and agreed that the reservation of the aforesaid right by the City
shall not impose or be construed to impose upon the City any obligation to repair, replace,
or alter any utility service lines now or hereafter located on the Leased Premises for the
purpose of providing utility services only to the Leased Premises.
16.3 in the event that any personal property of Lessee shall obstruct the access of the City, its
officers, employees, agents,or contractors, or the utility company ftimishing,utility service
to any of the underground utility systems described in Section 16.2 above, and thus shall
interfere with the inspection, maintenance, or repair of any such system pursuant to
Section 16.2, Lessee shall move such property, as directed by the City or said utility
company, in order that access may be had to the system or part thereof for inspection,
maintenance or repair. If Lessee shall fail to so move such property after direction from
the City or said utility company to do so, the City or the utility company may move it, and
Lessee hereby agrees to pay the cost of such moving upon demand, and further Lessee
hereby waives any claims against the City for damages as a result therefrom.
16.4 Exercise of any or all of the foregoing fights in this Article, by the City, or others under
right of the City, shall not be, nor be construed to be, an eviction of Lessee, nor be made
the grounds for any abatement of rental not any claim or demand for damages against the
City, consequential or otherwise.
ARTICLE 17
ADDITIONAL RENTS AND CHARGES
17.1 Except as provided in Section 5.3 (b), in the event Lessee fails within thirty (3 0) days after
receipt of written notice from the City to perform or commence to perform any obligation
required herein to be performed by Lessee, the City may enter the Leased Premises
(without any liability for such entry and without such entering causing or constituting a
cancellation of this Ground Lease or an interference with the possession of such Leased
Premises by Lessee) and do all things reasonably necessary to perform such obligation,
charging to Lessee the cost and expense thereof, and Lessee agrees to pay to the City
upon demand such charge in addition to any other amounts payable by Lessee hereunder.
Provided, however, that if Lessee's failure to perform any such obligation endangers the
safety of the public or employees or property of the City or other tenants of the Airport,
and the City so states in its notice to Lessee, the City(without any liability to Lessee) may
perfonn such obligation of Lessee at any time after the giving of such notice and charge to
Lessee the reasonable cost and expense thereof which Lessee shall pay upon demand.
17.2 If the City elects to pay any sum or sums or incur any obligation or expense by reason of
the failure, neglect, or refusal of Lessee to perform or fulfill any one or more of the
conditions, covenants, or agreements contained in this Ground Lease, or as the result of
any act or omission of Lessee contrary to said conditions, covenants, or agreements,
Lessee hereby agrees to pay the sum or sums so paid or expense so incurred by the City as
the result of such failure, neglect, or refusal of Lessee, including interest, not to exceed
twelve percent (12%) per annum, together with all costs, damages and penalties. n such
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event, the total of such amounts may be added to any installment of rent thereafter due
hereunder, and each and every part of the same shall be and become additional rent
recoverable by the City in the same manner and with like remedies as if it were originally a
part of the rent provided for in this Ground Lease.
ARTICLE 18
TERMINATION BY THE CITY
18.1 In the event Lessee (or any successor in interest to Lessee) ceases to pay the full amount
of rental or any other charges required by this Ground Lease to be paid to the City, the
City shall give written notice to Lessee of such default. If, within fifteen (15) days after
the date the City gives such notice, Lessee has not corrected said default and paid the
delinquent amount in full, the City may by written notice to Lessee terminate Lessee's
fights under this Ground Lease and all rights and privileges granted hereby to Lessee in
and to the Leased Premises.
18.2 Upon the default by Lessee in the performance of any covenant or conditions required to
be performed by Lessee, and the failure of Lessee to commence to remedy such default for
a period of thirty (30) days after receipt from the City of written notice to remedy the
same (except as otherwise provided in Section 5.3 (b) above) and thereafter diligently
pursue the completion of such remedy and, except default in the timely payment of any
money due the City, within fifteen (15) days after notice to Lessee, the City shall have the
right to terminate Lessee's rights under this Ground Lease for such cause by giving written
notice to Lessee. Notwithstanding the fact that Lessee may be diligently pursuing the
completion of any remedy, Lessee must substantially complete such remedy within nine
months after beginning,same.
18.3 Upon the default by Lessee, and the giving of notice of the default by the City as provided
for elsewhere herein, and the expiration of all applicable cure periods, the notice of
termination of Lessee's fights under this Lease shall become final; provided, however, that
should the City determine that Lessee is diligently remedying such default to completion,
the City may withhold said notice of termination. If, however, the City determines, in its
reasonable discretion, that such default is no longer being diligently remedied to
conclusion, the City shall have the right to issue said notice of termination, and said notice
of termination shall no longer be held in abeyance for any reason and shall become final
upon notice to Lessee.
18A Upon termination of Lessee's rights under this Ground Lease for any reason, all rights of
Lessee shall terminate. The rights of any Sublessees who are Affiliates of Lessee and who
occupy the Leased Premises at "below-market" rates shall also terminate. The fights of
other Sublessees under the terms of this Lease, however, shall not terminate, and their
rights shall not be disturbed so long as they perform in accordance with their respective
Subleases as more particularly provided in Section 12.6. Upon termination of this Lease
as permitted under Section 12.6, the Leased Premises, except for Lessee's equipment,
fixtures, and other personal property which may be removed from said Leased Premises as
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07515.0092:0273045.12
provided elsewhere herein, shall be free and clear of all claims of Lessee, and the City shall
have immediate right of possession to the Leased Premises. The City shall not be liable (i)
to assume, take subject to, or otherwise be responsible for the payment or performance
under any Leasehold Mortgage or (ii) to Lessee or Lessee's contractors, Sublessees, or
anyone else, for the value of Leasehold Improvements constructed or located on the
Leased Premises.
18.5 Failure by the City to take any authorized action upon default by Lessee, of any of the
terms, covenants or conditions required to be performed, kept and observed by Lessee
shall not be construed to be, nor act as, a waiver of said default nor of any subsequent
default of any of the terms, covenants and conditions contained herein to be performed,
kept, and observed by Lessee. Acceptance of rentals by the City from Lessee, or
performance by the City under the terms hereof, for any period or periods after a default
by Lessee of any of the terms, covenants, and conditions herein required to be performed,
kept and observed by Lessee shall not be deemed a waiver or estoppel of any right on the
part of the City to cancel this Ground Lease for any subsequent failure by Lessee to so
perform, keep, or observe any of said terms, covenants or conditions.
18.6 Foreglosurg-by Leasehold Mortgagee. Notwithstanding anything in this Ground Lease to
the contrary, the City shall not be entitled to exercise its right to terminate this Ground
Lease as provided in this Article 18 during the period that a Leasehold Mortgagee shall
require to (i)foreclose its mortgage or otherwise to fulfill or complete its remedies under
its Leasehold Mortgage or (b) cure any default under this Ground Lease, provided,
however, such period shall not exceed 180 days after the City gives notice of termination
pursuant to Section 18.1 and Section 19.2 hereof and provided further that within such
period: (a) such Leasehold Mortgagee proceeds promptly and with due diligence with its
remedies under its Leasehold Mortgage or its cure under this Ground Lease; (b) there is
timely paid to the City the rental and all other sums which have, or may, become due and
payable with respect to the portion of the Leased Premises or Leasehold Improvements
covered by the Leasehold Mortgage of such Leasehold Mortgagee and (c) and all other
terms and provisions of this Ground Lease, to the extent they are applicable to the portion
of the Leased Premises covered by the Leasehold Mortgage of such Leasehold
Mortgagee, are duly complied with by such Leasehold Mortgagee.
18.7 No Voluntary Surrender of Leasehold Egate,Without Consent. So long as there exists an
unpaid or undischarged Leasehold Mortgage on the estate of Lessee created hereby, the
City expressly agrees for the benefit of the Leasehold Mortgagee that it will not accept
from Lessee a voluntary surrender of the Leased Premises or a cancellation or amendment
of this Ground Lease prior to the expiration of this Ground Lease without the written
consent of the Leasehold Mortgagee. So long as Galaxy's Sublease shall remain in effect,
the City expressly agrees for the benefit of Galaxy that it will not accept from Lessee a
voluntary surrender of the Leased Premises or a cancellation or amendment of this Ground
Lease prior to the expiration,of this Ground Lease without the written consent of Galaxy.
is
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18.8 New Lease with Leasehold Mortgagee or Galaxy upon Termination. If this Ground Lease
shall terminate for any reason, the City agrees that the Leasehold Mortgagee and Galaxy
shall each have the right, for a period of 90 days subsequent to such termination of this
Ground Lease, to deliver to the City written notice of such party's election to execute a
new lease of the Leased Premises of the character and, when executed and delivered and
possession of the Leased Premises is taken thereunder, having the effect hereinafter set
forth. The new lease shaft be executed by the City and the Leasehold Mortgagee or
Galaxy within 15 days after the receipt by the City of such written notice. Such new lease
shall be for a term to commence at the termination of this Ground Lease and shall have as
the date for the expiration thereof the same date stated in this Ground Lease as the date
for the expiration hereof. The rent thereof shall be at the same rate as would have been
applicable during such term under the provisions of this Ground Lease had this Ground
Lease not so terminated, and all the rents, covenants, conditions, and provisions of such
new lease, including, but not limited to, the conditional limitations set forth in this Ground
Lease, shall be the same as the terms, conditions and provisions of this Ground Lease.
The Leasehold Mortgagee or Galaxy shall, at the time of the execution and delivery of
such new lease, pay to the City all rental and other sums which would have become
payable hereunder by Lessee to the City to the date of the execution and delivery of such
new lease had this Ground Lease not terminated, and which remain unpaid at the time of
the execution and delivery of such new lease, together with reasonable attorneys' fees and
expenses in connection therewith. Any such new lease, as contemplated in this Section
18.9 may, at the option of the Leasehold Mortgagee or Galaxy, be executed by a nominee
of such party, without the Leasehold Mortgagee or Galaxy assuming the burdens and
obligations of Lessee thereunder beyond the period of its ownership of the leasehold estate
created hereby.
