HomeMy WebLinkAboutContract 46530•'Z 1114 114
FACILITIES LEASE AGREEMENT
This Facilities Lease Agreement (this "Lease") is made and entered as of the 5th day of
February, 2015, by and between AllianceAirport Authority, Inc., a nonstock, nonprofit industrial
development corporation created by the City pursuant to the laws of the State of Texas, including
particularly the Development Corporation Act of 1979, Article 5190.6, V.A.T.C.S., as amended
"Landlord'), and Texas Aero Engine Services, L.L.C., a Delaware limited liability company
("Tenant").
RECITALS:
A. American Airlines, Inc., a Delaware corporation ("American"), Landlord, the City
of Fort Worth, Texas, a Texas home -rule municipal corporation (the "City"), Alliance Airport,
Ltd., a Texas limited partnership ("Alliance"), Hillwood/1358, Ltd., a Texas limited partnership
("Hillwood"), and Hillwood Development Corporation, a Texas corporation ("Developer")
entered into that certain Master Agreement for American Airlines Maintenance Base dated
August 10, 1989 (the "Master Agreement"), which Master Agreement (1) provided for, among
other things, the development of a major aircraft maintenance facility for use by American in the
maintenance and repair of its aircraft fleet and the acquisition of equipment to be used in
connection with the operation of said facility, all in connection with the overall development of
the Airport, and (ii) documented various commitments made to American by the City, Alliance,
and Hillwood to induce said development.
B. As contemplated in the Master Agreement, Landlord leased that certain land
known as Alliance Fort Worth Maintenance Base, located adjacent to the Airport and including
the Facility (as defined below) (collectively, the "Base" ), to American pursuant to that certain
Lease Agreement by and between Landlord and American dated as of March 1, 1990 (the
"Original Facilities Lease").
C. As further contemplated in the Master Agreement, Landlord leased certain
equipment, including the Equipment (defined below), to American pursuant to that certain
Master Equipment Lease Agreement by and between Landlord and American dated as of April 1,
1991 (the "Equipment Lease").
D. Pursuant to that certain Facilities and Equipment Sublease by and between
American and Tenant dated as of April 4, 1998, as amended by that certain First Amendment to
Facilities and Equipment Sublease dated as of April 4, 1998 (collectively, the "Original
Sublease"), Tenant sublet the Facility and the Equipment from American subject to and upon the
;;a terms and conditions set forth in the Original Sublease.
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C)
rn E. Pursuant to that certain Agreement on Rejection and Related Matters by and
m among American and Landlord (the "Rejection Agreement"), as approved by Order dated
® August 8, 2014 issued by the United States Bankruptcy Court, Southwestern District of New
York (the "Court'), Chapter 11 Case No. 1145463 (SHL), Document No. 12230 (the "Rejection
,.� Order"), American and Landlord have agreed that (i) the Master Agreement will be terminated as
soon as reasonably practicable after the effective date of the Rejection Agreement, (ii) the
On linal Facilities Lease ill be rejected by American as of the effective date of the Rejection
OFFICIAL RECORD
CITY SECRETARY 1
FT, WORTH, TX
Agreement, and (iii) the Equipment Lease will be deemed terminated as of the effective date of
the Rejection Agreement (collectively, the "Rejection of Facility Lease"), which Rejection of
Facility Lease has been agreed between Landlord and American to be effective at 11:59 p.m.
CST, February 5, 2015 ("Rejection Effective Time"),
F. At the Rejection Effective Time, and pursuant to the Rejection Order, (i) that
certain Construction and Lease Agreement by and between American and Texas Utilities Electric
Company (as assigned to TXU Energy Services Company) dated September 25, 1990 (as
subsequently amended, the "Construction Agreement") and that certain Agreement for the
Supply of Electricity, dated June 11, 2014 (unless otherwise expired pursuant to its terms) (the
"ESA" and together with the Construction Agreement, the "TXU Agreements"), will be
assigned by American to, and assumed by, Landlord with the consent of TXU Energy Services
Company, (ii) certain Operating Permits (as defined in the Rejection Agreement) will have been
assigned by American to and assumed by the Landlord, and (iii) the Original Sublease will be
rejected, and from and after the Effective Date Tenant will lease the Facility from Landlord
subject to and upon the terms and conditions set forth in this Lease.
G. Tenant currently has and will continue to have possession and use of the
Equipment and, pursuant to a separate purchase agreement between Landlord and Tenant (the
"Equipment Purchase Agreement"), Tenant will purchase and Landlord will sell and convey to
Tenant at a cost of One Million Five Hundred Thousand Dollars ($1,500,000.00) good and
marketable title and full ownership of the Equipment as of the Effective Date.
AGREEMENT:
NOW THEREFORE, in consideration of the duties, covenants, and obligations under this
Lease, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and agreed, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Lease the following terms shall have the
meanings respectively indicated:
"Additional Rent" has the meaning set forth in Section 10.3.
"Adjoining Tenants" has the meaning set forth in Section 8.1.
"Adjoining Tenant's Permitted Personnel" means those authorized employees of
Adjoining Tenants that shall be permitted access to the Communications Room pursuant
to Section 8.1 as designated in a written list submitted by Adjoining Tenants to Landlord,
with a copy being provided by Landlord to Tenant.
"Affiliate" means any corporation that is a subsidiary, directly or indirectly, of any
designated entity, or any person, corporation, or entity that, directly or indirectly, controls
or is controlled by the designated entity or is under common control with the designated
entity ("control", "controlled by" or "under common control with" each means the
possession of, directly or indirectly, the power to direct or to cause the direction of the
management and policies of an entity whether through the ownership of a substantial
portion of the voting securities or equity or by contract or otherwise).
"Airport" means Alliance Fort Worth Airport, located in Fort Worth, Texas.
"Amended and Restated Declaration of Covenants and Restrictions" has the meaning set
forth in Section 2.1(c)(i).
"ATA Specification 103" has the meaning set forth in Exhibit A.
"Automotive Shop" means AFW Building 6 —Automotive Shop, as delineated on the
Site Plan.
"Base" has the meaning set forth in Recital B.
"Base Rent" has the meaning set forth in Section 10.1.
"Cap" has the meaning set forth in Section 10.2.
"Casualty Date" has the meaning set forth in Section 16.1(c).
"Central Utility Plant" has the meaning set forth in Section 7.1.
"Central Utility Services" has the meaning set forth in Section 9.4.
"Change in Control" means, for purposes of Section 2.2, (A) the transfer of any corporate
stock, partnership interest or membership interest in Management Company or Fuel
Services Company, as applicable, or (B) a merger, consolidation, acquisition or
liquidation of or by Management Company or Fuel Services Company, as applicable,
either voluntarily or by operation of law, which shall result in a change in control over
fifty percent (50%) of the voting stock, membership interests, or equity interests of
Management Company or Fuel Services Company, as applicable, and controlling the
board or membership committee and polices of Management Company or Fuel Services
Company, as applicable.
"Chemical Tank" means any tank located in the three parts -clean areas containing
chemicals in a range of concentrations as governed by Rolls-Royce Engine Manual
specifications.
"Claims" has the meaning set forth in Section 18.1.
"CMS Building" means the "chemical materials storage building" as delineated on the
Site Plan (a portion of which is further delineated as being provided for Tenant's sole and
exclusive use).
"Common Area" means those areas of the Base designated for the common use by, and
common benefit of, all tenants of the Base, including but not limited to the lands forming
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part of the Base and all facilities (including the parking facilities and entrances thereto),
systems, improvements, structures and equipment serving or benefiting the Base.
Common Area shall not include the Facility or the portions of the Landlord Adjoining
Property leased to or available for lease to other tenants.
"Common Area Fees" has the meaning set forth in Section 8.2(c).
"Common Area Services" has the meaning set forth in Section 8.2(c).
"Communications Room" means the communications room located in the warehouse, as
delineated on the Site Plan.
"Conduit Maintenance Ex ep nses" has the meaning set forth in Section 4.2.
"Court" has the meaning set forth in Recital E.
"CUP Fees" has the meaning set forth in Section 7.5.
"CUP Services" has the meaning set forth in Section 7.4.
"CUP Services Interru tp ion" has the meaning set forth in Section 9.4.
"CUP Utilities" has the meaning set forth in Section 7.3.
"CUP Utilities and Services" means, collectively, the CUP Utilities and the CUP
Services.
"Declaration of Covenants and Restrictions" means that certain Declaration of Covenants
and Restrictions, dated August 10, 1989, made by Alliance and Hillwood and recorded at
Volume 2628, Page 852 of the Real Property Records of Denton County, Texas.
"Designated Fuel Supplier" has the meaning set forth in Section 5.2.
"Distribution Intez-ruption" has the meaning set forth in Section 9.1.
"Effective Date" has the meaning set forth in Section 2.1(b).
"Emergenev Response S sue" has the meaning set forth in Exhibit E.
"Environmental Condition" has the meaning set forth in Section 12.3.
"Environmental Laws" has the meaning set forth in Section 12.2.
"Equipment" means any and all of the tooling and equipment currently located at the
Facility and that was used by Tenant in accordance with the Equipment Lease pursuant to
the Original Sublease, which tooling and equipment is further defined in and will be sold
by Landlord to and purchased by Tenant on or prior to the Rejection Effective Time in
accordance with the Equipment Purchase Agreement.
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"Equipment Purchase Agreement" has the meaning set forth in Recital H.
"Event of Default" has the meaning set forth in Section 19
"Facility" means certain land, buildings and facilities on the Base owned by Landlord and
located within the Fence, as delineated on the Site Plan, including the following: (a) the
building labeled as "TAESL" and the land on which such building is located, as
delineated on the Site Plan, (b) the building labeled as "test cell" and the land on which
such building is located, as delineated on the Site Plan, (c) the building labeled as "heat
treat and blast" and the land on which such building is located, as delineated on the Site
Plan, and (d) all other areas within the Fence between and adjacent to the buildings
labeled as "TAESL", "test cell" and "heat treat and blast".
"Fees" means, collectively, CUP Fees, Fuel Fee, Uplift Fees, Common Area Fees, and
Conduit Maintenance Fees.
"Fence" has the meaning set forth in Section 14.1.
"Fuel Farm" has the meaning set forth in Section 5.1.
"Fuel Fee" has the meaning set forth in Section 5.6.
"Fuel Farm Services" has the meaning set forth in Section 5.2.
"Fuel Services Company" means any person or entity designated in writing by Landlord
to Tenant and with whom Landlord has entered into a written agreement to perform
and/or provide, at Landlord's expense, any duties, obligations or services to be performed
and/or provided by Landlord as set forth in Article V; provided, however, that any Fuel
Services Company must satisfy the provisions of Section 21.1(e).
"Fuel Services Interruption" has the meaning set forth in Section 9.2.
"Hazardous Materials" has the meaning set forth in Section 12.2.
"Hazardous Material Liabilities" has the meaning set forth in Section
"Hazardous Waste Building" means the "hazardous waste building" delineated on the
Site Plan (a portion of which is further delineated as being provided for Tenant's sole and
exclusive use).
"Indemnification Claims" has the meaning set forth in Section 12.5.
"Industrial Wastewater" has the meaning set forth in the Water Pollution Control Act
(Clean Water Act of 1977), 33 U.S.C. § 1251 et seq.
'Interruption" means any Distribution Interruption, Fuel Services Interruption, Uplift
Services Interruption, CUP Services Interruption, or Shared Facilities Interruption, as
applicable.
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"IWTF" has the meaning set forth in Section 6.1.
"Jet Fuel" means aviation jet fuel that meets the quality, requirements, and specifications
necessary to conduct Tenant's operations at the Facility. The parties acknowledge that
such specifications may change throughout the Term, however, the parties acknowledge
that initially the Jet Fuel will conform to the quality and specifications set forth in
Exhibit A attached hereto.
"Laboratory" means the chemical and water analysis laboratory located in the IWTF.
"Landlord Ad'o� fining Property" means the Base, excluding the Facility.
"Landlord Distributed Utilities" has the meaning set forth in Section 4.2(a).
"Landlord Failure" has the meaning set forth in Section 19.6.
"Landlord Hazardous Material Liabilities" has the meaning set forth in Section 12.4.
"Landlord Recovery Failure" means, with respect to any Distribution Interruption, Fuel
Services Interruption, Uplift Services Interruption, CUP Services Interruption, or any
Shared Facilities Interruption (each as described in Article IX), the failure or refusal of
Landlord, Management Company or Fuel Services Company, as applicable, to undertake
reasonable efforts to timely and promptly restore or replace or cause to be restored or
replaced the applicable services or utilities upon written request of Tenant, if, and only
if the ability to timely and promptly restore or replace or cause to be restored or replaced
the applicable services or utilities is within the reasonable control of any of Landlord,
Management Company, or Fuel Services Company.
"Landlord Responsible Parties" has the meaning set forth in Section 9.1.
"Landlord's Notice" has the meaning set forth in Section 16.1(d).
"Landlord's Permitted Personnel" means those authorized employees of Landlord or
Management Company that shall be permitted access to (i) the Communications Room,
(ii) the CMS Building or (iii) the Facility pursuant to Section 8.1, Section 8.2(b)�(c) and
the Emergency Response System paragraph of Exhibit E, which employees shall be
designated in advance in a separate written list submitted by Landlord or Management
Company to Tenant.
"Liens" has the meaning set forth in Section 14.3.
"Lift Station" means the industrial waste lift stations located on the Base and more
specifically delineated on the Site Plan, and all pipes connecting the IWTF to such lift
stations. The Lift Station shall be considered part of the IWTF.
"Management Company" means any person or entity designated in writing by Landlord
to Tenant and with whom Landlord has entered into a written agreement to perform
and/or provide, at Landlord's expense, any duties, obligations or services to be performed
and/or provided by Landlord hereunder, including, without limitation, the provision of
services as set forth in Articles IV, VI, VII and VIII but specifically excluding the Fuel
Farm Services; provided, however, that any Management Company must satisfy the
provisions of Section 21.1(e).
"Meter" has the meaning set forth in Section 5.1.
"Minimum Guaranteed Jet Fuel Requirement" has the meaning set forth in Section 5.6.
"Miscellaneous Maintenance Services" has the meaning set forth in Section 8.2(d).
"Negotiation Period" has the meaning set forth in Section 13.2(b).
"Noticed Date of Termination" has the meaning set forth in Section 16.1(d).
"Per -Gallon Jet Fuel Cost" has the meaning set forth in Section 5.6.
"Permitted Absence" has the meaning set forth in Section 19.1(a)(iv
"Permitted Successor" has the meaning set forth in Section 20.1(c).
"Permitted Transferee" has the meaning set forth in Section 20.1(d).
"Rejection Agreement" has the meaning set forth in Recital E.
"Rejection Effective Time" has the meaning set forth in Recital E.
"Rejection of Equipment Lease" has the meaning set forth in Recital E.
"Rejection Order" has the meaning set forth in Recital E
"Release" has the meaning set forth in Section 12.3.
"Rent Credit" has the meaning set forth in Section 8.1(c)(v).
"Repair Notice" has the meaning set forth in Section 13.2(b).
"Restoration Work" has the meaning set forth in Section 16.1(b).
"Rules and Regulations" has the meaning set forth in Section 12.1.
"Shared Facilities" means those buildings, facilities, and/or systems on the Base owned
or leased by Landlord which Tenant shall be entitled to access, inspect, use and receive
the benefit of but which shall be maintained and/or operated by Landlord, at Landlord's
cost, all as more particularly set forth in Article VIII. As of the Effective Date, the
Shared Facilities include the following: the Communications Room; the Automotive
Shop; the Hazardous Waste Building; and the CMS Building. Except as otherwise
agreed in writing by Landlord and Tenant, (i) commencing on January 1, 2016, or such
earlier date that Tenant notifies Landlord that Tenant has relocated its equipment and no
longer requires use of the Communications Room in accordance with Section
8.1 c iv ,the Shared Facilities shall thereafter not include the Communications Room,
and (ii) commencing on the effective date of any termination of Tenant's right to access
and use the Automotive Shop pursuant to Section 8.1(d), the Shared Facilities shall
thereafter not include the Automotive Shop (provided that if Tenant enters into a sublease
for the use of the Automotive Shop in accordance with the provisions of Section 8.1(d),
the rights of use and access granted Tenant under Section 2.1(a) of this Lease shall
continue to apply to Tenant's sublease and use of the Automotive Shop as if it continued
to be part of the Shared Facilities).
"Shared Facilities Interruption" has the meaning set forth in Section 9.5.
"Site Plan" means that site plan attached hereto as Exhibit B-1.
"TAESL Pipe Segment" has the meaning set forth in Section 5.1.
"Tenant Change in Control" has the meaning set forth in Section 20.1.
"Tenant Competitor" means an entity or person that engages in or that has an Affiliate
that engages in any business activity in competition with the business activity of Tenant,
American, or Rolls-Royce Engine Services Holding Co., Rolls Royce PLC, or their
Affiliates. For avoidance of doubt, a competitive business activity is (1) the maintenance,
repair or overhaul (e.g., any maintenance or repair activity, including without limitation,
the inspection, disassembly, assembly, cleaning, part replacement, part repair, re-
assembly or testing) of aircraft engines, modules and/or parts or components thereof, or
(ii) the manufacture of aircraft engines, modules and/or parts or components thereof, or
(iii) the sale or distribution of aircraft engines, modules and/or parts or components
thereof; or (iv) the operation of a commercial airline.
"Tenant Competitor Termination Option" has the meaning set forth in Section 2.2.
"Tenant's Notice" has the meaning set forth in Section 16.1(c).
"Tenant Recovery Expenses" means with respect to any Distribution Interruption, Fuel
Services Interruption, Uplift Services Interruption, CUP Services Interruption, or Shared
Facilities Interruption (each as described in Article IX), any commercially reasonable
additional cost or expense incurred by Tenant to (1) restore or replace the utility or service
in order to continue its operations without interruption or (ii) to mitigate the impact of the
interruption to its operations, in each case directly as a result of the applicable
interruption (including, without limitation, such costs or expenses incurred pursuant to
Section 11.3). For avoidance of doubt, Tenant Recovery Expenses shall not include
business interruption damages, special damages, or third -party damages.
"Tenant Storage" has the meaning set forth in Section 5.1.
"Tenant's Permitted Personnel" means those authorized employees, contractors, suppliers
and vendors of Tenant that shall be permitted access to (i) the Communications Room,
(ii) the CMS Building, and (iii) the Laboratory pursuant to Sections 6.5 and 8.1, which
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employees shall be designated in advance in a written list submitted by Tenant to
Landlord (which employees may be seconded employees of Rolls-Royce or American
Airlines).
"Term" has the meaning set forth in Section 2.1.
"Termination Option" has the meaning set forth in Section 2.2.
"TXU Agreements" has the meaning set forth in Recital F.
"Uplift Fees" has the meaning set forth in Section 6.4.
"Uplift Services" has the meaning set forth in Section 6.2.
"Uplift Services Interruption" has the meaning set forth in Section 9.4.
"Utility Costs" has the meaning set forth in Section 4.3
"Waivers and Indemnities" has the meaning set forth in Section 18.3.
"Wastewater Standards" has the meaning set forth in Exhibit C.
"World" has the meaning set forth in Section 5.2.
ARTICLE II
DEMISE; TERM
2.1 Lease of Facili
(a) Demise; Term. Landlord and Tenant agree that for a term commencing on the
Effective Date and expiring on January 31, 2025 (the "Term"), unless earlier terminated as
provided herein: (i) Landlord shall lease to Tenant, and Tenant shall lease from Landlord, the
Facility; (ii) Landlord grants to Tenant the use and associated rights with respect to the Shared
Facilities, the Central Utility Plant, the Fuel Farm and the IWTF as further provided herein; (iii)
Landlord shall distribute the Landlord Distributed Utilities and perform the obligations of
Landlord as set forth in Article IV; (iv) Landlord shall perform all of its obligations and provide
all services required to be performed and provided hereunder, including, without limitation, the
Fuel Farm Services as set forth in Article V, the Uplift Services as set forth in Article VI, and the
CUP Utilities and Services set forth in Article VII; (v) Landlord grants to Tenant a non-exclusive
right of ingress and egress through the "east entrance", as delineated on the Site Plan, and over
the existing "east parking lot", as delineated on the Site Plan; (vi) Landlord shall ensure that no
less than seven hundred (700) parking spaces in the "east parking lot" will be available for use
by Tenant and its agents, employees, subtenants, subcontractors, customers and visitors and that
the two (2) most western rows of parking spaces in the "east parking lot" shall be designated for
Tenant's exclusive use and shall include the greater of the minimum number of handicapped
spaces required by law or such number of handicapped spaces as exist as of the Effective Date;
and (vii) Landlord grants to Tenant a non-exclusive right of access over the driveways and
walkways within the Landlord Adjoining Property, including, without limitation, such areas
between the building labeled "TAESL" on the Site Plan, the CMS Building and the Hazardous
Waste Building, in all cases as reasonably necessary for the Tenant to access, utilize and/or
A eceive the services from the Shared Facilities, the IWTF, the Central Utility Plant and the Fuel
Farm as contemplated and permitted herein, to conduct its operations at the Facility and to
exercise all of its rights under this Lease; provided such right of access under this clause (vii)
will be subject to reasonable written rules and regulations set forth by Landlord and that do not
conflict with the terms of this Lease or materially and adversely impact Tenant's operations or
Tenant's use and quiet enjoyment of the Facility, or impose any material additional cost to
Tenant in connection with such use and operations. The parties acknowledge that Tenant is
currently subleasing, using and in possession of the Facility under the Original Sublease and that
concurrently with the termination of the Original Sublease and subject to the satisfaction of all
other Conditions Precedent, from and after the Effective Date, Tenant will directly lease,
possess, and use the Facility under this Lease.
(b) Effective Date. The term of this Lease shall commence automatically and
immediately following the effectiveness of the Amended and Restated Declaration of Covenants
and Restrictions which shall become effective automatically and immediately following the
Rejection Effective Time (the "Effective Date").
(c) Related Agreements. Landlord and Tenant, as applicable, agree to work in good
faith to complete the following prior to the Effective Date:
(i) All such parties as may be necessary shall execute and record an
Amended and Restated Declaration of Covenants and Restrictions that shall replace in its
entirety the Declaration of Covenants and Restrictions (the "Amended and Restated
Declaration of Covenants and Restrictions"), as considered necessary or advisable to
permit the lease, use and operation of the Facility by Tenant and Tenant's subtenants in
accordance with and as contemplated in this Lease, and Tenant has been provided fully
executed copies of same and proof of recordation. Landlord shall cause the Amended
and Restated Declaration of Covenants and Restrictions to be executed by the necessary
parties and to become effective immediately following the Rejection Effective Time.
(ii) In accordance with the Rejection Agreement, American shall
assign to Landlord, and Landlord shall assume, with the consent of TXU Energy Services
Company, if required, the TXU Agreements and the Operating Permits (as such term is
defined in the Rejection Agreement), and Landlord shall provide Tenant written
confirmation of same.
(iii) Landlord shall sell to Tenant and Tenant shall purchase the
Equipment at a cost of One Million Five Hundred Thousand Dollars ($1,500,000.00),
paid to Landlord in full on or prior to the Effective Date, and otherwise in accordance
with the Equipment Purchase Agreement.
If any of clauses (i) thru
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(A) an equitable adjustment of the Minimum Guaranteed Jet Fuel
Requirement; and
(B) an equitable abatement of Base Rent, Additional Rent, and other Fees, as
applicable, payable for the period of time that Tenant is prevented from using or
reasonably conducting, in whole or in any material part, its business at the Facility, the
IWTF, the Fuel Farm, the Shared Facilities, or the Common Area, as applicable, in the
same or substantially similar manner as normally conducted in the ordinary course of
business, or may not be so used or conducted without additional material cost to Tenant.
Additionally, if any of clauses (i) thru (iii) are not satisfied (through no fault of Tenant) within
ninety (90) days following the Effective Date, Tenant may terminate this Lease or the affected
portion thereof by giving writing notice thereof to Landlord, in which event this Lease shall be
considered termiriated in its entirety (or with respect to the affected portion, as applicable)
effective as of the Effective Date.
2.2 Termination Options. Tenant shall have the following options to terminate the
Lease prior to the expiration of the Term (each, a "Termination Option"):
(a) Tenant may at its sole option elect to terminate the Lease effective as of
January 31, 2017, by providing to Landlord written notice of such termination no later than
January 31, 2016.
(b) Tenant may at its sole option elect to terminate the Lease effective as of
January 31, 2019, by providing to Landlord written notice of such termination no later than
January 31, 2018.
(c) Tenant may at its sole option elect to terminate the Lease effective as of
January 31, 2021, by providing to Landlord written notice of such termination no later than
January 31, 2020.
(d) Tenant may at its sole option elect to terminate the Lease effective as of
January 31, 2023, by providing to Landlord written notice of such termination no later than
January 31, 2021
If Tenant exercises any of its Termination Options, the Lease shall terminate and be of no further
force or effect as of the designated termination date, and the parties hereto shall have no further
obligations hereunder (except under such provisions which by their terms survive termination or
expiration). Tenant's failure to exercise any of the Termination Options shall not be deemed a
waiver of the other Termination Options.
Notwithstanding the foregoing, Tenant shall have the option to terminate the Lease upon twelve
(12) months' prior written notice to Landlord if any of the following occurs (the "Tenant
Competitor Termination Option"):
(x) Landlord sells, assigns or otherwise transfers or conveys any of its interest
in and to this Lease, the Base, the Facility, the Shared Facilities, the Central Utility Plant, the
Fuel Farm, or the IWTF to a Tenant Competitor; or
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(y) Landlord contracts with or designates a Management Company or Fuel
Services Company that is a Tenant Competitor, or Management Company or Fuel Services
Company assigns or transfers any interest in any management agreement, or any rights or
obligations thereunder, to a Tenant Competitor; or
(z) A Change in Control of Management Company results in Management
Company being P. Tenant Competitor, or a Change in Control of Fuel Services Company results
in Fuel Services Company being a Tenant Competitor.
Tenant shall exercise the Tenant Competitor Termination Option, if at all, no later than the date
that is ninety (90) after the later to occur of (A) the date on which Tenant receives written notice
from Landlord that any of the events contemplated by clauses (x)-(z) will occur (or has occurred)
and (B) the date on which the assignment, transfer, conveyance, contract, or Change in Control
contemplated by clauses (x)-(z), as applicable, becomes effective.
2.3 Surrender. Upon the expiration or earlier termination of this Lease, Tenant shall
immediately surrender possession of the Facility (including all alterations, improvements and
additions to the Facility, unless such items are required to be removed pursuant to Section
14.2 b) to Landlord, and Tenant shall remove, at Tenant's expense, all of its personal property
from the Facility, leaving the Facility in good condition and repair, ordinary wear and tear
excepted. All removable fixtures, equipment, inventory, tooling, appliances, furnishings, and
any other personal property owned by Tenant and located within the Facility and/or the Shared
Facilities shall remain the property of Tenant and, at Tenant's option, may be removed from the
Facility and/or the Shared Facilities at any time; provided, that any damage caused to the Facility
or any of the Shared Facilities in connection with the removal thereof shall be repaired by Tenant
to Landlord's reasonable satisfaction at Tenant's cost. For the avoidance of doubt, the foregoing
list of property shall include all fixture and installed equipment that were added to the test cell
building by Tenant after the commencement date of the Original Facilities Lease or during the
Term of this Lease; provided that the same can be disassembled and removed without damage to
the structure of the test cell building that is not repaired by Tenant. Tenant shall remove all of
Tenant's personal property from the Facility and the Shared Facilities on or before the expiration
of the Term of this Lease or, in the event of any early termination, on or before the later of (i) the
effective date of termination or (ii) such date that is ninety (90) days following the date of notice
or event which gives rise to and effects such early termination in accordance with the provisions
of this Lease. Any of Tenant's personal property not removed from the Facility or the Shared
Facilities on or before the date required in the immediately preceding sentence shall, at
Landlord's option and upon five (5) days' prior written notice to Tenant (during which time
Tenant will be afforded reasonable access to remove such property subject to the foregoing
requirements regarding damage to the Facility), either become the property of Landlord or may
be removed by Landlord and Tenant shall pay to Landlord the cost of such removal within ten
(10) days after Tenant's receipt of an invoice therefor with appropriate supporting
documentation. This provision shall survive any termination of this Lease.
2.4 Holding Over. Should Tenant remain in possession of the Facility (or any portion
thereof) after the expiration or earlier termination of this Lease, Tenant shall become a tenant at
sufferance and shall be liable to pay Base Rent at the rate of 150% of Base Rent due and payable
by Tenant each month, in advance, effective immediately prior to the expiration or earlier
12
termination of this Lease. Such occupancy shall be subject to all the terms and conditions of this
Lease insofar as the same are applicable, including with respect to the payment of Additional
Rent and all other Fees that are due and payable by Tenant hereunder.
ARTICLE III
USE
3. I Use. Tenant may use the Facility and the Shared Facilities for the purpose of the
overhaul, testing, maintenance and repair of aircraft engines, including associated and related
activities, and for such other purposes that are not in conflict with the Amended and Restated
Declaration of Covenants and Restrictions.
ARTICLE IV
UTILITIES
4.1 Utilities and Services to be Obtained by Tenant. Tenant shall contract directly
with and shall be responsible for payment to the applicable utility/service provider for (a) all
telephone and internet used by Tenant in connection with its operations at the Facility, and (b) all
j anitorial, trash removal, extermination and security services (other than as specifically set forth
in this Lease) required by Tenant in connection with its operations at and use of the Facility. If
any other utilities required by Tenant in connection with its operations at the Facility are
necessary or are not being provided for Tenant in accordance with the provisions of Section 4.2,
then to the extent available directly to Tenant and with Landlord's written consent, which shall
not unreasonably be withheld, Tenant may contract directly with and shall be responsible for the
direct payment to the applicable utility provider for such utilities.
4.2 Utilities to be Procured and Distributed by Landlord.
(a) Landlord's Obli ag tion. During the Term, Landlord agrees to procure on
behalf of the entire Base and redistribute to the Facility the following utilities (the "Landlord
Distributed Utilities") at a level that is sufficient to satisfy Tenant's operational requirements at
the Facility:
(i) Electric current for lighting and operation of equipment or
machines requiring electrical consumption.
(ii) Domestic water for lavatory, toilet and other purposes.
(iii) Outgoing effluent from non -industrial sources including, but not
limited to, lavatory sinks, hand washing sinks, drinking fountains, lavatory drains,
kitchen sinks, and toilets.
(iv) Natural gas.
All Landlord Distributed Utilities will be furnished to the Base by third -party utility providers.
Landlord shall maintain the conduits by which the Landlord Distributed Utilities are made
available to the Facility (or removed from the Facility in the case of effluent) by Landlord at
Landlord's expense (the "Conduit Maintenance Expenses") (to be reimbursed by Tenant as set
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forth in Article X). The Landlord Distributed Utilities will be furnished as provided above on a
continuous basis 24 hours per day, 7 days per week, 365 days per year, except for (x) cleaning,
maintenance, and repair pursuant to an established schedule developed in consultation with
Tenant (with a view to minimizing disruption of Tenant operations) and delivered to Tenant no
less than fifteen (15) days in advance, (y) interruptions in Landlord Distributed Utilities that are
the result of unscheduled maintenance or repairs resulting from accidents, emergency situations,
service interruptions by third -party utility providers, or other occurrences beyond the reasonable
control of Landlord and Management Company, in which case no prior notice of interruption to
Tenant is required (however, Landlord shall use good faith efforts to give such notice where and
as promptly as possible), and (z) interruptions in Landlord Distributed Utilities to the extent
caused by the negligence or willful misconduct of Tenant, or any of its agents, employees,
subtenants, or contractors.
