HomeMy WebLinkAboutContract 58786CSC No. 58786
FACILITIES LEASE AGREEMENT
This Facilities Lease Agreement (this "Lease") is made and entered as of the IA day of
January, 2023, by and between City of Fort Worth, a Texas home rule municipal corporation
("Landlord'), and MTU Maintenance Dallas, Inc. ("Tenant").
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" means monetary obligations of Tenant to Landlord under the terms of this Lease
beyond Base Rent, including, but not limited to CUP Fees Utility Costs, Common Area
Fees, and amounts due and payable by Tenant under Section 9.4.
"Adjoining Tenants" means other tenants of the Landlord Adjoining Property.
"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" shall mean that certain
Amended and Restated Declaration of Covenants and Restrictions, dated February 5, 2015
at 11:59:01 p.m., made by Alliance Airport Authority, Inc., ADL Development, L.P., and
Hillwood and recorded at Document Number 2015-1241 S of the Real Property Records of
Denton County, Texas.
"ADA" has the meaning set forth in Section 12.1.
"ATA Specification 103" has the meaning set forth in Exhibit A.
"Base" means that certain land known as Alliance Fort Worth Maintenance Base, located adjacent
to the Airport and including the Facility.
OFFICIAL RECORD
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"Base Rent" has the meaning set forth in Section 9.1.
"Baseline Environmental Studv" shall mean that Phase I environmental site assessment report
regarding the Leased Premises dated December 16, 2022 and performed by Arcadis U.S., Inc.
for ISS Corporation.
"CCg ' has the meaning set forth in Section 8.1.
"Capital Reserve Fee" has the meaning set forth in Exhibit F.
"Casualty Date" has the meaning set forth in Section 14.6.
"Central Utility" has the meaning set forth in Section 7.1.
"Central Utility Services" means the CUP Utilities and the CUP Services, collectively.
"Chemical Tank" means any tank located in the three parts -clean areas containing chemicals in a
range of concentrations as governed by applicable engine manual specifications.
"Claims" has the meaning set forth in Section 16.1.
"CMS Building" means Building 3 — "Controlled Material Storage" as delineated on the Site Plan.
"Commencement Date" has the meaning set forth in Section 2.1(b).
"Commencement Date Memorandum" means the written agreement following completion of the
construction improvements and identifying the Term commencement and in substantially
in the form as set forth in Exhibit I.
"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 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 Leased Premises, or the portions of the Landlord Adjoining Property
leased to or available for lease to other tenants. The Common Area shall include the North
Lot, subject to Tenant's rights pursuant to Section 3.3.
"Common Area Fees" has the meaning set forth in Section 8.1.
"Common Area Services" has the meaning set forth in Section 8.1.
"Construction Period" has the meaning set forth in Section 2.1 (a).
"CUP Fees" has the meaning set forth in Section 7.5.
"CUP Services" has the meaning set forth in Section 7.4.
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"CUP Utilities" has the meaning set forth in Section 7.3.
"CUP Utilities and Services" means, collectively, the CUP Utilities and the CUP Services.
"Designated Fuel Supplier" means a third party jet fuel supplier authorized by Landlord to deliver
fuel to the Fuel Farm.
"Effective Date" has the meaning set forth in the last paragraph of this Lease.
"Emergency Response System" has the meaning set forth in Exhibit E.
"Environmental Condition" has the meaning set forth in Section 10.4.
"Environmental Laws" has the meaning set forth in Section 10.3.
"Environmental Permits" means the environmental permits from Texas Commission on
Environmental Quality for Tenant's intended operations at the Leased Premises as deemed
necessary by Texas Commission on Environmental Quality and applicable Environmental
Laws.
"Event of Default" has the meaning set forth in Section 17.1.
"Excess Load Factor" has the meaning set forth in Exhibit F.
"Existing Recognized Environmental Condition" means any Recognized Environmental
Conditions ("EEC") existing at the Leased Premises and identified in the Baseline
Environmental Study and in any prior environmental reports referenced therein, including
but not limited to: (a) Upgradient Fuel Release (2016), (b) Fuel release Building 15 (1996),
(c) Building 12 Vaults release of tirchlorethene (TCO) and evidence of staining and spills
in the vaults and unknown integrity of the vaults, and (d) Building 15 Test Cell Basin -
evidence of staining and unknown integrity of the concrete in the test cell basin.
"Fees" means, collectively, Capital Reserve Fee, CUP Fees, Uplift Fees, and Common Area Fees.
"Force Majeure Event" has the meaning set forth in Section 18.19.
"Fuel Farm" has the meaning set forth in Section 5.1.
"Fuel Services CompanX" means any person or entity with whom Landlord has entered into a
written agreement at any time during the Term to perform and/or provide, at Landlord's
expense, any duties, obligations or services to be performed and/or provided by Landlord
"Hazardous Materials" has the meaning set forth in Section 10.3.