ARTICLE 19
REMEDIES: SURRENDER; AND RIGHT OF RE-ENTRY
19.1 Limitation on City's Remedies. Notwithstanding any other provision in this Ground Lease
to the contrary, upon any default by Lessee of any provision of this Ground Lease or upon
any termination of this Ground Lease for any reason (including, but not limited to, any
such default by Lessee), the City's sole and exclusive remedy shall be to re-enter and take
possession of the Leased Premises (or portion thereof) and to take title to and possession
of the Leasehold Improvements (or portion thereof) then located, placed, or constructed
thereon, free from any claims by Lessee. The exercise of such remedy(i) shall not obligate
the City to assume, take subject to, or otherwise be responsible for the payment or
performance under any Leasehold Mortgage and (ii) shall not affect the tights of any
Sublessee (except Sublessees that are Affiliates of Lessee and that occupy the Lease
Premises at "below-market" rates). The remedy limitation set forth in this Section 19.1
shall not apply to (a) any indemnity obligations of Lessee set forth in this Ground Lease;
(b)to the repayment obligations of Lessee pursuant to Sections 5.3 or 5.4 hereof-, or(c)to
the obligations of Lessee pursuant to Section 6.15 hereof. In addition, nothing contained
in this Ground Lease shall be interpreted to constitute the personal obligations of Lessee
to pay or perform under or in accordance with any Leasehold Mortgage.
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19.2 Upon the expiration or termination of this Ground Lease pursuant to any terms hereof,
Lessee agrees peaceably to surrender up the Leased Premises to the City in the same
condition as they were at the time of the commencement of the term hereof, and as they
may hereafter be repaired and improved by Lessee; save and except., (a) such normal wear
and tear thereof as could not have been prevented by ordinary and usual repairs and
maintenance, (b) obsolescence in spite of repair, and (c) damage to or destruction of the
Leasehold Improvements for which insurance proceeds are received by the City. Upon
such termination, the City may re-enter and repossess the Leased Premises together with
all Leasehold Improvements. Furthermore, upon such termination, and for a reasonable
time thereafter(not exceeding thirty(30)days after such termination, and for which period
Lessee will pay to the City current lease rentals), or during the term of this Ground Lease,
if Lessee is not in default in rentals or any other charges or obligations due the City,
Lessee shall have the right to remove its personal property, fixtures 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 or building for the purpose for which
they were constructed or improved, and provided further that Lessee repairs all damages
that might be occasioned by such removal and restores the Leased Premises to the
condition above required.
ARTICLE 20
SERVICES TO LESSEE
20.1 The City covenants and agrees that during the term of this Ground Lease it will operate
the Air-port as such for the use and benefit of the public, provided however, that the City
may prohibit or limit any given type, kind, or class of aeronautical use of the Airport if
such action is necessary for the safe operation of the Airport or necessary to serve the civil
aviation needs of the public, The City further agrees to use its best efforts to maintain the
runways and taxiways in good repair. The City agrees to keep in good repair hard-
surfaced public roads for access to the Leased Premises. The City also agrees to provide
and maintain water and sanitary sewer services in areas designated for utilities or
easements adjacent to the Leased Premises for access thereto by Lessee in accordance
with the City policy governing same.
20.2 Lessee will contract with and obtain all required permits from the appropriate departments
for any utility services provided by the City for Lessee, paying any required connection
fees, including those to be paid by owners, and all such services will be provided at rates
and on terms and conditions established by the City for similar users in the City.
20.3 Lessee will also contract with the furnishers of all other utilities for the furnishing of such
services to the Leased Premises and shall pay for all water, gas, electricity, sanitary sewer
service, other utilities, telephone, private security and fire protection services furnished to
the Leased Premises. The City shall allow the providers of such utilities reasonable access
to the boundaries of the Leased Premises for the installation of their utility systems.
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07515.0092:0273045.12
ARTICLE 21
THIS ARTICLE 21 INTEMONALLY LEFT BLANK
ARTICLE 22
TFQ ARTICLE 22 INTENTIONALLY LEFT BLANK
ARTICLE 23
LIMITATION OF RIGHTS AND PRIVILEGES GRANTED
23.1 Except the exclusive right of Lessee to possession of the Leased Premises, no exclusive
lights at the Airport are granted by this Ground Lease, and no greater rights or privileges
with respect to the use of the Leased Premises or any part thereof are granted or intended
to be granted to Lessee by this Ground Lease, or by any provision thereof, than the rights
and privileges expressly and specifically granted hereby.
ARTICLE 24
NOTICES
24.1 All notices, consents and approvals required or desired to be given by the parties hereto
shall be sent in writing, and shall be deemed given when received at the recipient's notice
address, except that notice that must be given by a certain time to be effective and is sent
registered or certified mail, postage prepaid, return receipt requested, addressed to the
recipient's address shall be deemed given when posted. Notice that starts the running of a
time period and is delivered on a non-business day shall be deemed delivered on the next
business day if left at the notice address, or the next business day on which it is redelivered
if it is not left at the notice address.
24.2 The notice addresses of the parties are as follows:
To the Qy:
City Manager
City of Fort Worth
1000 Throckmorton
Ft. Worth, Texas 76102
and
Director Airport Systems
Meacham Airport
4201 North Main Street
Ft. Worth, Texas 76106
is
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07515,0092:0273045,12
To Lessee:
Alliance Aviation Investors, L.P.
Attn: Timothy D. Ward
2221 Alliance Boulevard, Suite 100
Ft. Worth, Texas 76177
and
Hillwood Development Corporation
Attn: Rick Patterson
2421 Westport Parkway, Suite 200
Ft. Worth, Texas 76177
Such addresses shall be subject to change from time to time to such other representatives
or addresses as may have been specified in written notice given by the intended recipient
to the sender.
24.3 N rtgaace and Sublessees. Notwithstanding anything in this Ground
Notice to Leasehold MQ ythi
Lease to the contrary, the City' agrees, if and so long as the leasehold estate of Lessee is
-
encumbered by any Leasehold Mortgages executed in accordance with the terms and
conditions of this Lease in favor of any Leasehold Mortgagees, or by any Sublease in
favor of Galaxy, to give-the Leasehold Mortgagees (at such address or addresses as may
be specified by said Leasehold Mortgagees to the City in writing) or Galaxy (or such
address or addresses as may be specified by Galaxy to the City in writing) duplicate copies
of any and all notices in writing which the City may from time to time give or serve upon
Lessee under and pursuant to the terms and provisions of this Ground Lease, and no such
notice to Lessee shall be effective or be deemed to have been given to Lessee hereunder
unless such notice is also given to said Leasehold Mortgagees or Galaxy; and said
Leasehold Mortgagees or Galaxy shall have the right, within the said period of time as
given to Lessee, and to the same extent and with the same effect as though done by
Lessee, to take such action or to make such payment as may be necessary or appropriate
to cure any event of default, it being the intention of the parties hereto that the City shall
not terminate this Ground Lease or Lessee's rights of possession hereunder without first
affording to said Leasehold Mortgagees and Galaxy the same rights and the same notices
with respect to any such default and the same period or periods of time within which to
cure the same, including the fight to enter into possession of the Leased Premises.
ARTI!QLE 25
HOLDING OVER
25.1 No holding over by Lessee after the termination of this Ground Lease "I operate to
extend or renew this Ground Lease for any further term whatsoever; but Lessee will by
such holding over become a tenant at will of the City and, after written notice by the City
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07515.0092:0273045.12
to vacate such premises, continued occupancy thereof by Lessee shall constitute Lessee a
trespasser.
25.2 Any holding over by Lessee beyond the thirty (30) day period permitted for removal of
fixtures without the written consent of the City shall make Lessee liable to the City for
damages equal to double the rentals provided for herein and which were in effect at the
termination of this Ground Lease.
25.3 All insurance coverage that Lessee is required under the provisions hereof to maintain in
effect shall continue in effect for so long as Lessee, or any of Lessee's Sublessees or
tenants occupy the Leased-Premises or any part thereof
ARTICLE 26
INVALID PROVISIONS
26.1 The invalidity of any provisions, articles, paragraphs, portions, or clauses of this Ground
Lease shall have no effect upon the validity of any other part or portion hereof, so long as
the remainder shall constitute an enforceable agreement.
ARTICLE 27
MISCELLANEOUS PROVISIONS
27.1 Non--Waiver of Rights. The failure by either party to exercise any right, or rights accruing
to it by virtue of the breach of any covenant, condition.or agreement herein by the other
party shall not operate as a waiver of the exercise of such right or rights in the event of
any subsequent breach by such other party, nor shall such other party be relieved thereby
from its obligations under the terms hereof
27.2 Non-liability of Individuals. No director, officer, agent or employee of either party hereto
shall be charged personally or held contractually liable by or to the other party under any
term or provision of this Ground Lease or of any supplement, modification or amendment
to this Ground Lease because of any breach thereof or because of his or their execution or
attempted execution of the same.
27.3 QUig Enjoyment. The City covenants that as long as Lessee is not in default of any
provision of this Ground Lease, Lessee shall and may peaceably and quietly have, hold and
enjoy the Leased Premises exclusively to it and the rights appurtenant to the Leased
Premises granted in this Ground Lease during the term hereof unless sooner canceled as
provided in this Ground Lease.
27.4 Estoppel Certificates, At the request of Lessee in connection with any Leasehold
Mortgage, Sublease, or assignment, the City shall execute and deliver a written statement
addressed to such Leasehold Mortgagee, Sublessee, or assignee identifying it as the
Lessor under this Ground Lease and certifying: (i) the documents that then comprise this
Ground Lease, (ii) that this Ground Lease is in full force and effect, (iii) the then current
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annual amount of rent and the date through which it has been paid, (iv) the expiration date
of this Ground Lew, (v) that no amounts are then owed by Lessee to the City (or, if
amounts are owed, specifying the same), (vi) to the knowledge of the City, there are no
defaults by Lessee, under this Ground Lease or any facts which but for the passage of
time, the giving of notice or both would constitute such a default, (vii) that the rights of
Sublessees (except Sublessees that are Affiliates of Lessee and that occupy the Leased
Premises at "below-market" rates)will not be disturbed by any default of Lessee, and (viii)
any other fact or information reasonably requested by such Leasehold Mortgagee,
Sublessee, or assignee. The person or entity to whom such statement is addressed shalt be
entitled to rely conclusively upon such written statement.