4.3 Consideration. In consideration of the Landlord Distributed Utilities, Tenant shall
pay to and reimburse Landlord for its proportionate share, as set forth in this Section 4.3, of the
Utility Costs. Utility Costs pursuant to this Section 4.3 shall be invoiced by Landlord to Tenant
monthly, in arrears. For purposes of this provision, "Utility Costs" means (i) the total actual
charges of the third -party utility provider of each of such Landlord Distributed Utilities that are
charged to Landlord (or Management Company on behalf of Landlord) for the purchase of each
of such Landlord Distributed Utilities in the applicable monthly billing period multiplied by (ii)
(A) Tenant's usage of each of such Landlord Distributed Utilities (as determined by the sub -
meter that measures Tenant's usage of such Landlord Distributed Utilities) during the same
monthly perioddivided by (B) the total of such Landlord Distributed Utilities furnished to the
Base during the same monthly period. Utility Costs shall be net of and reduced by any volume
or other discounts or credits/rebates/incentives extended to Landlord (or Management Company
on behalf of Landlord). Utility Costs shall not include any marls -up or additional fees charged by
Landlord or Management Company or any fees or other costs of Management Company, but
shall include only any applicable distribution charges, taxes, or other fees lawfully charged by
the third party provider of such Landlord Distributed Utilities or any governmental authority.
Subject to any laws, rules or regulations applicable to Landlord, Landlord shall use (and shall
cause Management Company to use) reasonable efforts to purchase and/or provide or cause to be
provided all such Landlord Distributed Utilities at competitive volume pricing.
4.4 ' Management Company. The parties acknowledge that the provision of Landlord
Distributed Utilities herein may be subcontracted to and performed on behalf of Landlord by
Management Company so long as Management Company is properly authorized to and holds
such licenses and permits as required by applicable law in regard to the provision of such
Landlord Distributed Utilities and otherwise complies with the provisions of this Article IV and
other provisions of this Lease applicable to the Landlord Distributed Utilities and Management
Company. Notwithstanding the foregoing, Landlord shall remain fully and primarily liable and
responsible for all of the obligations of Landlord set forth in this Article IV.
ARTICLE V
FUEL FARM; JET FUEL
5.1 Fuel Farm. Landlord owns an aviation jet fuel farm facility at the Base, as
delineated on the Site Plan, that supports and is connected to the Facility by means of associated
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piping (including the piping, the "Fuel Farm"). Some of the associated piping that is a
component of the Fuel Farm is located within the boundaries of the Facility (the "TAESL Pipe
Segment"). The TAESL Pipe Segment is connected to a fuel meter located within the
boundaries of the Facility ("Meter") and an underground storage tank installed in and
constituting part of the Facility ("Tenant Storage"). The Meter and the TAESL Pipe Segment as
delineated on Exhibit B-2 shall be considered part of the Fuel Farm, and the responsibility and
obligation of Landlord that are applicable to the Fuel Farm under the terms of this Lease exist up
to and include the Meter. The Tenant Storage and associated piping between and connecting the
Meter and the Tenant Storage are not a part of the Fuel Farm but are considered part of the
Facility and the responsibility and obligation of Tenant that are applicable to the Facility under
the terms of this Lease. During the Term, without the prior written agreement of Tenant (which
consent shall not be unreasonably withheld, conditioned, or delayed) or unless required by
applicable law, regulations or any governmental authority, Landlord shall not modify or alter or
permit the modification or alteration of the configuration of the Fuel Farm in any manner that
Erectly and materially adversely affects or increases the cost to Tenant of the storage or delivery
of Jet Fuel to Tenant consistent with the provisions of this Article V. If the configuration of the
Fuel Farm is modified or altered by mutual written agreement of Landlord and Tenant, Landlord
and Tenant shall negotiate in good faith the costs of making such changes and the fees to be
charged after such changes are completed.
5.2 Landlord Obli atg ions. Landlord shall, at its expense, do or cause to be done by
the designated Fuel Services Company all of the following during the Term: (i) operate,
maintain, insure and keep in good repair and operating condition all of the Fuel Farm, (ii) operate
and maintain the Fuel Farm in accordance with all applicable permits, certificates, licenses and
all applicable laws and regulations and reasonable industry standards, and in accordance with the
requirements set forth in Exhibit A, (iii) apply for and obtain and keep in full force and effect all
permits, certifications, and licenses necessary to lawfully operate and maintain the Fuel Farm in
compliance with applicable laws and regulations and reasonable industry standards, and (iv)
purchase, as applicable, and store in the Fuel Farm adequate supplies of Jet Fuel and operate and
maintain the Fuel Farm so as to permit the uninterrupted flow of Jet Fuel from and through the
Fuel Farm into the Tenant Storage as requested by Tenant for its normal operations at the
Facility generally consistent with historical usage (collectively, the "Fuel Farm Services"). The
parties acknowledge that any material increases in Tenant's requirements may be subject to then
existing capacity limitations of the Fuel Farm. Landlord or its Fuel Services Company shall
permit and use only one Jet Fuel supplier at a time (the "Designated Fuel Supplier") to input Jet
Fuel at the Fuel Farm and shall use reasonable efforts to purchase Jet Fuel (or, if Tenant shall
elect to purchase Jet Fuel directly from Fuel Services Company's fuel supplier, to cause such Jet
Fuel to be available for purchase directly by Tenant) at the most favorable pricing available. As
of the Effective Date it is understood that such Designated Fuel Supplier is World Fuel Services
Corporation ("World"). Landlord may upon ninety (90) days' prior written notice designate a
replacement Designated Fuel Supplier and Tenant shall thereafter purchase its Jet Fuel from such
entity (for delivery into and storage in the Fuel Farm), provided the economic impact of using
such replacement Designated Fuel Supplier is not materially dissimilar to that then existing with
World (or its qualified successor), and provided further that each Designated Fuel Supplier
(including World) must meet the quality, requirements, and specifications set forth in Exhibit A
(specifically including ATA Specification 103).
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5
5.3 Continuous Service, The Fuel Farm Services will be made available by Landlord
at the levels provided herein on a continuous basis, as needed 24 hours per day, 7 days per week,
365 days per year, in support of Tenant's operation at the Facility, except for (i) cleaning,
maintenance, and repair pursuant to an established schedule developed in consultation with
Tenant (with a view to minimizing disruption of Tenant operations) and delivered to Tenant no
less than fifteen (15) days in advance, (ii) interruptions in Fuel Farm Services that are the result
of the unscheduled maintenance or repairs, accidents, emergency situations, or other occurrences
beyond the reasonable control of Landlord and Fuel Services Company, in which case no prior
notice of interruption may be given to Tenant (however, Landlord shall use good faith efforts to
give such notice: where possible), and (iii) interruptions in Fuel Farm Services caused by the
negligence or willful misconduct of Tenant, or any of its agents, employees, subtenants, or
contractors.
5.4 Sampling. Landlord (or its Fuel Services Company) shall, at its expense, sample
the fuel entering the Fuel Farm and the fuel in the Fuel Farm in accordance with the standards
and requirements set forth in Exhibit A.
5.5 Use by Other Tenants; Defuelin�. Landlord shall not permit or allow anything
other than Jet Fuel to be in any manner introduced into (by defueling or other method) or
delivered to or stored in the Fuel Farm. Landlord or any Adjoining Tenant may purchase from
the Designated Fuel Supplier and store Jet Fuel in the Fuel Farm and Landlord may use the Fuel
Farm and the associated fuel piping (excluding the TAESL Pipe Segment) to pump and withdraw
such Jet Fuel for Landlord or any Adjoining Tenant without any prior notice to Tenant provided
such Jet Fuel and Landlord's operation and such use of the Fuel Farm conform to the standards
set forth and referenced in Exhibit A. Landlord must maintain on a current basis complete and
accurate books and records as set forth in Exhibit A and provide accurate information regarding
the use of the Fuel Farm and inventory of Jet Fuel (including, without limitation, deliveries and
withdrawals of Jet Fuel to and from the Fuel Farm. Landlord shall not, and shall cause Fuel
Services Company to not, draw or permit any other party to draw a negative fuel balance with
respect to Jet Fuel stored in the Fuel Farm by such party (i.e. such party withdraws more Jet Fuel
from the Fuel Farm than such party purchased and pumped into the Fuel Farm); provided,
however, if such a negative fuel balance occurs, such party shall promptly, and in any event no
later than two (2) business days of such party's actual knowledge of its negative fuel balance,
cause enough Jet Fuel to be delivered into the Fuel Farm to bring its fuel balance to a positive
level. The Jet Fuel inventory shall be reconciled monthly as more specifically set forth in
Exhibit A. Tenant shall not and Landlord shall ensure that Landlord, Fuel Services Company,
Adjoining Tenants and any other third -party shall not defuel Jet Fuel or any other fuel into the
Fuel Farm unless through segregated piping into a fully segregated tank and shall not commingle
defueled Jet Fuel or any other fuel or introduce any other substance into the Fuel Farm other than
Jet Fuel in compliance with Exhibit A.
5.6 Consideration for Jet Fuel. For each gallon of Jet Fuel delivered from the Fuel
Farm to the Tenant Storage, Tenant shall pay a fee ("Fuel Fee") to Landlord (or its designated
Fuel Services Company) in an amount equal to forty-five cents ($.45) per gallon. If Tenant
purchases Jet Fuel directly from Landlord (or its designated Fuel Services Company) instead of
the Designated Fuel Supplier, then, in addition to any Fuel Fee, if applicable, Tenant shall also
pay Landlord (or its designated Fuel Services Company) an amount equal to the then -current cost
of Landlord (or its designated Fuel Services Company) paid to a third -party supplier for each
such gallon of Jet Fuel purchased by Tenant from Landlord or its designated Fuel Services
Company (the "Per -Gallon Jet Fuel Cost"). The then -current cost per gallon shall be equal to the
average net cost per gallon of Jet Fuel actually paid by Landlord (or its Fuel Services Company)
to the Designated Fuel Supplier during the month the Jet Fuel is delivered to the Tenant Storage,
such then -current cost per gallon to be reduced by and calculated net of any discounts, incentives
credits or rebates extended to Landlord or its designated Fuel Services Company. The Per -
Gallon Jet Fuel Cost shall not include any mark-up or additional fees, charges or costs of
Landlord or Fuel Services Company, except for the Fuel Fee. Subject to all other provisions of
this Lease, Tenant shall, during each year of the Term, pay a Fuel Fee for no less than 60,000
gallons of Jet Fuel per calendar month (to be prorated for any partial calendar month during the
Term) that Landlord (or its designated Fuel Services Company) is operating and maintaining the
Fuel Farm in accordance with the terms of this Lease (the "Minimum Guaranteed Jet Fuel
Requirement"). 1)y way of example, if Tenant requests delivery of only 40,000 gallons of Jet
Fuel from the Fuel Farm in a given full calendar month, then, in addition to the Fuel Fee
attributable to such 40,000 gallons of Jet Fuel actually delivered, Tenant shall pay to Landlord
(or the designated Fuel Services Company, an additional amount of Fuel Fee equal to forty-five
cents ($.45) per gallon for the 20,000 gallon deficiency. Tenant shall likewise pay the Fuel Fee
for any gallon of Jet Fuel delivered to Tenant Storage in excess of the required minimum 60,000
gallons in a calendar monthly period (as may be prorated for any partial month during the Term).
The Fuel Fee and Per -Gallon Jet Fuel Cost shall be invoiced by Landlord to Tenant monthly, in
arrears, in accordance with Section 10.4. For avoidance of doubt, the Minimum Guaranteed Jet
Fuel Requirement applies only to the delivery of Jet Fuel and not the purchase of Jet Fuel.
Tenant shall have no obligation to purchase any minimum requirement of Jet Fuel from Landlord
or Fuel Services Company, or the Designated Fuel Supplier. Notwithstanding anything herein
to the contrary, Landlord may increase the Fuel Fee by an amount not to exceed three percent
(3%) of the Fuel Fee in effect in the immediately preceding calendar year. Such adjustments
may be made effective not more than one time in any one calendar year with the first such
adjustment to not be effective prior to January 31, 2016. Notice of any such adjustment shall be
provided to Tenant in writing not less than thirty (30) calendar days prior to the effective date of
an adjustment. If there is (i) a loss or disappearance of Jet Fuel purchased by Tenant (including
the initial inventory referenced in Section 5.7 below) that is stored in the Fuel Farm which loss is
in excess of the level of losses allowed in ATA 103 that cannot be adequately explained as a
normal operating loss reasonably beyond Landlord's control (by way of example, the normal
evaporation of Jet Fuel) or (ii) contamination of Jet Fuel purchased by Tenant (including the
initial inventory referenced in Section 5.7 below) that is stored in the Fuel Farm, Landlord (or
Fuel Services Company) shall upon demand replace or reimburse Tenant in an amount equal to
the cost to replace such Jet Fuel (including any delivery charges), except to the extent such loss
or contamination is caused by the negligence or willful misconduct of Tenant, or any of its
agents, employees, subtenants, or contractors. Such replacement and reimbursement shall be in
addition to all other remedies available under this Lease.
5.7 Provision of Jet Fuel. During the Term, Tenant may acquire and have Jet Fuel
delivered to the Tenant Storage, as follows:
(a) Tenant may purchase Jet Fuel directly from Landlord or its Designated
Fuel Supplier and Landlord shall deliver such Jet Fuel to Tenant Storage from the Fuel Farm (or
17
via truck as provided herein when the Fuel Farm is not operable, which delivery via truck shall
be credited against the Minimum Guaranteed Jet Fuel Agreement to the extent not equitably
adjusted pursuant to Section 9.2) in accordance with the applicable provisions of this Article V;
(b) If Tenant, after exercising commercially reasonable efforts, is unable to
purchase from Landlord or its Designated Fuel Supplier an adequate supply of Jet Fuel for
storage in the Fug? Farm and delivery to Tenant Storage, then Tenant may purchase Jet Fuel from
any thir&party fuel provider and have such Jet Fuel delivered into and stored by Landlord (or its
designated Fuel Services Company) in the Fuel Farm for delivery by Landlord (or its designated
Fuel Services Company) to Tenant Storage in accordance with the provisions of this Article V;
provided such Jet Fuel conforms to the standards set forth and referenced in Exhibit A; or
(c) If Landlord or Fuel Services Company is unable to timely deliver into
Tenant Storage any Jet Fuel required by Tenant, then until Landlord or Fuel Services Company
is able to recommence timely delivery of such Jet Fuel to Tenant Storage, Tenant may purchase
Jet Fuel from the Designated Fuel Supplier or any third -party fuel provider and have such Jet
Fuel trucked directly to and stored in the Tenant Storage (or any additional storage tanks
installed by Tenant pursuant to the terms of this Lease), provided such Jet Fuel conforms to the
standards set forth and referenced in Exhibit A.
The parties acknowledge that upon the Effective Date, Tenant shall have purchased from
American the Jet Fuel inventory then remaining stored in the Fuel Farm (approximately 80,000
gallons). On the Effective Date, Landlord (or its designated Fuel Services Company) will
measure and record the quantity of such Jet Fuel and Landlord (or its designated Fuel Services
Company) shall store and manage such inventory of Jet Fuel for delivery by Landlord (or its
designated Fuel Services Company) to Tenant Storage in accordance with the provisions of this
Article V as if pui':hased by Tenant from the Designated Fuel Supplier.
5.8 Pressure Testing and Maintenance. Landlord shall provide Tenant with no less
than thirty (30) days' prior written notice of any scheduled pressure testing, repair or
maintenance to be undertaken at the Fuel Farm. Such testing, repair and maintenance shall be
scheduled after consultation and in cooperation with Tenant at a time that will minimize (i) the
volume of Jet Fuel in the Fuel Farm and (ii) the disruption to Tenant operations at the Facility
and allow Tenant to continue, during such pressuring testing, repair or maintenance, to conduct
business operations in the Facility in the same or substantially similar manner as conducted prior
to such pressure testing, repair or maintenance, without additional cost or expense to Tenant. To
the extent Tenant may require Jet Fuel to be delivered during any such testing, repair or
maintenance, Landlord will or will cause its designated Fuel Services Company to provide for
Jet Fuel deliveries via fuel truck directly into Tenant Storage to Tenant at the then existing Fuel
Fee. Should Landlord or the designated Fuel Services Company fail or be unable to timely
deliver Jet Fuel via fuel truck delivery directly into Tenant Storage as provided above, the
Minimum Guaranteed Jet Fuel Requirement shall be equitably and proportionately adjusted
during and for any time period during which Landlord (or its designated Fuel Services Company)
is unable to deliver Jet Fuel from the Fuel Farm to Tenant Storage in accordance with the terms
of this Lease (whether during any such testing, repair or maintenance or as a result of any other
period that the Fuel Farm is not operable and available to store and deliver Jet Fuel to Tenant in
accordance with the terms of this Lease).
5.9 Termination of Landlord's Obligations. If pressure testing of the Fuel Farm
reveals that the Fuel Farm is in a condition significantly below the industry standards
(specifically ATA Specification 103) maintained by fuel farms with similar capacity to, and
similar services provided by, the Fuel Farm, then Landlord's liabilities and obligations with
respect to this Article V shall terminate on the first anniversary of the Effective Date; provided,
however, Landlord's obligations may be extended for successive periods of one (1) year each by
the mutual agreement of Landlord and Tenant, evidenced in writing at least one -hundred eighty
(180) days prior to the next annual anniversary of the Effective Date. Following such
termination and without payment of any additional fee:
(a) In accordance with a written agreement reasonably acceptable to Landlord
and Tenant, Tenant may retain the right to utilize the TAESL Pipe Segment at Tenant's cost, as
reasonably necessary for purposes of supplying Jet Fuel to Tenant Storage;
(b) Tenant shall have no further obligation or liability to Landlord for any
Fuel Fee or with respect to the Minimum Guaranteed Jet Fuel Requirement; and
(c) In accordance with a written agreement mutually acceptable to Landlord
and Tenant, Tenant may elect to either assume operation of the Fuel Farm directly or contract
with a qualified third -party operator. In either instance, Tenant shall thereafter be granted by
Landlord use of the Fuel Farm facilities at no cost and not subject to any Fuel Fee or Minimum
Guaranteed Jet Fuel Requirement,
5.10 Tenant Fuel Farm. Notwithstanding anything in Section 5.7 or Section 14.2 to the
contrary, and subject to compliance with ail applicable laws, Landlord acknowledges that in lieu
of, or in addition to, the use of the Fuel Farm, Tenant may, at any time during the Term, to
support Tenant's operation, upon one hundred eighty (180) days' prior written notice to Landlord
and the Fuel Services Company, if any, install on the Facility one or more additional fuel storage
tanks and associated meters and piping as necessary for Tenant to receive, store and use Jet Fuel
in support of Tenant's operations at the Facility. Notwithstanding the foregoing, Tenant shall
obtain Landlord's prior written approval, which shall not be unreasonably conditioned, delayed
or withheld, as to the design and location of any additional fuel storage tank (and associated
meters and piping) installed on the Facility. Any tanks, piping and meters installed pursuant to
this Section 5.10 shall be for the exclusive use of Tenant and Tenant shall be responsible for all
maintenance and expense of the same.
5.11 Fuel Services Company. The parties acknowledge that the Fuel Farm may be
managed, maintained and operated by and the obligations with respect to Fuel Farm Services
may be subcontracted to and performed on behalf of Landlord by Fuel Services Company so
long as Fuel Services Company is properly authorized to and holds such licenses and permits as
required by applicable law in regard to the operation of the Fuel Farm and provision of the Fuel
Farm Services and otherwise complies with the provisions of this Article V, and other provisions
of this Lease applicable to the Fuel Farm, Fuel Farm Services and Fuel Services Company.
ARTICLE VI
INDUSTRIAL WASTE TREATMENT FACILITY
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6.1 Industrial Waste Treatment Facility. The parties acknowledge that Landlord will
operate the existing industrial waste treatment facility at the Base and in support of the Facility
as delineated on the Site Plan (the "IWTF" ). During the Term, Landlord shall not modify or
alter the configuration or functionality of the IWTF in any manner that directly increases any
cost or liability to Tenant or directly and materially adversely affects the operations of Tenant at
the Facility or the ability of Landlord to treat all wastewater generated by Tenant, without the
prior written agreement of Tenant (which approval shall not be unreasonably conditioned,
delayed or withheld), unless required by applicable law, regulations, or any governmental
authority or on account of a material change in Tenant's operational requirements at the Facility.
If Landlord determines that the configuration or functionality of the IWTF is required to be
modified or altered, then prior to making such modification or alteration, Landlord shall provide
Tenant written notice of such determination and consult with Tenant in good faith in order to
provide Tenant the option to either (i) agree to or recommend changes to the modification or
alteration or (ii) modify its operational requirements at the Facility to make the modification or
alteration unnecessary.
6.2 Landlord Obli at�ns. Landlord shall, at its expense, provide certain industrial
wastewater services (the "Uplift Services") in support of the Tenant's operation of the Facility as
more specifically delineated in Exhibit C attached hereto. The Uplift Services shall be provided
by Landlord in accordance with this Lease at a level that is sufficient to satisfy Tenant's
operational requirements at the Facility. All Uplift Services will be furnished by Landlord at
Landlord's cost (subject to payment by Tenant of the Uplift Fees as provided in Section 6.4 and
as set forth in Article X). All Uplift Services will be furnished as provided above during Tenant's
regular business hours, except for (x) maintenance, and repair pursuant to an established
schedule developed in consultation with Tenant (with a view to minimizing disruption of Tenant
operations) and delivered to Tenant no less than fifteen (15) days in advance, (y) interruptions
that are the result of unscheduled maintenance or repairs resulting from accidents, emergency
situations, or other occurrences beyond the reasonable control of Landlord and Management
Company, in which case no prior notice of interruption to Tenant is required (however, Landlord
shall use good faith efforts to give such notice where and as promptly as possible), and (z)
interruptions in Uplift Services caused by the negligence or willful misconduct of Tenant, or any
of its agents, employees, subtenants, or contractors.
6.3 Maintenance, Permits, and Licensing. Landlord shall, at its expense, comply with
the standards, requirements, and obligations with respect to the IWTF and Uplift Services as
specifically delineated in Exhibit C.
6.4 Uplift Fees. In consideration of the Uplift Services, Tenant shall pay to Landlord
the Uplift Services fees (the "Uplift Fees") in the amounts specified in Exhibit D (subject to the
Cap imposed by Section 10.2).
6.5 Laboratory Access. Tenant's Permitted Personnel shall have the right to access
and use the L�'ooratory for the purpose of chemical and water analysis during normal business
hours. Tenant may use Landlord's equipment as needed, but shall provide its own supplies and
consumable items.
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6.6 Management Company. The parties acknowledge that the IWTF may be
managed, maintained and operated by and the obligations with respect to the Uplift Services
required of Landlord herein may be subcontracted to and performed on behalf of Landlord by
Management Company so long as Management Company is properly authorized to and holds
such license and permits as required by applicable law, if any, in regard to the operation of the
IWTF and performance of the Uplift Services and otherwise complies with the provisions of this
Article VI and other provisions of this Lease applicable to the IWTF, the Uplift Services and
Management Company. Notwithstanding the foregoing, Landlord shall remain fully and
primarily liable and responsible for all of the obligations of Landlord set forth in this Article VI.
ARTICLE VII
CENTRAL UTILITY PLANT
7.1 Central Utility. The parties acknowledge that Landlord will operate the
Central Utility Plant at the Base and in support of the Facility as delineated on the Site Plan (the
"Central Utility"). During the Term, Landlord shall not modify or alter the configuration
or functionality of the Central Utility Plant in any manner that directly and materially increases
any cost or liability to Tenant or directly and materially adversely affects the operations of
Tenant at the Facility, without the prior written agreement of Tenant, unless required by
applicable law, regulations, or any governmental authority or on account of a material change in
Tenant's operations at the Facility. If Landlord determines that the configuration or functionality
of the Central Utility Plant is required to be modified or altered, then prior to making such
modification or alteration, Landlord shall provide Tenant written notice of such determination
and consult with Tenant in good faith in order to provide Tenant the option to either (1) agree to
or recommend changes to the modification or alteration or (ii) modify its operational
requirements at the Facility to make the modification or alteration unnecessary.
7.2 Landlord Obli ate. During the Term, Landlord shall, at its expense, do all of
the following: (i) operate, maintain, insure and keep in good repair and operating condition the
Central Utility Plant, (ii) operate and maintain the Central Utility Plant in accordance with all
applicable permits, certificates, licenses and all applicable laws and operate and maintain the
Central Utility Plant in accordance with reasonable industry standards, (iii) apply for and obtain
and keep in full force and effect all permits, certifications, and licenses necessary or advisable to
lawfully operate and maintain the Central Utility Plant in compliance with applicable law and
reasonable industry standards, and (iv) furnish the CUP Utilities and Services, or cause the same
to be furnished, to the Facility and for the benefit of Tenant at the level and in the manner set
forth below, but in any event at such level and in such manner as is sufficient to satisfy Tenant's
operational requirements at the Facility. The CUP Utilities and Services will be provided by
Landlord to Tenant at the levels provided herein on a continuous basis, as needed 24 hours per
day, 7 days per week, 365 days per year, in support of Tenant's operation of the Facility, except
for (x) cleaning, maintenance and repair pursuant to an established schedule developed in
consultation with Tenant (with a view to minimizing disruption of Tenant operations) and
delivered to Tenant no less than fifteen (15) days in advance, (y) interruptions in CUP Utilities
and Services that are the result of unscheduled maintenance or repairs resulting from accidents,
emergency situations, or other occurrences beyond the reasonable control of Landlord and
Management Company, in which case no prior notice of interruption to Tenant is required
(however, Landlord shall use good faith efforts to give such notice where and as promptly as
21
possible), and (z)' interruptions in CUP Utilities and Services caused by the negligence or willful
misconduct of Tenant, or any of its agents, employees, subtenants, or contractors.
7.3 CUP Utilities. All CUP Utilities will be furnished by Landlord at Landlord's cost
(subject to payment by Tenant of the CUP Utility Fees as provided in Section 7.5 and as set forth
in Article X) and performed by Landlord in accordance with the requirements more specifically
set forth in Exhibit E hereto. "CUP Utilities" means the following utilities:
(a) Steam;
(li) Compressed Air; and
(c) Chilled Water.
7.4 CUP Services. All CUP Services will be furnished by Landlord at Landlord's
cost and performed by Landlord in accordance with the requirements more specifically set forth
in Exhibit E hereto. "CUP Services" means the following services to be provided by Landlord in
support of and as necessary for Tenant's use and operation of the Facility and the Shared
Facilities:
(a) Lightning Detection;
(b) Fire Monitoring and Protection Services;
(c) Chemical Tank Monitoring; and
(d) HVAC control for the Facility and the Shared Facilities.
7.5 CUP Fees. In consideration of the CUP Utilities and Services, Tenant shall pay
the fees specified in Exhibit F ("CUP Fees") (subject to the Cap imposed by Section
CUP Fees shall be invoiced by Landlord to Tenant monthly, in arrears.
7.6 Management Company. The parties acknowledge that the Central Utility Plant
may be managed, maintained and operated by and the associated obligations with respect to the
CUP Utilities and Services required of Landlord herein may be subcontracted to and performed
on behalf of Landlord by Management Company so long as Management Company is properly
authorized to and holds such licenses and permits as required by applicable law, if any, in regard
to the operation of the Central Utility Plant and performance of the CUP Utilities and Services
and otherwise complies with the provisions of this Article VII and other provisions of this Lease
applicable to the Central Utility Plant, the CUP Utilities and Services and Management
Company. Notwithstanding the foregoing, Landlord shall remain fully and primarily liable and
responsible for all of the obligations of Landlord set forth in this Article VII.
ARTICLE VIII
SHARED FACILITIES AND OTHER SERVICES
8.1 Grant. Landlord hereby grants to Tenant during the Term of this Lease the right
to use and receive the benefit of the Shared Facilities on a continuous basis, 24 hours per day, 7
0101
days per week, 365 days per year, except for (i) interruptions due to maintenance, and repair
pursuant to an established schedule developed in consultation with Tenant (with a view to
minimizing disruption of Tenant operations) and delivered to Tenant no less than thirty (30) days
in advance, (ii) interruptions that are the result of unscheduled maintenance or repairs resulting
from accidents, emergency situations, or other occurrences beyond the reasonable control of
Landlord and Management Company, in which case no prior notice of intezruption to Tenant is
required (however, Landlord shall use good faith efforts to give such notice where and as
promptly as possible), and (iii) interruptions caused by the negligence or willful misconduct of
Tenant, or any of its agents, employees, subtenants, or contractors. Tenant and Tenant's
Permitted Personnel (and reasonably necessary vendors, contractors and similar guests escorted
at all times by Tenant's Permitted Personnel) shall have the right of ingress to and egress from
the applicable Shared Facilities to and from the Facility without leaving the Base. The use of the
Shared Facilities, by Landlord and such other tenants of the Landlord Adjoining Property
("Adjoining Tenants") to whom Landlord has granted the right to use the Shared Facilities shall
not interfere in any material manner with Tenant's use of the Shared Facilities in support of its
operations at the Facility or any other material rights of Tenant as provided herein. The use of
the Shared Facilities by Tenant shall not interfere in any material manner with Landlord's or
Adjoining Tenants' use of the Shared Facilities in support of their respective operations at the
Base; provided such use by Landlord or such Adjoining Tenants is not in conflict with Tenant's
permitted use of the Shared Facilities.
(a) Hazardous Waste Building. Landlord shall ensure that Tenant has the
exclusive use of that portion of the Hazardous Waste Building as delineated on the Site Plan as
being for the exclusive use of the Tenant.
(b) CMS Building. Landlord shall ensure that Tenant has the exclusive use of
that portion of the CMS Building as delineated on the Site Plan as being for the exclusive use of
the Tenant, and Tenant's use of the remainder of the CMS Building shall be nonexclusive. Use
of the CMS Building shall be restricted to Landlord's Permitted Personnel, Tenant's Permitted
Personnel and Adjoining Tenant's Permitted Personnel, and their respective vendors, contractors
and similar guests to be escorted at all time.
(c) Communications Room. Tenant's use of the Communications Room will
be non-exclusive subject to the following provisions. Landlord shall restrict use of and access to
the Communications Room to Landlord's Permitted Personnel, Tenant's Permitted Personnel
and Adjoining Tenant's Permitted Personnel, and their respective vendors, contractors and
similar guests to be escorted at all time. Tenant and Landlord mutually acknowledge that both
paz-ties are currently users of the Communications Room and will have continuing rights to such
use subject to the provisions of this Article VIII.
(i) The parties acknowledge that certain equipment owned by Tenant
currently located in the Communications Room is the property of and is solely for the
exclusive use of the Tenant, such equipment being more particularly described on
Exhibit J; that the location of Tenant's equipment will not be changed without Tenant's
written consent. Tenant is responsible for the insurance, maintenance and repair of such
Tenant equipment, except for loss or damage resulting from the negligence or willful
misconduct of Landlord, Management Company or any other permitted user of the
23
Communications Room for which Landlord, to the extent permitted by law, shall be
solely responsible and defend, indemnify and hold harmless Tenant therefrom.
(ii) The parties also acknowledge that certain equipment owned by
Landlord currently located in the Communications Room is the property of and is solely
for the exclusive use of the Landlord; that the Tenant shall not move, modify, or interfere
with in pny way the Landlord's equipment without the Landlord's written consent.