"Hazardous Material Liabilities" has the meaning set forth in Section 10.5.
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"Hazardous Waste Buildina" means Building 1 — "Industrial Waste Treatment"
"Hillwood" means Hillwood/1358, Ltd., a Texas limited partnership.
"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.
"Improvements" means any alterations, addition, or improvements on, to or about the Leased
Premises.
"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 Leased Premises. 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.
"Landlord Adjoining_ Property' means the Base, excluding the Leased Premises.
"Landlord Distributed Utilities" has the meaning set forth in Section 4.2(a).
"Landlord Hazardous Material Liabilities" has the meaning set forth in Section 10.4.
"Landlord's Permitted Personnel" means those authorized employees of Landlord or
Management Company that shall be permitted access to the Leased Premises, which
employees shall be designated in advance in a separate written list submitted by Landlord
or Management Company to Tenant.
"Leased Premises" means certain land, buildings and facilities on the Base owned by Landlord
and located within the fence, more specifically described on Exhibit B-1, including the
following: (a) the building labeled as Building 12, Turbine Engine Overhaul Bldg. and the
land on which such building is located, (b) the building labeled as Building 15, Jet Engine
Test Cell, and the land on which such building is located, (c) the building labeled as
Building 13, Heat, Treat and Blast Bldg., and the land on which such building is located,
(d) the building labeled as storage and containing approximately 5,000 square feet, and the
land on which such building is located, and (e) all other areas between and adjacent to the
buildings labeled as Building 12, Building 13, Building 15, containing a total of
approximately 423,840 square feet.
"Liens" has the meaning set forth in Section 12.7.
"Lift Station" means the industrial waste lif
connecting the IWTF to such lift stations.
IWTF.
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stations located on the Base, and all pipes
The Lift Station shall be considered part of the
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"Management Company" means any person or entity with whom Landlord has entered into a
written agreement at any time during the Term to oversee performance and/or provision
of, at Landlord's expense, any duties, obligations or services to be performed and/or
provided by Landlord hereunder.
"North Lot" means that certain parking lot located immediately to; the north of the Facility and
delineated as the "North Parking Lot" on the Site Plan.
"Offset Limit" has the meaning set forth in Section 17.5.
"Option Term" has the meaning set forth in Section 2.1(b).
"Permitted Absence" has the meaning set forth in Section 17.1(c).
"Plans" has the meaning set forth in Section 12.2.
"PFAS" means any Per- and Polyfluoroalkyl substances including but not limited to
Perfluorooctanesulfonic acid ("PFOS") and Perfluorooctanoic Acid ("PFOA")
"Release" has the meaning set forth in Section 10.4.
"Renewal Option" has the meaning set forth in Section 2.1(b).
"Rules and Regulations" has the meaning set forth in Section 10.2.
"Site Plan" means that site plan attached hereto as Exhibit B-1.
"Tenant Parkin Spaces" paces" has the meaning set forth in Section 2.1.
"Tenant's Building Footprint" has the meaning set forth in Exhibit G.
"Tenant Improvements" shall mean the improvements identified in Exhibit H.
"Tenant Improvements Allowance has the meaning set forth in Section 9.1(b).
"Tenant's Notice" has the meaning set forth in Section 14.6.
"Tenant's Share" has the meaning set forth in Exhibit F.
"Tenant Fuel Storage" has the meaning set forth in Section 5.2(b).
"Tenant Exit Phase I ESA" means a Phase I Environmental Assessment of the Leased Premises
procured by Tenant from a licensed and qualified environmental engineer dated within
ninety (90) days before the date Tenant vacates the Leased Premises.
"Term" has the meaning set forth in Section 2.1(a).
"Total Base Footprint" has the meaning set forth in Exhibit G.
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"Total Common Area Costs" has the meaning set forth in Exhibit G.
"Uplift Fees" has the meaning set forth in Section 6.4.
"Uplift Services" has the meaning set forth in Section 6.2.
"Utility Costs" has the meaning set forth in Section 4.3,
"Wastewater Standards" has the meaning set forth in Exhibit C.
ARTICLE II
DEMISE; TERM
2.1 Lease of Leased Premises.
(a) Construction Period. Tenant shall have a construction period of six (6) months, to
initiate Tenant Improvements, as further described under Exhibit H, to the Leased Premises as
referenced within Article XII herein ("Construction Period"). Tenant, with Landlord approval,
reserves right to make changes to Tenant Improvements under Exhibit "H" as needed as long as
such changes are presented to and approved by Landlord in accordance with the provisions
hereinand the cost of the Tenant Improvements meet or exceed the eighteen (18) month rent
abatement of $794,700.00. The Construction Period will commence on the Effective Date. Tenant
will only be responsible for payment of utilities of the Leased Premises during the Construction
Period. Tenant may by written notice to Landlord prior to the expiry of the initial Construction
Period, extend the Construction Period for an additional two (2) months, at which time the parties
will execute an amendment to this Lease. Notwithstanding anything to the contrary herein, the
Construction Period shall precede, and not run concurrent with, the eighteen (18) month rental
abatement period provided in Section 9.1 herein.