27.5 Short Form of Lease. This Ground Lease shall not be recorded, but at the request of
either party, the other shalt execute a memorandum or short form of lease for recording.
27.6 General Provisions. Lessee shalt not use, or permit the use of, the Leased Premises, or
any part thereof, for any purpose or use other than those authorized by this Ground Lease.
27.7 This Ground Lease shall be performable and enforceable in Tarrant County, Texas, and
shaft be construed in accordance with the laws of the State of Texas.
27.8 This Ground Lease is made for the sole and exclusive benefit of the City and Lessee, their
successors and assigns, and is not made for the benefit of any third party.
27,9 In the event of any ambiguity in any of the terms of this Ground Lease, it shall not be
construed for or against any party hereto on the basis that such party did or did not author
the same.
27.10 All covenants, stipulations and agreements in this Ground Lease shall extend to and bind
each party hereto, its legal representatives, successors and assigns.
27.11 The titles of the several articles of this Ground Lease 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.
27.12 Nothing herein shall be construed as creating a joint enterprise or partnership between the
City and Lessee. Lessee shall at all times be considered an independent contractor in the
performance of the terms and conditions of this Ground Lease, and shall be solely
responsible for the servants, employees, contractors, and subcontractors. The doctrine of
respondent superior shall have no application as between the City and Lessee.
27.13 Leasehold Mortgageg-,Protection. The City and Lessee shall cooperate in including in this
Ground Lease by suitable amendment from time to time any provision which may
reasonably be requested by any proposed Leasehold Mortgagee for the purpose of
implementing the mortgagee protection provisions contained in this Ground Lease and
allowing such mortgagee reasonable means to protect or preserve the lien of the
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07515.0092:0273045.12
Leasehold Mortgage on the occurrence of a default under the terms of this Ground Lease.
The City and Lessee each agree to execute and deliver(and to acknowledge, if necessary,
for recording purposes)any agreement necessary to effect any such amendment; provided,
however, that any such amendment shall not in any way affect the term or rent under this
Ground Lease nor otherwise in any material respect adversely affect any rights of the City
under this Ground Lease. It is understood and agreed, however, that if such amendments
or agreements vary the substantive rights of the parties as set forth in this Ground Lease,
then such amendments or agreements must be approved by the City Council of the City.
27.14 Sublessee Protection. The City and Lessee shall cooperate in including in this Ground
Lease by suitable amendment from time to time any provision which may reasonably be
requested by Galaxy for the purpose of implementing the Sublessee protection provisions
contained in this Ground Lease and allowing Galaxy reasonable means to protect or
preserve Galaxy's interest in the Leased Premises on the occurrence of a default under the
terms of this Ground Lease. The City and Lessee each agree to execute and deliver(and to
acknowledge, if necessary, for recording purposes) any agreement necessary to effect any
such amendment; provided, however, that any such amendment shall not in any way affect
the term or rent under this Ground Lease nor otherwise in any material respect adversely
affect any rights of the City under this Ground Lease, It is understood and agreed,
however, that if such amendments or agreements vary the substantive rights of the parties
as set forth in this Ground Lease, then such amendments or agreements must be approved
by the City Council of the City.
27.15 Nonmerge . There shall be no merger of this Ground Lease or the leasehold estate
created hereby with the fee estate in and to the Leased Premises by reason of the fact that
this Ground Lease or the leasehold estate created hereby, or any interest in either of them,
may be held directly or indirectly by or for the account of any person who shall own the
fee estate in and to the Leased Premises, or any portion thereof, and no such merger shall
occur unless and until all persons at the time having any interest in the fee estate and all
persons having any interest in this Ground Lease or the leasehold estate, including the
holder of any mortgage upon the fee estate, shall join in a written instrument effecting
such merger.
27.16 Force Maieure. Any time period specified in this Ground Lease for the performance
of any duty or obligation by either the City or Lessee shall be extended to include delays
that result from any cause beyond the reasonable control of either party.
2T 17 Other-Ground-Leases. If at anytime during the term of this Ground Lease the City, as
lessor, enters into any other ground lease of real property located at Alliance Airport, and
if such other ground lease contains any terms, conditions, or other provisions (including,
but not limited to, the payment of rent and use fees, but excluding any provision that
would extend the 30-year term of this Ground Lease) which, directly or indirectly, are
more favorable or beneficial to Lessee thereunder than are the terms, conditions, and
provisions of this Ground Lease to Lessee; then the terms, conditions, and other
provisions of this Ground Lease shall be deemed to be automatically amended to the
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extent necessary to confer substantially the same favorable or beneficial treatment upon
Lessee.
ARTICLE 28
5UBQRDINATION CLAUSES
2&1 This Ground Lease is subject and subordinate to the following:
28.1.1 The City reserves the right to develop and improve the Airport as it sees fit, regardless of
the desires or view of Lessee, and without interference or hindrance by or on behalf of
Lessee. Accordingly, nothing contained in this Ground Lease shall be construed to
obligate the City to relocate Lessee.
28.1.2 The City reserves the right to take any action it considers necessary to protect the aerial
approaches to the Airport against obstruction, together with the right to prevent Lessee
from erecting or permitting to be erected any building or other structure on the Airport
which, in the opinion of the City, would limit the usefulness of the Airport or constitute a
hazard to aircraft,
28.13 This Ground Lease is and shall be subordinate to the provisions of existing and future
agreements between the City and the United States relative to the operation or
maintenance of the Airport, the execution of which has been or may be required as a
condition precedent or releVant to the obtaining or expenditure of federal funds for the
benefit of the Airport.
28.1.4 During the time of war or national emergency, the City shall have the right to lease all or
any part of the landing area or of the Airport to the United States for military or naval use,
and if any such lease is executed, the provisions of this Ground Lease insofar as they may
be inconsistent with the provisions of such lease to the Government, shall be suspended,
but such suspension shall not extend the term of this Ground Lease. Abatement of rentals
shall be reasonably determined by the City in proportion to the degree of interference with
Lessee's use of the Leased Premises.
28.1.5 Except to the extent required for the performance of any obligations of Lessee hereunder,
nothing contained in this Ground Lease shall grant to Lessee any rights whatsoever in the
airspace above the Leased Premises other than those rights which are subject to Federal
Aviation Administration rules, regulations and orders currently or subsequently effective.
2&L6 Nothing in this Ground Lease obligates the City in any way to take any action that is
prohibited by the 1968 Concurrent Ordinance adopted by the City of Fort Worth and the
City of Dallas, Texas regarding the Dallas/Fort Worth International Airport, Lessee agrees
that in the performance of this Ground Lease, it'will do no act and cause no omission that
is inconsistent with, or that will place the City in violation of, the 1968 Concurrent
Ordinance or any proceedings relating to the operation of the Dallas/Fort Worth
International Airport. The parties hereto acknowledge that the fights and duties of Lessee
Galaxy Ground L=w-Revised-1/21/98 Page 32
07515,0092:0273045.12
and the to of this Ground Lease may be qualified to the extent that the provisions of
the 1968 Concurrent Ordinance and proceedings relating to the operation of the
Dallas/Fort Worth International Airport govern the operation of the Airport,
28.1.7 Notwithstanding anything to the contrary stated herein, any contractual or statutory Hen
claimed by the City in all goods, wares, equipment, fixtures, furniture and other personal
property of Lessee presently or hereafter situated in the Leased Premises and all proceeds
therefrom(collectively,the"Collateral")(save and except liens for ad valorem taxes levied
on such personal property) shall be subject and subordinate to the rights, if any, of any
Leasehold Mortgagee, any holder of any Leasehold Mortgage or any holder of a lien or
security interest securing purchase money indebtedness covering any of the Collateral, and
the City agrees to execute such additional documents as shall be reasonably necessary to
effect or evidence such subordination. Lessee agrees to pay the City all reasonable and
nwessary costs incurred by the City in connection with the negotiation, preparation,
review, and execution of such additional documents, including, but not limited to, all
reasonable and necessary attorneys' fees.
28-1.8 it is agreed and understood that nothing in this Ground Lease shall be interpreted to
constitute an amendment or modification to the respective rights, duties, and obligations
of either the City or the Airport Operator under that certain Management Agreement
between Alliance Air Services, Inc., as Operator, and the City of Fort Worth dated
December 15, 1993. Notwithstanding the foregoing, however, in the event there is any
conflict between this Ground Lease and any to or provision of the Management
Agreement that concerns, addresses, or deals with any ground lease of Airport property
(including constructing improvements and/or providing FBO services), this Ground Lease
shall control.
2819 Any person or entity to which this Ground Lease (or any rights herein) is assigned,
conveyed, or otherwise transferred as a result of any foreclosure by any Leasehold
Mortgagee (or as a result of any deed or other transfer in lieu of foreclosure) shaU be
bound by all,terms and conditions of this Ground Lease.
ARTICLE 29
VENUE
291 Should any action, whether real or asserted, at law or in equity, arise out of or in
connection with the terms and conditions of this Ground Lease or the performance,
nonperformance or, attempted perfomaiince her venue for said action shall lie
exclusively in state courts located in Tarrant County, Texas or in the United States District
Court for the Northern District of Texas, Fort Worth Division.
Galaxy Ground lease-Rtviwd-ii2iigg Page33
07513,0092:0273045,12
ARTICLE 3
ENTM AGREEMENT
30.1 This Ground Lease consists of Articles I to 30, inclusive, Exhibits A4. A-2, A-3 and
Schedule A and Appendix A-
302 This Ground Lease constitutes the entire agreement of the parties hereto and may not be
changed, modified, discharged or extended except by written instrument duly executed by
the City and Lessee. The parties agree that no representations or warranties shall be
binding upon the City or Lessee unless expressed in writing in this Ground Lease.