Landlord is responsible for the insurance, maintenance and repair of such Landlord
equipment except for loss or damage resulting from the negligence or willful misconduct
of Tenant or its employees or agents for which Tenant shall be solely responsible and
defend, indemnify and hold harmless Landlord therefrom.
(iii) Tenant consents to Landlord adding other users to the
Communications Room, provided that (i) Landlord gives Tenant no less than seven (7)
days' written notice prior to any third party being granted use of the Communications
Room, (ii) Landlord will provide for appropriate secured access to the Communications
Room, and (iii) upon request of Tenant, Landlord will provide a mutually agreed
physically segregated area to which Tenant can move its equipment, which area will be
allocated for the exclusive use of Tenant in a manner reasonably acceptable to Tenant
prior to adding any additional users, provided that Tenant shall solely be responsible for
any costs associated with provision of such physically segregated area.
(iv) Landlord shall keep the temperature of the Communications Room
at 68-74 degrees Fahrenheit or such other optimal temperature range as Landlord may
specify (which shall have no adverse impact upon Tenant's operations or equipment) by
giving no less than thirty (30) days' advanced written notice; provided, however, to the
extent tha? the parties mutually determine that HVAC controls are installed that permit
monitoring from within the Facility or the Communications Room (rather than from the
Central Utility Plant), Tenant shall be responsible for maintaining the required
temperature of the Communications Room so long as Tenant's use of the
Communications Room has not been terminated in accordance with Section 8.1(c)(y).
(v) Notwithstanding anything to the contrary herein, Tenant shall
cause all of the equipment owned by Tenant currently located in the Communications
Room to be relocated to the Facility no later than December 31, 2015, and commencing
on the earlier of January 1, 2016, or such date that Tenant notifies Landlord that Tenant
has relocated its equipment and no longer requires use of the Communications Room,
Tenant's right to use and any obligations of Tenant with regard to the Communications
Room shall terminate. Tenant shall receive a rent credit ("Rent Credit") from Landlord in
an amount equal to the actual costs reasonably incurred by Tenant, as evidenced by
reasonably sufficient supporting documentation, to construct a new communications
room within the Facility; provided, however, such Rent Credit shall not exceed Three
Hundred Thousand Dollars ($300,000.00). The Rent Credit shall be applied against Base
Rent, Additional Rent and all other fees or charges due and payable as required hereunder
in twelve (12) equal monthly installments commencing on January 1, 2016.
24
(dj Automotive Shop. Tenant shall have and Landlord shall ensure that
Tenant has access to and the exclusive use of the Automotive Shop; provided that either
Landlord or Tenant may terminate such exclusive use upon fifteen (15) days' prior written notice
to the other party. If Landlord exercises its termination right pursuant to this Section 8.1(d),
Tenant shall be permitted to enter into a sublease with the then -current tenant of the Automotive
Shop for continued access to and use of the Automotive Shop. If, prior to the effective date of a
termination pursuant to this Section 8.1(d), Tenant does not enter into such a sublease for the use
of the Automotive Shop, Tenant shall remove all personal property of Tenant and its vendors and
customers from the Automotive Shop on or before the effective date of the termination.
8.2 Landlord's Obli atg ions.
(a) Shared Facilities. Landlord shall, at Landlord's cost, operate, maintain
and keep in good repair and operating condition each and every part of the Shared Facilities in
order to permit the continuous and uninterrupted operation of the Facility by Tenant as necessary
for and so as to not materially interfere with or materially and adversely impact in any way the
conduct of Tenant's business at the Facility, except (i) for cleaning, maintenance and repair
pursuant to an established schedule developed in consultation with Tenant (with a view to
minimizing disruption of Tenant operations) and delivered to Tenant no less than fifteen (15)
days in advance, and (ii) for Shared Facilities Interruptions that are caused by the negligence or
willful misconduct of Tenant or any of Tenant's agents, employees, subtenants or contractors or
resulting from accidents or emergency situations beyond the reasonable control of Landlord and
Management Company, in which case no notice of interruption to Tenant is required (however,
Landlord shall use good faith efforts to give such notice where and as promptly possible).
Subject to compliance with the foregoing provisions, Landlord and Landlord's Permitted
Personnel shall be permitted reasonable access to the Facility to inspect, repair and maintain any
portion of the Shared Facilities (lift station, piping, conduits, drains, etc.), any meters related to
the Landlord Distributed Utilities or the CUP, and any piping supporting the Fuel Farm that are
located within the Facility. Landlord acknowledges that such access may require an escort with
respect to secured or proprietary areas of the Facility and compliance with Tenant's security and
safety plans and procedures. For purposes of this Section 8.2(a), Landlord's obligations
hereunder to operate the Hazardous Waste Building shall be limited to (i) providing access to the
building, (ii) providing electricity to the building, and (iii) securing the Hazardous Waste
Building from access from third parties.
(b) Security Services. Landlord shall provide security services in regard to
the Shared Facilities to restrict access in accordance with reasonable and mutually agreed upon
security plans and procedures, including restriction of access to the authorized employees of
Landlord, Tenant, and Adjoining Tenants, and their authorized vendors, contractors, customers,
and suppliers, which vendors, contractors, customers and suppliers shall be escorted at all times
by Landlord, Tenant and Adjoining Tenant, as applicable. If an unauthorized person has
accessed the Shared Facilities, the party becoming aware of such unauthorized access shall
immediately notify the opposite party of such unauthorized access.
(c) Common Area Services. Landlord agrees to operate, repair and maintain
the Common Area of the Base consistent with standard industry practices pertaining to the
current use of the Base (the "Common Area Services'). In consideration of the Common Area
Services, Tenant shall pay to Landlord the Common Area Services fees (the "Common Area
Fees") in the amounts specified in Exhibit I (subject to the Cap imposed by Section 10.2).
(d) Miscellaneous Maintenance Services. Landlord agrees to perform certain
miscellaneous maintenance services for Tenant in respect of components and spaces located in
the Facility (the "Miscellaneous Maintenance Services"). For the purpose of performing these
services, Landlord's Permitted Personnel shall have the right to access the Facility as necessary
to perform such Miscellaneous Maintenance Services. As part of such Miscellaneous
Maintenance Services, Landlord, at its expense, shall (i) monitor and, to the extent necessary,
pump out such water as may collect in the fuel and/or communications pits; and (ii) maintain the
pressure indicator valves.
8.3 Additional Rent. In consideration of the use of the Shared Facilities and
Landlord's perfot rnance of the Miscellaneous Maintenance Services, Tenant shall pay the
Additional Rent in accordance with Article X.
8.4 Management Company. The parties acknowledge that the Shared Facilities may
be managed, maintained and operated by and the associated obligations with respect to the
Shared Facilities, the Common Area Services and the Miscellaneous Maintenance Services
required of Landlord herein may be subcontracted to and performed on behalf of Landlord by
Management Company so long as Management Company is properly authorized to and holds
such licenses and permits as required by applicable law, if any, in regard to the operation of the
Shared Facilities and Common Area and performance of the obligations set forth in this Article
VIII and other provisions of this Lease applicable to the Shared Facilities, the Common Area
Services, the Miscellaneous Maintenance Services and Management Company. Notwithstanding
the foregoing, Landlord shall remain fully and primarily liable and responsible for all of the
obligations of Landlord set forth in this Article VIII.
ARTICLE IX
INTERRUPTIONS
9.1 Distribution Interruption. It is hereby agreed that if at any time during the Term
(i) the conduits by which Landlord makes the Landlord Distributed Utilities available to the
Facility fail or become obstructed such that Tenant is no longer receiving any or all of the Tenant
Distributed Utilities at the level and in compliance with the standards and requirements of Article
IV for a period of more than six (6) hours in a twenty-four (24) hour period after Tenant advises
Landlord in writing that such failure exists and is continuing, (ii) to the extent such failure has
not been caused by the negligence or willful misconduct of Tenant or any of Tenant's agents,
employees, subtenants, or contractors, and (iii) due to such failure, the Facility or the Shared
Facilities cannot be reasonably used by Tenant, in whole or in any material part, to conduct
Tenant's business operations at the Facility or the Shared Facilities in the same or substantially
similar manner as normally conducted in the ordinary course of business, or may not be so used
and conducted without additional material cost to Tenant ("Distribution Interruption"), then
Tenant shall be entitled to an equitable adjustment of the Minimum Guaranteed Jet Fuel
Requirement (in proportion to the extent such Distribution Interruption directly and adversely
impacts the operations of Tenant).
Additionally, (1) if the cause of such Distribution Interruption is due to the negligence or willful
conduct of, any of Landlord, Management Company, Adjoining Subtenants, or their respective
agents, employees, or contractors ("Landlord Responsible Parties"), or (2) in the event of a
Landlord Recovery Failure, then, in addition to the remedies set forth above in this Section 9.1,
Tenant shall also be entitled to an equitable abatement of the Base Rent, Additional Rent, and
other Fees, as applicable, payable for (i) the period of time of any such Distribution Interruption
caused by the negligence or willful conduct of any of the Landlord Responsible Parties, and (ii)
the period of time of any Landlord Recovery Failure.
For the avoidance of doubt, a blackout, water main leak, or other general interruption in the
services furnished to the Base (i.e. prior to the point of entry upon the Base) by a third -party
provider and not caused by the negligence or willful acts of Landlord (such as non-payment)
shall not constitute a Distribution Interruption.
9.2 Fuel Services Interruption. It is hereby agreed that if at any time during the Team
(i) Tenant is unable to obtain the required quantities of Jet Fuel it is entitled to receive from the
Fuel Farm for a'period of more than twelve (12) hours after Tenant advises Landlord in writing
that such inability to obtain fuel exists and is continuing, (ii) to the extent such inability to obtain
fuel has not been caused by the negligence or willful misconduct of Tenant or any of Tenant's
agents, employees, subtenants or contractors, and (iii) due to such inability to obtain such Jet
Fuel Tenant cannot conduct business operations in the Facility in the same or substantially
similar manner as conducted prior to such failure, or may not be so conducted without additional
material cost or expense to Tenant ("Fuel Services Interruption"), then Landlord shall provide to
Tenant, at Landlord's cost and liability, an alternative to the Fuel Farm Services, which will
provide for a lawful method by which to infuse Jet Fuel into the Tenant Storage, which method
shall comply with ATA Specification 103, all applicable rules and regulations and other
applicable provisions of Exhibit A. If Landlord fails to provide an alternative to Tenant, then
Tenant shall be entitled to:
(A) an equitable adjustment
Requirement; and
of the Minimum Guaranteed Jet Fuel
(B) an equitable abatement of Base Rent, Additional Rent, and other Fees, as
applicable, payable for the period of time that Tenant is prevented from using or
reasonably conducting, in whole or in any material part, its business at the Facility, the
IWTF, the Fuel Farm, the Shared Facilities, or the Common Area, as applicable, in the
same or substantially similar manner as normally conducted in the ordinary course of
business, or may not be so used or conducted without additional material cost to Tenant.
9.3 Uplift Services Interruption. It is hereby agreed that if at any time during the
Term (i) Landlord fails to comply with its obligations to make available the Uplift Services (or
cause the same to be available) in accordance with the requirements of Article VI and Exhibit C
for a period of more than forty-eight (48) continuous hours after Tenant advises in writing that
such failure exists and is continuing, (ii) to the extent such failure has not been caused by the
negligence or willful misconduct of Tenant or any of Tenant's agents, employees, subtenants, or
contractors (an "Uplift Services Interruption"), then Landlord shall provide to Tenant, at
Landlord's cost acid liability, an alternative to the Uplift Services, which will provide for the
27
lawful treatment and disposal of Tenant's wastewater. If Landlord fails to provide an alternative
to Tenant, then Tenant shall be entitled to:
(A) an equitable adjustment of the Minimum Guaranteed Jet Fuel Requirement
in proportion to the extent such Uplift Services Interruption directly and adversely
impacts the operations of Tenant); and
(B) an equitable abatement of Base Rent, Additional Rent, and other Fees, as
applicable, in the amount of the Uplift Fees payable for the period of time that the
Facility; or the Shared Facilities cannot be reasonably used by Tenant, in whole or in any
material part, to conduct Tenant's business operations at the Facility, the IWTF, the Fuel
Farm, the Shared Facilities, or Common Area, as applicable, in the same or substantially
similar manner as normally conducted in the ordinary course of business, or may not be
so used or conducted without additional material cost to Tenant.
9.4 CUP Services Interruption. It is hereby agreed that if at any time during the Term
(i) Landlord fails to comply with its obligations to maintain and operate the Central Utility Plant
and to provide (or cause to be provided) the CUP Utilities and/or the CUP Services (collectively,
the "Central Utility Services") in accordance with the requirements of Article VII and Exhibit E
for a period in excess of that provided in the applicable chart set forth in Exhibit E following
written notice from Tenant to Landlord that such failure exists and is continuing, (ii) to the extent
such inability to obtain the Central Utility Services has not been caused by the negligence or
willful misconduct of Tenant or any of Tenant's agents, employees, subtenants, or contractors,
and (iii) due to such failure the Facility or the Shared Facilities cannot be reasonably used by
Tenant, in whole or in any material part, to conduct Tenant's business operations in the Facility
or the Shared Facilities in the same or substantially similar manner as normally conducted in the
ordinary course of business, or may not be so conducted without material additional cost or
expense to Tenant ("CUP Services Interruption"), then Tenant shall be entitled to:
(�-�) an equitable adjustment of the Minimum Guaranteed Jet Fuel Requirement
in proportion to the extent such CUP Services Interruption directly and adversely
impacts the operations of Tenant); and
(B) an equitable abatement of Base Rent, Additional Rent, and other Fees, as
applicable, payable for (1) the period of time of any such CUP Services Interruption and
(2) the period of time of any Landlord Recovery Failure,
9.5 Shared Facilities Interruption. It is hereby agreed that if at any time during the
Term (i) Landlord fails to comply with its obligations to operate and maintain (or cause the
maintenance and:, operation of) the Shared Facilities or to provide Tenant with the beneficial use
of any one or more of the Shared Facilities to the extent required by Article VIII for a period of
more than six (6) hours in a twenty-four (24) hour period with respect to the Communications
Room or forty-eight (48) hours in a five (5) day period with respect to the Hazardous Waste
Building or CMS Building, in each case after Tenant advises Landlord in writing of that such
Failure exists and is continuing, (ii) to the extent such failure has not been caused by the
negligence or willful misconduct of Tenant or any of Tenant's agents, employees, subtenants or
contractors, and (iii) due to such failure the Facility or Shared Facilities cannot be reasonably
used by Tenant, in whole or in any material part, to conduct Tenant's business operations in the
Facility or Shared Facilities in the same or substantially similar manner as normally conducted in
the ordinary course of business, or may not be so used or conducted without material additional
cost or expense to Tenant (a "Shared Facilities Interruption"), then Tenant shall be entitled to
(A) an equitable adjustment of the Minimum Guaranteed Jet Fuel Requirement
in proportion to the extent such Shared Facilities Interruption directly and adversely
impacts the operations of Tenant); and
(B) an equitable abatement of such Base Rent, Additional Rent, and other
Fees, as applicable, payable by Tenant hereunder for (1) the period of time of such
Shared Facilities Interruption and (2) the period of time of any Landlord Recovery
Failure.
9.6. Additional Remedies. In addition to the remedies set forth in Sections 9.1
through 9_5, if as a direct result of the applicable Interruption, the Facility or Shared Facilities
cannot be reasonably used by Tenant, in whole or in any material part, to conduct business
operations at the Facility or Shared Facilities in the same or substantially similar manner as
normally conducted in the ordinary course of business, or if such business operations may not be
so used or conducted without additional material cost or expense to Tenant, and (1) if the cause
of the Interruption is due to the negligence or willful conduct of any of the Landlord Responsible
Parties, or (2) in the event of a Landlord Recovery Failure, then:
-(a) Landlord will pay directly or reimburse Tenant (if paid and incurred by
Tenant) any Tenant Recovery Expenses; and
(b) Landlord will (to the extent permitted by law) defend and indemnify
Tenant from all direct damages incurred by Tenant directly resulting from such
Interruption and any Landlord Recovery Failure; provided, that for avoidance of doubt,
no third -party damages or special or consequential damages may be recovered under this
clause (b).
9.7. Abated Amounts. For avoidance of doubt, the Base Rent, Additional Rent, and
other Fees abated in accordance with Sections 9.1 through 9_5 shall be only that amount which is
(1) applicable to the Uplift Services, the Fuel Farm Services, the CUP Services or any other
services to be provided by Landlord herein that Tenant is unable to use or receive the benefit of
in regard to the corresponding services, and (2) applicable to that portion of the Facility or
Shared Facilities that cannot be reasonably used by Tenant, in whole or in any material part, to
conduct Tenant's business operations at the Facility or the Shared Facilities in the same or
substantially similar manner as normally conducted in the ordinary course of business, or may
not be so used without additional material cost to Tenant, in each case directly as a result of such
Interruption or Landlord Recovery Failure. At the time of payment of Base Rent, Additional
Rent, and other Fees, Tenant will provide written notice to Landlord setting forth the amount of
Base Rent, Additional Rent, and other Fees, as applicable, that is abated in accordance with this
Article IX, and providing an explanation in reasonable detail of the reasons for such abatement.
If within five (5) days of receipt of such notice from Tenant, Landlord provides Tenant written
notice setting forth in good faith reasonable grounds for disputing Tenant's right to abate the
29
amount set forth in Tenant's written notice, then Tenant shall deposit the disputed amount into an
escrow account until such dispute is resolved. The parties agree to meet and negotiate in good
faith to resolve such dispute, provided that if the dispute is not resolved within sixty (60) days of
the date the disputed amount is deposited into the escrow account, then either party may
commence an action in a court of competent jurisdiction seeking a judgment relating to the
disputed amount. The prevailing party in any such court action shall be entitled to recover from
the other party all .costs of the escrow account and an amount equal to the reasonable attorney
fees and costs incurred in obtaining such favorable judgment in the court action.
9.8. Force Mateure. Notwithstanding the foregoing, Tenant is not entitled to the
remedies set forth in this Article IX if the applicable Interruption is due to strikes, acts of God,
shortages of labor or materials, war, terrorist acts, actions by a utility or service provider, civil
disturbances and other causes beyond the reasonable control of the Landlord Responsible Parties,
in each case solely to the extent not due to, or resulting from, the negligence or willful conduct of
any of the Landlord Responsible Parties; provided, however, Tenant will be entitled to the
remedies set forth in this Article IX in the event of and for the duration of any period of time
applicable to a -Landlord Recovery Failure.
ARTICLE X
RENT
10.1 Base Rent. Tenant agrees to pay "Base Rent" to Landlord, without demand or
notice, in advance in the following amount (prorated on a per diem basis for any partial month):
PERIOD
BASE RENT PER MONTH
ANNUAL BASE RENT
Effective Date —
$203,500.00
$25442,000.00
01/31/2016
02/01/2016-
$210,622.50
$2,527,470.00
O1/31/2017
02/01/2017-
$217,994.29
$25615,931.48
O1/31/2018
02/01/2018-
$225,624.09
$2,707,489.08
O1/31/2019
02/01/2019-
$233,520.93
$25802,251.16
01 /31 /2020
02/01/2020-
$2415694.16
$259005329092
01 /31 /2021
02/01/2021-
$250,153.46
$33001,841.52
01 /31 /2022
02/01/2022-
$2585908483
$3065905.96
01 /31 /2023
02/01/2023-
$267,970.64
$3,215,647.68
01 /31 /2024
02/01/2024-
$2775349061
$35328,195.32
01 /31 /2025
30
10.2 Uplift Fees CUP Fees and Common Area Fees Cap. Notwithstanding anything
herein to the contrary, Tenant's combined annual payment of the Uplift Fees, the CUP Fees and
the Common Area Fees shall not exceed the Cap for each year of the Lease. As used herein, the
"Ca " shall mean Seven Million Dollars ($7,000,000.00) for the first twelve (12) months of the
Lease, and the Cap will be increased by three percent (3%) for the ensuing twelve (12) months
and for each subsequent twelve (12) month period during the remaining Term of the Lease.
10.3 Additional Rent. As consideration for the use of the Shared Facilities and
Landlord's performance of the CUP Services and the Miscellaneous Maintenance Services,
Tenant agrees tpay "Additional Rent" (herein so called) to Landlord, without demand or notice,
in advance for each month of the Term, in the amount of Ten Thousand Dollars ($10,000.00) per
month (to be prorated on a per diem basis for any partial month); provided, however, such
amount shall be reduced to Nine Thousand Dollars ($9,000.00) per month (to be prorated on a
per diem basis for any partial month) upon Tenant ceasing use of the Communications Room in
accordance with Section 8.1(c)(v).
10.4 Payment.
(a) Fixed Monthly. Base Rent and the Additional Rent shall be due and
payable by Tenant, in advance, on or before the first (1st) day of each calendar month at such
place and to such party as Landlord shall designate in writing from time to time. Such amounts
shall be prorated for any fractional calendar month. Tenant shall be entitled, at Tenant's
discretion, to make such payments in one or more lump sum(s) so long as the full amount of
Base Rent and Additional Rent are paid in their entirety by the first (1s) day of the month in
which they are due.
(b) Variable. Utilities Costs, Conduit Maintenance Expenses, Fuel Fee, Uplift
Fees, CUP Fees, Common Area Fees, Conduit Maintenance Fees, and other fees assessed for
services provided in accordance with Exhibit E shall be due and payable by Tenant within thirty
(30) days after receipt of an invoice therefor that is accompanied by an itemized invoice with
reasonably sufficient supporting data and calculations. Payment shall be submitted to such
account and payable to Landlord or such party as Landlord (or Management Company pursuant
to written authorization to act on Landlord's behalf) shall designate in writing from time to time
prior to payment by Tenant; provided that payment for the Fuel Fee shall be remitted to Fuel
Services Company unless otherwise designated in writing by Landlord prior to payment by
Tenant. Tenant shall be entitled, at Tenant's discretion, to make any such payments in one or
more lump sum(s).
10.5 Taxes and Other Charges. Tenant agrees to pay, prior to the delinquency thereof,
(i) all taxes, assessments, license fees, excise and other charges levied or assessed by any
governmental or quasi -governmental authority against personal property, furniture or fixtures on
the Facility, and (ii) any other taxes, assessments, license fees, excise and other charges levied or
assessed by any governmental or quasi -governmental authority on account of the operations of
Tenant at, or conduct of business by Tenant, in or from the Facility; provided that any such other
taxes referenced in this clause (ii) are of general applicability to all similarly situated taxpayers
and not solely directed or applicable to the operations of Tenant at or its conduct of business by
Tenant, in or from the Facility. Tenant shall also pay to Landlord the amount of any applicable
31
sales, use or excise tax with respect to any Base Rent, Additional Rent or Fees due Landlord
hereunder (but excluding any such taxes attributable to fees and costs paid or reimbursed by
Landlord to Management Company or Fuel Services Company), whether the same be levied,
imposed or assessed by the State of Texas or any other federal state, county or municipal
governmental entity or agency; provided, however, that Tenant shall not be liable for such
amounts where Tenant has provided Landlord an exemption certificate, direct pay permit, or
other suitable evidence of exemption from the imposition of such tax. For the sake of clarity,
Tenant and Landlord shall each be responsible for taxes, assessments, fees and other charges
levied on their own income, whether gross or net, capital or payroll, or franchise taxes or taxes
imposed for the privilege of doing business in a jurisdiction. Tenant, upon written notice thereof
to Landlord, may contest in good faith any such tax, imposition, charge or assessment levied by
any governmental authority at Tenant's cost, and in such event may permit such tax, imposition,
charge or assessment to remain unsatisfied during the period of such contest and any appeal
therefrom; provided, however, upon request of Landlord, Tenant shall provide such security to
Landlord or take such other permitted actions as Landlord shall reasonably require to protect
against loss or impairment of Landlord's interest in the Facility and shall in any event pay such
tax, imposition, charge or assessment (or post bond or other security therefore in a manner that
will prevent such loss or impairment) before any such loss or impairment occurs. If Landlord
reasonably determines that any such loss or impairment may occur, Tenant shall, within ten (10)
days after notice from Landlord, pay such tax, imposition, charge or assessment in full (or post
bond or other security therefore in a manner that will prevent such loss or impairment). If
Tenant fails to pay such tax, imposition, charge or assessment in full (or post such bond or other
security) within,; such ten (10) day period or upon completion of such contest, Landlord may
apply the security provided to Landlord by Tenant under this Section to pay such tax, imposition,
charge or assessment. Where Landlord receives a refund, credit or other benefit related to such a
contest, Landlord shall immediately reimburse Tenant such amount, together with any interest or
other additions received thereon. Tenant shall furnish to Landlord promptly upon written request
proof of the payment of or other evidence of favorable disposition of any such tax, assessment or
other governmental or similar charge which is payable by Tenant as set forth in this Section.
10.6 Audit Rights.
(a) Documentation Review. Upon written notice delivered to Landlord within
thirty (30) days of Tenant's receipt of an invoice for the payment of any cost or fee provided for
in this Article X. Tenant shall have the right to conduct such inspections and review and audit
any and all relevant documentation of or relied upon by Landlord, Management Company or
Fuel Services Company relating to the incurring and provision of any service provided for in this
Lease and computation of any such cost or fee set forth in such invoice. Notwithstanding
anything to the contrary set forth herein, Tenant shall have the right to conduct an inspection and
review and audit documentation relating to but not limited to: (i) the calculation and supporting
costs related to all Fees, (ii) Landlord Distributed Utilities and corresponding Utility Costs, (iii)
the determination of equitable abatements and adjustments to rents, fees and charges due to
Distribution Interruptions, CUP Services Interruptions, Fuel Services Interruptions, Uplift
Services Interruptions, and Shared Facilities Interruptions, (iv) the cost of providing and quantity
of the CUP Utilities and Services, including, without limitation, the actual cost of utilities
utilized in providing the CUP Utilities, (v) the quantities of Uplift Services provided and the
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actual costs of providing the Uplift Services, and (vi) the quantities of Jet Fuel delivered from the
Fuel Farm to the Tenant Storage and the actual cost of such Jet Fuel.
(b) Services Review and Inspection. Upon reasonable notice to Landlord,
Tenant shall also have access to: (i) the Fuel Farm and all associated records, (ii) the Shared
Facilities and all associated records, and (iii) the IWTF and all associated records, in each case
for the purpose of a compliance audit and verification of the facilities and services provided.
(c) Procedure and Results. Any audit pursuant to Section 10.6(a) shall be
conducted at the expense of Tenant, except as otherwise expressly provided. Tenant shall
promptly provide Landlord with a copy of the written audit report prepared by Tenant or
Tenant's auditor. If the written audit report proves that the aggregate rent, costs or Fees were
overstated by Landlord by more than five percent (5%) of the actual rent, costs or Fees that were
due to Landlord pursuant to this Lease for the applicable period so audited, then Landlord will
pay to Tenant, upon demand, any actual, out-of-pocket costs reasonably incurred by Tenant in
connection with such audit. In any event, Landlord shall reimburse Tenant the amount that the
audit determined was overcharged by Landlord if such amounts were already paid by Tenant.
Notwithstanding anything to the contrary in this provision, upon request, Landlord shall provide
and shall cause Management Company and Fuels Services Company to provide Tenant access to
all its records related to Landlord's provision of the Fuel Farm Services and the Uplift Services,
as applicable, so that Tenant may audit Landlord's compliance with Rules and Regulations and
applicable standards and requirements set forth in Sections 5.2 and 6_2 in connection with the
performance of Fuel Farm Services and the Uplift Services.
(d) Landlord Audit Right. Tenant agrees that Landlord shall, until the
expiration of three (3) years after the expiration or termination of this Lease, have access to and
the right to exarome any directly pertinent books, documents, papers and records of Tenant
which are required to evaluate the compliance with terms of this Lease (but excluding any
privileged and confidential attorney/client communications or work product, including
communications with, or reports or documents produced by or directed to Tenant's attorneys).
Tenant agrees that, upon at least seventy-two (72) hours' prior written notice to Tenant, Landlord
shall have reasonable access during normal working hours to all necessary Tenant facilities
required for such examination and, if available, shall be provided adequate and appropriate
workspace in order to conduct examination in compliance with the provisions of this Section
10.6(d). Landlord shall not interfere with Tenant's normal business operations and shall comply
with all of Tenant's security and safety procedures at its facilities. To the extent permitted by
applicable law, Landlord shall maintain as strictly confidential, and shall cause its representatives
conducting any such examination to execute in favor of Tenant a confidentiality agreement (in
Form prepared by Tenant which shall be subject to all applicable laws) regarding, all information
examined, the results of any such examination, and the resolution of any disputed issues arising
in connection with such examination. The right to examination granted in this Section 10.6(d) is
personal to the initial Landlord named in this Lease and to any Permitted Transferee and shall
not be available to and shall be null and void with respect to any other transferee, successor or
assign of Landlord.
10.7 Set _Off Right. If (i) Tenant is entitled to reimbursement and payment from
Landlord fir any Tenant Recovery Expenses or other expenses or damages, (ii) Tenant shall
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have made demand upon Landlord for such reimbursement and payment along with an
explanation in reasonable detail accompanied with supporting documentation, and (iii) Landlord
shall have failed or refused to make such reimbursement and payment to Tenant within five (5)
days of such written demand, then Tenant may set-off against and abate Base Rent, Additional
Rent, and other Fees in an amount equal to such unreimbursed Tenant Recovery Expenses and
such other expenses and damages due to Tenant from Landlord as described in Article IX. Such
right of setoff is subject to Tenant providing written notice to Landlord of the total amount that
Tenant intends to set off and the rent stream or fee against which Tenant intends to set off the
unreimbursed amount of Tenant Recovery Expenses and other expenses and damages. If within
five (5) days of receipt of such notice from Tenant, Landlord provides Tenant written notice
setting forth in good faith reasonable grounds for disputing Tenant's right to set off the amount
set forth in Tenant's written notice, then Tenant shall pay the disputed set-off amount in an
escrow account until such dispute is resolved. If the dispute is not resolved within sixty (60) days
of the date the disputed amount is put into the escrow account, Tenant must commence an action
in a court of competent jurisdiction seeking a judgment relating to the disputed amount. If such
action is commenced, the disputed amount shall remain in the escrow account so long as Tenant
is diligently pursuing a judgment relating to the disputed amount. If such action is not
commenced within sixty (60) days or if Tenant does not diligently pursue the judgment, the
escrow agent shall transfer the disputed amount to Landlord.
ARTICLE XI
INTERRUPTION SELF-HELP RIGHTS
11.1 Alternative Sources. In the event of and during the continuance of any
Interruption and with Landlord's approval, which shall not be unreasonably withheld, Tenant
shall have the right to seek and obtain, at its sole risk, alternative sources for such Landlord
Distributed Utilities, Fuel Farm Services, Uplift Services, CUP Utilities and Services or the
Shared Facilities, as applicable; provided however Landlord's approval shall not be required if
Tenant's self-help activities do not involve and are not conducted on the Base other than the
Facility.
11.2 Injunctive Relief. In addition to all rights and remedies under law in connection
with loss, damage or liability incurred by Tenant by reason of an Interruption, if Tenant
reasonably determines that Landlord has failed to take prompt and reasonable steps to cure and
resolve an Interruption, and provided Tenant has provided or undertaken commercially
reasonable efforts to provide reasonable prior written notice to Landlord, Tenant shall have the
right to seek immediate injunctive or other equitable relief against Landlord to cause Landlord to
take (or authorize and permit Tenant or its contractors to take) such actions in connection with
the IWTF, the Shared Facilities, the Central Utility Plant or other areas of the Base, and in
Landlord's name'; as is reasonably necessary to promptly restore Landlord Distributed Utilities,
Fuel Farm Services, Uplift Services, CUP Utilities or Shared Faculties, as applicable, at
Landlord's expense.