(b) Demise, Lease Term. Landlord and Tenant agree that the term of this Lease term
will begin upon expiry of the Construction Period or completion of Tenant improvements,
whichever occurs first ("Commencement Date") and expire ten years thereafter (the "Term"),
unless earlier terminated as provided herein:
(i) Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Leased Premises located on the Alliance Fort Worth Maintenance Base, more
specifically described in Exhibit B-1; and
(ii) Landlord hereby grants to Tenant the use and associated rights with
respect to 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; and
(iv) Landlord shall perform all of its obligations and provide all services
required to be performed and provided hereunder, including, without limitation, the Uplift
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Services as set forth in Article VI, and the CUP Utilities and Services set forth in Article VII;
and
(v) Landlord shall ensure that no less than seven hundred (700) parking
spaces (one hundred (100) of which shall be reserved for Tenant's exclusive use) as delineated
on the Site Plan ("Tenant Parking Spaces") will be available for use by Tenant and any
subtenant of Tenant and their respective employees, invitees and licensees pursuant to Section
3_4 below and Landlord shall ensure that the Tenant Parking Spaces 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. Landlord shall have the right to use and/or license to
a third party the non-exclusive portion of the parking spaces until Tenant employment levels
are such that require their use of the non-exclusive spaces, at which time, the parties may
agree to amend this Lease to provide for more exclusive spaces for Tenant.
(c) Renewal Option and Terms.
Tenant shall have the right and option to renew the Term of the Lease ("Renewal Option") for
two (2) successive additional periods of five (5) years (the "Option Term"); provided, however,
the Renewal Option is contingent upon the following:
(i) there is not then an Event of Default by Tenant beyond any applicable notice
and cure period provided for herein at the time Tenant gives Landlord notice of
Tenant's intention to exercise the Renewal Option; or
(ii) no event has occurred that upon notice or the passage of time would
constitute an Event of Default; and
(iii) Subject to any sub -lease, Tenant is occupying the Leased Premises.
Following the expiration of the Option Term, Tenant shall have no further right to
renew the Lease.
(iv) Exercise of Option. Tenant shall notify Landlord of either the exercise or the
refusal to exercise the Renewal Option by giving Landlord notice at least six (6)
months prior to the expiration of the Term or sixty (60) days prior to the last day of
the first Option Term. If Tenant fails to give notice to Landlord prior to the six (6)
month period, then Tenant shall forfeit the Renewal Option. If Tenant exercises
the Renewal Option, then during the applicable Option Term, Landlord's and
Tenant's respective rights, duties and obligations shall be governed by the terms
and conditions of the Lease, except as provided otherwise herein. Time is of the
essence in exercising each Renewal Option.
(v) Term. If Tenant exercises the Renewal Option, then during the applicable
Option Term, all references to the term "Term", as used in the Lease, shall mean
the "Option Term".
(vi) Base Rent for Option Term. The Base Rent for the Option Term shall be
negotiated in good faith and agreed upon by the parties, but will not increase by
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more than 10% above the Base Rent for the previous year. In the event the parties
cannot reach an agreement on the Base Rent, the Base Rent for the Option Term
shall be fair market rental rate, which shall be determined as follows:
Landlord and Tenant shall each appoint an independent real estate appraiser
with an MAI designation and with at least ten (10) years' commercial real estate
appraisal experience in the area market, and experience appraising leaseholds for
similarly situated industrial facilities. The two appraisers shall then, within ten (10)
days after their designation, select an independent third appraiser with like
qualifications. Within twenty (20) business days after the selection of the third
appraiser, a majority of the appraisers shall determine the fair market rental rate. If
a majority of the appraisers is unable to agree upon the fair market rental rate by
such time, then the two (2) closest appraisals shall be averaged and the average will
be the fair market rental rate. Tenant and Landlord shall each bear the entire cost
of the appraiser selected by it and shall share equally the cost of the third appraiser.
2.2 Early Termination Option.
Tenant shall have the option to terminate the Lease sixty (60) months after the Commencement
Date ("Early Termination Option") by providing to Landlord six (6) months' written notice of its
intent to exercise its Early Termination Option. If Tenant exercises the Early Termination Option,;
this Lease shall terminate and be of no further force or effect as of the designated termination date
set forth in the Early Termination Option notice, and the parties hereto shall have no further
obligations hereunder (except under such provisions which by their terms survive termination or
expiration) and Tenant shall be obliged to pay the equivalent of the waived Base Rent of seven
hundred ninety four thousand seven hundred dollars and no cents ($794,700.00) for the initial
eighteen (18) months of the Term, except in case of termination in accordance with Section 14
below.