ARTICLE 31
LeESSEEIS UPPORTOM RIGHT
31.1 The City hereby grants Lessee a right of first opportunity (the "QUortupilY Ri to
lease all or a portion of any improvements constructed by Lessee(included, but not limited
to, the Aviation Related Facilities) (collectively, the "Constructed Improvements")
pursuant to this Ground Lease. The Opportunity Right shall continue until termination
(upon an event of Lessees default) of this Ground Lease; and if no such termination for
Lessees default occurs, until the last of the Constructed Improvements ceases to exist.
31,2 Upon the expiration or termination(other than upon an event of default by Lessee) of this
Ground Lease, the City and Lessee agree to begin (and thereafter use their best efforts to
complete) negotiations of a new lease of any of the Constructed Improvements (of such
portion thereof as Lessee desires)covered by such expired or terminated lease. If the City
and Lessee are unable to negotiate such a new lease, the City shall then be free to solicit
offers from third parties to lease such improvements.
31.3 The City shall give Lessee written notice within 10 days after beginning negotiations with
any party to lease all or any portion of any Constructed Improvements, which notice shall
describe the proposed schedule for negotiations (including a "target date" for submission
to the City Council).
31.4 The City shall also give Lessee written notice (the "Opportunity_Notice") of any proposed
lease of all or a portion of any Constructed Improvements within three days after the city
manager's office is prepared to recommend approval of such agreement (the
"Reornmended Building-Lea ") to the City Council. The Opportunity Notice shall
include the Recommended Building Lease, together with copies of the city manager's
recommendation, the applicable W&C" prepared for the City Council, and any other
written materials or information in the City's possession or control that are reasonably
necessary or convenient to understanding the Recommended Building Lease,
31.5 Lessee shall have a period of 30 days after receipt of the Opportunity Notice during which
to notify the City that Lessee desires to lease the Constructed improvements upon the
same terms and conditions contained in the Recommended Budding Lease,
Galaxy Ground Lease-Revised-1/21/98 Page 34
07515.0092:0273045.12
ARTICLE 32
SUBDIVISION OF THE LEASED PREMISES
32.1 Lessee shall have the right to divide the Leased Premises into separately platted portions
(a "Platted Portion") for the sole purpose of constructing improvements on such Platted
Portions. When Lessee desires to divide any portion of the Leased Premises into a Platted
Portion, Lessee shall,'at Lessee's expense, prepare a map and legal description of such
Platted Portion and shall submit such map and description to the City Manager of the City
for the Manager's approval. The City Manager shall approve such map and legal
description if the Manager determines that the Leased Premises are being divided into
Platted Portions in such manner that each Platted Portion retains reasonable access to the
Transient Apron and to-adjacent public roadways. It is agreed and understood that any
such map and legal description shall be used only for the purpose of describing portions of
the Leased Premises and shall not constitute a plat or a subdivision of land within the
meaning of Chapter 212, Subchapter A of the Texas Local Government Code. The City
and Lessee shall execute a separate lease agreement (in substantially the form of this
Ground Lease; provided, however, that (i) plans and specifications for subsequently
constructed improvements must be submitted within 12 months after any request to plat or
replat a Platted Portion and construction of such improvements must be substantially
completed within 18 months after the City has approved*the plans and specifications and
issued a building permit and (ii)the term of all separate leases shall begin when certificates
of occupancy are issued for such improvements and shall be concurrent with the term of
this Ground Lease) for each such Platted Portion-, whereupon, such Platted Portion shall
become the leased pren-dses for purposes of such separate lease. Upon the execution of
such separate lease, the Platted Portion covered thereby shall no longer by part of the
Leased Premises under this Ground Lease; and no default under this Ground Lease shall
be a default under any such separate lease; and no default under such separate lease shall
be a default under this Ground Lease or under any other separate tease.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
Galaxy Ground Lease-Revised-1/21/99 Page35
0731?.0092:0273045-12
IN WITNESS WHEREOF, the parties hereto have executed this Ground Lease on the day
and year written above.
LESSOR
CITY OF FORTH WORTli, TEXAS
By:
City Secretary Title: City Manager
Approved As to Form LESSEE:
And ALLIANCE AVIATION INVESTORS,
-12ozn L.P., a Texas limited partnership
City Attorney 7-2 7 (formerly known as ALLIANCE AIR
PARTNERS, LTD.)
By: Hillwood Operating L.P., a Texas
limited partnership, general partner
C act WAho,1,7.at111n BY: Hillwood Development
Corporation, a Texas corporation,
n;tteL gener4allp ner
By:
/ IV
Title:
Ga4XY Ground L&M-Revised-121198 Page36
07515.0092:0273045.12
Exhibit A-1
Description of Leased Premises
rt� y cro -tr2119s Page 37
LEGAL DESCIUPTION
LFASE PARCEL 2
Being a tact of land situated in the City of Fort Word3,'f arrant County,Texas,and being a
portion of Lot 1,Block 1,Alliance Airport,an Addition to the City of Fort Wo&4 Texas,as
recorded in Cabinet A,Slide 622,County Records,Tarrant County,Texas,and being more
particularly described by metes and bounds as follows:
CG504ENCINGat an ell corner in the easterly boundary line of said Lot 1,Block 1,and being
the northeastern ten umus point of GjaOXY Way,
THENCE S 09*53'13"E, 1290-00 fee aloug the cast line of said Galaxy Way;
TIJINCE S 800'06147'V,57.00 fact crossing said street to the POINT OF BEGINNING;
THENCIK continuing S 80*0647"W,450.34;
THENCE IN 0905110"W,267-00 feet;
TEMNCE N 80-06-47113,119.79 fed to the beginning of a curve to the le&,
THENCE 100.53 feet along the arc of said curve,through at cAmWal angle of 45*,whose radius is
128.00 feet,the Long chord of which bears N 57*36147"E,97.97 feet;
THENCE N 35*06'48"B,25.09 foe to the beginning of a curve to the right;
THENCE 28.18 feat along the are of said curve,through a central angle of 90"43'51".whose
radius is 20.00 foot,the long chord of which bears N 75*29'43"B,25.91 feet to the beginning of a
curve to the Icit
THENCE 173.37 feet along ft are of said curve,through a central angle of 35'43'5 1",vtose
radius is 278-00 feet,the long chord of which bears S 82'001118"E, 170.57 feet;
THENCE N 80-06-48-E, 14.00 feet to the beginning of a curve to the right;
THENCE 31.42 feet along the am of said curve,through iL ceraral angle of 90',whose radius is
20-00 feet,the long chord of which beaus S 54053112"E,29.28 feet to the west fi=of said
crataxy way.,
THENCE S 09-53-13-B,252.00 fee along said west line to the POM OF REGMNING, dud
containing 127,248 squam feet or 2.921 acres of land,more or less.
C&B Job No. 971413014 January 21, 1998
Sector#ACE
J-\IOB\97143314\SUR\WPNLEG\971433EI.LUL Post 1 of 2
LEASE PARCEL 5
Being a use of land sitUSIOd in the City of Fort Worlh,Tarrant County,Texas,ao,4 being a
portion ofLot 1,Block 1,Alliarm Akpoxt,za Additim to ihe City of Fort WOW4 Tex^as
recorded in-Cabinouk Slide 622,County Rocmxis,Tawant County,Teas,and being more
particubaly descrawd by metes and bounds as follows:
COS at an ell conwr in the eastady boundgy Iinv of said Lot 1,Block 1,and being
the nortbeastom namninus:point of Galaxy Way,
TMXCE S 09*53113"E, 1649.56 ket along dw e4tst line ot3aid Galaxy Way;
TBZNCE,%* 80*06147 �57.00 g said hdrect to the PODIT OF HUGROMG,
TEWqCE con tinaing S 80"0647*W,450.51;
ENCE N 0905130"W,359.56 fiwt
TE[MCE N 808W4M,45029 fed to the west line of said GaJaxy Way-,
111ECE S a9*51113ITs,359-56 feet along said wv*Lbw to the POTNT OF WGEN and
containjug 161,956 squ=&et or 3-719 scres of land,,more or leas.
C&B job No.971433014 January2l. 1998
sector!#ACE
j:\JOB\97143314\SM\WP%EG�971433EIJ,GL Page 2 of 2
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LEASE PARCEL. 2
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' ++ . -ram+ DESIGNED
'CIO
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Exhibit A-2
Description of Transient Apron Area
c,d,,y o,,,a -Rmjsed-1l21l9a Page 38
07515.0042:0273045.12
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LEASE PARCEL 5
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N,BUMM WC GALAXY' .AIR SERVI�
DESIGNED
1AT►fJ6-�70
Exhibit A-3
Description of Aviatign Related Facilities
Galaxy Gtound Loam-Rzvised-lf2l/99 Page39
07515.0092:0279045.12
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Form of Pledge AgEgSmgnt
una .Revised-irzirga Page 40
o73i5- :02 as.t2
MaS PLEDGE AGREMG= (the "Pledge Agreement") , entered
into as of , by and among
Alliance Air Services, Inc. ("Lessee") , the City of Fort
Worth, Texas, a municipal corporation of Tarrant and Denton
Counties, Texas ("Fort Worth") and NationsBank of Texas,
N.A. , a national banking association ("NationsBank") .
WITNESSETH:
WHERk:AS, Lessee and Fort Worth have entered into that
certain Lease Agreement dated December , 1993, (the
"Lease") ; and
WBZREAS, the Lease provides that Lessee shall submit to
Fort Worth security acceptable to the City (the "Intended
Security") for the purpose of guaranteeing satisfactory
completion by Lessee of the Improvements (defined below) to
be constructed in accordance with the Lease (the "Secured
obligations") ; and
NBEREAS, Lessee and Fort Worth desire and agree that
Lessee be allowed to pledge Securities (as defined below)
to Fort Worth, to be held by NationsBank as escrow agent, in
lieu of and in complete satisfaction of the obligation to
submit the Intended Security to secure the performance of
the Secured Obligations;
NOW T8E&.BFORE, for and in consideration of the
premises, ten dollars ($10.00) and other good and valuable
consideration, the receipt, sufficiency, and adequacy of
which are hereby acknowledged and confessed, the parties
hereto hereby agree as follows:
SECTION 1. DEF TERMS.