11.3 Curative Actions. If (i) Tenant reasonably determines that Landlord has failed to
take prompt and reasonable steps to cure and resolve an Interruption, (ii) Tenant, as time permits,
has provided, or undertaken commercially reasonable efforts to provide, prior written notice to
Landlord and afforded Landlord an opportunity to timely undertake such curative actions, and
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(iii) such Interruption is affecting a critical service that may cause or result in the risk of
immediate and material damage to Tenant equipment (such as HVAC for the servers in the
Communications Room), facilities, inventory or employees, then Tenant may, but shall not be
required to, undertake such emergency actions as are reasonably necessary to restore or receive
such critical service, at Landlord's expense to the extent permitted by law, and for such purposes
Tenant may enter into and undertake such actions within the IWTF, the Shared Facilities, the
Central Utility Plant, or other areas of the Base as may be necessary; provided that (A) there
must be a commercially reasonable method to replace the service, or to minimize the interruption
to Tenant's operations directly as a result of the Interruption, the cost of which is commercially
reasonable in light of the damage such action is designed to prevent, and (B) Tenant shall be
responsible and liable for any liability or damage resulting from any negligence or willful
misconduct of Tenant or its contractors, agents, employees, or subtenants in connection with
undertaking such -actions and, after taking into account all facts and circumstances, including and
subject to the nee.I for prompt curative action and risk of damage, loss or liability resulting from
such Interruption.
ARTICLE XII
COMPLIANCE WITH LAW; ENVIRONMENTAL
12.1 Compliance with Rules and Regulations. Throughout the Term, Tenant shall (i)
comply or cause compliance with all environmental permits, governmental orders and
compliance plans and all laws, orders, rules, regulations, permits and requirements of duly
constituted public authorities that are applicable to Tenant's use and occupancy of the Facility
(the "Rules and Regulations"), (ii) comply with all environmental permits, governmental orders
and compliance plans and all laws, orders, rules, regulations, permits and requirements of duly
constituted public authorities that are applicable to Tenant in regard to Tenant's use of the
Shared Facilities, the IWTF, the Central Utility Plant, and the Fuel Farm pursuant to this Lease,
solely to the extent such use by Tenant requires Tenant to so comply, and (iii) timely submit to
the appropriate public authorities (with a copy to Landlord) all environmental notifications,
forms, reports and permit applications, alterations, modifications or renewals required in
connection with Tenant's use or occupancy of the Facility. Notwithstanding the foregoing,
Landlord shall be solely responsible and liable for and Tenant shall not be required to comply or
cause compliance with such Rules and Regulations or the terms set forth in clauses (ii) and (iii)
above (or to expend any sums in connection therewith) to the extent of the obligations of
Landlord (and its designated Management Company and Fuel Services Company) with respect to
the ownership and operation of the IWTF and Uplift Services, the Fuel Farm, and the provision
of the Fuel Farm Services, each of which the sole responsibility, obligation and liability of
Landlord (including the designated Management Company and Fuel Services Company, as
applicable) pursuant to the terms of this Lease or if such failure to comply is caused by the
negligence or willful misconduct of Landlord, Management Company, Fuel Services Company
or their respective agents, contractors or employees; provided, however, Tenant will remain
responsible for its specific obligations under this Lease and its negligence or willful misconduct
in connection with its use of the Shared Facilities, the IWTF, the Central Utility Plant, and the
Fuel Farm.
12.2 Hazardous Materials. Subject to Landlord's obligations with respect to the IWTF
and Uplift Services and the Fuel Farm, and associated Fuel Farm Services, all as provided in this
Ki
Lease, any and all Hazardous Materials generated, used, stored, treated or recycled at the Facility
shall be handled and disposed of by Tenant (at Tenant's cost) pursuant to the terms and
provisions of and in compliance with all Rules and Regulations, including all Environmental
Laws. For purposes of this Article, "Hazardous Materials" shall include, but not be limited to,
any petroleum -based products, substances or wastes, including any additives associated
therewith, pesticides, paints, solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids,
explosives and any other substance or material defined or designated as a hazardous or toxic
substance, hazardous waste, hazardous material, pollutant, or other similar term, by any federal
or state environmental statute, law, permit, rule or regulation, applicable to the Facility presently
in effect or that may be promulgated in the future, as such statutes, laws, rules, regulations and
permits may be amended from time to time pertaining to protection of the environment and
preventing pollution (collectively, `Environmental Laws") including (but not limited to) the
following statutes and any applicable state or local equivalent(s): Resource Conservation and
Recovery Act of 1976, 42 U.S.C. § 6901 et seq., Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 40 U.S.C. § 9601 et seq., Clean Air Act, 42 U.S.C. §
7401 et seq., Water Pollution Control Act (Clean Water Act of 1977), 33 U.S.C. § 1251 et seq.,
Federal Insecticide, Fungicide, and Rodenticide Act (Pesticide Act of 1987), 7 U.S.C. § 136 et
seq., Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., Safe Drinking Water Act, 42
U.S.C. § 300(f) et seq.
12.3 Environmental Procedures and Remediation. Subject to Landlord's obligations
and responsibilities with respect to the IWTF, the Uplift Services, and the Fuel Farm, and
associated Fuel Farm Services, all as provided in this Lease, Tenant, its employees, agents,
contractors, guests, or invitees shall not cause, or permit the placement, discharge or disposal of
any industrial or hazardous waste into (i) the sanitary wastewater system or (ii) the IWTF, which
industrial or hazardous waste contains such constituents or characteristics as would (x) cause a
violation' of any of Landlord's industrial and sanitary wastewater discharge permits, as
applicable, or (y) cause a pass through or interference at the City of Fort Worth's Publicly
Owned Treatment Works or at the IWTF, as applicable. Tenant shall not, and its employees,
agents, contractors, guests, and invitees shall not Release or cause the Release of any Hazardous
Material into or onto the environment or the Facility, including but not limited to, the air, surface
or subsurface soil or water such that it causes an Environmental Condition or violates the Rules
and Regulations. In the event of such a Release or the discovery by Tenant of the presence of
Hazardous Materials to the environment, air, surface or subsurface soil or water at or above
levels those which cause an Environmental Condition or a violation of the Rules and
Regulations, Tenant shall promptly notify Landlord of such Release, discovery of Hazardous
Materials, or violation of the Rules and Regulations. Landlord and Tenant shall promptly notify
the applicable governmental authority(s) of such Release, if so required under applicable
Environmental Laws. The party with responsibility under this Lease for such Release shall (and
the other party may, after giving the other party reasonable opportunity to respond, but without
prejudice to seeking reimbursement for such costs from any otherwise responsible party),
promptly hire an environmental consultant, after giving the other party reasonable opportunity to
object, to investigate and delineate the cause, nature and extent of any such Release or presence
of Hazardous Materials. Tenant and Landlord shall consult in good faith and diligently undertake
and complete to Landlord's reasonable satisfaction the remediation of any Hazardous Material at
or originating from the Facility or Base arising out of Tenant's operations at the Facility, the
presence of which constitutes an Environmental Condition or otherwise violates an applicable
36
Environmental Lca w or the Rules and Regulations. Remediation, if required, shall be conducted
in a timely and professional manner, by the responsible party's environmental consultant,
consistent with standard industry practices pertaining to the current use of the property, to those
levels accepted by all then applicable Environmental Laws governing the remediation of the
property to applicable standards protective of human health and the environment (without the use
of engineering or institutional controls other than restrictions on the residential use of the
property and use of groundwater, unless such controls are approved by Landlord and, if such
restrictions affect Tenant operations at the Facility, Tenant) or as may otherwise be required by
the governmental authority exercising jurisdiction over the remediation. Subject to privileged
attorney -client communications and work product, the party performing the remediation and
investigation shall provide to the other party, at no cost, copies of all final studies, reports and
sample analysis and results (including quality assurance data), including submittals to and formal
correspondence with any governmental authority, related to the investigation and remediation of
the Environmental Condition promptly upon receipt of request for such information. Landlord
shall provide Tenant with a minimum of seven (7) days' notice, except when responding to an
emergency in which case no prior notice shall be required, prior to any sampling event or
remediation activity. Tenant shall be responsible for and pay for the costs and expenses of such
investigation and remediation of any Hazardous Material at or migrating from the Facility or
Base and proven to be arising out of Tenant's operations at the Facility. To the extent any
Environmental Condition or violation of any Environmental Law relates to Tenant's activities or
operations (including during the tern of Tenant's possession under the Original Sublease) and/or
to Landlord's and/or a previous or adjoining or adjacent tenant's or occupant's (other than
Tenant's) activities or operations, including without limitation, ownership or operation of the
Facility or any Landlord Adjoining Property, each party shall bear its share, if any, of the costs to
address such matter in proportion to its contribution, if any, to such condition or violation, with
Tenant not responsible for the contribution of previous and other tenants or occupants.
Notwithstanding any of the foregoing, Tenant shall not be, and Landlord shall be, responsible for
any investigation or remediation of a Release from the Fuel Farm, or any Release caused by the
negligent operation of the Fuel Farm. As used herein, the term "Release" means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, or disposing of any substance into the environment for which Release is regulated
under or violates any Environmental Laws. As used herein, the tern `Environmental Condition"
means the presence of any Hazardous Material in the environment, air, surface or subsurface soil
or ground water at a level exceeding applicable Rules and Regulations, including Environmental
Laws governing the remediation of the property to applicable standards protective of human
health and the environment.
12.4 Tenant Environmental Indemnification. Tenant agrees to indemnify, defend and
hold Landlord and its officers, partners, directors, shareholders, employees and agents harmless
from any claims,' judgments, damages, fines, penalties, costs, liabilities (including sums paid in
settlement of claims) or loss including reasonable attorney's fees, reasonable consultant's fees,
and reasonable expert fees which arise during or after the Term, or in connection with a violation
of the Rules and Regulations, or the presence of Hazardous Materials in the environment,
including but not limited to, the air, soil, groundwater, or soil vapor, including but not limited to
land on or under the Facility or adjacent portions of the Base, or in enforcing the provisions of
this Section (collectively, "Hazardous Material Liabilities"), in each case, however, limited to the
extent such Hazardous Materials are from Tenant's operations at the Facility. Specifically
37
excluded from the foregoing indemnification obligation of Tenant are Hazardous Material
Liabilities that arise out of or result from a previous or adjoining or adjacent tenant's or
occupant's (other than Tenant's) activities or operations, including without limitation, such
tenant's or occupant's ownership or operation of or activities upon the Facility or any past or
future tenant, occupant or user of Landlord Adjoining Property, the operation of the Fuel Farm,
or the acts of Landlord, Management Company, Fuel Services Company or their respective
officers, employees or agents (the "Landlord Hazardous Material Liabilities"). Without limiting
the generality of the foregoing, this indemnification shall survive the expiration of this Lease and
does specifically cover costs incurred in connection with any investigation of site conditions or
any cleanup, remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of the presence of Hazardous Materials in
the environment, air, soil, groundwater or soil vapor on or under the Facility or migrating to
adjacent portions of the Base and any location where such Hazardous Materials from the
Tenant's operation of the Facility may be deposited, discharged, or located, and any location
where a state or federal governmental agency has determined liability relates to the Tenant's
operations on the Facility, except for Landlord Hazardous Material Liabilities. Without limiting
the generality of the foregoing, this indemnification shall also specifically cover costs in
connection with Hazardous Materials present in the soil, ground water or soil vapor on or under
the Facility or adjacent portions of the Base before the date hereof and which were released by
Tenant, its employees, contractors, or employees at the Facility during the term of Tenant's
possession under the Original Sublease, except for Landlord Hazardous Material Liabilities.
12.5 Landlord Environmental Indemnification. To the extent permitted by law,
Landlord agrees to indemnify, defend and hold Tenant and its officers, partners, directors,
shareholders, employees and agents harmless from all Landlord Hazardous Material Liabilities.
Without limiting the generality of the foregoing, this indemnification shall survive the expiration
of this Lease and does specifically cover costs incurred in connection with any investigation of
site conditions or any cleanup, remedial, removal or restoration work required by any federal,
state or local governmental agency or political subdivision because of the presence of Hazardous
Materials in the soil, groundwater or soil vapor on or under the Facility or adjacent portions of
the Base, except for Hazardous Material Liabilities to be indemnified by Tenant in accordance
with Section 12.4. Without limiting the generality of the foregoing, this indemnification shall
also specifically cover costs in connection with Hazardous Materials present in the soil, ground
water or soil vapor on or under the Facility or adjacent portions of the Base before the date
hereof and which were released during the term of Tenant's possession under the Original
Sublease, except for Hazardous Material Liabilities to be indemnified by Tenant in accordance
with Section 12.4. If any Landlord Hazardous Material Liabilities are claims to which Landlord
is entitled to indemnification from American under the terms of the Rejection Agreement
(collectively, the "Indemnification Claims"), then, upon the written request of Tenant, Landlord
shall assert against American, pursuant to the terms of the Rejection Agreement, any and all such
claims, subject to appropriation of sufficient funds to pursue such Indemnification Claims by
Landlord's City Council at the time
12.6 Landlord Responsibilities. Landlord shall be responsible for, and shall comply
with all Environmental Laws and Rules and Regulations pertaining to Landlord Hazardous
Material Liabilities. Landlord's responsibilities shall survive the expiration of this Lease and the
vacation of the Facility by Tenant. Notwithstanding any other provision of this Lease, Landlord
does not waive any of its immunities, rights, or responsibilities including those with regard to
compliance and enforcement of city ordinances including, but not limited to Chapter 12.5
(Environmental Protection and Compliance) of the Code of the City of Fort Worth, nor with its
obligations or contracts with other governmental entities as they relate to protection of the
environment, including contracts with the Texas Commission on Environmental Quality.
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ARTICLE XIII
CONDITION, MAINTENANCE AND REPAIR
13.1 Condition, PROVIDED THERE IS NO DAMAGE OR OTHER MATERIAL
ADVERSE CHANGE IN THE FACILITY OR THE CENTRAL UTILITY PLANT, IWTF,
FUEL FARM, OR SHARED FACILITIES SINCE THE DATE HEREOF, THEN ON THE
EFFECTIVE DATE, TENANT WILL ACCEPT THE FACILITY IN ITS CONDITION ON
THE EFFECTIVE DATE, AND ASSUMES ALL RISKS, IF ANY, RESULTING FROM ANY
PRESENT OR FUTURE, LATENT OR PATENT DEFECTS THEREIN, EXCEPT AS ANY
PRESENT OR ,FUTURE, LATENT OR PATENT DEFECTS MAY RELATE TO THOSE
OBLIGATIONS THAT LANDLORD HAS ASSUMED HEREIN, TENANT
ACKNOWLEDGES THAT IT HAS INSPECTED THE FACILITY. LANDLORD HAS NOT
MADE, AND DOES NOT HEREBY MAKE, ANY REPRESENTATION, WARRANTY OR
COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION, QUALITY,
DURABILITY, TITLE, DESIGN, OPERATION, OR FITNESS FOR USE OR SUITABILITY
OF THE FACILITY IN ANY RESPECT WHATSOEVER, AND TENANT IS LEASING THE
FACILITY "AS IS, WHERE IS AND WITH ALL FAULTS". TENANT IS NOT RELYING
ON, ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING: (I) THE NATURE AND
PHYSICAL CONDITION OF THE FACILITY AND THE SUITABILITY THEREOF AND OF
THE FACILITY FOR ANY AND ALL ACTIVITIES AND USES TENANT MAY ELECT TO
CONDUCT THEREON; AND (II) THE COMPLIANCE OF THE FACILITY OR ITS
OPERATION WITH ANY LAWS, ORDINANCES OR REGULATIONS OF ANY
GOVERNMENTAL AUTHORITY OR OTHER BODY INCLUDING, WITHOUT
LIMITATION, THE AMERICANS WITH DISABILITIES ACT OR THE FAIR HOUSING
ACT AND RELATED RULES AND REGULATIONS. EXCEPT AS OTHERWISE SET
FORTH IN THIS LEASE, LANDLORD HAS NO, AND TENANT WAIVES AND
RELEASES LANDLORD FROM ANY, DUTY TO DISCLOSE ANY INFORMATION TO
TENANT CONCERNING THE FACILITY. EXCEPT AS OTHERWISE SET FORTH IN THIS
LEASE, LANDLORD MAKES NO, AND TENANT WAIVES AND RELEASES LANDLORD
FROM ANY, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED TO TENANT.
EXCEPT AS OTHERWISE SET FORTH IN THIS LEASE, TENANT SPECIFICALLY
UNDERSTANDS THAT ANY INFORMATION PROVIDED BY LANDLORD, LANDLORD
AFFILIATES OR LANDLORD AGENTS IS SUBJECT TO TENANT'S VERIFICATION
AND, NOTWITHSTANDING TENANT'S FAILURE TO SO VERIFY THE INFORMATION,
TENANT MAY NOT HOLD LANDLORD, LANDLORD AFFILIATES OR LANDLORD
AGENTS LIABLE OR MAKE ANY FUTURE CLAIMS AGAINST LANDLORD,
LANDLORD AFFILIATES OR LANDLORD AGENTS AS TO THE ACCURACY OR
INACCURACY OF ANY INFORMATION PROVIDED BY LANDLORD.
13.2 Tenant's Maintenance and Repair Obligations.
(a) General Standard. During the Term, except as expressly provided below
and for those aspects and parts to be maintained and repaired by Landlord as provided in Section
13.3, Tenant shall keep, maintain and repair, at its expense, all aspects and parts of the Facility
neat, clean, free from waste or nuisance, and in good order and condition, ordinary wear and tear
excepted, and shall make all needed repairs and replacements thereto, including, without
limitation, maintenance, repair and replacement of the foundation, roof, walls, floors, air-
conditioning, plumbing, electrical, sewer and all other mechanical systems serving the Facility,
and all direct IT connections within the Facility.
(b) Tenant's Election for Certain Repairs. Notwithstanding the clause (a), if
(i) the cost to repair or replace a building or other improvement will, under generally accepted
accounting principles that are consistently applied, constitute a capital expense; and (ii) either
(A) the estimated useful life of the repair or replacement will extend beyond the Term (without
respect to any early termination right granted herein, unless such right has been exercised) or (B)
Tenant reasonably determines that the cost of the repair or replacement is not economically
justified based on the estimated value of the building or other improvement following the repair
or replacement, then Tenant may: (w) make the repair or replacement; or (x) provide notice (the
"Repair Notice")' _o Landlord of the nature and estimated cost of the repair or replacement and,
for a period of thirty (30) days following Tenant's provision of the Repair Notice (the
"Negotiation Period"), negotiate with Landlord in an attempt to reach a mutually acceptable
agreement with Landlord pursuant to which Landlord and Tenant will each pay a share of the
cost of the repair or replacement. If Tenant provides a Repair Notice to Landlord and Landlord
and Tenant are unable to reach a mutually acceptable agreement within the Negotiation Period,
Tenant may, at its option and instead of making the repair or replacement, either (y) take such
steps as Tenant determines are reasonably necessary to prevent further deterioration of the
building or other improvement over the remaining Term or demolish or otherwise remove the
building or other improvement from the Facility, or (z) if the failure to make such repairs and
replacements materially limits or impairs Tenant's use and operation of the Facility and the
conduct of its business, as reasonably determined by Tenant in good faith, then Tenant may
terminate this Lease upon giving written notice to Landlord of Tenant's intent to terminate the
Lease, such termination to be effective ninety (90) days following the giving of such notice.
(c) Tenant's Removal of Improvements. If Tenant demolishes or removes
any improvements pursuant to the terms of this Section 13.2, Tenant must also clear that portion
of the Facility upon which the demolished building or improvement was located, remove all
demolition debris, disconnect and stub up all utilities that served the building or other
improvement, and satisfy any reasonable requirements of the City necessary to control erosion
on the site, including but not limited to planting grass or other groundcover in the cleared area.
In the event of a total loss of the Facility or damage to the Facility, Tenant shall have the rights
under and the provisions of Section 16.1 shall apply.
13.3 Landlord's Maintenance and Repair Obligations. It is understood and agreed that
Landlord shall have no obligation to repair, replace or maintain all or any portion of the Facility,
nor any obligation to pay any costs or expenses, of any description, associated with the operation
of the Facility except (a) Landlord shall be responsible for repairs and replacements where so
required in accordance with Section 13.2, Section 16.3 or elsewhere in this Lease or when
maintenance, repair or replacement is due to the negligence or willful misconduct of Landlord,
Management Company, Fuel Services Company or Landlord's, Management Company's or Fuel
Services Company's agents or employees, contractors, tenants or invitees, (b) Landlord shall be
responsible for the maintenance, repair and replacement of all piping up to any applicable meter
or submeter at or on the Facility, and (c) Landlord shall be solely liable for repairing, replacing
41
and/or maintaining (or causing the repair, replacement and/or maintenance of) the Shared
Facilities, the IWTF, the Fuel Farm, and the Central Utility Plant to the standards set forth in
Articles V, VI, VII and VIII and any other facilities, equipment, wiring, piping, meters or
submeters necessary to provide the Landlord Distributed Services, the Fuel Farm Services, the
Uplift Services (including the IWTF), and the Central Utility Services provided for in Articles
IV V, VI, and VII, except if such repair, replacement and/or maintenance is required due to the
negligence or willful misconduct of Tenant.
ARTICLE XIV
ALTERATIONS, IMPROVEMENTS AND ADDITIONS
14.1 Fence. Landlord and Tenant acknowledge that Tenant has installed a fence to
segregate the Facility (with the exception of the portion of the Shared Facilities that are
delineated on the Site Plan as being for the sole and exclusive use of Tenant) from the rest of the
property and improvements that are subject to the Facilities Lease (the "Fence"). The Fence is
located as depicted on the Site Plan. The Fence includes gates that allow Tenant access to the
Communications Room, the CMS Building, Fuel Farm, the IWTF and the Hazardous Waste
Building without leaving the Base.
14.2 Alterations, Improvements and Additions.
(a) Improvements. Subject to compliance with all applicable laws, the
consent of Hillwood and any other restriction contained in the Amended and Restated
Declaration of Covenants and Restrictions, or any other document, covenant, or restriction
recorded as of the date of such proposed improvement, Tenant, at its cost, risk and expense, may
(but shall have no obligation to) construct, erect, and complete any improvements on, to or about
the Facility as Tarrant, in its sole discretion, may deem appropriate, provided the cost thereof
does not exceed Five Hundred Thousand ($500,000.00) (or One Million Dollars [$1,000,000.00]
in connection with the test cell located at the Facility). Tenant and Landlord acknowledge and
agree that if the cost of such improvement exceeds the amounts set forth in the preceding
sentence and in certain other circumstances under the Amended and Restated Declaration of
Covenants and Restriction, Hillwood's consent will be required in order for improvements or
additions to be made to the Facility, and Landlord agrees to, upon Tenant's request, cooperate
with Tenant in seeking such approval provided Landlord shall not be required to pay any money
in connection with such approval. In order to obtain such consent, if necessary, Tenant shall
submit such information as Hillwood may reasonably require as a condition to any required
consent, including, without limitation, (i) plans and specifications, (ii) permits, licenses and
bonds, (iii) evidence of insurance coverage in such types and amounts and from such insurers as
Hillwood reasonably deem satisfactory, and (iv) the name and identity of the third -party
contractor and subcontractors.
(b) Ownership and Requirements for Improvements. All alterations,
improvements and additions shall be done in a good and workmanlike manner by qualified and
licensed contractors or mechanics, and shall comply with any and all Rules and Regulations.
Title to and ownership of any alterations, improvements or additions to the Facility shall be and
remain in Tenant during the Term hereof, but shall be transferred to Landlord upon termination
of this Lease, unless Hillwood or Landlord require in writing that such alterations,
42
improvements, or additions be removed at the end of the Term, in which case Tenant shall
remove such alterations, improvements, or additions and repair any damage to the Facility
caused by such removal, and Tenant shall be given a reasonable time and adequate access to the
Facility to remove same following receipt of such written request. Notwithstanding the
foregoing, Tenant shall have no obligation to remove the fence installed pursuant to Section
14.1, or fuel tanks or improvements to fuel tanks installed pursuant to Section 5.10, provided,
however, Tenant will be responsible for complying with all Environmental Laws with respect to
the fuel tanks or improvements to fuel tanks, including without limitation, the obligation to
remove the fuel tanks and all related improvements at the end of the Term if required in order to
comply with such Environmental Laws as then in effect. Tenant acknowledges and agrees that
changes to the exterior of the Facility must comply with Landlord's then -current color and
appearance requirements, and Tenant shall not make any alterations, improvements or additions
to the exterior of the Facility (including painting the exterior of the Facility) without Landlord's
prior written consent.
14.3 Liens and Encumbrances. Tenant covenants and agrees that, except for this
Lease, it will not create or suffer to be created any lien, encumbrance or charge (collectively,
"Liens"), upon the Facility, or any part thereof, and that it will promptly satisfy or cause to be
discharged, or will make adequate provision to satisfy and discharge, and in any event within
thirty (30) days af�er the same shall occur, all claims and demands for labor, materials, supplies
or other items which, if not satisfied, might by law become a Lien upon the Facility, or any part
thereof, provided that Liens for labor and materials arising by operation of statutory law shall not
be within the purview of this paragraph if, when such Liens shall be perfected, Tenant shall
cause them to be promptly discharged, or if Tenant is diligently contesting the validity of such
Lien, Tenant may utilize the provisions of the next succeeding sentences. If any such Lien shall
be filed or asserted against Tenant or the Facility by reason of work, labor, services or materials
supplied or claimed to have been supplied to Tenant, on the Facility, at the request or with the
permission of Tenant or of anyone claiming under it, Tenant shall, promptly, but within thirty
(30) days after it receives notice of the imposition of the filing thereof or the assertion thereof
against the Facility, cause the same to be discharged of record, or effectively prevent the
enforcement or foreclosure thereof, by contest, payment, deposit, bond, order of court or
otherwise. Nothing in this Section 14.3 shall require Tenant to satisfy or discharge any such
claim or demand so long as the validity thereof shall be contested in good faith by appropriate
legal proceedings without cost or expense to Landlord. If Tenant breaches its obligations under
this Section 14.3, then, following ten (10) business days' prior written notice to Tenant, Landlord
shall have, in addition to all other remedies provided herein and by law, the right, but not the
obligation, to cause such lien to be released by such means as Landlord deems proper, including
payment of the claim giving rise to such Lien. Any amount expended by Landlord in the
performance of T nant's obligations shall be paid by Tenant to Landlord promptly upon written
demand therefore accompanied by appropriate documentation of such expenditures.
14.4 Signs. Tenant shall not install or place any additional exterior signage on the
Facility or at the entrance thereto (i.e., in addition to Tenant's, signage existing as of the Effective
Date) without the prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, however, that Landlord acknowledges and agrees
that Tenant shall be permitted to continue utilizing, at no additional cost to Tenant, such existing
signage and to repair (or replace, so long as substantially identical to the existing signage) such
43
existing signage as Tenant determines appropriate in its reasonable discretion. Tenant shall keep
its signs in good repair and operating condition.
ARTICLE XV
INSURANCE
15.1 Tenant Insurance. During the Term, Tenant shall at its expense procure and
maintain in connection with its lease and use of the Facility, the following insurance coverages
and in accordance with all other applicable terms and conditions of this Article XV:
(a) Aviation liability insurance (including hangarkeepers liability coverage),
covering, without limitation, aircraft products and completed operations, airport premises
liability, and covering bodily injury and property damage (with limits of no less than One
Million Dollars-[,1,000,000.00] per occurrence), all such coverages to be on an "occurrence"
basis with aggregate limits of no less than Two Million Dollars ($2,000,000.00) per consecutive
twelve (12) month period; provided that such limits may be reduced to then existing and
commercially reasonable industry standards and customary levels for operation of a facility such
as the Facility to the extent the foregoing limits may not be available on commercially
reasonable terms in then -current market conditions,
(b) Commercial general liability insurance covering bodily injury and
property damage on an "occurrence" basis with limits of no less than Two Million Dollars
($2,000,000.00),per occurrence and Two Million Dollars ($2,000,000.00) in the aggregate,
(c) Premises pollution liability (PPL) insurance covering environmental risks
associated with Tenant's operations and lease, use and occupancy of the Facility and Equipment,
with limits of no less than Three Million Dollars ($3,000,000.00) per occurrence and Three
Million Dollars ($3,000,000.00) in the aggregate,
(d) Fire and casualty insurance with respect to Tenant's interest in the Facility
and all personal property of Tenant located at or within the Facility or within any of the Shared
Facilities, with coverages in such amounts and against such risks as are customarily insured
against in connection with the ownership, lease and operation of comparable facilities and
equipment, including, without limitation, business interruption coverage with respect to Tenant's
operations at the Facility, and
(e) Automobile liability insurance covering any owned, non -owned and hired
automotive vehicle (endorsed to provide contractual liability coverage) covering bodily injury
and property damage with a limit of no less than Five Million Dollars ($5,000,000.00) combined
single limit.
15.2 Workers Compensation and Employer's Liability Insurance. Tenant represents
that Workers Compensation and Employer's Liability insurance coverages are maintained by
American, or Rolls-Royce Engine Services Holding Co. or Rolls Royce PLC for all personnel
working at the Facility with a limit of no less than One Million Dollars ($1,000,000.00) for each
accident for bodily injury by accident or One Million Dollars ($1,000,000.00) for each employee
for bodily injury by disease. Prior to the Effective Date and upon any modification to or renewal
following termination or expiration of any insurance coverages required hereunder, Tenant will
44
provide to Landlord a certificate of the insurer or an authorized broker evidencing the insurance
coverages and terms described in this Section.
The parties agree that the coverages and limits provided in the foregoing Sections 15.1 and 15.2
may be adjusted by Tenant upon no less than thirty (30) days' prior written notice to Landlord
(A) to such coverages and amounts that are then considered standard and customary in the
industry as applicable to the operation of a facility such as the Facility, (B) to such coverages and
the lesser maximum limits then available in the market upon commercially reasonable terms, or
(C) to such coverages and amounts as may be approved by Landlord, such approval to not be
unreasonably withheld.
15.3 Tenant Insurance Policy Conditions. Each insurance policy required by Section
15.1 (i) shall be issued by an insurer (or insurers) possessing an A-VII A.M. Best Rating or better
and of recognized standing and authorized to issue such policy of insurance in the State of Texas;
(ii) shall provide for a waiver of subrogation by each such insurer with respect to any claims
against Landlord and the City solely to the extent of the amount of any payment of a loss by such
insurer pursuant to the applicable insurance coverages; and (iii) shall be endorsed to prohibit
cancellation or substantial reduction of coverage by the insurer without at least thirty (30) days'
prior written notice to Landlord. Notwithstanding the foregoing, and for the avoidance of doubt,
Tenant shall not waive claims against Landlord or Landlord's insurer to the extent of the amount
of any loss or damage that Tenant is entitled to recover from Landlord under any provision of
this Lease or applicable law exceeds the amount of any insurance proceeds received under
Tenant's insurance coverage. The liability policies and coverages set forth in clauses (a) through
(d) of Section 15.1 shall each contain an endorsement naming Landlord as an additional insured.
Tenant shall be named sole loss payee with respect to all insurance coverages maintained by
Tenant pursuant ,to Section 15.1. Prior to the Effective Date and upon any modification to or
renewal following termination or expiration of any insurance coverages required hereunder,
Tenant will provide to Landlord a certificate of the insurer or an authorized broker evidencing
the insurance coverages and terms required by Section 15.1.