2.3 Surrender. Upon the expiration or earlier termination of this Lease, Tenant shall, in
accordance with this Section 2.3, surrender possession of the Leased Premises (including all
alterations, improvements and additions to the Leased Premises, unless such items are required or
permitted to be removed pursuant to Section 12.2) to Landlord, and Tenant shall remove, at
Tenant's expense, all of its personal property from the Leased Premises, leaving the Leased
Premises in substantially similar condition and repair as on the Effective Date, ordinary wear and
tear and casualty damage excepted and subject to the effects of any alterations, improvements and
additions as may have been made pursuant to this Lease. All removable fixtures, equipment,
inventory, tooling, appliances, furnishings, and any other personal property owned by Tenant and
located within the Leased Premises shall remain the property of Tenant and shall be removed
promptly from the Leased Premises; provided, that any damage caused to the Leased Premises in
connection with the removal thereof shall be repaired by Tenant to Landlord's reasonable
satisfaction at Tenant's cost. Tenant shall remove all of Tenant's personal property from the Leased
Premises 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
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termination in accordance with the provisions of this Lease, provided that if Tenant stays in
possession of the Leased Premises after such termination then Tenant shall be subject to the
requirements of Section 2.3, including payment of 150% of Base Rent and payment of Additional
Rent. Any of Tenant's personal property not removed from the Leased Premises on or before the
date required in the immediately preceding sentence shall, at Landlord's option and upon ten (10)
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 Leased
Premises), either become the property of Landlord or may be removed by Landlord and Tenant
shall pay to Landlord the reasonable 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 Leased Premises (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 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 that is due and
payable by Tenant hereunder.
ARTICLE III
USE
3.1 Use. Tenant may use the Leased Premises, for the purpose of maintenance, repair,
overhaul and testing of various jet aircraft engines and gas turbines, a prep shop, general office,
control room, flight engines or jet engines storage and data operations as well as all other general
commercial aircraft and engine and related equipment maintenance and repair services and for such
other purposes that are not in conflict with the Amended and Restated Declaration of Covenants and
Restrictions or any other requirements of this Lease. Any use other than the uses allowable under
this Section 3.1 must be approved in writing by Landlord prior to such use, which approval shall not
be unreasonably withheld, conditioned or delayed.
3.2 Quiet Enjoyment. Landlord hereby covenants that, so long as Tenant is not in default
beyond the expiration of any applicable notice and cure periods, if any, if Tenant shall keep and
perform all of the covenants of this Lease on the part of Tenant to be performed, Landlord will keep
Tenant in the quiet and peaceful possession of the Premises.
3.3 Access.
(a) Landlord shall maintain, continuously and without interruption, perimeter fencing
around the Base, which operational controls shall be maintained from within the CUP. Tenant and
Tenant's employees, contractors, and subcontracts shall have access to the Leased Premises at all
times twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days per
year, including all holidays. Tenant, at Tenant's sole cost and expense, may secure entrance access
into the Leased Premises, but shall not allow any security measures that would limit or deny ingress
or egress up to or around the exterior of the buildings of the Leased Premises at any location.
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Landlord, Landlord's Permitted Personnel, and Landlord's agents, consultants, and contractors shall
have the right to enter the Leased Premises, including all secured access areas of the Leased Premises,
during normal business hours and upon 24 hour' advance notice to Tenant, for the purpose of
inspecting the Leased Premises, reading any meters or submeters related to the services provided in
this Lease, making non -emergency repairs that Landlord is obligated or permitted to make pursuant
to this Lease, or performing any other Landlord obligation; provided, however, that any such person
entering the Leased Premises (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 Leased Premises except to the extent reasonably
necessary to complete such maintenance, repair, or replacements the Landlord is obligated or
permitted to make under this Lease. In the event of an emergency, Landlord shall have the immediate
right to access the Leased Premises, including all secured access areas of the Leased Premises.
(b) Tenant shall have the right to access to the Alliance Airport upon approval by the
Landlord's airport management company, Alliance Air Services ("AAS") and after all applicable
access agreements, if any, are executed between Tenant and Landlord.
3.4 Parkins. Tenant and Tenant's employees and invitees shall have (i) the exclusive,
without cost, of one hundred (100) Tenant Parking Spaces located in the two (2) most western
rows of Tenant Parking Spaces ("Tenant's Exclusive Parking Spaces"), plus (ii) the non-exclusive
use, without cost, of six hundred (600) Tenant Parking Spaces that are undetermined and
immediately adjacent to the Leased Premises and the North lot as shown in the Exhibit B-1 Site
Plan ("Parkins'). Anything herein to the contrary notwithstanding, Landlord shall operate, repair
and maintain all Adjacent Parking Spaces as part of its Common Area Services (and Tenant shall
pay Landlord the Common Area Services fees contemplated by Section 8.1 and Exhibit G but
shall not be obligated to pay anything more for the use of the Tenant Parking Spaces).