For the purposes of this Pledge Agreement, unless the
context otherwise clearly requires, the following terms
shall have the following meanings:
"Initial Security" shall mean the Securities identified
on Exhibit "A" attached hereto having an aggregate Market
Value of not less than $ , which sum represents 100
percent of the estimated cost of constructing the following
improvements (the "Improvements") :
(DESCRIPTION OF IMPROVEMENTS)
i
"Lien" shall mean any lien, security interest, charge,
tax lien, pledge, encumbrance, conditional sales or
other title retention arrangement or any other interest
in property designed to secure the repayment of
indebtedness or the satisfaction of any other
obligation.
"Market Value" shall mean the price, as of any date,
obtained on such date from a generally recognized
source agreed to by the parties or the most recent
closing bid quotation obtained from such a source,
excluding accrued interest. The parties agree in
advance to any source acceptable to NationsBank that is
a nationally recognized exchange.
"Securities" shall mean (a) securities that are direct
obligations of the United States having a maturity of
not more than twenty (20) years and (b) municipal bonds
having a maturity of not more than twenty (20) years
which are approved by Fort worth and which are rated
"AAA" by Moody's or by Standard & Poor's.
SECTION 2. PLEDGE.
As security for the full and punctual performance of
the Secured Obligations, Lessee hereby pledges,
hypothecates, assigns, transfers, and sets over to Fort
Worth, and hereby grants to Fort worth a security interest
in, the Initial Security and all rights and privileges
pertaining thereto with the exception of the interest income
to be derived therefrom, which interest income shall remain
the property of Lessee and shall be distributed by
Nationseank in accordance with Lessee's periodic
instructions tall such initial Security, substitutions
therefor as permitted hereunder, and other property and
rights described are collectively called the "Pledged
Collateral") ; TO HAVE AND TO HOLD the Pledged Collateral,
together with all rights, titles, interests, privileges, and
preferences appertaining to or incidental thereto, unto Fort
Worth subject, however, to the terms covenants, and
conditions hereinafter set forth. The security interest
granted and the assignments made hereunder are made as
security only and shall not subject Fort Worth or
NationsBank to, or transfer or in any way affect or modify,
any obligation of Lessee with respect to any of the Pledged
Collateral or any transaction involving or giving rise
thereto.
SECTION 3. PHTSIM PCl,'"UESSION OF PLEMED_ Cam,LLATERn -
Concurrently with the execution of this Pledge
Agreement, Lessee shall have delivered to and deposited with
NationsBank the certificates or instruments representing, or
evidencing the Pledged Collateral. The parties acknowledge
and agree that NationsBank shall be required to segregate
the Pledged Collateral from other securities held in trust
by NationsBank for Lessee in accordance with the normal
practices of NationsBank. NationaBank shall return all
certificates or instruments representing or evidencing the
Pledged Collateral remaining in its possession to Lessee (or
take such other action as Lessee may request or direct)
immediately after receipt of written notice from Fort Worth
that the Secured obligations have been fully performed.
During such time as NationsBank has possession of the
Pledged Collateral., NationsBank shall furnish to the City
(when requested by the City) written acknowledgments signed
by a trust officer listing the Pledged Collateral by name of
security, type of security, maturity date, interest rate,
and CQSSP number and acknowledging that such collateral has
been pledged to the City pursuant to this Pledge Agreement.
SECTION 4. REPRESENTATIONS ANL_NARRAX=S.
Lessee does hereby represent and warrant to Fort Worth
and NationsBank that:
(a) The Pledged Collateral is free and clear of all
Liens except those created by this Pledge Agreement;
(b) Lessee (i) is the owner of the Pledged Collateral
or (ii) has obtained the consent of the owner of the
Pledged Collateral-to use the Pledged Collateral in the
manner contemplated in this Pledge Agreement;
_ FC) Lessee has lawful authority to pledge the Pledged
Collateral in the manner hereby contemplated;
(d) no consent or approval of any governmental body or
regulatory authority is necessary to the validity of
the rights created hereunder;
(e) the .execution, delivery and consummation of this
Pledge Agreement will not violate any law, regulation,
mortgage, indenture, contract, instrument, judgment or
decree applicable to or binding on Lessee; and
(f) this Pledge Agreement has been duly authorized,
executed and delivered by Lessee and constitutes a
legal, valid, and binding obligation of Lessee
enforceable in accordance with its terms except as
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, or other similar laws affecting
(ii) written notice of such Default has been given
by Fort Worth to Lessee and NationsBank and such
Default was not cured within the time periods
provided in the Lease; and
(iii) Fort Worth is entitled to have the Pledged
Collateral sold or disposed of in accordance with
the Pledge Agreement.
In the event of sale, NationsBank shall not be liable
for any fluctuation in Market Value of the Pledged
Collateral, and any such sale or other disposition may
be as a unit or in parcels (it being agreed that the
sale of any part of the Pledged Collateral shall not
exhaust the power of sale granted hereunder, but sales
may be made from time to time until all of the Pledged
Collateral has been sold or until the Secured
Obligations have been fully performed) . Fort Worth
shall -be liable for, and shall return to Lessee, the
amount, if any, by which the sales proceeds exceed the
amount necessary to complete performance of the Secured
Obligations.
(b) Sale of Pledged Collateral. Upon the consummation
of any sale, NationsBank shall have the right to
deliver, assign, and transfer to the purchaser the
Pledged Collateral sold. Each purchaser at any such
sale shall hold the property sold free from any claim
or right of whatsoever kind, and Lessee hereby waives
(to the extent permitted by law) all rights of
redemption, stay, and/or appraisal.
(c) Notices. Any notice required or permitted to be
given to Lessee or Fort Worth shall be given in writing
and shall be personally delivered or mailed by prepaid
certified or registered mail to such party at the
address set forth below. Any notice required or
permitted to be given to NationsBank shall be given in
writing and shall be effective when actually received.
Alliance
City of Fort Worth
Attnt City Manager
1000 Throckmorton Street
Fort Worth, Texas 76102
creditors' rights generally and except as
enforceability may be limited by general principles of
equity.
The delivery at any time by Lessee to NationsBank for the
benefit of Fort Worth of instruments, cash or other items
evidencing the Pledged Collateral shall . constitute a
representation and warranty by Lessee that, with respect to
such pledged Collateral, the matters heretofore warranted in
clauses (a) through M immediately above are true and
correct on, and as if they were made upon, the date of such
delivery.
SECTION S. CgY_'JAM.
(a) Affirmative Covenants. So long as any of the
Secured Obligations remain unperformed, Lessee
covenants and agrees that Lessee will:
(i) from time to time execute and deliver to Fort
Worth all such assignments, certificates,
supplemental writings, and other items and do all
other acts or things as Fort Worth may reasonably
request in order to evidence and perfect the
security interest of Fort Worth in the Pledged
Collateral;
(ii) furnish Fort Worth with inf ormation which
Fort Worth may reasonably request concerning the
Pledged Collateral; and
(iii) notify Fort Worth of any claim, action, or
proceeding affecting title to the Pledged
Collateral or—Fort Worth's security interest
therein.
-- (b) Negative Covenants. So long as any of the Secured
Obligations remain unperformed, Lessee covenants and
agrees that Lessee will not:
(i) sell, assign or transfer any rights of Lessee
in the Pledged Collateral; or
(ii) create any Lien in the Pledged Collateral, or
any part thereof, or permit the same to be or
become subject to any Lien except the security
interest herein created in favor of Fort Worth.
SECTION 6. VOTING RIGHTS: DIVIDMMS, ETC. , PRIOR TO
I)E?AtrL
So long as no Default exists, Lessee shall be entitled
to receive, retain, and expend any interest income payable
with respect to the Pledged Collateral and any and all other
distributions made on or with respect to the Pledged
Collateral. If a Default shall have occurred and be
continuing, any interest income payable on the Pledged
Collateral, and any and all other distributions made on - or
with respect to the Pledged Collateral, shall be and become
part of the Pledged Collateral and shall be held in trust
for the benefit of Fort Worth. Fort Worth shall have the
right, during the continuance of any Default, to direct
NationsBank to notify and direct, and NationsBank shall have
the right to notify and direct, the issuer of the Pledged
Collateral to make all payments and distributions directly
to Nationsaank for the benefit of Fort Worth. The issuer of
the Pledged Collateral making any such payments or
distributions shall be fully protected in relying on the
written notice from NationsBank.
SECTION 7. E'4F.NTS OF DEFA=.
Lessee shall be in default under this Pledge Agreement
only upon the happening of any the following events (a
"Default") :
(a) default in the timely performance of the Secured
Obligations after written notice thereof has been given
to Lessee and NationsBank and such default is not cured
within the time periods provided in the Lease;
(b) any warranty or representation made to Fort Worth
by Lessee in connection with this Pledge Agreement
proves to have been false in any material respect when
made; or
(c) default in delivery of the Additional Securities
as provided in Section 13 hereof.
SECTION 8. RIGHTS AND REMEDIES OF FORT WORTH IIPON .AND AFTER
;D, FE AULT.
(a) Remedy. Upon the occurrence of a Default, Fort
Worth shall have the right to direct NationsBank to
sell or otherwise dispose of all or any part of the
Pledged Collateral in accordance with normal banking
procedures. NationsBank is hereby authorized to sell
or otherwise dispose of the Pledged Collateral
immediately upon the receipt of a written statement
purporting to be executed by an authorized j
representative of Fort Worth stating that:
(i) a Default by Lessee has occurred under the
Lease with respect to construction of the
Improvements; and
NationsBank of Texas, N.A.