15.4 Tenant Current Insurance. Landlord acknowledges and agrees that the insurance
policies and the coverages referenced therein as currently cazried by Tenant with respect to the
Facility and more particularly described on Exhibit G attached hereto, are acceptable to
Landlord and are considered by Landlord to comply with the terms of Section 15.1; provided that
(i) such insurance policies or renewal or replacement policies containing substantially similar
terms are and remain in effect as of the Effective Date and during the Term, (ii) such insurance
policies are amended on or before the Effective Date to name Landlord as an additional insured
thereunder and to contain the endorsements required in Section 15.3, and (iii) Tenant provides to
Landlord on or prior to the Effective Date a certificate evidencing such insurance as required in
Section 15.3. Tenant must provide certificates of insurance evidencing the same on or before the
Effective Date.
15.5 Landlord Insurance. During the Term, Landlord shall at its expense procure and
maintain in connection with the Fuel Farm, Central Utility Plant, IWTF and Shared Facilities, the
following insurance coverages and in accordance with all other applicable terms and conditions
of this Article XV:
45
r
(a) Aviation liability insurance (including hangarkeepers liability coverage),
covering, without limitation, aircraft products and completed operations, airport premises
liability, and grounding liability (also covering bodily injury, property damage, and fire legal
liability), all on an "occurrence" basis with limits of no less than One Hundred Million Dollars
($100,000,000,00) per occurrence and with an aggregate limit of no less than One Hundred
Million Dollars ($100,000,000.00) per consecutive twelve (12) month period,
(b) Commercial general liability insurance covering bodily injury and
property damage on an "occurrence" basis with limits of no less than One Hundred Million
Dollars ($100,000,000.00) per occurrence and in the aggregate,
(c) Premises pollution liability (PPL) insurance covering environmental risks
associated with Landlord's activities at or in connection with the Facility as permitted or required
in this Lease; the lease and use by Landlord of and the operations and activities conducted by
Landlord or its agents and contractors at or in connection with the Shared Facilities, the Fuel
Farm, the IWTF and the Central Utility Plant; and the lease by Landlord and the use of the
Landlord Adjoining Property, with limits of no less than Five Million Dollars ($5,000.000.00),
(d) Workers Compensation and Employer's Liability insurance coverages
with a limit of no.less than One Million Dollars ($1,000,000.00) for each accident for bodily
injury by accident or One Million Dollars ($1,000,000.00) for each employee for bodily injury
by disease,
(e) Automobile liability insurance covering any owned, non -owned and hired
automotive vehicle covering bodily injury and property damage with a limit of no less than One
Million Dollars ($1,000,000.00) combined single limit, and
(f) Fire and casualty insurance at full replacement value with respect to the
Shared Facilities, the Fuel Farm, the IWTF, the Central Utility Plant, and all other real or
personal property and improvements located at the Base and owned or leased by Landlord, with
coverages providing for full replacement value as the Shared Facilities, the Fuel Farm, the IWTF
and the Central Utility Plant, and otherwise with coverages in such amounts and against such
risks as are customarily insured against in connection with the ownership, lease and operation of
comparable property, facilities and equipment.
15.6 Landlord Insurance Policy Conditions. Each insurance policy required by Section
15.5 (i) shall be issued by an insurer (or insurers) possessing an A-VII A.M. Best Rating or better
and of recognized standing and authorized to issue such policy of insurance in the State of Texas;
(ii) shall be endorsed to provide for a waiver of subrogation by each such insurer with respect to
any claims against, Tenant in connection with any payment of a loss by such insurer pursuant to
the applicable insurance coverages; (iii) shall be endorsed to prohibit cancellation or substantial
reduction of coverage by the insurer without at least thirty (30) days prior written notice to
Tenant; (iv) shall be endorsed to provide contractual liability coverage with respect to the
indemnification obligations of Landlord, Management Company and Fuel Services Company
under this Lease and (v) shall have deleted from such insurance policies any exclusion related to
denial of coverage or payment to or for the benefit of Tenant and Tenant's officers, directors,
partners, employees, and agents based upon a defense or claim of sovereign immunity that may
46
apply to or be asserted in connection with any indemnification obligation of Landlord,
Management Company or Fuel Services Company under this Lease, or based upon any
qualification or reference in this Lease that any such indemnification obligation of Landlord is
subject to and qualified by "to the extent permitted by law" or similar references, and be
endorsed to provide that (A) such insurance coverages shall be fully valid and enforceable
notwithstanding any such claims by Landlord or such insurers of sovereign immunity or that any
indemnification obligation of Landlord is not permitted by law, and (B) the insurers shall (to the
extent of the insurance proceeds available under the applicable insurance coverages) specifically
disclaim and waive for the benefit of Tenant and Tenant's officers, directors, partners,
employees, and agents, the right of such insurers to assert or rely upon, or the right to deny
payment of insurance coverages based upon, any claim or defense of sovereign immunity or that
an indemnification obligation of Landlord hereunder is not permitted by law (by reason of its
governmental capacity) in connection with Landlord's (or that of Management Company and
Fuel Services Company) indemnification for Claims or other insured liabilities and obligations
under this Lease. The liability policies and coverages set forth in clauses (a), (b), (c), (e) and (f)
of Section 15.5, shall each provide that such policies insure and provide coverage for the
indemnification obligations of Management Company and Fuel Services Company as
contemplated and required in this Lease, on the same terms and conditions as if Management
Company and Fuel Services Company were signatories to this Lease and named insureds under
such insurance policies, and shall contain an endorsement naming each of Management
Company and Fuel Services Company, Tenant, American, Rolls-Royce Engine Services Holding
Co., and their respective officers, directors, members, employees and agents as either (x) a
named insured under such insurance policies and coverages, or (y) an additional insured with
respect to such insurance policies and coverages, provided that such additional insured status
satisfies the foregoing requirements and provides liability coverage for the negligence and
indemnification obligations required of Management Company and Fuel Services Company
under the terms of this Lease. Prior to the Effective Date and no less than thirty (30) days prior
to any modification to or expiration of any insurance coverages required hereunder, Landlord
will provide to Tenant a certificate of the insurer or an authorized broker evidencing the
insurance coverages and terms consistent with and as required by Section 15.5 and this Section
15.6. It is expressly acknowledged and agreed that notwithstanding the foregoing provisions of
clause (v) which are intended to preclude Landlord's insurers from raising sovereign immunity
as a defense or bar to making payment in satisfaction of any Claims for which the foregoing
insurance liability coverages may otherwise apply, Landlord expressly reserves the right to assert
on its own behalf (but not for the benefit of such insurers) any defense of sovereign immunity to
the extent permitted and applicable under governing law.
15.7 Management Company and Fuel Services Company Insurance. During the Term,
Landlord shall cause Management Company and Fuel Services Company to procure and
maintain in connection with their respective management and operation of the Shared Facilities,
the Fuel Farm, the IWTF and the Central Utility Plant, and all services it may otherwise provide
for and on behalf of the Landlord as contemplated by or in connection with this Lease, the
Facility, the Shared Facilities, the Fuel Farm, the IWTF or the Central Utility Plant, such
customary and reasonable levels of insurance coverages which are consistent with standard
industry practices.
15.8 General Insurance Policy Requirements of Fuel Service Company and
47
Management Company. Each insurance policy required by Section 15.7 shall be issued by an
insurer (or insurers) which is financially responsible, of recognized standing and authorized to
issue such policy of insurance in the State of Texas; (ii) shall be endorsed to provide for a waiver
of subrogation by each such insurer with respect to any claims against Tenant in connection with
any payment of a loss by such insurer pursuant to the applicable insurance coverages; and (iii)
shall be endorsed to prohibit cancellation or substantial reduction of coverage by the insurer
without at least` thirty (30) days prior written notice to Tenant. The liability policies and
coverages shall each contain an endorsement naming Tenant and its parent companies,
American, Rolls-Royce Engine Services Holding Co., and each of their respective officers,
directors, members, employees and agents as an additional insured. Prior to the Effective Date
and no less than thirty (30) days prior to any modification to or expiration of any insurance
coverages required hereunder, Landlord will cause Management Company and Fuel Services
Company to provide to Tenant a certificate of the insurer or an authorized broker evidencing the
insurance coverages and terns consistent with and as required by this Section 15.8.
15.9 t�.1UTUAL RELEASE. LANDLORD AND TENANT RELEASE EACH OTHER FROM ALL
CLAIMS FOR LOSSES OF OR TO (I) THE FUEL FARM, THE IWTF, THE CENTRAL UTILITY PLANT AND
THE SHARED FACILITIES, (II) TENANT'S PERSONAL PROPERTY, EQUIPMENT AND FIXTURES, AND (III)
TENANT'S OR LANDLORD'S BUSINESS OR REVENUES, PROVIDED THE LOSSES ARE COVERED BY THE
RELEASING PARTY'S INSURANCE OR THAT WOULD HAVE BEEN COVERED BY THE INSURANCE
REQUIRED TO BE MAINTAINED BY SUCH RELEASING PARTY IF SUCH PARTY FAILED TO MAINTAIN
SUCH INSURANCE COVERAGES. THE PARTY INCURRING THE LOSS IS RESPONSIBLE FOR ANY
DEDUCTIBLE OR SELF -INSURED RETENTION UNDER ITS INSURANCE. THE PARTIES WILL NOTIFY THE
ISSUING INSURANCE COMPANIES OF THIS LEASE AND HAVE THE APPLICABLE POLICIES ENDORSED, IF
NECESSARY, TO PREVENT INVALIDATION OF COVERAGE BY REASON OF THIS PROVISION.
ARTICLE XVI
CASUALTY AND CONDEMNATION
16.1 Casualty of Facility. Tenant shall use reasonable efforts to promptly notify
Landlord of destruction of the Facility or material damage to the Facility.
(a) Insurance Proceeds. The settlement and compromise of any insurance
claims with respect to damage or destruction of the Facility shall be negotiated by Landlord in
consultation with Tenant and all insurance proceeds payable for the repair or replacement of the
Facility shall ,be paid to and shall be the property of Landlord; provided, however, that the
foregoing proceeds payable for the repair or replacement shall be made available by Landlord
directly to Tenant for repair or replacement of damages to the Facility.
(b) Repair and Restoration by Tenant. Upon notice to Landlord, Tenant may
elect to repair or restore the Facility, in which event Landlord shall make the insurance proceeds
available to Tenant for the completion of such repair or restoration. Tenant shall submit to
Landlord detailed site specific plans and specifications (i.e., construction documents) for
Tenant's repair or restoration of the Facility (the "Restoration Work"), and Tenant shall not
commence construction of the Restoration Work until it has obtained Landlord's approval of the
plans and specifcations therefor, which approval shall not be unreasonably withheld,
conditioned or delayed. Landlord shall notify Tenant in writing within fifteen (15) days after its
receipt of such plans and specifications (and five (5) business days of the submission of any
revised plans and specifications of any change or modification reasonably required by the
Landlord). If Landlord fails to timely respond, the plans and specifications shall be deemed
approved. If Landlord requests reasonable changes or modifications, Tenant shall as soon as
reasonably practical make or cause to be made the required changes and shall thereupon deliver
amended plans and specifications to Landlord. Upon Tenant's request, Landlord shall, at no cost
to Landlord, cooperate with Tenant and assist Tenant in Tenant's efforts to obtain all
governmental permits, approvals, authorizations and entitlements required in connection with the
Restoration Work. The Restoration Work shall be constructed in full compliance with all laws,
codes, regulations and other governmental requirements.
(c) Tenant's Termination Right. Notwithstanding anything in this Section
16.1 to the contrary, in the event of a total loss of the Facility or damage to the Facility that has a
material adverse effect on Tenant's operation at the Facility (as determined by Tenant) and
would require more than three (3) months to repair or rebuild, Tenant may terminate this Lease
or the affected portion thereof by giving written notice thereof ("Tenant's Notice") to Landlord
within sixty (60) days after the date of such total loss or damage, in which event this Lease shall
be considered terminated in its entirety (or with respect to the affected portion, as applicable)
Affective as of the date of such damage and destruction (the "Casualty").
(d) Landlord's Termination Right; Tenant's Response. If Tenant (i) does not
elect to terminate this Lease or such affected portion pursuant to clause (b), or (ii) undertakes
efforts to repair or rebuild the Facility, and thereafter fails after written notice from Landlord to
diligently proceed to repair or rebuild the Facility within a commercially reasonable time,
Landlord may terminate this Lease or the affected portion thereof by giving written notice
thereof ("Landlord's Notice") to Tenant of its intention to terminate the Lease or affected portion
thereof, and such notice to terminate the Lease or affected portion thereof shall be effective thirty
(30) days after the date such Landlord's Notice is given to Tenant (the "Noticed Date of
Termination" ); provided that in lieu of such termination, and upon written notice of Tenant to
Landlord during such thirty (30) days following Landlord's Notice, Tenant may elect to have any
equitable adjustment of the Minimum Guaranteed Jet Fuel Requirement and any reduction and
abatement of Base Rent, Additional Rent and all other applicable Fees and charges due and
payable by Tenant hereunder cease as of the Noticed Date of Termination of this Lease or
portion thereof by Landlord. Upon any such election by Tenant, this Lease or such portion
thereof shall not terminate so long as Tenant commences payment of such Base Rent, Additional
Rent and all other applicable fees and charges due and payable by Tenant hereunder accruing
from and after the Noticed Date of Termination of this Lease or portion thereof.
(e) Termination of the Lease or a Portion Thereof. Upon any termination of
this Lease or portion thereof in accordance with this Section 16.1, Landlord shall provide Tenant
reasonable access to the Facility or terminated portion thereof for a period of not more than
ninety (90) days following the Tenant's Notice or the Landlord's Notice, as applicable, for
Tenant to remove all personal property of Tenant and its vendors and customers. If this Lease is
terminated as to less than all of the Facility, the Minimum Guaranteed Jet Fuel Requirement,
Base Rent, Additional Rent and all other applicable Fees and charges due and payable by Tenant
hereunder will be equitably adjusted. If this Lease is not terminated pursuant to this Section
16.1, the Minimum Guaranteed Jet Fuel Requirement will be equitably adjusted and Base Rent,
49
Additional Rent and all other applicable Fees and charges due and payable by Tenant hereunder
shall be equitably reduced and abated during any period of time in which the Facility (or any
portion thereof cannot be reasonably used by Tenant to conduct Tenant's business operations in
the same or substantially similar manner as previously conducted, or may not be so conducted
without material additional cost or expense to Tenant, but only to the extent the Facility (or such
portion thereof) is unfit for the conduct of such operations.
16.2 Condemnation. If the Facty or any portion thereof is taken by eminent domain,
the total amount of any condemnation awards paid or payable to Landlord or Tenant shall be
apportioned between Landlord and Tenant according to this Section 16.2. Tenant shall receive
that part of any condemnation awards or compensation that is attributable to the fair market
value of any improvements that were constructed or replaced by Tenant using its own funds and
any personal provQrty or movable trade fixtures that were installed by Tenant using solely its
own funds. Notwithstanding the foregoing, Tenant may bring a separate claim in Tenant's name
to recover damages for the fair market value of any improvements that were constructed by
Tenant and any personal property or movable trade fixtures that were installed by Tenant using
its own funds. If Tenant determines, in its reasonable discretion, that such part of the Facility has
been taken so as to materially interfere with Tenant's use and occupancy thereof, then Tenant
may terminate this Lease by delivering written notice of such election to Landlord within thirty
(30) days after such taking. If this Lease is not terminated pursuant to the terms of this Section
16.2, then this Lease shall terminate only to the part of the Facility so taken as of the date of the
taking, and the Minimum Guaranteed Jet Fuel Requirement, the Base Rent, the Additional Rent
and all other applicable Fees and charges due and payable by Tenant hereunder shall be
equitably adjusted.
16.3 Casualty or Condemnation Other than the Facility. If ail or any portion of the
Shared Facilities, the IWTF, the Fuel Farm, the Central Utility Plant, or any other part of the
Base necessary for Tenant's operations at the Facility that is owned by Landlord or leased by
Landlord are damaged, destroyed or taken by eminent domain, Landlord shall, upon request of
Tenant, apply any available insurance proceeds or condemnation awards towards, and commence
with due diligence to complete, the repair or replacement of the applicable facility; provided,
however, in the event (i) the available insurance or condemnation proceeds are insufficient to
rebuild or repair the applicable facility and Tenant is not willing to pay the difference in such
cost of rebuild or repair, or (ii) there is a total loss or material damage to any such facility that
has a material adverse effect on Tenant's operations at the Facility (as determined by Tenant)
and would require more than three (3) months to repair or rebuild, either Landlord or Tenant may
terminate this Lease by giving written notice thereof to the other party within sixty (60) days
after the date of such total loss or material damage, in which event this Lease shall be considered
terminated effective as of the date of such damage and destruction. Upon any such termination,
Landlord shall provide to Tenant reasonable access to the Facility for a period of not more than
ninety (90) days following such termination notice for Tenant to remove all personal property of
Tenant and its,�cndors and customers. If this Lease is not terminated as provided by this Section
16.3, the Minimum Guaranteed Jet Fuel Requirement, Base Rent, Additional Rent and all other
Fees and charges due hereunder shall be equitably abated and adjusted from the date of such
damage, destruction or taking, but only for such time and to the extent the Facility (or such
portion thereof) cannot be reasonably used by Tenant to conduct Tenant's business operations in
the same or substantially similar manner as previously conducted, or may not be so conducted
50
without material additional cost or expense to Tenant, but only to the extent the Facility (or such
portion thereof) is unfit for the conduct of such operations.
ARTICLE XVII
INDEMNIFICATION RELATED TO SERVICES
17.1 Landlord's Indemnification. To the extent permitted by law, Landlord shall
defend, indemnify and hold harmless Tenant from and against any and all liability, loss, costs,
fines, penalties, remediation expenses and damages arising out of or resulting from the
following:
(a) the introduction of contaminated Jet Fuel or other contaminants within the
Fuel Farm other than by Tenant;
(b) any contamination to Jet Fuel that occurs after the Jet Fuel enters the Fuel
Farm and prior- to the point the Jet Fuel passes through the Meter into Tenant Storage; or
(c) the leasing, ownership, operation, maintenance, management or use of the
Fuel Farm by Fuel Services Company (including without limitation any negligence or willful
acts of Fuel Services Company, or its agents or suppliers) and any third party to which Landlord
grants access to the Fuel Farm.
Notwithstanding the foregoing, (i) any indemnification by Landlord with respect to damages
resulting from any Interruption shall be governed by the relevant provisions of Article IX, except
when due to a willful breach in accordance with clause (a), above; and (ii) such damages
hereunder shall not include special or consequential damages.
17.2 Tenant's Indemnification. Tenant shall defend, indemnify and hold harmless
Landlord from and against any and all liability, loss, costs, fines, penalties, remediation expenses
and damages arising out of or resulting from the following:
(a) any liability or damage for which Tenant has agreed to be responsible and
liable under Section 11.3(B);
(b) any contamination to Jet Fuel that occurs after the Jet Fuel enters the
Tenant Storage;
(c) damage to any portion of the Laboratory to the extent caused by the
negligence or willful misconduct in Tenant's, or its employees, agents, subtenants, or
contractors' use of the Laboratory; or
(d) Tenant's causing or permitting the placement, discharge or disposal of any
industrial or hazardous waste into (a) the sanitary wastewater system or (b) the IWTF (via the
Lift Station), which industrial or hazardous waste contains such constituents or characteristics as
would (x) cause a violation of Landlord's industrial and sanitary wastewater discharge permits,
as applicable, (y� cause a pass through or interference at the City of Fort Worth's Publicly
Owned Treatment Works or at the IWTF, as applicable, or (z) cause a violation of the
Wastewater Standards resulting in additional costs to treat the industrial or hazardous waste or
51
resulting in any damage and remediation costs in respect of the equipment and filters at the
IWTF;
in each case, solely to the extent not arising from the willful acts or negligence of Landlord,
Management Company or Fuel Services Company. Notwithstanding the foregoing, damages
under this Section 17.2 shall not include special or consequential damages.
17.3 Insurance Proceeds. Any amount to be indemnified by either Landlord or Tenant
pursuant to the terms of this Lease (including but not limited to Articles VIII, IX, XII, XVII, and
XVIII) shall be reduced by and to the extent of the amount of insurance proceeds collected and
retained by the other party for such liability, loss, costs, fines, penalties, remediation expenses
and damages, pursuant to insurance coverages maintained by such party. This provision shall
survive any termination of this Lease.
17.4 Survival. This Article XVII shall survive any termination of this Lease.
ARTICLE XVIII
GENERAL INDEMNITY
18.1 Te�lant's Covenant. Tenant hereby agrees to defend, indemnify and save harmless
Landlord and Landlord's officers, directors, partners, employees and agents from and against any
and all claims, actions, damages, liability, cost and expense, including reasonable attorneys' fees
(collectively, "Claims"), arising out of or resulting from
(a) the possession, use or occupancy of the Facility by Tenant, or its
employees, agents, subtenants, or contactors;
(b) the negligence or willful misconduct in Tenant's, or its employees, agents,
subtenants, or contractors' use of the Shared Facilities;
(c) any material breach by Tenant of the terms of this Lease, provided that
Landlord has used reasonable efforts to mitigate the damages of such breach; or
(d) any negligent act, omission, willful misconduct, or unlawful act of Tenant
or Tenant's agents, employees, licensees, subtenants, contractors, or invitees;
excluding in each case, however, (x) such Claims arising out of the negligent acts, omissions,
unlawful act, or willful misconduct of Landlord, Landlord's agents, employees, licensees, or
invitees, Management Company or Management Company's agents, employees, licensees, or
invitees, Fuel Services Company or Fuel Services Company's agents, employees, licensees, or
invitees and (y) such matters for which Landlord is to indemnify Tenant as provided in Articles
VIII, IX, XII, and XVII, and Section 18.2. The provisions of this Section 18.1 shall survive the
expiration or earlier termination of this Lease.
18.2 Landlord's Covenant. To the extent permitted by law, Landlord hereby agrees to
defend, indemnify and save harmless Tenant and Tenant's officers, directors, partners,
employees, and agents from and against any and all Claims arising out of or resulting from:
52
(a) Landlord's, Management Company's and Fuel Services Company's
ownership, leasing, operation, maintenance, possession, use or occupancy of any real or personal
property within the portion(s) of the Base owned or leased by Landlord other than the Facility,
but including, without limitation, the Fuel Farm, the IWTF, the Central Utility Plant and the
Shared Facilities, or
(b) any negligent act, omission, willful misconduct or unlawful act of
Landlord, Management Company, Fuel Services Company or their respective agents, employees,
contractors, licensees or invitees;
in each case, (x) except to the extent such Claims result from the negligent acts, omissions or
willful misconduct of Tenant or Tenant's agents, employees, licensees, subtenants, and invitees
and (y) excluding such matters for which Tenant is to indemnify Landlord as provided in Section
18.1. The provisions of this Section 18.2 are in addition to Landlord's indemnity obligations in
Articles VIII, IX, XII, and XVII. The provisions of this Section 18.2 shall survive the expiration
or earlier termination of this Lease.
18.3 WITH RESPECT TO ALL LIABILITY WAIVERS, INDEMNITIES, AND
OBLIGATIONS TO HOLD HARMLESS AND DEFEND THAT ARE SET FORTH IN THIS
LEASE (COLLECTIVELY, THE "WAIVERS AND INDEMNITIES"):
(a) FOR PURPOSES OF THIS SECTION 18.3 ONLY, THE SPECIFIC
LANDLORD PARTY OR TENANT PARTY AGAINST WHOM LIABILITY IS WAIVED
UNDER THIS LEASE IS CALLED THE "RELEASED PARTY," AND THE SPECIFIC
LANDLORD PARTY OR TENANT PARTY THAT IS BEING INDEMNIFIED, DEFENDED,
AND HELD HARMLESS UNDER THIS LEASE IS CALLED THE "INDEMNITEE";
(b) THE WAIVERS AND INDEMNITIES WILL BE ENFORCED EXCEPT
TO THE EXTENT OF THE PERCENTAGE OF THE APPLICABLE CLAIM THAT A FINAL
JUDGMENT OF A COURT OF COMPETENT JURISDICTION ESTABLISHES, UNDER
THE COMPARATIVE NEGLIGENCE PRINCIPLES OF THE STATE OF TEXAS, THAT
THE APPLICABLE CLAIM WAS THE PROXIMATE RESULT OF THE NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE APPLICABLE RELEASED PARTY OR INDEMNITEE,
AS THE CASE MAY BE, BUT THE WAIVERS AND INDEMNITIES WILL REMAIN
VALID FOR ALL OTHER TENANT PARTIES AND LANDLORD PARTIES.
(c) THE WAIVERS AND INDEMNITIES ARE INDEPENDENT OF, AND
WILL NOT BE LIMITED BY, EACH OTHER OR ANY INSURANCE OBLIGATIONS
UNDER THIS LEASE; AND
(d) THE WAIVERS AND INDEMNITIES SURVIVE THE EXPIRATION
DATE OR EARLIER TERMINATION OF THIS LEASE UNTIL ALL CLAIMS AGAINST
THE APPLICABLE RELEASED PARTY OR INDEMNITEE, AS THE CASE MAY BE, ARE
FULLY AND FINALLY BARRED BY THE APPLICABLE STATUTE OF LIMITATIONS.
ARTICLE XIX
EVENTS OF DEFAULT; REMEDIES
53
19.1 Default by Tenant.
(a) Event of Default. Any of the following events shall constitute an "Event
of Default" and a breach by Tenant under this Lease:
M Tenant fails to pay Base Rent, Additional Rent or any Fees due and
payable as required hereunder when due, and such failure continues for a period of five
(5) business days following Tenant's receipt of written notice from Landlord that such
payment is past due;
(ii) Tenant fails to observe or perform any of the material covenants,
conditions or provisions of this Lease, and such failure continues for a period of thirty
(30) days following Tenant's receipt of written notice thereof from Landlord, which
notice specifically describes the default in question; provided, however, that in the event
such default is not capable of being cured within such thirty (30) day period, Tenant shall
be givQI such additional time as is required to cure such default so long as Tenant
commences such cure within such thirty (30) day period and diligently prosecutes the
cure to completion within sixty (60) days;
(iii) any petition seeking protection against creditors is filed by or
against Tenant under the U.S. Bankruptcy Code that is not dismissed or stayed within
sixty (60) days of the date of filing; or
(iv) Tenant abandons or vacates the Facility (except for a
Permitted Absence) and fails to reoccupy the Facility within thirty (30) days following
Tenant's r0 ceipt of written notice thereof from Landlord. Notwithstanding the foregoing,
Tenant may abandon or vacate the Facility at any time during the last three (3) months of
the Term, provided that it otherwise performs its other obligations under this Lease.
"Permitted Absence" means any abandonment or vacation of the Facility by Tenant
resulting from an event of force majeure, casualty damage, condemnation, or an
Interruption.
19.2 Remedies. Upon the occurrence of an Event of Default, Landlord may: (i)
terminate this Lease; (ii) terminate Tenant's right of possession of the Facility and Shared
Facilities, without terminating this Lease, and relet the Facility and Shared Facilities on behalf of
Tenant; (iii) enter and take possession of the Facility and Shared Facilities; (iv) remove and store
all Tenant's furniture, fixtures, equipment, and personal property in the Facility and Shared
Facilities; (v) enter the Facility and Shared Facilities and cure the Event of Default; and (vi)
withhold or suspend payment of sums Landlord would otherwise be obligated to pay to Tenant
under this Lease. Landlord may, at any time after terminating Tenant's right to possess the
Facility and Shared Facilities without terminating this Lease, elect to terminate this Lease and
pursue any and all other rights and remedies otherwise available upon such latter election. All of
the rights and remedies of Landlord set forth in this Lease or available under Applicable Law are
cumulative.
19.3 Measure of Damages.
(a) Performance of Tenant's Obli atg ions. If Landlord cures Tenant's Default,
then Tenant will immediately pay Landlord (A) all reasonable expenses incurred by Landlord in
enforcing this Lease, including all legal costs (including attorneys' fees), (B) all reasonable
expenses incurred by Landlord in curing Tenant's Default, and (C) all other damages incurred by
Landlord due to the Event of Default, subject to Landlord's duty to mitigate any and all such
damages.
(b) Surrender; Outstanding Obli atg ions. If Landlord terminates Tenant's right
to possess the Facility and Shared Facilities but not this Lease, then Tenant will immediately
vacate and surrender the Facility and Shared Facilities and pay Landlord (A) the cost of
recovering the Facility and Shared Facilities and removing and storing Tenant's furniture,
fixtures, equipment, and personal property or other property, (B) the amounts referenced in
clauses (A) through (C) of paragraph (a) of this Section 19.3. All Base Rent or any other fee or
charge due and payable as required hereunder will continue to accrue after Landlord terminates
Tenant's right of possession to be payable in accordance with the provisions in clause (c) of this
Section 19.3.
(c) Damages for Remainder of the Term. If Landlord terminates Tenant's
right to possess the Facility and Shared Facilities but not this Lease, then Tenant will pay to
Landlord upon demand in addition to the amounts set forth in Section 19.3(b), the present value
of the amount (never less than zero) by which (A) the total Base Rent or any other fee or charge
due and payable as required hereunder payable by Tenant for the portion of the Term remaining
after the month in which the termination becomes effective exceeds (B) the Fair Rental Value of
the Facility and Shared Facilities for the same period. In calculating present value, each payment
of Base Rent and Fair Rental Value will be discounted at four percent (4%) from its respective
due date to the date of termination. The Fair Rental Value is the total rental (including Tenant's
all amounts payable under this Lease) that would be received from a Tenant of comparable
creditworthiness for space of equivalent quality, size, condition, remaining lease term, and
location as the Facility and Shared Facilities, taking into account rental rates and concessions
then generally prevailing in the market place, the period of time the Facility and Shared Facilities
is reasonably expected to remain vacant before commencement of rental payments by a suitable
new Tenant, and all other relevant factors.
19.4 Mitigation of Damages. Upon termination of Tenant's right to possess the
Facility and Shared Facilities, to the extent required by applicable law, Landlord will use
reasonable efforts to mitigate damages by reletting the Facility and Shared Facilities. Landlord
will be deemed to be acting reasonably if Landlord refuses to lease the Facility and Shared
Facilities to a prospective new Tenant who (1) is an Affiliate of Tenant, (ii) requires additional
leasehold improvements to be made at Landlord's expense, or (iii) desires (A) to lease for a
shorter or longer term than remains under this Lease, (B) to reconfigure or combine the Facility
and Shared Facilities with other space, (C) to take only a part of the Facility and Shared
Facilities, or (D) to change the permitted use.
19.5 Default by Landlord. If Landlord fails to perform any of its obligations,
covenants or agreement contained in this Lease, then Tenant may give written notice to Landlord
of such failure and upon receipt of that notice, Landlord shall be obligated to cure its default or
breach within thirty (30) days from the date of Landlord's receipt of that written notice (provided
55
that if the nature of such breach is such that although curable, the breach cannot reasonably be
cured within a 30-day period, a default shall not exist if Landlord shall commence to cure such
breach and thereafter rectifies and cures such breach with due diligence), and upon failure of
Landlord to cure such default, Tenant shall have the right to terminate this Lease in addition to
and not in lieu of all rights and remedies to which it is entitled by law or elsewhere in this Lease,
all of which remedies are hereby incorporated herein and made a part hereof with the same force
and effect as if herein specifically set forth in full. For avoidance of doubt, the foregoing shall
not be construed to limit or restrict Tenant's remedies or Landlord's obligations as specifically
set forth in Articles IV through VIII, XI, and XI through XII.