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 all telephone
and intemet used by Tenant, all janitorial, 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 Leased Premises. If any other utilities required by Tenant in connection with its
operations at the Leased Premises 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.
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4.2 Utilities to be Procured and Distributed by Landlord.
(a) Landlord's Obligation. During the Term Landlord agrees to procure on
behalf of the entire Base and redistribute to the Leased Premises the following utilities (the
"Landlord Distributed Utilities"):
(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, subject to Tenant's right to extend infrastructure for
natural gas to the Leased Premises, as set forth below.
All Landlord Distributed Utilities will be furnished to the Base by third -party utility providers.
Landlord at its sole cost and expenses shall maintain in good working order the conduits by which
the Landlord Distributed Utilities are made available to the Leased Premises (or removed from the
Leased Premises in the case of effluent) by Landlord at Landlord's expense; provided, however,
that in the event that new infrastructure or conduit is necessary to provide a utility service that is
not currently provided to the Leased Premises, e.g., natural gas, Tenant shall have the right, but
not the obligation, at its sole cost and expense to extend the necessary infrastructure to the Leased
Premises, subject to the written approval of Landlord of the location of and construction plans for
such infrastructure, such approval not to be unreasonably withheld. The Landlord Distributed
Utilities will be furnished as provided above on a continuous basis twenty-four (24) hours per day,
seven (7) days per week, and three hundred sixty-five (365) days per year, including all holidays,
except for (v) 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 thirty (30) days in advance, (vi) 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 (vii) 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 Utility Costs. 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
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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 period
divided by (b) the total of such Landlord Distributed Utilities furnished to the Base during the
same monthly period. Utility Costs shall include any applicable distribution charges, taxes, or
other fees lawfully charged by the third party provider of such Landlord Distributed Utilities or
any governmental authority.
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
4.5 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 that supports
and is connected to the Leased Premises by means of associated piping (including the piping, the
"Fuel Farm"). Landlord shall maintain at its sole cost and expense the Fuel Farm in good working
order. Some of the associated piping that is a component of the Fuel Farm is located within the
boundaries of the Leased Premises (the "Tenant Pipe Segment'). The Tenant Pipe Segment is
connected to a fuel meter located within the boundaries of the Leased Premises ("Meter") and an
underground storage tank installed in and constituting part of the Leased Premises ("Tenant
Storage"). The Meter and the Tenant 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 Leased Premises and the responsibility
and obligation of Tenant that are applicable to the Leased Premises under the terms of this Lease.
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. Notwithstanding anything
herein to the contrary, within sixty (60) days after written request from Tenant, Landlord, at the
sole cost and expense of Tenant, shall return the Tenant Storage to an active status, and Tenant
shall reimburse Landlord for Landlord's costs to bring Tenant Storage to an active status, within
sixty (60) days of receipt of invoice from Landlord to Tenant.
5.2 Provision of Jet Fuel. During the Term, Tenant may acquire and have Jet Fuel
delivered to the Tenant, 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 from the Fuel Farm in
accordance with the applicable provisions of this Article V; and
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(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 Fuel Farm and delivery to Tenant, or if the price for Jet Fuel charged by
Landlord or its Designated Fuel Supplier is higher than Tenant would pay from a third -party
fuel provider, then Tenant may purchase Jet Fuel from any third -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 in accordance with the provisions of this Article V; provided such Jet Fuel conforms
to the standards set forth and referenced in Exhibit A.
5.3 Fuel Services Company. The parties acknowledge that the Fuel Farm may be
managed, maintained, and operated 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 otherwise complies with the provisions of this Article
V, and other provisions of this Lease applicable to the Fuel Farm and Fuel Services 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 V.
5.4 Continuous Service. The Fuel Farm Services will be made available by Landlord at
the levels provided herein on a continuous basis, as needed twenty-four (24) hours per day, seven
(7) days per week, three hundred sixty-five (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 sole negligence or willful misconduct of Tenant, or any of Tenant's agents,
employees, subtenants, or contractors.
ARTICLE VI
INDUSTRIAL WASTE TREATMENT FACILITY
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 Leased
Premises (the "IWTF"). Landlord will maintain at its sole cost and expense the IWTF in good
working order. 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 Leased Premises to make the
modification or alteration unnecessary. Tenant shall have a reasonable time to select its preferred
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option. The foregoing notwithstanding, in no event shall any such modification or alteration
adversely affect Tenant's use and operation of the Leased Premises.
6.2 Landlord Obligations. Landlord shall, at its expense, provide certain industrial
wastewater services (the "Uplift Services") in support of the Tenant's operation of the Leased
Premises 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 reasonable operational requirements at the Leased Premises. 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).