Attn: Ray Colvin, Trust Department
P. O. Box 830241
Dallas, Texas 75283-0241
Any such notice shall be deemed to have been given
(whether actually received or not) on the day
personally delivered as aforesaid or, if mailed, on the
day it is mailed as aforesaid. Any party may change
its address for notice by giving all other parties
hereto notice of such change in the manner set forth in
this Section 8 (c) not later than 10 days before the
effective date of such new address.
SECTION 9. Q rG LUM OTHER RIGETS = D=- ZES OF FORT Wg=
AND NATIONSBAM.
(a) Responsibility for Pledged Collateral. Fort Worth
and NationsBank shall not have a duty to fix or
preserve rights against parties who may have had a
prior interest in the Pledged Collateral or to collect
any amount payable with respect to the Pledged
Collateral, but shall be liable only to the account of
Lessee for what Fort Worth and NationsBank may actually
collect or receive thereon.
(b) Nondisclosure. In so far as permitted by Art.
6252-17, Texas Revised Civil Statutes, Fort Worth shall
not discuss or disclose the Pledged Collateral with any
persons who are not employed by Fort Worth, and then
only to the extent such discussion or disclosure is
absolutely required
SECTION 10. NONERCLUSXVE RIG S AND_ -REMEDIZS.
If the Lessee fails to timely perform the Secured
Obligations, Fort Worth is entitled to exercise its rights
as set forth in Section 8 hereof.
.SECTION 11. SUBSTITUTION OF COLLATERAL.
Notwithstanding any contrary provision in this Pledge
- Agreement, Lessee shall have the right (without the consent
of Fort Worth) , at any time and from time to time, to obtain
releases of all or any part of the Pledged Collateral
thereinafter called the "Released Collateral") upon
satisfaction of the following conditions:
(a) Lessee shall provide Fort Worth and NationsBank
written notice (the "Substitution Notice") that Lessee
i
desires to obtain Released Collateral (as specified and t
described in such notice) in exchange for a
contemporaneous substitution of different Securities
for collateral (as also specified and described in the
Substitution Notice) ; and E
(b) Lessee shall pledge to Fort Worth, and deliver to p
NationsBank for the benefit of Fort Worth, substituted
Securities (the "Substituted Collateral") the Market
value of which Substituted Collateral together with the
Market value of the remaining non-released Pledged
Collateral shall in the aggregate be at least equal to
100% of the cost to construct the Improvements. All
Substituted Collateral shall be deemed to be Pledged
Collateral for purposes of this Pledge Agreement. l
I
Upon satisfaction of the above-specified conditions,
NationsBank shall be authorized (without the consent, of Fort
Worth) to return to Lessee any original certificates or
instruments In Na,tionsBank's possession that represent or
evidence the Released Collateral or take such other action
with respect to the Released Collateral as Lessee may r
request or direct. Lessee shall pay the expenses incurred
by NationsBank in connection with obtaining each such
release and substitution.
SECTION 12. PERK} IC WITEDRAWAL OF COLLATERAL.
Notwithstanding any contrary provision in this Pledge
Agreement, Lessee shall have the right to monthly
withdrawals of the Pledged Collateral (hereinafter called
the °withdrawn Collateral- ) , upon satisfaction of the
following conditions: -�
W Lessee shall provide Fort Worth and NationsBank
-. 'written notice (the mWithdrawal Notice") that Lessee
desires to obtain the Withdrawn Collateral; and
(b) the aggregate Market Value of the Pledged
Collateral after withdrawal of the Withdrawn Collateral
is at least equal to the estimated value of the Secured
Pbligations_-then.. remaining to be performed (such
remaining value is hereinafter called the "Estimated
Cost to Complete") . i
The Withdrawal Notice shall include a description of the
Withdrawn Collateral and Lessee's calculation of the
Estimated Cost to Complete. Upon receipt of the Withdrawal
Notice, Fort Worth shall have ten (10) calendar days to
notify Lessee of Fort Worth' s calculation of the Estimated
Cost to Complete. If Fort Worth fails to so notify Lessee,
then Lessee' s calculation shall be deemed to have been
accepted and approved by Fort Worth. if Fort Worth's
calculation is less than, or not more than five percent (5t)
higher than, Lessee's calculation, then Fort Worth's
calculation shall be deemed to have been accepted and
approved by Lessee. If Fort Worth's calculation exceeds
Lessee's calculation by more than five percent (5t) , Fort
Worth and Lessee shall jointly approve a Estimated Cost - to
Complete.
Within thirty days of receipt of withdrawal Notice, Fort
worth shall execute a release authorizing NationsBank to
return to Lessee any original certificates or instruments in
NationsBank's possession that represent or evidence the
withdrawn Collateral or take such other action with respect
to the Withdrawn Collateral as Lessee may request or direct.
Lessee shall pay the expenses incurred by NationsBank in
connection with obtaining each such release.
SECTION 13. PERIODIC VALUATION OF P1MrzED CO ORAL.
At any time and from time to time (but not more
frequently than once each month) Fort Worth, at Lessee's
sole cost and expense, may request NationsBank to obtain or
provide the Market Value of the Pledged Collateral. Fort
worth may cause Lessee to pledge additional Securities (the
"Additional Securities") as Pledged Collateral upon
satisfaction of the following conditions:
(a) Fort Worth shall provide Lessee and NationsBank a
written notice setting forth the Market Value of the
Pledged Collateral and requesting Lessee to pledge
Additional Securities having a specified Market Value;
and
(b) the aggregate Market Value of the Pledged
Collateral (including the Additional Securities) shall
be equal to (or, at Lessee's option, greater than) the
last-determined Estimated Cost to Complete (or the
estimated cost to construct the Improvements if no
Estimated Cost to Complete has yet been determined
hereunder) .
Lessee shall have five days from receipt of such notice to
pledge to Fort worth, and deliver to NationsBank for the
benefit of Fort Worth, all certificates or instruments
representing or evidencing Additional Securities, the market
value of which Additional Securities shall be confirmed by
NationsBank within five (5) business days after receipt of
same.
SECTION 14. N --ASS19 a_ILI= of FORT„ Nox=r s Rr�rs.
The rights, powers, and interest held by Fort Worth
hereunder in and to the Pledged Collateral may not be
transferred or assigned by Fort Worth in whole or in part.
Any attempted transfer or assignment shall be absolutely
void and shall entitle Lessee to a release of all Pledged
Collateral.
SECTION 15. NO WAS.
No waiver by Fort Worth of any Default shall be deemed
to be a waiver of any other subsequent Default. No delay or
omission by Fort Worth in exercising any right or power
hereunder shall impair any such right . or power or be
construed as a waiver thereof, nor shall any single or
partial exercise of any such right or power preclude other
or further exercise thereof.
SECTION 16. B=XM EFFECT.
This Pledge Agreement shall be binding on the parties,
their successors and assigns. No provision of this Pledge
Agreement may be amended, waived, or modified except
pursuant to a written instrument executed by Fort Worth,
NationsBank, and Lessee.
SECTION 17. CHOICE OF SAW.
This Pledge Agreement is to be construed and
interpreted in accordance with the laws of the State of
Texas.
SECTION S s. C 9—M-r F.PARTS.
This Pledge Agreement may be executed in any number of �
multiple counterparts and by different parties on separate
counterparts, all of which when taken together shall
constitute one and the same agreement.
SECTION 19 . NATIdNSBANR INDEMNITY.
Lessee hereby agrees to release, hold harmless, and
indemnify NationsBank (and its directors, officers,
employees, agents and representatives) from and against all
claims, damages, expenses, costs, suits, and other liability
of any kind whatsoever that arise out of or are directly or
indirectly related to the performance by NationsBank of its
I
duties hereunder except for the gross negligence or willful
misconduct of NationsBank or its directors, officers,
employees, agents, or representatives.
ALLIANCE
By:
Title:
Date:
C= OF FORT WORTH, TEXAS
By:
Title:
Date:
NATIONS BANK OF TEXAS, N.A.
By:
Title:
Date
EXHIBIT A 4
United States Treasury Bills
CUSIP No.
Due
Schedule A
Lessee shall, at its own cost and expense, take out and maintain such insurance as Lessee
is required to take out and maintain under the Workers' Compensation Act; and also take
out and maintain such public liability and automobile liability insurance sufficient to fiM
Lessee's indemnification obligations set forth in Article 9 of this Ground Lease. The
policies shall provide the amounts of insurance specified in this schedule A and shall name
the City and its Airport Operator as additional insureds for their own acts or omissions.
All insurance required by this Ground Lease shall be effective on the "made-and-entered-
into" date set forth on the first page of this Ground Lease; and upon full execution of this
Ground Lease by both the City and Lessee, certificates of insurance in form acceptable to
the City and marked "premium paid" must be submitted to the City. Each certificate shall
have endorsed thereon:
A clause naming the City of Fort Worth and its Airport Operator, Alliance Air
Services, Inc., as additional insureds under the policies.
"No cancellation or change in the policy shall become effective until after thirty
(30) days notice by registered mail to the City Manager, City of Ft. Worth, 1000
Throckmorton,Ft. Worth, TX 76102."
Upon failure of Lessee to furnish, deliver and maintain such insurance as above provided,
is the City may obtain such insurance and charge Lessee the cost of the insurance plus all
appropriate administrative charges and incidental expenses associated with the transaction.
Failure of Lessee to take out and/or maintain, or the taking out and/or maintenance of any
required insurance shall not relieve Lessee from any liability under this Ground Lease, nor
shall the insurance requirements be construed to conflict with the obligations of Lessee
concerning indemnification.
All required insurance must be in effect and so continue during the fife of this Ground
Lease in not less than the following amounts-,
A. Workers' Compensation Unlimited Statutory in compliance with the
Compensation Law of the State of Texas.