19.6 Tenant's Self -Help Right. Without limiting the provisions of Section 19.2 and
any other provision of this Lease (i.e., in addition to and not in lieu thereof), if Landlord fails or
neglects to perfor` a or cause to be performed any act or thing herein provided to be performed or
caused to be performed by Landlord in respect of the Facility or fails to pay any sum of money
required to be paid by Landlord hereunder (collectively, a "Landlord Failure") and such
Landlord Failure continues for a period of thirty (30) days after notice from Tenant specifying
the acts or things to be performed, then, without limiting any of Tenant's rights herein provided,
Tenant may (but shall not be required to) perform or pay the same and Landlord, on demand and
to the extent allowed by law, shall reimburse Tenant for its reasonable out-of-pocket costs in
connection therewith. However, if such Landlord Failure does not relate to the payment of
money and is not capable of being cured within such thirty (30) day period, Landlord shall be
given such additional time as is reasonably required to cure such Landlord Failure, so long as
Landlord commences such cure within said thirty (30) day (or shorter) period and diligently
prosecutes the cure to completion. Notwithstanding the foregoing, if Tenant, in good faith,
deems that an emergency is occurring or has occurred so that a Landlord Failure requires
immediate curing, then no such notice shall be required to be given by Tenant, and, Tenant may
immediately take such action as is necessary to cure the Landlord Failure, provided Tenant shall
first attempt to provide prior notice to Landlord and afford Landlord an opportunity to timely
undertake such curative actions, and Landlord, on demand and to the extent allowed by law, shall
reimburse Tenant for the reasonable cost thereof. Except for any negligent or willful act or
omission of Tenant or Tenant's agents, employees or contractors, Tenant shall not be liable or in
any way responsible for any loss, inconvenience, annoyance or demand resulting to Landlord or
anyone else holding under Landlord for any action taken pursuant to this Section 19.6.
ARTICLE XX
MISCELLANEOUS
20.1 Assignment and Subleasing.
(a) By Tenant. Except as expressly permitted below, Tenant shall not,
without the prior written consent of Landlord, assign, transfer, sublet, mortgage or hypothecate
this Lease or the right to use and occupy the Facility, and any attempt to do any of the foregoing
without Landlord's consent shall be void. The transfer of any corporate stock, partnership
interest or membership interest in Tenant, or a merger, consolidation, acquisition or liquidation
of or by Tenant, either voluntarily or by operation of law, which shall result in an entity that is
not an Affiliate of either American or Rolls-Royce Engine Services Holding Co. owning more
than fifty percent (50%) of the voting stock, membership interests, or equity interests of Tenant
and controlling the board or membership committee and polices of Tenant ("Tenant Change in
Control"), shall be deemed an assignment and shall require Landlord's consent. Landlord's
consent to any proposed assignment, transfer, sublease, or mortgage by Tenant shall not be
unreasonably withheld, conditioned or delayed. Landlord's acceptance of the Base Rent or any
other costs or fees due and payable by Tenant hereunder from any other person shall not be
deemed to be a 1,vaiver of any provision hereof. Consent to one assignment or subletting shall
not be deemed to be consent to any subsequent assignment or subletting. Provided that an
assignee or Tenant assumes all the obligations of Tenant from and after the date of such sublease
or assignment, Tenant shall have no further obligations hereunder with respect to obligations
arising out of facts and circumstances occurring (and obligations accruing) after the date of any
such permitted assignment or sublease. For avoidance of doubt, in no event shall any assignment
or subletting release Tenant from any of its obligations or liabilities under this Lease accruing
prior to the date of such assignment or subletting.
(b) Tenant's Permitted Subleases. Landlord acknowledges that Tenant has
and will continue, and agrees that Tenant can continue without obtaining the prior written
consent of Landlord, to sublease portions of space within the Facility to and for the use of (a)
American Airlines Credit Union (or its successor), (b) American or Rolls-Royce Engine Services
Holding Co., or any Affiliate of either American or Rolls-Royce Engine Services Holding Co.,
for office purposes, (c) AMR Engineering (or its successor) and (d) customers and vendors of
Tenant on a month to month basis for customer representatives offices which are consistent with
historical practice in conjunction with Tenant's operations at the Facility and provided such
subleases do not exceed five hundred (500) square feet or breach any provisions of the Amended
and Restated Declaration of Covenants and Restrictions,. Tenant will provide Landlord with a
copy of any executed subleases; provided that economic and other sensitive and confidential
competitive info mation may be redacted from such copies as reasonably determined
appropriate. Such subleases must explicitly provide that such agreement is subject to and
subordinate to this Lease.
(c) Tenant's Permitted Successor. Notwithstanding the foregoing, Tenant
may at any time during the Term and without the consent of Landlord assign its interest under
this Lease or sublet the Facility to any Permitted Successor. As used herein, "Permitted
Successor" means American, Rolls-Royce Engine Services Holding Co., any Affiliate of either
American or Rolls-Royce Engine Services Holding Co., or any corporation, limited liability
company, partnership or other entity (a) which controls, is controlled by or is under common
control with Tenant, American, Rolls-Royce Engine Services Holding Co. or any Affiliate of
either of them, (b) has merged or consolidated with or into Tenant (except to the extent
triggering a change in control requiring Landlord approval as provided above) or (c) that was
created from any restructuring or reorganization of Tenant, and in each case expressly assumes
in writing all obligations of Tenant hereunder.
(d) By Landlord. Landlord may, without Tenant's consent, sell, assign or
otherwise transfer or convey to the City of Fort Worth or other instrumentality or entity created
by the City of Fort Worth (each, a "Permitted Transferee") all of Landlord's interest in and to
this Lease, the Base, the Facility, the Shared Facilities, the Central Utility Plant, the Fuel Farm
and the IWTF, and Tenant agrees to attorn to the City of Fort Worth or any such other
instrumentality or entity as "Landlord" for all purposes hereunder so long as Landlord provides
57
Tenant no less than thirty (30) days' prior written notice of the effective date of any such
proposed sale, assignment, transfer or conveyance (provided, however, only one (1) days' prior
notice is required in connection with such an assignment to the City of Fort Worth that is
effective on or within thirty (30) days following the Effective Date of this Lease), and such
assignee (i) has or will have all the permits, certificates, licenses, and authorizations that are
necessary and advisable for such transferee to fulfill the obligations of "Landlord" under this
Lease (or has contracted with a Management Company or Fuel Services Company to fulfill such
obligations and that has all such permits, licenses and authorizations) and (ii) enters into a
written agreement (a copy of which is to be provided to Tenant) pursuant to which such
transferee acquires all rights and assumes all obligations of Landlord under this Lease and any
other agreement or document necessary to provide to Tenant the benefits and rights afforded to
Tenant under this Lease, as if such transferee were named Landlord herein. Except as provided
for above, Landlord shall not sell, assign or otherwise transfer or convey any of its interest in and
to this Lease, the Base, the Facility, the Shared Facilities, the Central Utility Plant, the Fuel
Farm, or the IWTF without the prior written consent of Tenant, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that such consent of Tenant
shall not be required if Landlord provides Tenant no less than thirty (30) days' prior written
notice of the effective date of any such proposed sale, assignment, transfer or conveyance and
the proposed transferee (i) has all the permits, certificates, licenses, and authorizations that are
necessary and advisable for such transferee to fulfill the obligations of "Landlord" under this
Lease (or has contracted with a Management Company or Fuel Services Company to fulfill such
obligations and that has all such permits, licenses and authorizations); and (ii) enters into a
written agreement (a copy of which is to be provided to Tenant) pursuant to which such
transferee acquires all rights and assumes all obligations of Landlord under this Lease and any
other agreement or document necessary to provide to Tenant the benefits and rights afforded to
Tenant under this Lease, as if such transferee were named Landlord herein.
20.2 Interest Charges. Should either party fail to pay any amount due to the other party
under this Lease when due, interest will accrue fiom the date on which such sum is due and such
interest will be paid at the time of payment of the delinquent sum. Whenever reference is made
in this Lease to the accrual of interest on sums due or whenever any amount owed is not paid
when due, such sum will bear interest at a rate of ten percent (10%) per annum.
20.3 Attorneys' Fees. If either party brings an action in litigation related to this Lease,
the prevailing party shall be entitled to recover from the non -prevailing party the reasonable
attorneys' fees and litigation costs incurred by such prevailing party in connection with such
litigation.
20.4 Access. Landlord and Landlord's agents shall have the right to enter the Facility
during normal business hours and upon reasonable advance notice to Tenant, for the purpose of
inspecting the Facility or making repairs that Landlord is obligated or permitted to make
pursuant to this Lease; provided, however, that any such person entering the Facility (a) shall do
so subject to and in compliance with Tenant's and all applicable governmental procedures,
security and safety programs, and rules and regulations, the Occupational Safety & Health
Administration and the Federal Aviation Administration), and (b) shall not interfere with
Tenant's operations within the Facility except to the extent reasonably necessary to complete
such maintenance, repair or replacements the Landlord is obligated or permitted to make under
58
this Lease; provided that Landlord shall undertake all reasonable efforts to consult and
coordinate with_ Tenant prior to such maintenance, repair or replacements and to minimize any
such interference with Tenant's operations.
20.5 Severability. Any provision hereof which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. To the fullest extent permitted by law, the parties hereby waive any
provision of law which may render any provision hereof void or unenforceable in any respect.
20.6 Entire Agreement; Amendments. This Lease constitutes the complete agreement
of the parties with respect to the subject matter contained herein and supersedes all previous
agreements, representations and understandings concerning the same. The provisions of this
Lease may be modified, amended or waived only by a written instrument, executed by Landlord
and Tenant.
20.7 Notices. Unless otherwise expressly set forth in this Lease, all notices, reports,
invoices and other communications required hereunder to be given to or made upon any party
shall be in writing, shall be addressed as provided below and shall be considered as properly
given and received: (i) when delivered, if delivered in person (and a signed acknowledgment of
receipt is obtair}ed); (ii) one (1) business day after dispatch, if dispatched by a recognized express
delivery service which provides signed acknowledgments of receipt; (iii) three (3) business days
after deposit in the U. S. mail, if sent by certified or registered first class mail, postage prepaid,
return receipt requested; or (iv) if transmitted by facsimile or electronic mail, upon completion of
transmission and upon confirmation by the sender (by a telephone call to a representative of the
recipient or by machine or response confirmation) that the transmission was received. For the
purposes of notice, the addresses of the parties shall be as set forth below; provided, however,
that either party shall have the right to change its address for notice to any other location by
giving at least three (3) business days prior written notice to the other party in the manner set
forth above.
If t� Landlord:
AllianceAiiport Authority Inc.
Attn: Director, Housing and Economic Development Dept.
1000 Throckmorton
Fort Worth, Texas 76102
With a copy to:
rGity Attorney
City of Fort Worth
1000 Throclanorton
Fort Worth, Texas 76102
If to Tenant:
Texas Aero Engine Services, L.L.C.
2180 Eagle Parkway, MD 8353
Fort Worth, Texas 76177
Ati�.ntion: Vice -President, Finance
Telephone: (817) 224-0211
Facsimile: (817) 224-0067
mail: lance.linguist@taesl.com
with a copy to:
Husch Blackwell, LLP
901 St. Louis, Suite 1800
Springfield, MO 65806
Attention: David C. Agee
Telephone: 417-2684066
Facsimile: 417-2684040
Email: david.agee@huschblackwell.com
20.8 Waiver Remedies Cumulative. Either party to this Lease may specifically waive
in writing any rights, terms or conditions hereunder, or any breach hereof, but no such waiver
shall constitute a waiver of any other right, term, condition or breach. By written notice, a
waiving party may at any time direct future compliance with any matter previously waived, in
which event, such "Party shall comply as directed from that time forward. No delay or omission
in the exercise or enforcement of any right or remedy hereunder by either party shall be
construed as a waiver of such right or remedy. All remedies, rights, undertakings, obligations
and agreements contained herein shall be cumulative and not mutually exclusive.
20.9 Binding Effect. Subject to Section 20.1, this Lease shall be binding upon the
parties, their personal representatives, successors and assigns.
20.10 Governing Law. This Lease will be governed by, and construed in accordance
with, the laws of the State of Texas without regard to choice of law principles. Any suit, action
or proceeding with respect to this Lease may be brought exclusively in the courts of the State of
Texas, County of Tarrant, or in the United States District Court for the Northern District of
Texas, Fort Worth Division, as Tenant or Landlord, whichever is applicable, in its sole discretion
may elect and Landlord and Tenant hereby submit to the jurisdiction of such courts for the
purpose of any suit, action or proceeding. Landlord and Tenant hereby agree that service of all
writs, process and summons in any suit, action or proceeding may be made upon it at the address
set forth in Section 20.7 hereof in the manner provided in such Section.
20.11 Waiver of Trial by Jury. DELETED BY AGREEMENT OF THE PARTIES.
20.12 References. All references in this Lease to particular Articles and Sections are
references to Articles and Sections of this Lease, unless otherwise indicated. The headings and
captions in this Lease are furnished for convenience of reference only and do not constitute a part
of this Lease or in any way affect the meaning or interpretation of the terms or provisions hereof.
References in the singular number in this Lease shall be considered to include the plural, if and
when appropriate, and vice versa.
20.13 Multiple Counterparts. This Lease may be executed in multiple counterparts,
each of which shall be an original but all of which together shall constitute but one and the same
instrument.
20.14 Recordation. Landlord and Tenant agree not to record this Lease, but both parties
hereto agree, on request of the other, to execute a memorandum of lease in recordable form and
complying with applicable laws of the State of Texas, which memorandum of lease may be
recorded by the party requesting same at such party's cost.
20.15 Construction. This Lease is the product of negotiations between the parties, and
shall be construed as if jointly prepared and drafted by them. No provision hereof shall be
construed for or against any party due to its actual role in the preparation or drafting hereof by
reason of ambiguity in language, rules of construction against the drafting party or similar
doctrine.
20.16 No Third Party Beneficiaries. Except as otherwise provided herein, nothing in
this Lease shall be construed as giving any person other than the parties hereto any right, remedy
or claim under or in respect of this Lease or any provision hereof.
20.17 Brokerage. Each party warrants to the other that it has had no dealings with any
broker, agent or consultant in connection with this Lease. Each party agrees, to the extent
allowed by law, to indemnify and hold the other party harmless from and as to any liability for
any compensation claimed by any broker, agent or consultant with respect to this Lease or its
negotiation on behalf of the party through whom the claim is made.
20.18 Compliance with Laws Tenant must at all times conduct its operations at and use
the Facility and the Shared Facilities in material compliance with all statutes, laws, rules,
regulations and ordinances as may exist from time to time. Landlord must at all times perform
and cause Management Company and Fuel Services Company to perform its obligations under
this Lease in material compliance with all statutes, laws, rules, regulations and ordinances as
may exist from time to time. Tenant hereby represents and warrants that prior to the Effective
Date it shall have obtained (i) any such permit as is necessary or required by any governmental
or quasi -governmental authority in order to properly discharge industrial and sanitary wastewater
from the Facility -that is generated by Tenant in the conduct of its operations at and use of the
Facility, and (ii) any other permit or license that is required in order for Tenant to properly
perform Tenant's obligations hereunder and conduct its operations at the Facility and Shared
Facilities. Landlord hereby represents and warrants that prior to the Effective Date it shall have
obtained or caused Management Company or Fuel Services Company to have obtained (i) any
such permit as is necessary or required by any governmental or quasi -governmental authority in
order to operate the Fuel Farm, the IWTF and the CUPS Facility, including, without limitation,
permits related to air, storm water, waste, and wastewater, and (ii) any other permit or license
that is required in order for Landlord to properly perform Landlord's obligations hereunder.
61
20.19 Governmental Powers. By execution of this Lease, neither Landlord nor any of
its assignees or transferees waives or surrenders any of their governmental powers or immunities.
ARTICLE XXI
LANDLORD REPRESENTATIONS AND ADDITIONAL AGREEMENTS
21.1 Specific Representations and Warranties and Agreement of Landlord.
(a) Industrial and Sanitary Wastewater Discharge Permit. Landlord hereby
represents and warrants that prior to the Effective Date it (or Management Company or Fuel
Services Company on its behalf) shall have obtained (by transfer from American or otherwise)
(i) any such permit as is necessary or required by any governmental or quasi -governmental
authority in order =Wo properly discharge industrial and sanitary wastewater from the Facility and
the rest of the property at the Base owned or leased by Landlord, and (ii) any other permit or
license that is required in order for Landlord to properly perform Landlord's obligations
hereunder (including, but not limited to, the provision of required services under Article IV
(Utilities), Article V (Fuel Farm; Jet Fuel), Article VI (Industrial Waste Treatment Facility),
Article VII (Central Utility Plant), or Article VIII (Shared Facilities)).
(b) Warranty of Peaceful Possession. Landlord hereby represents and
warrants that it has full power and authority to enter into this Lease and to lease the Facility to
Tenant as provided herein. Provided Tenant is not in default hereunder beyond the expiration of
any applicable notice and cure period, Landlord covenants and warrants that Tenant may
peaceably and quietly have, hold, occupy, use and enjoy the Facility, and may use the Common
Area and Shared Facilities on a non-exclusive basis (as provided herein), including access to and
use of the Fuel Farm, and, during the Term as provided for in this Lease and that neither
Landlord nor anyone claiming through or on behalf of Landlord shall interfere with Tenant's
rights to such use and enjoyment, except as may be otherwise expressly provided herein.
(c) Landlord Subordination. Landlord hereby agrees to provide to Tenant, on
or before the Effective Date, a Landlord Subordination Agreement for the benefit of Tenant's
lender in substantially the form attached as Exhibit H hereto or such other reasonable form
requested by Tenant's lender and acceptable to Landlord in form and substance, which
acceptance will not be unreasonably withheld, conditioned or delayed.
(d) Insurance Maintained by Management Company and Fuel Services
Company. Landlord shall cause Management Company and Fuel Services Company to maintain
alI insurance required by this Lease as provided in this Lease (including, but not limited to
naming Tenant as an additional insured thereunder).
(e) Designation of Management Company and Fuel Services Company.
(i) Landlord hereby agrees that in the event it designates, or enters
into any contract or agreement with, any person or entity (including Management
Company and Fuel Services Company) to perform and/or provide any of the duties,
obligations or services to be performed and/or provided by Landlord hereunder,
including, without limitation, the provision of utilities and services as set forth in Articles
IV V VI, VII and VIII hereof, such person or entity shall at all times be duly qualified
and properly licensed and permitted and shall have the experience necessary to perform
the applicable duties and obligations and/or to provide the applicable services required of
Landlord herein so as to not adversely impact Tenant's operations at the Facility in any
way (material or not).
(ii) Landlord shall promptly provide Tenant with prior written notice
of the designation and scope of authority and responsibilities of each of the Management
Company and Fuel Services Company (which notice may be satisfied by providing
Tenant with a complete and accurate copy of the then currently effective and applicable
Management Company or Fuel Services Company agreement between Landlord and such
Management Company and Fuel Services Company, as may be amended and
supplemented), and will use reasonable efforts to provide Tenant with at least thirty (30)
days' prior written notice, upon any termination or change in Management Company or
Fuel Services Company and written notice within five (5) business days of Landlord's
actual knowledge of a change or proposed change in the controlling ownership or
management of such Management Company or Fuel Services Company and shall
thereafter provide Tenant with such information as Tenant shall reasonably request in
connection therewith regarding the new management company's, controlling entity's or
management, or person's experience, insurance levels, and qualifications.
(f) Landlord's Continuing Liability. Notwithstanding any designation or
contracting with Management Company and Fuel Services Company to perform any duties,
obligations or services under this Lease, Landlord shall remain directly responsible and liable to
Tenant for the performance and/or provision of all such duties, obligations and services to be
provided or performed by Landlord, Management Company or Fuel Services Company in
accordance' with this Lease.
Exhibits:
• Exhibit A —Jet Fuel Specification
• Exhibit B-1 —Site Plan
• Exhibit 13-2 — TAESL Pipe Segment and Fuel Meter
• Exhibit C — Uplift Services
• Exhibit D — Fees for Uplift Services
• Exhibit E — CUP Utilities and Services
• Exhibit F — CUP Utilities and Services Fees
• Exhibit G — Tenant's Insurance
• Exhibit H — Form of Landlord Subordination Agreement
• Exhibit I — Common Area Fees
• Exhibit J — Tenant's Equipment in the Communications Room
The parties.hereto have executed this Lease to be effective on the Effective Date.
[Signature Page Follows]
63
LANDLORD:
ALLIANCEAIRPORT AUTHORITY, INC.
a nonstock, nonprofit industrial
development corporation created by the City
pursuant to the laws of the State of Texas,
including particularly the Development
Corporation Act of 1979, Article 5190.6,
V.A.T.C.S., as amended
TENANT:
TEXAS HERO ENGINE SERVICES, L.L.C.
a Delaware limited liability company
leb
By: By:
Name: Name:
Title: Title: ( GG(/�%
Name: Loft /�
Title: V - Cd\(f. 0(\CA f cY1I VOI ?c
LANDLORD:
ALLIANCEAIRPORT AUTHORITY, INC.
a nonstock, nonprofit industrial
development corporation created by the City
pursuant to the laws of the State of Texas,
including particularly the Development
Corporation Act of 1979, Article 5190.6,
V.A.T.C.S., as amended
By:
Name
Title:
65
TENANT:
TEXAS AERO ENGINE SERVICES, L.L.C.
a Delaware limited liability company
By: _
Name:
Title:
By: _
Name:
Title:
EXHIBIT A
JET FUEL SPECIFICATIONS AND FUEL FARM REQUIREMENTS
Operating Standards. Beginning on the Effective Date and continuing through the Term,
the Jet Fuel necessary to conduct Tenant's operations at the Facility must meet the quality,
requirements, and specifications set forth in the latest revision of the ATA Specification 103 —
Standard for Jet Fuel Quality Control at Airports, published by the Air Transport Association
("ATA Specification 103"); provided, however, that the Jet Fuel quality, requirements, and
specifications may be revised and amended from time to time upon prior written approval from
Tenant and Landlord.
Security. Landlord shall take such measures as are reasonably required in order to secure
the Fuel Farm and to prevent tampering with the portions of the Fuel Farm and the associated
fuel piping that are outside of the Facility, including, without limitation, a control system, storage
and distribution. facilities, buildings, and equipment, provided, however, Landlord shall not be
required to provide guards.
System Inspections. In accordance with ATA Specification 103 and applicable federal,
state, and local Laws, Landlord shall maintain detailed records of inspections of the Fuel Farm
(including the TAESL Pipe Segment) that demonstrate there are no material leaks in the
pipelines that are a part of the Fuel Farm, that the Fuel Farm is cathodically protected, and that
the Jet Fuel is not present in material quantities in the vaults containing vents, drains, valves, or
any other subsurface features of the Fuel Farm. On a scheduled basis or otherwise upon ten (10)
days' prior written notice, Landlord (or its designated Fuel Services Company) may inspect or
;red the equipment of Tenant, and shall conduct such other inspections of each
cause to be inspe
of Landlord's tenants using the Fuel Farm as required by ATA Specification 103, to ensure that:
(i) such equipment is compatible with the safe and efficient operation of the Fuel Farm; and (ii)
metering devices on such equipment are accurate and compatible with such devices used by
Landlord and Tenant.
Jet Fuel Standards. Landlord shall assure that Jet Fuel delivered to the Fuel Farm and
dispensed from the Fuel Farm meets or exceeds the fuel specification and purity standards listed
in the latest edition of ATA Specification 103, Section 1-2 (or equivalent) unless Tenant and
Landlord agree in writing otherwise. Landlord may refuse to accept any deliveries from any
party, including Tenant and its fuel vendors, without penalty or breach of its obligations
hereunder if the party delivering such Jet Fuel does not provide Landlord with evidence
satisfactory to Landlord (including without limitation any written certificate of compliance that
Landlord may in good faith request) that such Jet Fuel complies with the foregoing
specifications, unless Tenant instructs Landlord in writing to accept such delivery, in which case
Landlord shall bear no liability for, and shall be indemnified and held harmless by Tenant
against, any failure of such delivery to comply with the foregoing specifications.
Sampling_ Landlord shall conduct and record results of fuel receipt inspections in
accordance with ATA Specification 103, Section 1-3 (or equivalent). Landlord shall receive a
certification document from the Jet Fuel supplier or shipping agent which certifies that the
A- 1
product to be delivered meets ASTM D1655 specification requirements with
following select property values listed as measured by specified ASTM test methods:
(a) Visual Appearance in White bucket
(b) Gravity, corrected to
(c) Distillation
(i) 10%Recovered
(ii) 50% Recovered
(iii) 90%Recovered
(iv) Final Boiling Point
(v) Residue
(vi> Loss
(d) Flash Point
(e) Freezing Point
(f) Water Separation (MSEP)
(g) Copper Strip Corrosion
(h) Existent Gum
at least the
Accompanying documents shall also include all delivery information including, but not limited
to, the destination, the batch number, the fuel grade or type, and the quantity to be shipped.
Landlord must not receive Jet Fuel into the fuel tank in the Fuel Farm without the appropriate
certification document.
Landlord shall conduct the following tests on fuel samples received from each highway transport
truck tank compartment and record the results:
(a) Visual Appearance in White Bucket
(b) API Gravity, corrected to 60° F (15° C)
Vehicles with a common manifold will be considered as a single compartment for sampling
purposes. A composite sample of up to three (3) compartments is acceptable for the API Gravity
check only.
Contamination of Jet Fuel. Landlord shall protect the Jet Fuel from the introduction of
any substances which change the quality of the Jet Fuel after delivery thereof to the Fuel Farm
A-2
and take all other reasonable steps to preserve the quality of the Jet Fuel in Landlord's possession
in the Fuel Farm.
Records. Landlord shall maintain on a current basis complete and accurate boolcs and
records and make reports available to Tenant, at reasonable times upon reasonable notice and
request, in such form and detail as may be agreed between the parties of the withdrawals and
gains and losses of Jet Fuel from the Fuel Farm,
Inventory Reconciliations. Landlord (or Fuel Services Company on its behalf) shall keep
current, complete and accurate inventory records of the Jet Fuel in the Fuel Farm as follows:
(a) Receipts into inventory and disbursements from inventory shall be
recorded in net and/or gross gallons as agreed by the parties from time to time. At
approximately the same time each day, Landlord shall take inventory measurements of each
fuel tank and, for each measurement so taken, Landlord shall record the volume and the time of
day such measurement was made. Each disbursement of Jet Fuel shall be recorded on
individual fueling tickets unless an alternate arrangement is agreed upon in writing by
Landlord and Tenant.
(b) Using the above daily measurements, Landlord shall reconcile monthly
the physical inventory to the calculated inventory and, at reasonable times upon reasonable
notice and request, present such reconciliation to the Tenant and, as applicable, Landlord's
other tenants using the Fuel Farm. Such reconciliation shall explain to Tenant's commercially
reasonable satisfaction the receipt and distribution of all Jet Fuel, including all operating gains
or losses of inventory.
(c) Landlord shall be responsible for all losses of Jet Fuel that result from
Landlord's negligence or willful misconduct. Landlord shall be responsible for all loss or
disappearances of Jet Fuel in excess of the level of losses allowed in ATA 103 that cannot be
reconciled as required by this subparagraph, or adequately explained as a normal operating loss
reasonably beyond Landlord's control; provided that, if on the Effective Date, the actual level
of Jet Fuel loss is in excess of the level of losses allowed by ATA 103, then Landlord shall
have six (6) months to bring the Fuel Farm operations into compliance with ATA 103. Within
thirty (30) days following each yearly anniversary of the Effective Date, Landlord shall replace
all losses or disappearances of Jet Fuel in excess of what is allowed in ATA 103 and not
reconciled or adequately explained as provided for above, such replacement or payment to be
allocated to Tenant and Landlord's other tenants using the Fuel Farm during such previous
year, based upon the percentage ownership of the Jet Fuel in the Fuel Farm during the period.
All gains and losses for which Landlord is not responsible shall be determined monthly and
shared proportionately by Tenant and Landlord's other tenants using the Fuel Farm based upon
total monthly volume withdrawn from the Fuel Farm for the month in question.
(d) Notwithstanding anything herein to the contrary, any liability of
Landlord for Jet Fuel lost, contaminated or otherwise damaged or destroyed while in
Landlord's custody or control shall be limited to the replacement value of such Jet Fuel, the
cost of removing and replacing such Jet Fuel, any costs of environmental remediation and fines
A-3
or charges related to removing and replacing such Jet Fuel, and all costs associated with tank
cleaning and filter replacements required due to contamination of such Jet Fuel.
(e) Landlord (or Fuel Services Company on its behalf) will maintain a
)eipetual inventory of Tenant owned Jet Fuel and all other Jet Fuel inventory (by owner and
withdrawal) in the Fuel Farm and will reconcile such inventory on no less than a monthly basis
and make such inventory records and information available to Tenant upon reasonable notice.
A-4
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EXHIBIT C
UPLIFT SERVICES
The IWTF collects and processes wastewater, generates Reverse Osmosis (RO) water and
distributes treated water to the Base, including the Facility. During the Term, and subject to the
permitted service interruptions described in Section 6.2, the Lift Station shall be available to
receive the flow of Industrial Wastewater from Tenant's operations that are transported through
it to the IWTF on a continuous basis 24 hours per day, 7 days per week, 365 days per year.
Generally, Landlord will be responsible for the maintenance, operation, and compliance
of the IWTF in a reasonable manner. More specifically, Landlord will be responsible for
collecting the uplift (wastewater) meter readings for the Base, including the Facility, the Central
Utility Plant and the Shared Facilities, and shall perform all of the following during the Term: (i)
operate, maintain, insure and keep in good repair and operating condition the IWTF (including
all pipes connecting the IWTF to the Lift Station), (ii) operate and maintain the IWTF in
accordance with all applicable permits, certificates, licenses and all applicable laws and
regulations and operate and maintain the IWTF Station in accordance with reasonable industry
standards, (iii) apply for and obtain and keep in full force and effect, and comply with all terms
A, all permits, certifications, and licenses necessary or advisable to lawfully operate and
maintain the IWTF and to perform the Uplift Services in compliance with applicable laws and
regulations and reasonable industry standards, and (iv) employ and maintain properly licensed
and qualified operators to operate the IWTF and to perform the Uplift Services.
Landlord ��hall have the right, but not the obligation, to sample the Industrial Wastewater
transported through the Lift Station using the internal testing equipment in existence and in place
at the IWTF as of the Effective Date, and if Landlord completes such sampling, Landlord must
deliver to Tenant the testing results within three (3) business days after receiving such testing
results.
Tenant shall have the right, but not the obligation, to sample the Industrial Wastewater
transported through the Lift Station at commercially reasonable intervals to confirm the
Industrial Wastewater is within the acceptable limits regarding substances and concentrations as
determined by commercially reasonable industry standards (the "Wastewater Standards").
C-1
EXHIBIT D
FEES FOR UPLIFT SERVICES
The Uplift Fees shall be calculated using the following formula.
(Tenant Uplift Services Usage /Total Uplift Services Usage) * (Total IWTF Costs)
Where the capitalized terms not otherwise defined in this Lease shall have the following
meanings:
"Tenant Uplift Services Usage" means the gallons of Industrial Wastewater transported
through the Lift Station to the IWTF on behalf of Tenant in the applicable monthly
billing period (as determined by the applicable sub -meter).
"Total Uplift Services Usage" means the total number of gallons of Industrial Wastewater
transported to the IWTF, whether on behalf of Tenant, the Adjoining Tenants, or
otherwise, in the applicable monthly billing period.