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. Uplift Fees shall
be due and payable by Tenant within thirty (30) days after receipt of an invoice therefor. 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. Tenant shall be entitled, at
Tenant's discretion, to make any such payments in one or more lump sum(s).
6.5 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 Plant. The parties acknowledge that Landlord will operate the Central
Utility Plant at the Base and in support of the Leased Premises (the "Central Utility Plant') and
that Tenant shall utilize the Central Utility Plant as its sole source for the services included in the
CUP Services. Landlord at its sole cost and expense shall maintain the Central Utility Plant in
good working order. 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 Leased Premises, 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 Leased Premises. If Landlord determines that the configuration or functionality
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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 (i) agree to or
recommend changes to the modification or alteration or (ii) modify its operational requirements at
the Leased Premises to make the modification or alteration unnecessary. Tenant shall have a
reasonable time to select its preferred option. The foregoing notwithstanding, in no event shall
any such modification or alteration adversely affect Tenant's use and operation of the Leased
Premises.
7.2 Landlord Obligations. 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 Leased Premises 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 reasonable
operational requirements at the Leased. Premises. The CUP Utilities and Services will be provided
by Landlord to Tenant at the levels provided herein on a continuous basis, as needed twenty-four
(24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year, in
support of Tenant's operation of the Leased Premises, except for (v) 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 five (5) days in
advance, (vi) 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 possible), and (vii) interruptions in CUP Utilities and
Services caused by the sole negligence or willful misconduct of Tenant, or any of Tenant's agents,
employees, subtenants, or contractors. Notwithstanding anything to the contrary contained in this
Lease, if any interruption of utility services caused by Landlord's acts or omissions shall continue
for more than forty-eight (48) consecutive hours, then Base Rent shall be abated retroactively to
the first day of such interruption and shall continue until full use of the Premises and all utilities
under the control of the Landlord are restored to Leased Premises., If Landlord or Landlord's
agents, contractors or employees requires any planned or scheduled interruption (non -emergency)
for maintenance or repairs to any utility service to the Premises, Lessor shall provide Tenant with
written notice no less than 72 hours prior to such interruption.
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 IX) and performed by Landlord in accordance with the requirements more specifically
set forth in Exhibit E hereto. "CUP Utilities" means the following utilities:
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(a) Steam;
(b) 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 Leased Premises:
(a) Fire Monitoring and Protection Services (provided, however, Tenant shall
be responsible, at its sole cost and expense, for any and all fire monitoring
and protection services within the Leased Premises); and
(b) HVAC control for the Leased Premises (provided, however, Tenant shall
be responsible, at its sole cost and expense, for any and all HVAC control(s)
located within the Leased Premises).
7.5 CUP Fees. In consideration of the CUP Utilities and CUP Services, Tenant shall pay
the fees specified in Exhibit F ("CUP Fees") (subject to Section 9.2 below). CUP Fees shall be
invoiced by Landlord to Tenant monthly, in arrears. Payments shall be due and payable by Tenant
within thirty (30) days after receipt of an invoice therefor. 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. Tenant shall be entitled, at Tenant's discretion, to make any such payments
in one or more lump sum(s).
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
COMMON AREA SERVICES
8.1 Common Area Services. Landlord agrees to operate, repair and maintain the Common
Area of the Base as described in Exhibit G and consistent with standard industry practices
pertaining to the current use of the Base (the "Common Area Services"). This shall include
landscaping, roadways, exterior lighting, structural and roof repairs and replacements, plumbing,
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HVAC and mechanical systems (other than routine maintenance, which shall be Tenant's
obligation, subject to the Cap (as such term is defined below)), building insurance, and other items.
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 G. Notwithstanding
anything herein to the contrary, the Common Area Fees shall not exceed the Cap for each year of
the Lease. As used herein, the "Cap" shall mean an increase of no greater than five percent (5%)
per year in the controllable Common Area Fees, which shall mean expenses other than real estate
taxes, the cost of all insurance relating to the Leased Premises, and the cost of all utilities that are
included as a Common Area Fee.