B. General Liability Insurance with a maximum combined single limit of
$3,000,000.00 per occurrence. This insurance shall indicate on the Certificate(s)
of Insurance, marked"premium paid,"the following coverages:
Comprehensive General Liability
Premises/Operations
Contractual Liability
Independent Contractors
Products and Completed Operations
Galaxy Chound Least.Revised-1/21198 Page4l
075 1 SM92:027304 5,12
Broad Form Property Damage
Personal Injury
Hangar Keepers Liability
C. Auto Liability (single limit or occurrence $500,000.00). Owned, Non-owned and
Hired Location of operation shall be "AD locations in Tarrant and Denton
Counties, Texas".
The City reserves the right, from time to time, to change the types of coverages and
increase the coverage limits set forth above; which changes and increases must be
reasonable and must be based on ordinary and customary principles of risk management
adopted by the City and applied to activities at the Airport similar to those activities
conducted on the Leased Premises. In the event the City considers it necessary to change
such coverages or increase such coverage limits, the City shall give written notice of to
Lessee, together with a reasonably detailed explanation of the reason for the change or
increase. Lessee agrees that it shall comply with such changes or increases and that the
effective date of such changes or increases shall not be sooner than 30 days after the
written notice is given to Lessee.
Nothing herein contained shall prevent Lessee from taking out any other insurance for
protection of its interest which it deems advisable or necessary.
ad.xyGmuM Lem-RoiW-1121/98 Page42
07515.0092.0773045.12
Appendix A
Construclion by Lessee
I Prior to the commencement of construction of any Leasehold Improvements,
Lessee shall submit to the City complete plans and specifications and an estimated
time table for such proposed construction.
2. The City may refuse to grant approval of Lessee's plans and specifications i� in its
reasonable opinion, the proposed facilities as laid out and indicated by Lessee on
such plans or constructed according to such plans and specifications:
2.1 will be structurally unsound or unsafe or hazardous for human occupancy;
2.2 will not substantially comply with all the requirements of this Ground Lease,
2.3 will be so located that there will not be sufficient clearances in respect to existing
or planned projecting aprons, runways or taxiways adjacent thereto;
2.4 will be in violation of any state code, OSHA-70, the National Electric and Fire
Protection Codes or any other laws, ordinances or regulations of any governmental
authority having jurisdiction over the Airport;
2.5 will not be at locations or not be oriented in accordance with the approved
comprehensive plans for the Airport.
3. Upon approval of such plans and specifications by the City, Lessee shall proceed
expeditiously and with all reasonable diligence to construct, at its own expense and
cost, the facilities in accordance with such approved plans and specifications and
complete the facilities in accordance with the estimated time table (subject to
delays beyond Lessee's reasonable control).
3.1 (1) Prior to the date of commencement of any modification, renovation,
improvement or new construction of any Leasehold Improvements, Lessee shall
deliver to the City payment and performance bonds, executed by a corporate
surety in accordance with Texas Government Code, Chapter 2253, as amended, in
the full amount of each construction contract or project. The bonds shall
guarantee (i) satisfactory compliance by Lessee with all requirements, terms and
conditions of this Ground Lease, including, but not limited to, the satisfactory
completion of the Leasehold Improvements, and (ii) full payments to all persons,
firms, corporations or other entities with whom Lessee has a direct relationship for
the complete performance of such Leasehold Improvements.
Galaxy Ground Lease-Revised-1/21198 Page43
07515.D092;0273045.12
(2) In lieu of the bonds required in Section 3.1(1) of this Appendix A, Lessee
may provide the City with a cash deposit or a pledge of government securities (in
the form attached herewith as Exhibit B) and acceptable to Lessee in an amount
equal to 100r/o of the full amount of each construction contract or project. If
Lessee fails to complete the Leasehold Improvements, or if claims are filed by third
parties on grounds relating to such Leasehold Improvements, the City shall be
entitled to draw down the cash deposit or pledge of government securities, in
accordance with the terms and conditions of the attached Exhibit B.
(3) Prior to the commencement of any modification, renovation, improvement
or new construction of Leasehold Improvements, Lessee's respective contractor
shall execute and deliver to Lessee payment and performance bonds executed by a
corporate surety in accordance with Texas Government Code, Chapter 2253, as
amended, to cover the costs of all work performed under such contractor's
contract for such Leasehold Improvements. Lessee shall provide the City with
copies of such bonds prior to the commencement of such Leasehold
Improvements. The bonds shall guarantee (i) the faithful performance and
completion of all construction work in accordance with the final plans and
specifications as approved by the City and (b) full payment for all wages for labor
and services and of all bills for materials, supplies and equipment used in the
performance of the construction contract. Such bonds shall name both the City
and Lessee as dual obligees. If Lessee serves as its own contractor, Sections
3.1(1) and(2) shall apply.
(4) The City will allow Lessee a dollar-for-dollar reimbursement from its cash
deposit account or reduction of its claim upon Lessee's pledge of government
securities upon (i) where Lessee serves as its own contractor, verification that
Lessee has completed construction work or (ii) where Lessee uses a contractor,
receipt of the contractor's invoice and verification that the contractor has
completed its work and released Lessee to the extent of Lessees payment for such
work, including bills paid affidavits and waivers of liens.
Bonds shall be standard performance and payment bonds provided by a licensed
surety company in the State of Texas.
4. All construction work shall be done in accordance with the following terms and
conditions:
4.1 Lessee hereby assumes the risk of loss or damage to all of the construction work
prior to the completion thereof and the risk of loss or damage to all property of the
City arising out of or in connection with the performance of the construction work.
In the event of such loss or damage, Lessee shall forthwith repair, replace and
make good the construction work and the property of the City without cost or
expense to the City.
Galaxy Ground Lease-Rcvi-d-i/2v98 Page44
07515.0092:0273043.12
4.2 Lessee shall itself and shall require its contractors to indemnify, hold harmless and
defend the City, its officers, agents and employees from and against any and all
claims or suits for property damage and/or personal injury, including death, to any
and all persons, of whatsoever kind or character, whether real or asserted, arising
out of or in connection with any construction, maintenance or repair work
performed on or in connection with the Leased Premises, by Lessee, its officers,
employees, contractors, subcontractors, licensees, invitees, or tenants (and to
provide such insurance as required in Section 4.7 of this Appendix) covering the
acts and omissions of Lessee and its contractors; and Lessee shall itself assume and
shall require its contractors to assume all responsibility and liability for such claims
or suits. Lessee shall itself assume and shall require its contractors to assume all
responsibility and liability for, and shaft indemnify and hold harmless the City for
any and all damage to or destruction of Airport property, the Leased Premises, and
their facilities, arising out of or in connection with any construction, maintenance
or repair work performed on or in connection with the Leased Premises, by
Lessee, its officers, employees, contractors, subcontractors, licensees, invitees, or
tenants.
4.3 Lessee shall identify a project manager during the construction period with whom
the City may communicate at all times.
4.4 The City shall have the right, through its duly designated representatives, to
inspect the construction work and the plans and specifications thereof, at any and
all reasonable times during the progress thereof and from time to time, in its
discretion, to take samples and perform testing on any part of the construction
work, but the taking of samples and testing shall be conducted so as to minimize
interference with the construction work.
4.5 Lessee agrees that it shall deliver to the City"as-built" drawings (capable of being
reproduced) of the construction work and shall during the term of this Ground
Lease keep said drawings current showing thereon any changes or modifications
which may be made. (No changes or modifications to be made without the City's
consent not to be unreasonably withheld or delayed.)
4.6 Lessee shall pay or cause to be paid all claims lawfully made against it by its
contractors, subcontractors, materialmen and workmen, and all claims lawfully
made against it by other third persons arising out of or in connection with or
because of the performance of any repair, maintenance or construction work, and
shall cause its contractors and subcontractors to pay all such claims lawfully made
against them, provided, however, that nothing herein contained shall be construed
to limit the right of Lessee to contest any claim of a contractor, subcontractor,
materialman, workman and/or other person and no such claim shall be considered
to be an obligation of Lessee within the meaning of this Section unless and until
the same shall have been finally adjudicated. Lessee shall use its best efforts to
Galaxy Ground Lease-Revised-1/21/98 Page45
M15.0092:0273045,12
resolve any such claims and shall keep the City fully informed of its actions with
respect thereto.
4.7 Lessee shall procure and maintain comprehensive general liability insurance,
including automotive, with a contractual liability endorsement covering the
obligations assumed by Lessee in Sections 4.1 and 4.2 of this Appendix, which
shall be in addition to all policies of insurance otherwise required under this
Ground Lease; or Lessee may provide such insurance by requiring each contractor
engaged by it for the construction work to procure and maintain such insurance
including such contractual liability endorsement. Said insurance shall not contain
any care, custody or control exclusions, any exclusion for explosions, collapses or
damage, or any exclusions for bodily injury to or sickness, disease, or death of any
employee of Lessee or of any of its contractors which would conflict with or in
anyway impair coverage under the contractual liability endorsement. Said
insurance shall name the City, its officers, its employees and its agents as additional
insureds and be in not less than the following amounts:
(i) Bodily Injury liability:
For injury to or wrongful death
to one person ......... ...........--..................................................$1,000,000
For injury or wrongful death of more
than one person for any one occurrence.....................................$5,000,000
Aggregate Products Completed Operations.......... ............ ...........-$3,000,000
(d) Property Damage Liability:
For all damages arising out of injury
to or destruction of property in any
one occurrence...... ...................................................................$3,000,000
Aggregate Products Completed Operations.....................................$3,000,000
Aggregate Operations ............................................................... .....$3,000,000
Aggregate Productive................................................ .....................$3,000,000
Aggregate Contractual.......................................... .........................$3,000,000
The insurance required hereunder shall be maintained in effect during the
performance of the maintenance, repair or construction work. A certified copy of
each of the policies or a certificate or certificates' evidencing the existence thereof,
or binders, shall be delivered to the City at least fifteen (15) days prior to the
commencement of any work. In the event any binder is delivered, it shall be
replaced within thirty (30) days by a certified copy of the policy or a certificate.
Each such copy or certificate shall contain a valid provision or endorsement that
the policy may not be canceled, terminated, changed or modified without giving
fifteen(15) days' written advance notice thereof to the City.