"Total IWTF Costs" shall mean Landlord's reasonable out-of-pocket operating costs of
providing the Uplift Services in the applicable monthly billing period and shall include
the salaries of Landlord's (or Management Company, as applicable) employees (or
portion thereof) solely to the extent directly attributable to the operation of the IWTF,
administrative overhead directly attributable to the operation of the IWTF, costs of input
(e.g., natural gas, electricity and water) required to operate the IWTF, costs of materials
and maintenance costs of the IWTF, licensing costs to the extent attributable to the
IWTF, and other costs incurred in the normal course of operating the IWTF. The Total
IWTF Costs shall not include capital costs or other costs that are reimbursed by insurance
or other third -party sources and shall be adjusted by any reimbursements, discounts,
rebates, credits, and refunds received by Landlord.
D-1
EXHIBIT E
CUP UTILITIES AND SERVICES
CUP Utilities
Steam: Landlord must maintain minimum steam pressure of 150 PSI (or such other
minimum pressure as the parties may hereafter agree from time to time) and a baseline minimum
capacity of 20,000 pounds/hour.
Compressed Air: Landlord must maintain the compressed air system at a minimum of
100 PSI (or such other minimum pressure as the parties may hereafter agree from time to time) at
1000 CMF/minimum average capacity. The optimal air pressure is between 103 and 105 PSI;
provided, however, it shall never exceed 125 PSI.
Chilled Water: Landlord must maintain enough delivered capacity to maintain a baseline
of 2,600 gallons per minute of water with a temperature of 4345 degrees Fahrenheit, which
baseline has been a successful strategy employed in the past to permit an optimal air temperature
for the buildings located on the Facility of 72 degrees Fahrenheit.
Landlord will be responsible for maintenance, operation and compliance of the Central Utility
Plant in order to assure the provision of the CUP Utilities to Tenant as required under the
Lease. Landlord will be responsible for collecting the meter readings for each utility
component (steam, chilled water, and compressed air) for the Base, including the Facility and
all other buildings and facilities receiving any CUP Utilities.
CUP Services
Li hg tnin� Detection: Landlord must maintain and operate the lightning detection system,
which shall alarm and provide notification to Landlord of any lightning strike within the same
detection range that existed on August 6, 2013. Landlord must receive prior written approval
from Tenant before implementing any changes that reduce the detection range.
Fire Monitoring and Protection Services: Landlord must maintain both a monitoring
network and a suppression network up to the walls of Tenant's turbine engine overhaul building.
Landlord must maintain and operate the central pump house to provide water pressure for the fire
suppression systems, and such central pump must maintain enough pressure to run the
suppression systems of multiple buildings at one time. Landlord must also maintain and operate
the master fire and smoke detection panels, including that to which Tenant's subpanel connects.
HVAC Control for the Facility and Shared Facilities: Landlord shall continuously
monitor and adjust from the CUP as necessary the indoor air temperatures within the Facility so
as to assist the Tenant in achieving the agreed target temperatures in all of the buildings located
on the Facility. If Tenant requests an adjustment of individual valve settings for ambient
temperature, Landlord must acknowledge Tenant's request within thirty (30) minutes of the
receipt of such request and begin to make changes necessary to make such adjustment within
four (4) hours of Tenant's request.
E-1
Chemical Tank Monitoring: Landlord must maintain real time monitoring and reporting
of the temperatures and water levels in the Chemical Tanks. Within thirty (30) minutes after
notification (through the monitoring system) that the temperatures and water levels are outside of
determined limits, Landlord shall call or radio Tenant's facilities maintenance group, whose
contact informatiOn shall be provided in writing by Tenant to Landlord. Tenant will provide
written notification to Landlord of the acceptable temperatures and water level fills for each
Chemical Tank and any subsequent changes to such acceptable temperatures and water level
fills. Landlord shall not be responsible for making any changes or repairs necessary to restore
the temperature or water level to the levels described above.
CUP Services Interruption
To constitute to a CUP Services Interruption under Section 9.4 of the Lease, following
written notice from Tenant to Landlord that such failure exists and is continuing, Landlord must
fail to comply with its obligations to maintain and operate the Central Utility Plant or to provide
the CUP Utility or CUP Service for a period in excess of the interruption period for the particular
CUP Utility or CUP Service as set forth below:
CUP Utility/CUP Service
Steam
Compressed Air
Chilled Water
Lightning Detection
Fire Monitoring and Protection
Services
Emer�ency Response System
Interruption Period
Four (4) hours during a Twenty -Four (24) hour
period
Four (4) hours during a Twenty -Four (24) hour
period
Four (4) hours during a Twenty -Four (24) hour
period
Four (4) hours during a Twenty -Four (24) hour
period
Forty -Eight (48) hours during a Five (5) day period
Tenant shall at all times (i.e., 24 hours per day, 7 days per week, 365 days per year)
maintain an emergency response system (the "Emerg_ency Response System") for the water
levels in the Chemical Tanks that permits Tenant or Landlord to shut off any system operating in
connection with the Chemical Tanks within fifteen (15) minutes of an emergency shutoff event.
Tenant shall establish and update the emergency response standards, which shall include a
designation of the water level that constitutes an emergency shutoff event, and Tenant shall
provide a copy of such emergency response standards to Landlord. Tenant remains responsible
For responding to an emergency shutoff event; provided, however, that Tenant may request that
Landlord's Permitted Personnel respond to an emergency shutoff event. Landlord will
separately invoice Tenant for such actions in connection with the Emergency Response System
pursuant to the S-eparate fee schedule then in effect, as agreed upon in writing by Landlord and
Tenant.
E-2
Landlord's personnel must attend and satisfactorily complete any and all safety and
emergency response training that is necessary or advisable in connection with Landlord's
operations at the Base. In addition, Landlord's Permitted Personnel must attend training that is
specifically related to Tenant's Emergency Response System and is not required as part of
Landlord's other operations at the Base. The training related to Tenant's Emergency Response
System shall be conducted on the Base, unless otherwise agreed upon in writing by Landlord and
Tenant, and such training shall be at Tenant's cost.
E-3
EXHIBIT F
CUP UTILITIES AND SERVICES FEES
"CUP Fees" shall mean the sum of the Tenant Steam Fee, the Tenant Chilled Water Fee, the
Tenant Compressed Air Fee, and the Capital Reserve Fee which are calculated as follows:
"Tenant Steam Fee" _ (Tenant's Share of steam usage /Total steam creation from the
Central Utility Plant) * Total Operating Costs attributable to steam
"Tenant Chilled Water Fee" _ (Tenant's Share of chilled water usage /Total chilled water
creation from the Central Utility Plant) * Total Operating Costs attributable to chilled
water
"Tenant Compressed Air Fee" _ (Tenant's Share of compressed air usage /Total
compressed air creation from the Central Utility Plant) * Total Operating Costs
attributable to compressed air
"Capital Reserve Fee" _[(Tenant's Share of steam usage +Tenant's Share of chilled
water usage + Tenant's Share of compressed air usage) / (Total steam creating from the
Central Utility Plant + Total chilled water creation from the Central Utility Plant + Total
compressed air creation from the Central Utility Plant)] * Total Operating Costs * $.02
per kwh utilized by the Base
Where the capitalized terms not otherwise defined herein shall have the following meanings:
• "Tenant's Share" shall be calculated based upon the sum of (i) Tenant's usage of the
relevant utility as determined by the sub -meter that measures Tenant's use of such
Landlord Distributed Utilities) in the applicable monthly billing period and (ii) the Excess
Load Factor. The "Excess Load Factor" shall mean the difference between the total CUP
Utilities o�_itput in the monthly billing period and the sum of the sub -meters to which CUP
Utilities are distributed in the same monthly billing period; provided, however, the Excess
Load Factor does not include CUP Utilities distributed to buildings outside of the
Facility. Landlord shall use reasonable efforts to operate and maintain the Central Utility
Plant in a prudent manner consistent with industry best practices (including prompt repair
of leaks) and in order to minimize "waste steam" and the Excess Load Factor.
• "Total Operating Costs" shall mean Landlord's total reasonable out-of-pocket operating
costs incurred in connection with the provision of the CUP Utilities in the applicable
monthly billing period and shall include the salaries of Landlord's (or Management
Company, as applicable) employees (or portion thereof) solely to the extent directly
attributable to the provision of the CUP Utilities, administrative overhead solely to the
extent directly attributable to the operation of the Central Utility Plant, costs of input
(e.g., natural gas, electricity and water) required to operate the Central Utility Plant, costs
of materials and maintenance costs of the Central Utility Plant, licensing costs to the
extent attributable to the Central Utility Plant, and other necessary costs incurred in the
F-i
normal course of providing the CUP Utilities. Total Operating Costs shall not include
capital costs or other costs that are reimbursed by insurance or other third -party sources
and shall be adjusted by any reimbursements, discounts, rebates, credits, and refunds
received by Landlord.
Landlord will expend all Capital Reserve Fees received on necessary capital repairs,
replacement or maintenance of the Central Utility Plant and for no other reason.
F-2
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EXHIBIT H
FORM OF LANDLORD SUBORDINATION AGREEMENT
This LANDLORD SUBORDINATION AGREEMENT (this "A'areement") made this
�] day of [ 1, 20� _� by and among:
SECURED PARTY:
TENANT: TEXAS AERO ENGINE SERVICES, L.L.C.
P.O. Box 961024 MD 8353
Fort Worth, Texas 76161
and
LANDLORD: ALLIANCEAIRPORT AUTHORITY, INC.
RECITALS
WHEREAS [ ] ("Secured Party") has made a loan (as
renewed, modified, consolidated, replaced or extended, the "Loan") to TEXAS AERO
ENGINE SERVICES, L.L.C. ("Tenant") to provide working capital for its operations located at
the Alliance Fort Worth Airport, located in Fort Worth, Texas as more particularly described in
the Lease (as hereinafter defined) (the "Premises") and such Loan is governed by an
[ ] (the "Security Agreement") and
secured by, inter alia, a perfected security interest in Tenant's inventory and other property
described or referenced in Exhibit "A" (wherein Tenant is referred to as "Debtor") hereto (the
"Collateral");
WHEREAS it benefits ail parties named herein for Secured Party to make the Loan to
Tenant so as to further the economic vitality of Tenant's business and operations located on the
Premises; and
WHEREAS Secured Party, as a condition of making the Loan, requires that its security
interest in the Collateral will be superior to any lien, right, title or interest of
[ ("Landlord") in, upon, under or to the Collateral;
NOW, THEREFORE, in consideration of the premises, the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each of the parties, Landlord, Secured Party and Tenant covenant and
agree as follows:
H-1
AGREEMENT
1. SUBORDINATION. All interest of Landlord in the Collateral pursuant to the
Facilities Lease Agreement dated as of , 201_, executed by and between Landlord
and Tenant (as the same may have been or may hereafter be amended or modified, the "Lease"),
and all rights, title, liens and interests in the Collateral accruing to Landlord as Landlord or
otherwise under or pursuant to the Lease, whether consensual or arising by operation of law, are
and shall be subject and subordinate in all respects to Secured Party's security interest in the
Collateral, to the extent of each and every Loan advance made or hereafter to be made under or
in connection with the Security Agreement, together with interest, charges and expenses as
provided in the Security Agreement, and to all renewals, modifications, consolidations,
replacements and extensions of the Loan and/or the Security Agreement. Notwithstanding any
provisions of the Lease to the contrary, and for as long as the Security Agreement and any
renewals, modifications, consolidations, replacements or extensions thereof shall remain in
effect, Secured Party's security interest in the Collateral shall be superior to any rights, title, liens
and interests in the Collateral in favor of Landlord.
Landlord hereby further agrees not to take any action of any kind (whether or not
permitted by Article 9 of the Uniform Commercial Code or any other applicable law) to possess,
repossess, foreclose upon, dispose of (at public or private sale) or otherwise realize upon any of
the Collateral without the prior written consent of Secured Party.
2. SECURED PARTY ACCESS. Upon the occurrence of any Event of Default (as
defined in the Security Agreement) and at any time thereafter so long as the same shall be
continuing, upon written demand by Secured Party to Landlord, or in the event Landlord
succeeds to the interest of Tenant in the Premises, whether by default or termination of the Lease
or otherwise, Secured Party shall be allowed to enter the Premises for such reasonable periods
of time (not to exceed ninety (90) days from the date of the demand to Landlord or from the date
Landlord succeeds to the interest of Tenant in the Premises) as are required for the purpose of
preserving, collecting or liquidating its security interests in the Collateral in accordance with the
terms and provisions of the Security Agreement and such other purposes as are reasonably
incident to such procedures and shall be allowed to remove all or part of the Collateral from the
Premises and/or store all or part of the Collateral on the Premises during such period of time,
without further obligation or liability to Tenant or Landlord; provided that (i) Secured Party shall
provide, prior to entering the Premises, either, at Landlord's sole option, (a) assurances
reasonably acceptable to Landlord that Secured Party and its representatives are fully insured
with respect to any risks incurred in connection with conducting such procedures on the
Premises, or (b) a written release satisfactory to Landlord and Secured Party with respect to such
risks; (ii) to the extent applicable, such procedures shall be subject to the safety, security and
workplace rules relating to the Premises and the requirements of any applicable laws; (iii) any
such procedures conducted following Landlord's succession to Tenant's interest in the Premises
shall not unreasonably interfere with Landlord's business conducted on the Premises; and (iv)
Secured Party shall be liable for, and shall repair, any damages to the Premises caused by
Secured Party.
If Secured Party elects to take possession of or uses or occupies the Premises at any time
as provided hereinabove, then Secured Party shall pay Landlord Base Rent (as hereinafter
H-2
defined) calculated on a per diem basis for the number of days Secured Party is in possession of
the Premises, commencing on the first day of such possession, use, or occupancy and ending on
the day Secured Party abandons the Premises. "Base Rent" shall be defined as all monetary
obligations of the Tenant to the Landlord under the Lease, prorated for the period of time
Secured Party possesses, uses, or occupies the Premises. Notwithstanding the foregoing to the
contrary, despite Secured Party's possession of the Premises, Secured Party shall not be
obligated to pay Base Rent (or any other sums) to Landlord for any period in which Tenant has
previously paid rent to Landlord in accordance with the terms of the Lease.
3. ASSIGNMENT. Tenant and Landlord agree not to assign or transfer at any time
while this Agreement remains in effect any rights, title, liens or interests of any kind in, upon,
under or to the Premises or the Collateral (or any indebtedness, obligation or liability secured
thereby) without notifying Secured Party in writing at the address listed on page one of this
Agreement. Notwithstanding the foregoing to the contrary, Landlord and Secured Party
acknowledge and agree that Landlord shall use its best efforts to provide such notice, but
Landlord shall not have any liability for failing to provide such notice.
4. DURATION; BINDING EFFECT. This Agreement shall continue in effect
until all obligations and liabilities under the Security Agreement have been satisfied and paid in
Full. No termination, however, shall impair the rights or priorities created or acquired by
Secured Party prior to the effective date of such termination. This Agreement is solely for the
benefit of the parties hereto and all of the covenants, terms, conditions and obligations herein
contained shall be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns, and no other person or entity is
intended to or shall have any rights hereunder, whether as a third party beneficiary, or otherwise.
5. MISCELLANEOUS. '1'IIIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF TEXAS. THIS AGREEMENT BINDS LANDLORD AND
LANDLORD'S HEIRS, PERSONAL REPRESENTATIVE, SUCCESSORS AND ASSIGNS
AND BENEFITS SECURED PARTY, ITS SUCCESSORS AND ASSIGNS. This Agreement
may be executed in one or more counterparts and shall be binding upon the parties hereto when a
counterpart hereof has been signed by each of them. This Agreement may be filed and recorded
by Secured Party.
H-3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective on the date hereof.
SECURED PARTY:
Name:
Title:
TENANT:
TEXAS AFRO ENGINE SERVICES, L.L.C.
By:
By:
William Wozniak
President & General Manager
Lance Linguist
Vice President — Finance & Controller
LANDLORD:
Name:
Title:
H-4
THE STATE OF TEXAS §
COUNTY OF
BEFORE ME,
personally
the undersigned
appeared
authority, in and for said County and State, on this day
of
known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he/she executed the same for the purposes
and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND
201
AND SEAL OF OFFICE this
Notary Public in and for
the State of Texas
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, the undersigned authority, in and for said County and State, on this day
personally appeared WILLIAM WOZNIAK, President and General Manager, of TEXAS AERO
ENGINE SERVICES, L.L.C. known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the purposes and
consideration thercin expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
201
Notary Public in and for
the State of Texas
H-5
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, the undersigned authority, in and for said County and State, on this day
personally appeared LANCE LINGUIST, Vice President — Finance and Controller, of TEXAS
AERO ENGINE SERVICES, L.L.C. known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND
201 .
THE STATE OF TEXAS §
COUNTY OF §
SEAL OF OFFICE this
Notary Public in and for
the State of Texas
BEFORE ME, the undersigned authority, in and for said County and State, on
personally appeared ,
known to me to be the person whose
subscribed to the foregoing instrument and acknowledged to me that he/she executed
for the purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE thisft
201 .
Notary Public in and for
the State of Texas
H-6
this day
of
name is
the same
day
of
EXHIBIT A
All of Debtor's right, title and interest and interest in the following (the "Collateral"):
(a) accounts and accounts receivable;
(b) inventory wheresoever the same maybe located;
(c) contract rights, chattel paper, electronic chattel paper, notes, notes
receivable, documents, instruments, general intangibles, and payment intangibles,
in each case, which evidence an account or accounts receivable and are now or
may hereafter be in the possession of or deposited with Secured Party, or which
are otherwise assigned to Secured Party or as to which Secured Party may now or
hereafter control possession by documents of title or otherwise; and
(d) substitutions, accessions, additions, parts, accessories, attachments,
replacements, proceeds and products of, for and to any and all of the foregoing,
including, without limitation, any and all insurance proceeds (solely to the extent
payable to Secured Party in connection with a loss of Collateral in accordance
with Section 6.2 the Security Agreement), whether now or hereafter owned,
existing, created, arising or acquired; provided, however, nothing herein shall be
intended to grant a security interest in any engines or other components of third
parties to which any item of inventory may become attached and considered an
accession, addition, accessory or attachment.
H-7
EXHIBIT I
COMMON AREA FEES
"Common Area Fees" shall be calculated using the following formula:
(Tenant's Building Footprint / Total Base Footprint) * (Total Common Area Costs)
Where the capitalized terms not otherwise defined herein shall have the following
meanings:
• "Tenant's Building Footprint" shall mean the sum of the square footage of the
ground level floor of each of the buildings located within the Facility.
• "Total Base Footprint" shall mean the sum of the square footage of the ground
level floor of each of the buildings located on the Base.
• "Teal Common Area Costs" shall mean the sum of Landlord's reasonable out of
pocket operating costs and expenses which Landlord shall incur, pay or become
obligated to pay in connection with the operation, maintenance, and repair of the
Common Areas, and shall include but not be limited to landscaping, janitorial,
security, repairs and other operating costs that are necessary for the continuing
operation of the Base, excluding, however, the following:
1. An amount equal to any reimbursements, discounts, rebates, credits, and
refunds to which Landlord (or Management Company on its behalf or in
connection with incurring any such Total Common Area Costs) is entitled
or receives from any third party;
2. Any expenditures that are the responsibility of Landlord or Tenant under
this Lease or any Adjoining Tenant and that are attributable to the Facility,
the IWTF, the Central Utility Plant (excluding the janitorial and security
services provided by Landlord in connection with the Central Utility
Plant), the Fuel Farm, the Hazardous Waste Building, the Automotive
Shop, the CMS Building, or any Adjoining Tenant's facility (such as the
hangar);
3. Costs of capital improvements, replacements or equipment and any
depreciation or amortization expenses thereon, except to the extent (A)
reasonably intended to produce a reduction in Total Common Area Costs,
(B) required by any laws applicable to the Base after the date of the
Lease, or for health or safety purposes, or (C) for improvements to or
replacements of any components of the Common Areas (it being
understood that such costs shall be amortized over the useful life of such
improvements, replacements and equipment);
4. Rentals for items (except when needed in connection with normal repairs
and maintenance of permanent systems) which if purchased, rather than
rented, would constitute a capital improvement excluded in clause (2)
above;
5. Costs, including permit, license and inspection costs, incurred with respect
to an Adjoining Tenant or other occupants of the Base or incurred in
1-1
renovating or otherwise improving vacant space for or the premises of
Adjoining Tenants or other occupants of the Base;
6. Costs incurred by Landlord due to the violation by Landlord of the terms
and conditions of this Lease or any other lease of any portion of the Base;
7. Marketing costs and advertising and promotional expenditures; Interest,
fines or penalties incurred as a result of Landlord's failure to make
payments when due unless such failure is reasonable under the
circumstances;
�. The depreciation of any capital improvements on the Base; and
9. Any cost incurred due to the negligence or willful misconduct of
Landlord, Tenant, Management Company, Fuel Services Company or any
Adjoining Tenant.
I-2
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BILL OF SALE
FOR VALUABLE CONSIDERATION, receipt of which is acknowledged,
ALLIANCEAIRPORT AUTHORITY, INC., a nonstock, nonprofit industrial development
corporation created by the City pursuant to the laws of the State of Texas, including particularly
the Development Corporation Act of 1979, Article 5190.6, V.A.T.C.S., as amended ("Seller"),
grants, sells, transfers and assigns to TEXAS AERO ENGINE SERVICES, L.L.C., a Delaware
limited liability company ("Buyer"), all right, title and interest in and to the TAESL Equipment
as such term is defined in that certain Equipment Purchase Agreement dated on or about the
date hereof, between Seller and Buyer [the "Agreement"]), free and clear of all liens, claims and
encumbrances whatsoever (excluding only those arising by and through Buyer) and subject in all
respects to the terms, limitations and conditions contained in said Agreement. Seller conveys
and Buyer accepts the TAESL Equipment in its "AS IS" condition and with all faults and
without any representation of any kind or nature except to the extent, if any, specifically made in
the Agreement.
Seller acknowledges that the parties have not prepared a specific list of the TAESL
Equipment and therefore Seller confirms that it has not sold, transferred or conveyed to any third
parry any right, title or interest in and Seller hereby disclaims all right, title and interest in and to
the TAESL Equipment and any and all other equipment or tooling (not otherwise constituting
fixtures) that is located at and used by Buyer upon or about the TAESL Premises (as such term is
defined in the Agreement).
EXECUTED as of this .day of �1�� , 2015.
ALLIANCEAIRPORT AUTHORITY, INC.
a no110tock5 nonprofit industrial development
corporation created by the City pursuant to the laws
of the State of Texas, including particularly the
Development Corporation Act of 1979, Article
5190.6. V.A.T.C.S., as amended
Name:
Title.
AUS-6055608-2
LANDLORD SUBORDINATION AGREEMENT
This IgUN DLORD SUBORDINATION AGREEMENT (this "Agreement") made this
v!qL day of , 2015 by and among:
SECURED PARTY: COMPASS BANK
Attn: Structured Lending Group/Dallas Commercial Funding
Department
8080 N. Central Expressway, Suite 120
Dallas, Texas 75206
TENANT: TEXAS AERO ENGINE SERVICES, L.L.C.
P.O. Box 961024 MD 8353
Fort Worth, Texas 76161
LANDLORD: ALLIANCE AIRPORT AUTHORITY, INC.
Attn* Director, Housing and Economic Development Dept.
1000 Throckmorton
Fort Worth, Texas 76102
RECITALS
WHEREAS COMPASS BANK ("Secured Party") has made a loan (as renewed,
modified, consolidated, replaced or extended, the "Loan") to TEXAS AERO ENGINE
SERVICES, L.L.C., a Delaware limited liability company ("Tenant"), to provide working
capital for its operations located at the Alliance Fort Worth Airport, located in Fort Worth,
Texas as more particularly described in the Lease (as hereinafter defined) (the "Premises") and
such Loan is governed by a Second Amended and Restated Revolving Credit and Security
Agreement (the "Security Agreement") and secured by, inter alia, a perfected security interest
in Tenant's inventory and other property described or referenced in Exhibit "A" (wherein
Tenant is referred to as "Debtor") hereto (the "Collateral");
WHEREAS it benefits all parties named herein for Secured Party to make the Loan to
Tenant so as to further the economic vitality of Tenant's business and operations located on the
Premises; and
WHEREAS Secured Party, as a condition of making the Loan, requires that its security
interest in the Collateral will be superior to any lien, right, title or interest of ALLIANCE
AIRPORT AUTHORITY, a nonstock, nonprofit industrial development corporation created by
the City pursuant to the laws of the State of Texas, including particularly the Development
Corporation Act of 1979, Article 5190.6, V.A.T.C.S., as amended ("Landlord") in, upon, under
or to the Collateral.
AUS-6054000-2
NOW, THEREFORE, in consideration of the premises, the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each of the parties, Landlord, Secured Party and Tenant covenant and
agree as follows:
AGREEMENT
1. SUBORDINATION. Ali interest of Landlord in the Collateral pursuant to the
Facilities Lease Agreement dated as of , 2015, executed by and between Landlord
and Tenant (as the same may have been or may hereafter be amended or modified, the "Lease"),
and all rights, title, liens and interests in the Collateral accruing to Landlord as Landlord or
otherwise under or pursuant to the Lease, whether consensual or arising by operation of law, are
and shall be subject and subordinate in all respects to Secured Party's security interest in the
Collateral, to the extent of each and every Loan advance made or hereafter to be made under or
in connection with the Security Agreement, together with interest, charges and expenses as
provided in the Security Agreement, and to all renewals, modifications, consolidations,
replacements and extensions of the Loan and/or the Security Agreement. Notwithstanding any
provisions of the Lease to the contrary, and for as long as the Security Agreement and any
renewals, modifications, consolidations, replacements or extensions thereof shall remain in
effect, Secured Party's security interest in the Collateral shall be superior to any rights, title, liens
and interests in the Collateral in favor of Landlord.
Landlord hereby further agrees not to take any action of any kind (whether or not
permitted by Article 9 of the Uniform Commercial Code or any other applicable law) to possess,
repossess, foreclose upon, dispose of (at public or private sale) or otherwise realize upon any of
the Collateral without the prior written consent of Secured Party.
2. SECURED PARTY ACCESS. Upon the occurrence of any Event of Default (as
defined in the Security Agreement) and at any time thereafter so long as the same shall be
continuing, upon written demand by Secured Party to Landlord, or in the event Landlord
succeeds to the interest of Tenant in the Premises, whether by default or termination of the Lease
or otherwise, Secured Party shall be allowed to enter the Premises for such reasonable periods
of time (not to exceed ninety (90) days from the date of the demand to Landlord or from the date
Landlord succeeds to the interest of Tenant in the Premises) as are required for the purpose of
preserving, collecting or liquidating its security interests in the Collateral in accordance with the
terms and provisions of the Security Agreement and such other purposes as are reasonably
incident to such procedures and shall be allowed to remove all or part of the Collateral from the
Premises and/or store all or part of the Collateral on the Premises during such period of time,
without further obligation or liability to Tenant or Landlord; provided that (1) Secured Party shall
provide, prior to entering the Premises, either, at Landlord's sole option, (a) assurances
reasonably acceptable to Landlord that Secured Party and its representatives are fully insured
with respect to any risks incurred in connection with conducting such procedures on the
Premises, or (b) a written release satisfactory to Landlord and Secured Party with respect to such
risks; (ii) to the extent applicable, such procedures shall be subject to the safety, security and
workplace rules relating to the Premises and the requirements of any applicable laws; (iii) any
such procedures conducted following Landlord's succession to Tenant's interest in the Premises
shall not unreasonably interfere with Landlord's business conducted on the Premises; and (iv)
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Secured Party shall be liable for, and shall repair, any damages to the Premises caused by
Secured Party,
If Secured Party elects to take possession of or uses or occupies the Premises at any time
as provided hereinabove, then Secured Party shall pay Landlord Base Rent (as hereinafter
defined) calculated on a per diem basis for the number of days Secured Party is in possession of
the Premises, commencing on the first day of such possession, use, or occupancy and ending on
the day Secured Party abandons the Premises. "Base Rent" shall be defined as all monetary
obligations of the Tenant to the Landlord under the Lease, prorated for the period of time
Secured Party possesses, uses, or occupies the Premises. Notwithstanding the foregoing to the
contrary, despite Secured Party's possession of the Premises, Secured Party shall not be
obligated to pay Base Rent (or any other sums) to Landlord for any period in which Tenant has
previously paid rent to Landlord in accordance with the terms of the Lease.
3. ASSIGNMENT. Tenant and Landlord agree not to assign or transfer at any time
while this Agreement remains in effect any rights, title, liens or interests of any kind in, upon,
under or to the Premises or the Collateral (or any indebtedness, obligation or liability secured
thereby) without notifying Secured Party in writing at the address listed on page one of this
Agreement. Notwithstanding the foregoing to the contrary, Landlord and Secured Party
acknowledge and agree that Landlord shall use its best efforts to provide such notice, but
Landlord shall not have any liability for failing to provide such notice.
4. DURATION; BINDING EFFECT. This Agreement shall continue in effect
until all obligations and liabilities under the Security Agreement have been satisfied and paid in
full. No termination, however, shall impair the rights or priorities created or acquired by
Secured Party prior to the effective date of such termination. This Agreement is solely for the
benefit of the parties hereto and all of the covenants, terms, conditions and obligations herein
contained shall be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns, and no other person or entity is
intended to or shall have any rights hereunder, whether as a third party beneficiary, or otherwise.
5. MISCELLANEOUS. THIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF TEXAS. THIS AGREEMENT BINDS LANDLORD AND
LANDLORD'S HEIRS, PERSONAL REPRESENTATIVE, SUCCESSORS AND ASSIGNS
AND BENEFITS SECURED PARTY, ITS SUCCESSORS AND ASSIGNS. This Agreement
may be executed in one or more counterparts and shall be binding upon the parties hereto when a
counterpart hereof has been signed by each of them. This Agreement may be filed and recorded
by Secured Party.
AUS-6054000-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective on the date hereof.
SECURED PARTY:
COMPASS BANK
Name:
Title:
TENANT:
TEXAS AERO ENGINE SERVICES, L.L.C.
By:
By:
William Wozniak -"
President & General Manager
���
Lance Linguist v
Vice President — Finance & Controller
LANDLORD:
ALLIANCEAIRPORT AUTHORITY, INC.
Name:
Title:
AUS•6054000-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective on the date hereof.
SECURED PARTY:
COMPASS BANK
Name:
Title:
TENANT:
TEXAS AERO ENGINE SERVICES, L.L.C.
By:
By:
William Wozniak
President &General Manager
Lance Linguist
Vice President — Finance & Controller
LANDLORD:
ALLIANCE AIRPORT AUTHORITY
Name:
Title:
AUS-6054000-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective on the date hereof.
SECURED PARTY:
COMPASS BANK
TENANT:
TEXAS AERO ENGINE SERVICES, L.L.C.
By:
William Wozniak
President & General Manager
By:
Lance Linguist
Vice President — Finance & Controller
LANDLORD:
ALLIANCEAIRPORT AUTHORITY, INC.
Name:
Title:
AUS-6054000-2
THE STATE OF TEXAS §
§
COUNTY OF 14xra §
BEFORE ME, the undersigned authority, in and for said County, and State, on this day
personally appeared �"A&" b . {-�WIv'1-G� �Yese , C"`of
COMPASS BANK known to me to be the p rson whose name is subscribed to the foregoing
instrument and acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 261 day of
20158
n/
gt�v p��� KIMBERLY JANE GILES
Notary Public
STATE OF TEXAS
*0 My Cortxn Exp. Nov. 19, 2018
THE STATE OF TEXAS §
COUNTY OF §
Notary Public intend for
the State of Texas
BEFORE ME, the undersigned authority, in and for said County and State, on this day
personally appeared WILLIAM WOZNIAK, President and General Manager, of TEXAS AERO
ENGINE SERVICES, L.L.C. known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN
UNDER MY
2015.