8.2 Management Company. The parties acknowledge that the associated obligations with
respect to the Common Area Services 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 Common Area and performance of the obligations set forth in this Article VIII and other
provisions of this Lease applicable to the Common Area 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
RENT AND FEES
9.1 (a) Base Rent. Tenant agrees to pay "Base Rent" to Landlord throughout the
Term, with Base Rent due beginning upon the Commencement Date, in accordance with the chart
below, without demand or notice, in advance in the following amounts (prorated on a per diem
Months 1-18
Sq Feet
Annual
Monthly
Monthly Sq. ft. Cost
Base Rent
$ -
423,840
$ -
$ -
Estimated Operating Expenses
$ 4.14
423,840
$1,754,697.60
$ 146,224.80
Total
$ 4.14
423,840
$1,754,697.60
$ 146,224.80
$ 0.35
Months 19 - 60
Sq Feet
Annual
Monthly
Monthly Sq. ft. Cost
Base Rent
$ 1.25
423,840
$ 529,800.00
$ 44,150.00
Estimated Operating Expenses
$ 4.14
423,840
$1,754,697.60
$ 146,224.80
Total
$ 5.39
423,840
$ 2,284,497.60
$ 190,374.80
$ 0.45
Months 61-120
Sq Feet
Annual
Monthly
Monthly Sq. ft. Cost
Base Rent
$ 1.50
423,840
$ 635,760.00
$ 52,980.00
Estimated Operating Expenses
$ 4.14
423,840
$1,754,697.60
$ 146,224.80
Total
$ 5.64
423,840
$ 2,390,457.60
$ 199,204.80
$ 0.47
basis for any partial month) which are based upon 423,840 square feet:
(b) Tenant Improvement Allowance. In recognition and consideration of
current market conditions and the Tenant's responsibility to complete the Tenant
Improvements as described in Exhibit H of this Lease (subject to change per the terms
under paragraph 2.1 (a) in this Lease), Landlord shall grant base rent credits in the amount
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of Seven Hundred Ninety Four Thousand Seven Hundred Dollars ($794,700.00),
amortized over the first eighteen months of the Lease Term effective upon the
Commencement Date.
9.2 Capital Reserve Fee. A component of the CUP Fees to be paid by Tenant pursuant to
Section 7.5 above is the Capital Reserve Fee as defined in Exhibit F attached hereto.
9.3 Payment.
(a) Base Rent shall be due and payable by Tenant, in advance, on or before
the first (1st) day of each calendar month and paid via direct deposit into the Alliance
Maintenance Fund bank account using the details provided by Landlord or its property manager.
(b) Operating Expense payment and any other amounts due to Landlord under
this Lease shall be paid via direct deposit into the Alliance Maintenance Fund bank account using
the details provided by Landlord or its property manager.
Such amounts shall be prorated for any fractional calendar month. Tenant shall be entitled,
at Tenant's sole discretion, to make such payments in one or more lump sum(s) so long as the full
amount of Base Rent is paid in its entirety by the first (I") day of the month in which it is due. A
late fee, pursuant to Section 18.2, of 10% interest of the amount due will be assessed if payment
is not received by the Landlord on or before the fifth (5th) day of the month.
9.4 Taxes and Other Charges. As of the Effective Date, the Base Rent is exempt from ad
valorem taxation. However, notwithstanding the current exemption, in the event ad valorem or
any other tax, general and special assessments, or other charges of any kind are levied on or
assessed against the Leased Premises, any interest in the Leased Premises, or any equipment or
personal property in the Leased Premises, Landlord will promptly provide Tenant with copies of
any and all notices thereof, and Tenant will pay and discharge, punctually when due and payable,
as Additional Rent, (i) all amounts attributable to the Leased Premises, including any increase in
valuation attributable to Tenant, and (ii) a pro rata portion of the amount attributable to the
Common Area, based on a multiplier calculated by dividing the square footage of the Leased
Premises by the total square footage of the Base. Such amounts shall be paid directly to the public
officer charged with their collection before they become delinquent. TENANT WILL
INDEMNIFY LANDLORD AND HOLD IT HARMLESS FROM ALL SUCH TAXES,
CHARGES, AND ASSESSMENTS. Tenant may, in good faith at its own expense (and in its
own name) contest any such taxes, charges, and assessments and must pay the contested amount,
plus any penalties and interest imposed, if and when finally determined to be due. Tenant's failure
to discharge any such tax, charge or assessment when finally due within ten (10) days after the
date Landlord supplies written notice to Tenant shall constitute an Event of Default hereunder.
However, Tenant's financial obligation to Landlord to liquidate and discharge such tax, charge or
assessment shall survive following termination of this Lease and until such a time as the lien is
discharged.
9.5 Audit Rights.
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(a) Documentation Review. Upon written notice delivered to Landlord, Tenant shall have
the right from time to time to conduct such inspections and review and audit, or contract a
competent third party to 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 Fees.
Notwithstanding any exercise by Tenant of its audit rights, Tenant shall pay the invoice subject to
reimbursement as provided below.
(b) Services Review and Inspection. Upon reasonable notice to Landlord, Tenant shall
also have access to: (i) the Fuel Farm and all associated records, and (ii) 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 9.5(a) shall be conducted at the
expense of Tenant, except as otherwise expressly provided. Audits and reviews may not be
conducted more than one time per year, and may not be performed on a contingency basis. 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, then Landlord shall have the option to conduct its own third party audit to
confirm the amounts overcharged in the Tenant's report. If the overcharged amounts differ in both
reports, Landord and Tenant will work together in good faith to determine an agreed upon amount
that Landlord will pay to Tenant no later than thirty (30) days from the date in which the parties
agree on the amount overcharged by Landlord, subject to Landlord's City Council approval, if
such amounts were already paid by Tenant.