Galaxy Ground lease-Revised-1121198 Page46
07515.0092:0273045.12
4.8 Lessee shall procure and maintain or cause to be procured and maintained
Builder's Risk Completed Value Insurance covering the construction work during
the performance thereof, including material delivered to the construction site but
not attached to the realty, in an amount and form satisfactory to the City. Such
insurance shall name the City, Lessee and its contractors and subcontractors as
additional insureds and such policy shall provide that the loss shall be adjusted in
accordance with Article 8 of this Ground Lease. The policies or certificates
representing this insurance shall be delivered by Lessee to the City prior to the
commencement of construction and each policy or certificate delivered shall bear
the endorsement of or be accompanied by evidence of payment of the premium
thereon and, also, a valid provision obligating the insurance company to furnish the
City fifteen (15) days' advance notice of the cancellation, termination, change or
modification of the insurance evidenced by said policy or certificate.
4.9 Nothing contained herein shall grant or be deemed to grant to any contractor,
architect, supplier, subcontractor or any other person engaged by Lessee or any of
its contractors in the performance of any part of the construction work any right of
action or claim against the City, its officers, agents and employees with respect to
any work any of them may do in connection with the construction work.
4.10 Nothing contained herein shall create or be deemed to create any relationship
between the City and any such contractor, architect, suppliers subcontractor or any
other person engaged by Lessee or any of its contractors in the performance of any
part of the construction work, and the City shall not be responsible to any of the
foregoing for any payments due or alleged to be due thereto for any work
performed or materials purchased in connection with the construction work.
4.11 When the construction work is substantially completed and is ready for use by
Lessee, Lessee shall advise the City to such effect and shall deliver to the City a
certificate by an authorized officer of Lessee certifying that such construction work
has been constructed substantially in accordance with the approved plans and
specifications and the provisions of this Ground Lease and in compliance with all
applicable laws, ordinances and governmental rules, regulations and orders.
Thereafter, such construction work will be inspected by the City and if the same
has been completed as specified by Lessee, a certificate to such effect shall be
delivered to Lessee, subject to the condition that all risks thereafter with respect to
the construction and installation of the same and any liability therefor for
negligence or other reason shall be borne by Lessee.
Lessee shall not use or permit the use of the construction work for the purposes
set forth in this Ground Lease until such certificate is received from the City. The
date of delivery of the certificate by the City shall constitute the Completion Date
for the purposes of this Ground Lease.
Galaxy Ground Lease-Revised-1121/98 Page47
07515.0092:0273045.12
6. Other Construction by Lessee
Title to any construction, improvement, alteration, modification or addition
performed by Lessee at or on the Leased Premises in accordance with a City
approved building permit shall vest in Lessee and remain in Lessee until the
expiration or earlier termination of this Ground Lease.
Page48
07515.002:0273045.12
FIRST AMENDMENT
TO
GROUND LEASE AGREEMENT
THIS FIRST AMENDMENT TO GROUND LEASE AGREEMENT (this
"Amendment') is made effective as of the 29th day of July, 1997, by and between the City of
Fort Worth, Texas, hereinafter referred to as "City". and Airport Building Partners, Ltd., a Texas
limited partnership, as assignee of Alliance Aviation Investors, L.P., a Texas limited partnership
(ftJa Alliance Air Partners, Ltd.), hereinafter referred to as"Lessee
RECITAL
A. City and Lessee are parties to that certain Ground Lease Agreement, dated July 29, 1997
(the "Ground Lease"), covering approximately 6.639 acres of land in Tarrant County,
Texas, as more particularly described in the Ground Lease.
B. City and Lessee wish to amend the Ground Lease to provide that title to the Leasehold
Improvements (as defined in the Ground Lease) are vested in the City from the date of
completion of construction or installation of the Leasehold Improvements.
AGREEMENT
NOW, THEREFORE, in consideration of the premises contained herein and in the
Ground Lease and the benefits to be derived by the parties hereto, City and Lessee agree as
follows:
1. Section 5.6 of the Ground Lease is hereby amended, in its entirety, to read as follows:
Fee simple title to all Leasehold Improvements located on the Leased Premises
"I vest in the City free and clear of any and all claims by any Leaschold
Mortgagee (provided, however, that any Leasehold Mortgagee shall retain its
leasehold mortgage claim on the Lessee's leasehold interest in and to the Leased
Premises, including, without limitation, the Leasehold Improvements), free and
clear of any and all claims on the part of Lessee (provided, however, that Lessee
1
007 515.00092:485346.03
shall retain its leasehold interest in and to the Leased Premises, including,without
limitation, the Leasehold Improvements), and free and clear of any mechanics'
and materialmen's liens by any person on account of any repair or improvement
work done or to be done under the terms hereof by Lessee. The vesting of title in
the City at the time specified is a part of the consideration for this Ground Lease.
The City shall not be liable (i) to assume, take subject to, or otherwise be
responsible for the payment or performance of the Lessee's obligations under any
Leasehold Mortgage (as hereinafter defined) or (ii)to Lessee or Lessee's
contractors, Sublessees, or anyone else, for the value of any Leasehold
Improvements constructed or located on the Leased Premises.
2. Section 8.2 of the Ground Lease is hereby modified and amended by adding the
words "Lessee's leasehold interest in and to the Leasehold Improvements"
following the words "covered the" in the 4 1h line of said section, so that the first
sentence of such Section 8.2 shall be revised to read as follows:
In the event any Leasehold Improvements, insurable or uninsurable, on the Leased
Premises are damaged or destroyed, the use of all insurance proceeds and Lessee's
obligations, if any, to rebuild shall be governed solely by any Leasehold
Mortgage(s) that covered the Lessee's leasehold interest in and to the Leasehold
Improvements at the time of the damage or destruction.
3. Section 13.1 of the Ground Lease shall be amended, in its entirety, to read as follows:
In the event that the Leased Premises or any part thereof shall be condemned and
taken by authority of eminent domain for any purpose during the term of this
Ground Lease or sold to such authority in lieu of a taking (collectively, a
"condemnation"), any award which shall be made as a result of such
condemnation (i) if for the fee interest in the Leased Premises exclusive of the
Leasehold Improvements placed, located, or constructed thereon, shall be paid to
the City and(ii) if for the Leasehold Improvements placed, located, or constructed
thereon and if for a leasehold interest in the Leased Premises, shall be paid to the
Lessee and any Leasehold Mortgagee in accordance with the rights under any
Leasehold Mortgages. Either party, consistent with its rights under applicable
law, may appear in any such condemnation proceeding and present its claims for
damages, if any, arising from such condemnation.
4. The first sentence of Section 19.1 of the Ground Lease shall be amended as
follows:
Notwithstanding any other provision in this Ground Lease to the contrary, upon
any default by Lessee of any provision of this Ground Lease or upon any
termination of this Ground Lease for any reason(including,but not limited to, any
such default by Lessee), the City's sole and exclusive remedy shall be to re-enter
and take possession of the Leased Premises(or portion thereof) and the Leasehold
2
007515.00092;485346.03
Improvements (or any portion thereof) then located, placed, or constructed
thereon, free from any claims by Lessee.
5. Except as hereby amended, all other provisions of said Ground Lease remain unchanged
and in fall force and effect, and the Ground Lease is hereby ratified and affirmed. In the
event of a conflict between the terms and conditions of the original Ground Lease and this
Amendment,the terms and conditions of this Amendment shall control.
[SIGNATURE PAGES FOLLOW]
0
0
3
007515.00092;485346.03
EXECUTED to be effective for all purposes as of July 29, 1997.
CITY: CITY OF FORT WORTH
Byzq-�
, City Manager
LESSEE: AIRPORT BUILDING PARTNERS,LTD.
By: Hillwood Operating,L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Corporation,
a Texas corporation,
its general partner
By: 1
M THOMAS MASON
VICE PRESIDENT
APPROVED AS TO FORM AND LEGALITY:
Assistant Git ttocney
4
007515.00092:485346.03
SUP-2B-00 14:52 FROMINUGHES&LUCE L.L.P. PACE 6/8
Consented to:
Paribags, ica o Bank
Name:
Tlitle:
THE STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME's the undersigned notary public, on this day personally appeared
City
Manager, the City of Fort Worth,known to me to be the person and
b
officer�who name isubs subscribed the foregoing instrument, and acknowledged to me that the
same was the act of the City of Fort Worth and that he executed the same as the act of the City of
Fort Worth for the purposes and consideration therein expressed, and in the capacity therein
stated.
C1
Given under my hand and seal of office thislrday of 2000
ft 1A11 All IJAINE ODLE
r4OT4SY PUBLIC Notary Public jrh and for
to state of Texas the State of Texas
aii C.Ofm.Exp.01-29-2002
THE STATE OF TEXAS
F-)Q i I(t,5
COUNTY OF TARRA.NT
BEFORE ME, the und iers1 ed notary public, on this day personally appeared
r Hillwood Development Corporation, known to me
to be the person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of the said Hillwood Development Corporation,
and that he executed the same as the act of such corporation for the purposes and consideration
therein expressed, and in the capacity therein stated.
Given under my hand and seat of office this � day of 2000.
*tart'Public in and ior\-�
the State of Texas
SEW Comm. Expires X.
6
007 5 15.00092:485346.03
THE STATE OF TEXAS
COUNTY OF TARRANT
BEFORE NE, the undersigned notary public, on this day personally appeared
Arj a rY),,C,(-,-j ;CL -' Paribas, Chicago Bank, known to me to be the
person and officer whose name is subscribed to the foregoing instrument, and acknowledged to
me that the same was the act of the said Paribas,Chicago Bank,and that he executed the same as
the act of such corporation for the purposes and consideration therein expressed, and in the
capacity therein stated.
Given under my hand and seal of office this My'day,of -112000.
Notary Public in and for
the State of4.;e*".de w
JOSM 0. cArARINA
NMW K4M So"of Now Yak
ft 3140NM
OAMed h Hm York 0 Lty
Dow Am I.�
7
007515.00092AS5346.03