HAND AND SEAL OF OFFICE this
Notary Public in and for
the State of Texas
AUS-6054000-2
H-5
THE STATE OF TEXAS §
COUNTY OF §
BEFORE ME, the undersigned authority, in and for said County and State, on this day
personally appeared 9 of
COMPASS BANK known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GNEN UNDER MY HAND AND SEAL OF OFFICE this
2015o
Notary Public in and for
the State of Texas
THE STATE OF TEXAS
COUNTY OF
BEFORE ME, the undersigned authority, in and for said County and State, on this day
personally appeared WILLIAM WOZNIAK, President and General Manager, of TEXAS AERO
ENGINE SERVICES, L.L.C. known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY
2015.
HAND AND SEAL OF OFFICE this day of
=o,�pav a��� ANGELA REICHERT
Notary Public
N STATE OF TEXAS
9lF pF T My Comm. Exp, August 27, 2015
AUS-6054000-2
THE STATE OF TEXAS §
eA
COUNTY OF §
BEFORE ME, the undersigned authority, in and for said County and State, on this day
personally appeared LANCE LINGUIST, Vice President — Finance and Controller, of TEXAS
AERO ENGINE SERVICES, L.L.C. known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
on L
MY HAND AND
,�pRv a��,, ANGEIA REICHERT
JOF
Notary Public
STATE OF TEXAS
My Comm. Exp. August 27, 2015
THE STATE OF TEXAS §
COUNTY OF Ida' §
SEAL OF OFFICE this L!5y day of
BEFORE ME, the u�r dersigned authority, in and for said ounty and State, on this day
personally appeared c\j ESu S P*je Unit it , 40fl RWCWCOR- of
ALLIANCEAIRPORT AUTHORITY, INC. known to me to be the person whose name is
subscribed to the foregoing instrument and acknowledged to me that he/she executed the same
for the purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of
riw"AIZY , 2015.
Notary Public in and for
the State of Texas
��� VICKI S. GANSKE
*JotaryVr PuI C
AMO
u�ar8OF My Comm. Exp. 0511612014
AUS-6054000-2
EXHIBIT A
All of Debtor's right, title and interest and interest in the following (the "Collateral
(a) accounts and accounts receivable;
(b) inventory wheresoever the same may be located;
(c) contract rights, chattel paper, electronic chattel paper, notes, notes receivable,
documents, instruments, general intangibles, and payment intangibles, in each case,
which evidence an account or accounts receivable and are now or may hereafter be in the
possession of or deposited with Secured Party, or which are otherwise assigned to
Secured Party or as to which Secured Party may now or hereafter control possession by
documents of title or otherwise; and
(d) substitutions, accessions, additions, parts, accessories, attachments, replacements,
proceeds and products of, for and to any and all of the foregoing, including, without
limitation, any and all insurance proceeds (solely to the extent payable to Secured Party
in connection with a loss of Collateral in accordance with Section 6.2 the Security
Agreement), whether now or hereafter owned, existing, created, arising or acquired;
provided, however, nothing herein shall be intended to grant a security interest in any
engines or other components of third parties to which any item of inventory may become
attached and considered an accession, addition, accessory or attachment.
H-6
AUS-6054000-2
EQUIPMENT PURCHASE AGREEMENT
This Equipment Purchase Agreement (the "Agreement") dated as of , 2015
the "Effective Date"), by and between AllianceAirport Authority, Inc., a nonstock, nonprofit
industrial corporation created by the City of Fort Worth pursuant to the laws of the State of
Texas, including particularly the Development Corporation Act of 1979, Article 5190.6,
V.A.T.C.S., as amended ("Authority"), and Texas Aero Engine Services, L.L.C., a Delaware
limited liability company ("TAESL") (each individually a "party" and together the "parties"),
serves to memorialize the terms and conditions for the purchase by TAESL of the TAESL
Equipment (as defined below).
RECITALS
A. Pursuant to that certain Master Equipment Lease Agreement, dated April 1, 1991
1991 Equipment Lease ("Equipment Lease"), between Authority and American Airlines, Inc.,
Authority leased to American Airlines, Inc. certain equipment owned by Authority
("Equipment") to American.
B. Pursuant to that certain Agreement on Rejection and Related Matters by and
among American and Landlord, as approved by Order dated August 8, 2014, issued by the
United States Bankruptcy Court, Southwestern District of New York, Chapter 11 Case No. 11-
15463 (SHL), Document No. 12230, the Equipment Lease was rejected and therefore terminated.
C. Contemporaneously herewith, Authority, as landlord, and TAESL, as tenant, have
entered into that certain Facilities Lease Agreement (the "Lease") for the lease of certain
premises located adjacent to the Alliance Fort Worth Airport in Fort Worth, Texas (the "TAESL
Premises").
D. Authority desires to sell to TAESL, and TAESL desires to purchase from
Authority, all of the Equipment that is physically located at the TAESL Premises on the
Effective Date of this Agreement, including but not limited to the Equipment listed on Exhibit A
attached hereto (collectively, the "TAESL Equipment'), in accordance with the terms of this
Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein and other good and valuable consideration, the sufficiency and receipt of which the parties
acknowledge, the parties agree as follows:
1. Agreement
A. The parties hereto acknowledge that the recitals set forth above are true and
correct.
B. Authority agrees to sell, transfer, assign, convey, and deliver to TAESL free and
clear of all liens, claims and encumbrances (other than those arising by and through TAESL),
AUS-6052614-2
and TAESL shall purchase, acquire, and accept from Authority, all right, title, and interest in and
to the TAESL Equipment.
C. As full consideration for the purchase of the TAESL Equipment, TAESL agrees
to pay and deliver to Authority the total sum of $1,500,000.00 in cash or wire transfer
("Purchase Price") on or before the Rejection Effective Date (as such term is defined in the
Lease).
D. On the Rejection Effective Date, subject only to receipt of the Purchase Price,
Authority will relinquish and sell, transfer, assign, convey and deliver to TAESL all right, title
and interest in and to the TAESL Equipment, free and clear of all liens, claims and
encumbrances (other than those arising by and through TAESL) by executing and delivering to
TAESL a Bill of Sale in the form attached hereto as Exhibit B ("Bill of Sale").
E. Notwithstanding anything in the Bill of Sale to the contrary, the TAESL
Equipment shall not include any permanent improvements located at any time at or on the
TAESL Premises,
2. Representations and Warranties
A. Each of the parties hereto represents and warrants that it has the legal capacity to
enter into this Agreement and that this Agreement constitutes the legal, valid, binding and
enforceable obligation of each party hereto.
B. Authority represents and warrants that it holds, and at the time of execution and
delivery of the Bill of Sale will hold and convey to TAESL, good and indefeasible title to the
TAESL Equipment, free and clear of liens, claims and encumbrances (other than those arising by
and through TAESL).
3. Governing Law
This Agreement shall be construed and interpreted in accordance with the laws of the
State of Texas. It shall not be construed against the party on whose behalf it was drafted solely
because of the fact that that party drafted it, rather, the parties hereto acknowledge that this
Agreement is a fully negotiated document.
4. Entire Agreement and Successors in Interest
This Agreement contains the entire agreement between the parties hereto with regard to
the matters set forth in it and supersedes any and all prior agreements and understandings,
whether written or oral, relating to the subject matter hereof. This Agreement may be amended,
or any right or conditions hereunder waived, only by written instrument. This Agreement shall be
binding upon the parties, and their respective executors, administrators, personal representatives,
heirs, successors, and assigns, related and affiliated entities, parents, subsidiaries, officers,
directors, shareholder, members, managers, agents, representatives, employees, predecessors,
successors, and assigns.
5. "As Is, Where -Is" Sale; Disclaimer of Warranty
AUS-6052614-2
A. The TAESL Equipment is being conveyed "AS -IS, WHERE -IS" on the date hereof,
with all faults and without any representation, warranty or guarantee of any kind being made or
given by Authority, or its affiliates, servants or agents, express or implied, arising by law or
otherwise, other than warranty of title as expressly provided for herein or in the Bill of Sale.
B. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
AUTHORITY SPECIFICALLY DISCLAIMS, AND EXCLUDES HEREFROM, OTHER
THAN AS EXPRESSLY PROVIDED HEREIN, (a) ANY WARRANTY AS TO THE
VALUE OR CONDITION OF THE TAESL EQUIPMENT OR ANY DAMAGE
THERETO; (b) ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY OF
MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE;
AND (c) ANY LIABILITY OF AUTHORITY FOR ANY INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGE WHATSOEVER WITH RESPECT TO THE TAESL
EQUIPMENT.
6. Miscellaneous Provisions
A. This Agreement may be executed in counterparts, and if so executed, shall
constitute one agreement binding on all the parties hereto, notwithstanding that all the parties are
not signatories to the original or the same counterpart.
B. This Agreement shall be immediately effective upon signature by all parties
hereto. Documents transmitted by facsimile or electronic transmission with signatures of the
parties shall be as valid and binding as though they were original documents.
[Signature Page Follows]
AUS-6052614-2
The parties hereto have executed this Agreement to be effective on the Effective Date.
AUTHORITY:
ALLIANCEAIRPORT AUTHORITY, INC.
a nonstock, nonprofit industrial development corporation
created by the City pursuant to the laws of the State
of Texas, including particularly the Development
Corporation Act of 1979, Article 5190.6. V.A.T.C.S.,
as ameilded
By:Gt�"�/
Name:Ur�� C Title:Yc�
TAESL:
TEXAS AERO ENGINE SERVICES, L.L.C.,
a Delaware limited liability company
Name:
Title:
The parties hereto have executed this Agreement to be effective on the Effective Date.
AUTHORITY:
ALLIANCEAIRPORT AUTHORITY, INC.
a nonstock, nonprofit industrial development corporation
created by the City pursuant to the laws of the State
of Texas, including particularly the Development
Corporation Act of 1979, Article 5190.6, V.A.T.C.S.,
as amended
By:
Name
Title:
TAESL:
TEXAS AERO ENGINE SERVICES, L.L.C.,
a Delaware limied liability company
By:
AUS-6052614-2
EXHIBIT A
CERTAIN TAESL EQUIPMENT
Horizontal Boring Machine
Blade Tip Grinder
Vertical Machining Center
Metal Spray System
Grinding Machine
48" Vertical Turning Center
Modular Storage System (Stak System)
;NC Vertical Grinding/Turning Machine
Horizontal Bal, Machine
Contour Band Machine (Saw) w/Standard
Equipment
AUS-6052614-2
HIM§ I]
FORM OF BILL OF SALE
FOR VALUABLE CONSIDERATION, receipt of which is acknowledged,
ALLIANCEAIRPORT AUTHORITY, INC., a nonstock, nonprofit industrial development
corporation created by the City pursuant to the laws of the State of Texas, including particularly
the Development Corporation Act of 1979, Article 5190.6, V.A.T.C.S., as amended ("Seller"),
grants, sells, transfers and assigns to TEXAS AERO ENGINE SERVICES, L.L.C., a Delaware
limited liability company ("Buyer"), all right, title and interest in and to the TAESL Equipment
(as such term is defined in that certain Equipment Purchase Agreement dated on or about the
date hereof, between Seller and Buyer [the "Agreement"]), free and clear of all liens, claims and
encumbrances whatsoever (excluding only those arising by and through Buyer) and subject in all
respects to the terms, limitations and conditions contained in said Agreement. Seller conveys
and Buyer accepts the TAESL Equipment in its "AS IS" condition and with all faults and
without any representation of any kind or nature except to the extent, if any, specifically made in
the Agreement.
Seller acknowledges that the parties have not prepared a specific list of the TAESL
Equipment and therefore Seller confirms that it has not sold, transferred or conveyed to any third
party any right, title or interest in and Seller hereby disclaims all right, title and interest in and to
the TAESL Equipment and any and all other equipment or tooling (not otherwise constituting
fixtures) that is located at and used by Buyer upon or about the TAESL Premises (as such term is
defined in the Agreement).
EXECUTED as of this day of , 2015.
ALLIANCEAIRPORT AUTHORITY, INC.
a nonstock5 nonprofit industrial development
corporation created by the City pursuant to the laws
of the State of Texas, including particularly the
Development Corporation Act of 1979, Article
5190.6, V.A.T.C.S., as amended
Name:
Title:
AUS-6052614-2
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made by and between the
AllianceAirport Authority, Inc. (the "Authority") and Texas Aero Engine Services,
L.L.C., a Delaware limited liability company ("TAESL"), and together with the
Authority, collectively, the "Depositors"), and Rattikin & Rattikin, LLP, a Texas limited
liability partnership ("Escrow Agent").
WHEREAS, Authority is an industrial development corporation created in 1989
to benefit the City of Fort Worth ("City") and to, among other things, issue bonds to
promote and develop new and expanded business enterprises in the City, to promote and
encourage employment, and otherwise to benefit the public welfare in accordance with
the Development Corporation Act of 1979, as amended; and
WHEREAS, pursuant to the Authority's lawful authority and in accordance with
Authority's stated purpose, as reflected in its Articles of Incorporation, Authority owns
the American Airlines, Inc. ("American") maintenance facility adjacent to Fort Worth
Alliance Airport and issued bonds to finance construction of that facility (the
"Maintenance Facility"); and
WHEREAS, American has leased the Maintenance Facility and sun•ounding land
and improvements (collectively, the "Facility Property") from the Authority under that
certain real property Lease Agreement between the Authority and American dated as of
March 1, 1990 (the "Facility Lease"); and
WHEREAS, TAESL has been a sublessee of American under the Facility Lease
for a portion of the Maintenance Facility; and
WHEREAS, on November 29, 2011 American and AMR Corporation, and
certain of their subsidiaries, as debtors and debtors in possession, filed for relief under
Chapter 11, Title 11 of the United States Code in the United States Bankruptcy Court for
the Southern District of New York (In re AMR Corporation, et al., Case No. 1145643)
the "AMR Bankruptcy"); and
WHEREAS, as part of the resolution of the AMR Bankruptcy, on July 2, 2014
the Authority, the City and American entered into that certain Agreement on Rejection
and Related Matters under which American, with the Authority's and the City's consent,
will reject the Facility Lease effective as of February 5, 2015 at 11:59 p.m. (the
"Effective Rejection Date"); and
WHEREAS, upon the rejection of the Facility Lease, the Authority shall enter
into certain agreements in order to provide a smooth transition in operational control of
the Facility Property from American to the Authority; and
Page 1 of 12
AUS-6055584-1
WHEREAS, as part of the transition of operational control from American to the
Authority, the Authority is entering into a direct Facilities Lease Agreement with TAESL
for a portion of the Maintenance Facility (the "TAESL Lease"), among other agreements
with TAESL; and
WHEREAS, the Facility Property is subject to that certain Declaration of
Covenants and Restrictions dated August 10, 1989 and recorded in Volume 2628, Page
852, Deed Records, Denton County, Texas ("Original Declaration") which runs in favor
of ADL Development, L.P. (f/k/a Hillwood/2470 Ltd., f/k/a Alliance Airport, Ltd.), a
Texas limited partnership; Hillwood/1358 Ltd., a Texas limited partnership; and
Authority; and
WHEREAS, the Original Declaration must be amended to facilitate the use of the
Facility Property following the Effective Rejection Date, and
WHEREAS, the Depositors desire to deposit with Escrow Agent the documents
related to the amendment of the Original Declaration, the agreements with TAESL, and
the Equipment Purchase Price, as hereinafter defined.
NOW, THEREFORE, for and in consideration of the mutual covenants set forth
herein, it is agreed by all the parties hereto as follows.
Agreement
1. (a) Authority shall deposit with Escrow Agent the following
documents ("Documents") by no later than February 54, 2015:
(i) Amended and Restated Declaration of Covenants and
Restrictions;
TAESL Lease;
(iii) Equipment Purchase Agreement between Authority and
TAESL for the purchase by TAESL from Authority of the
TAESL Equipment, as defined in the Equipment Purchase
Agreement, for the purchase price of $1,500,000.00
("Equipment Purchase Price"),
(iv) Bill of Sale pursuant to the Equipment Purchase
Agreement;
(v) Landlord Subordination Agreement; and
(vi) Binders of Insurance.
(b) TAESL shall deposit with Escrow Agent executed counterparts of the
following Documents by no later than February 5, 2015:
(i) TAESL Lease;
(ii) Equipment Purchase Agreement; and
(iii) Landlord Subordination Agreement.
Page 2 of 12
AUS-6055584-1
The Documents and the Deposit, as hereinafter defined, shall be held in accordance with
the terms of this Agreement until Escrow Agent has received written notification as set
forth in Section 3.
(c) TAESL shall deposit with Escrow Agent the (i) Equipment Purchase
Price; (ii) first month's Base Rent in the amount of $203,500.00; and (iii) first month's
Additional Rent in the amount of $10,000.00 (collectively, "Deposit") by no later than
Wednesday, February 5, 2015, said Deposit to be deposited into an escrow account by
Escrow Agent, to be held in accordance with the terms of this Agreement until Escrow
Agent has received written notification as set forth in Section 3.
2. Escrow Agent shall see that all of the Documents are properly dated and
duly executed (including initials, where provided for) and that all required
exhibits/schedules to the Documents, including correct legal descriptions, have been
attached, are properly labeled and properly describe the real and/or personal property
intended to be conveyed, secured or encumbered thereby. Escrow Agent shall confirm
receipt in writing to Depositors of each of the fully executed Documents and of the
Deposit (the Documents and Deposit are collectively referred to herein as the "Escrow
Property"). Upon receipt by Escrow Agent of all fully executed Documents and the
Deposit, Escrow Agent shall notify Depositors and confirm receipt of such notice.
3. Upon written notice from a representative of each of the Depositors
directing Escrow Agent to do so, Escrow Agent shall immediately or as soon as
practicable, in the following order, (i) record in the Real Property Records of Denton
County and the Real Property Records of Tarrant County the Amended and Restated
Declaration of Covenants and Restrictions, (ii) deliver the entire Deposit to the Authority,
and (iii) distribute the remaining Documents to the Depositors. Escrow Agent shall
return evidence of recording or filing, as applicable of the the Amended and Restated
Deccaration of Covenants and Restrictions to Depositors immediately after recording.
After filing or recording, Escrow Agent shall send the original recorded or filed
documents to the appropriate counsel, with copies to each of the other counsel.
4. If Escrow Agent receives from either of the Depositors (the "Noticing
Party") a written notice not to proceed with the obligations of Escrow Agent in Section 3,
Escrow Agent shall send (by reputable overnight courier or by certified mail, return
receipt requested and by email) a copy of such request to the other party (the "Non -
Noticing Party"). The Non -Noticing Party shall have the right to object to the
termination of this Agreement as evidenced by a written notice of objection delivered to
and received by Escrow Agent within ten (10) days after the date of Escrow Agent's
mailing of such copy to the Non -Noticing Party, but not thereafter. If Escrow Agent shall
not have so received a written notice of objection from the Non -Noticing Party, Escrow
Agent shall deliver the Escrow Property to the Noticing Party in accordance with the
instructions of the Noticing Party. If Escrow Agent shall have received a written notice
of objection from the Non -Noticing Party within the time herein prescribed, Escrow
Agent shall continue to hold the Escrow Property until Escrow Agent receives either (i) a
written notice signed by both Depositors stating who is entitled to the Escrow Property or
(ii) a final order of a court of competent jurisdiction directing release of the Escrow
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Property in a specific manner, in either of which events Escrow Agent shall then release
the Escrow Property, in accordance with such notice or order. Escrow Agent shall not be
or become liable in any way or to any person for its refusal to comply with any such
requests or demands until and unless it has received a direction of the nature described in
clause (i) or (ii) above.
6. The duties, responsibilities and obligations of the Escrow Agent shall be
limited to those expressly set forth herein, and no duties, responsibilities or obligations
shall be inferred or implied. The Escrow Agent shall not be subject to, nor required to
comply with, any other agreement between the Depositors or to which any Depositor is a
party, even though reference thereto may be made herein, nor to comply with any
direction or instruction (other than those contained herein or delivered in accordance with
this Agreement) from any individual Depositor or any entity acting on its behalf. The
Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds
or otherwise incur any financial liability in the performance of any of its duties
hereunder. Notwithstanding the above, Escrow Agent and Authority are parties to a
separate escrow agreement related to the transfer of the Facility Property to the City, and
Escrow Agent acknowledges its obligations thereunder and that Escrow Agent is subject
to the terms thereof.
5. This Agreement is for the exclusive benefit of the parties hereto and their
respective successors hereunder, and shall not be deemed to give, either express or
implied, any legal or equitable right, remedy, or claim to any other entity or person
whatsoever.
6. If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or administrative
process which in any way affects the Escrow Property (including but not limited to orders
of attachment or garnishment or other forms of levies or injunctions or stays relating to
the transfer of the Escrow Property), the Escrow Agent shall immediately provide notice
A same to each of the Depositors. Thereafter, the Escrow Agent is authorized to comply
therewith in any manner as it or its legal counsel of its own choosing deems appropriate,
unless one or more of the Depositors notifies the Escrow Agent in writing of its (their)
intent to appeal such order, judgment, decree, writ or other form of process and thereafter
timely perfects that appeal. Pending any such appeal, the Escrow Agent shall take no
action directed by the order, judgment, decree, writ or other process under appeal unless
approved in writing by all of the Depositors. If the Escrow Agent complies with any
final judicial or administrative order, judgment, decree, writ or other form of judicial or
administrative process, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person or entity.
7. (a) The Escrow Agent shall not be liable for any action taken or omitted or
for any loss or injury resulting from its actions or its performance or lack of performance
of its duties hereunder in the absence of gross negligence or willful misconduct on its
part. In no event shall the Escrow Agent be liable (i) for acting in accordance with or
relying upon any instruction, notice, demand, certificate or document from all of the
Page 4 of 12
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Depositors or any entity acting on behalf of all of the Depositors, (ii) for any
consequential, punitive or special damages, or (Ili) for an amount in excess of the value
of the Escrow Property, valued as of the date of deposit.
(b) The Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence
beyond the control of the Escrow Agent (including but not limited to any act or provision
of any present or future law or regulation or governmental authority, any act of God or
war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
8. Escrow Agent shall have the right, at any time after a dispute between
Authority and TAESL has arisen, to deposit the Escrow Property to any court of
competent jurisdiction for payment to the appropriate party, at which
point Escrow Agent's obligation under this Agreement shall terminate.
9. The Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities deposited hereunder,
or for any description therein, or for the identity, authority or rights of persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement.
10. Escrow Agent shall not be required to take or be bound by notice of any
default of any person, or to take any action with respect to such default involving any
expense or liability, unless notice in writing is given to an officer of Escrow Agent of
such default and unless it is indemnified in a manner satisfactory to it against any such
expense or liability.
11. Escrow Agent shall not be liable for any error of judgment or for any act
done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for
anything which it may do or refrain from doing in connection herewith, except its own
gross negligence or willful misconduct, and Escrow Agent shall have no duties to anyone
except those signing these instructions.
12. Escrow Agent may consult with legal counsel in the event of any dispute
or questions as to the construction of the foregoing instructions, or Escrow Agent's duties
hereunder, and Escrow Agent shall incur no liability and shall be fully protected in acting
in accordance with the opinion and instructions of such counsel.
13. Escrow Agent assumes no liability and the parties hereto consent and
agree that Escrow Agent shall have no liability for any defalcation, insolvency,
receivership or conservatorship of the depository institution.
14. Nor shall Escrow Agent have any liability due to any of the parties other
than Escrow Agent filing for bankruptcy or the consequences or effect of such a
bankruptcy on the funds and/or documents deposited hereunder.
Page5ofl2
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15. For its ordinary services hereunder, Escrow Agent shall be entitled to a fee
of $750.00 payable in accordance with Section 2(b) hereof.
16. In the event that Escrow Agent performs any service not specifically
provided hereinabove, or that there is any assignment or attachment of any interest in the
subject matter of this escrow or any modification thereof, or that any controversy arises
hereunder, or that Escrow Agent is made a party to, or intervenes in, any litigation
pertaining to this escrow or the subject matter hereof, Escrow Agent shall be reasonably
compensated therefor and reimbursed for all reasonable costs and expenses occasioned
thereby; and to the extent allowed by law the parties hereto agree jointly and severally to
pay the same and to indemnify Escrow Agent against any loss, liability, or expense
incurred in any act or thing done by it hereunder, it being understood and agreed that
Escrow Agent may interplead the subject matter of this escrow into any court of
competent jurisdiction in Tarrant County, Texas, and the act of such interpleader shall
immediately relieve Escrow Agent of its duties, liabilities, and responsibilities hereunder.
17. Notices, instructions or other communications shall be in writing and shall
be given to the addresses set forth in this section (or to such other address as may be
substituted by written notification to the Escrow Agent or the Depositors). The Escrow
Agent is authorized to comply with and rely upon any notices, instructions or other
communications believed by it to have been sent or given by the Depositors or by a
person or persons authorized by the Depositors. Whenever under the terms hereof the
time for giving a notice or performing an act falls upon a Saturday, Sunday, or banking
holiday, such time shall be extended to the next day on which the Escrow Agent is open
for business.
AUTHORITY:
AllianceAirport Authority, Inc.
c/o Jesus Chap"
1000 Throckmorton
Fort Worth, Texas 76102
Phone: 817-392-5804
Email: Jesus.Chapa@fortworthtexas.gov
With a copy to:
City Attorney
City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76102
Phone: 817-392-7600
Email: Peter.Vaky@fortworthtexas.gov
Page6ofl2
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TAESL:
Texas Aero Engine Services, L.L.C.
2180 Eagle Parkway, MD 8353
Fort Worth, Texas 76177
Attention: Vice -President, Finance
Telephone: (817) 224-0211
Facsimile: (817) 224-0067
Email: lance.linguist@taesl.com
with a copy to:
Husch Blackwell, LLP
901 St. Louis, Suite 1800
Springfield, MO 65806
Attention: David C. Agee
Telephone: 417-2684066
Facsimile: 417-2684040
Email: david.agee@huschblackwell.com
ESCROW AGENT:
Jeff Rattikin
Rattikin & Rattikin, LLP
4936 Collinwood Ave. Suite 200
Fort Worth Texas 76107
18. (a) The Depositors may remove the Escrow Agent at any time by giving to
the Escrow Agent ten (10) calendar days' prior notice in writing signed by all the
Depositors. The Escrow Agent may resign at any time by giving to the Depositors ten
(10) calendar days' prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice of removal to
the Escrow Agent or receiving the foregoing notice of resignation from the Escrow
Agent, all the Depositors shall jointly agree on and appoint a successor Escrow Agent. If
a successor Escrow Agent has not accepted such appointment by the end of such 10-day
period, the Escrow Agent may, in its sole discretion, deliver the Escrow Property to the
Depositors, with the Deposit delivered by check made payable to all of them jointly, at
the address provided herein, or may apply to a court of competent jurisdiction for the
appointment of a successor Escrow Agent or for other appropriate relief. The costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the Escrow
Agent in connection with such proceeding shall be paid by, and be deemed a joint and
several obligation of, the Depositors.
(c) Upon receipt of the identity of the successor Escrow Agent, the Escrow Agent
shall either deliver the Escrow Property then held hereunder to the successor Escrow
Agent, or hold such Escrow Property (or any portion thereof), pending distribution, until
all required fees, costs and expenses or other obligations are paid.
Page 7 of 12
AUS-6055584-1
(d) Upon delivery of the Documents to the successor Escrow Agent, the Escrow
Agent shall have no further duties, responsibilities or obligations hereunder.
19. In the event of any ambiguity or uncertainty hereunder or in any notice,
instruction or other communication received by the Escrow Agent hereunder, the Escrow
Agent may, in its sole discretion, refrain from taking any action other than retain
possession of the Escrow Property, unless the Escrow Agent receives written instructions,
signed by all the Depositors, which eliminates such ambiguity or uncertainty.
20. This Agreement shall be interpreted, construed, enforced and administered
in accordance with the internal substantive laws of the State of Texas. Each of the parties
to this Agreement hereby submits to the personal jurisdiction of, and each agrees that all
proceedings relating hereto shall be brought in, the courts located within Tarrant County,
Texas.
21. Except as otherwise permitted herein, this Agreement may be modified
only by a written amendment signed by all the parties hereto, and no waiver of any
provision hereof shall be effective unless expressed in a writing signed by the party to be
charged.
22. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not preclude or
inhibit the exercise of any additional rights or remedies. The waiver of any right or
remedy hereunder shall not preclude the subsequent exercise of such right or remedy.
23. Each of the Depositors hereby represents and warrants (a) that this
Agreement has been duly authorized, executed and delivered on its behalf and constitutes
its legal, valid and binding obligation and (b) that the execution, delivery and
performance of this Agreement by each of the Depositors does not and will not violate
any applicable law or regulation.
24. The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of any other
provision; and if any provision is held to be enforceable as a matter of law, the other
provisions shall not be affected thereby and shall remain in full force and effect.
25. This Agreement shall terminate upon the distribution of all the Escrow
Property. The provisions of this Agreement shall survive termination of this Agreement
and/or the resignation or removal of the Escrow Agent.
26, This Agreement may be executed by each of the parties hereto in any
number of counterparts, each of which counterpart, when so executed and delivered, shall
be deemed to be an original and all such counterparts shall together constitute one and the
same agreement.
Page 8 of 12
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27. The Escrow Agent does not have any interest in the Escrow Property
deposited hereunder but is serving as escrow holder only and having only possession
thereof. The Depositors shall pay or reimburse the Escrow Agent upon request for any
transfer taxes or other taxes relating to the Escrowed Property incurred in connection
herewith and to the extent allowed by law shall indemnify and hold harmless the Escrow
Agent for any amounts that it is obligated to pay in the way of such taxes. Any payments
of income from this Escrow Account shall be subject to withholding regulations then in
force with respect to United States taxes. The parties hereto will provide the Escrow
Agent with appropriate W-9 forms for tax I.D., number certifications, or W-8 forms for
non-resident alien certifications. It is understood that the Escrow Agent shall be
responsible for income reporting only with respect to income earned on investment of
funds which are a part of the Escrowed Property and is not responsible for any other
reporting.
Effective as of the date set forth below by Escrow Agent.
Page 9 of 12
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AEEIANCEAIRPORT AUTHORITY
a nonstock, nonprofit industrial
development corporation created by the City
pursuant to the laws of the State of Texas,
including particularly the Development
Corporation Act of 1979, Article 5190.6,
V.A.T.C.S., as amended
By:
Name:.s�s
Title:
Pagel0of12
AUS-6055584-1
SIGNATURE PAGE TO
ESCROW AGREEMENT
TEXAS AERO ENGINE SERVICES, L.L.C.
a Delaware limited liability company
By: _
Name:
1U4C) f
By:
Nan
Tith
ESCROW AGENT
By:
Nar
Titl
Page 12 of 12
AUS-6055584-1
1.)
2.)
ALLIANCE MAINTENANCE FACILITY
LEGAL DOCUMENTS
TAESL Lease Documents 11=V CCk
- Facility Lease Agreement
- Bill of Sale
- Landlord Subordinate Agreement: Alliance
- Equipment Purchase Agreement
- Escrow Agreement
Transfer to City Documents h�,�,�c� y�,1,U �,��,,� .�
- Landlord Subordinate Agreement: CFW
- Assignment and Assumption of Lease
- Special Warranty Deed
- Escrow Agreement
S
- Assignment and Escrow Agreement and MOU
- Ltr to Carla D. Janouselc Re: Escrow Agreement AA and GDC
pier