(d) Landlord Audit Right. Tenant agrees to provide Landlord ,within sixty (60) days of
Landlord notice to Tenant, commercially reasonable documentation supporting expenditures by
Tenant evidencing Tenant's performance of its obligations under this Lease. If Landlord
reasonably believes that Tenant has not complied with its obligations hereunder, Landlord shall,
until the expiration of one (1) year after the expiration or termination of this Lease, have access to
and the right to examine any directly pertinent books, documents, papers and records of Tenant
which are required to evaluate the compliance with Tenant's obligations under 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). By way of clarification, Landlord shall not have access to, or have any audit rights
regarding, Tenant's revenues, customers or other matters not relevant to the performance by
Tenant of its obligations hereunder. Tenant agrees that, upon at least five (5) business days prior
written notice to Tenant, Landlord shall have reasonable access during normal working hours to
all necessary Tenant facilities required for such limited examination as described above, and, if
available, shall be provided adequate and appropriate workspace in order to conduct examination
in compliance with the provisions of this Section 9.5(d). Landlord shall be responsible for all
reasonable costs and expenses associated with any such examination or audit. 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
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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.
ARTICLE X
COMPLIANCE WITH LAW; ENVIRONMENTAL
10.1 Environmental Permits. Tenant shall obtain all necessary Environmental Permits
and shall diligently pursue approval of the Environmental Permits until the Environmental Permits
are approved or denied. Tenant shall not perform any operations for which Environmental Permits
are required prior to receipt of the Environmental Permits,
10.2 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 Leased Premises (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 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 Leased Premises. Notwithstanding the foregoing, Landlord shall inform Tenant about any
potential environmental issues that are brought to the attention of Landlord related to the Leased
Premises and provide respective documentation. 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/or its designated
Management Company and Fuel Services Company) with respect to the ownership and operation
of the IWTF and Uplift Services, and the Fuel Farm, each of which is 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 IWTF, the Central Utility Plant, and the Fuel Farm.
10.3 Hazardous Materials. Subject to Landlord's obligations with respect to the IWTF and
Uplift Services and the Fuel Farm, all as provided in this Lease, any and all Hazardous Materials
generated, used, stored, treated or recycled at the Leased Premises by Tenant, its employees,
agents, contractors, guests, or invitees 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
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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
Leased Premises 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.
(a) PFAS Testing_ Rights. For up to sixty (60) days after the Effective Date
of the Lease, Tenant shall have the right, but not the obligation, to supplement the Baseline
Environmental Study by sampling and testing the Leased Premises for PFAS to the extent
required by an Environmental Professional to determine the existence of PFAS or lack thereof.
Tenant's PFAS testing shall supplement and be incorporated into the Baseline Environmental
Study. Tenant shall not be responsible for any pre-existing PFAS prior to occupying the
Leased Premises.-
10.4 Environmental Procedures and Remediation. Subject to Landlord's obligations and
responsibilities with respect to the IWTF, the Uplift Services and the Fuel Farm, 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 (y) cause a violation of any of Landlord's industrial and
sanitary wastewater discharge permits, as applicable, or (z) 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 Leased Premises, 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. If Landlord, at any time during the
Term -of the Lease or any extension thereof, has good reason to suspect that there has been a
Release, there is an imminent threat of a Release or that Hazardous Material is being stored,
handled, disposed of or otherwise managed onsite in violation of Environmental Laws, the Rules
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and Regulations or the requirements of this Lease, then Landlord may, after written
communication of those reasons to Tenant, conduct environmental testing. 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 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, in accordance with the applicable Environmental Law, the remediation of any
Hazardous Material at or originating from the Leased Premises or Base arising out of Tenant's
operations at the Leased Premises, the presence of which constitutes an Environmental Condition
or otherwise violates an applicable Environmental Law 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 Leased Premises,
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 written
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 Leased Premises or Base and proven to be arising out of Tenant's operations
at the Leased Premises. Notwithstanding the forgoing or anything else in this Lease to the contrary,
to the extent any Environmental Condition, Release or violation of any Environmental Law relates
to (i) Landlord's and/or a previous or adjoining or adjacent owner's, tenant's or occupant's (other
than Tenant's) activities or operations, including without limitation, ownership or operation of the
Leased Premises or any Landlord Adjoining Property, (ii) a Release occurring prior to the Effective
Date of this Lease unless caused by Tenant, its employees, agents, contractors, guests, or invitees,
(iii) a Release occurring on or under, or migration of Hazardous Material from, property other than
the Leased Premises, unless caused by Tenant, its employees, agents, contractors, guests, or
invitees, (iv) any Environmental Condition disclosed or reflected as part of the Baseline
Environmental Study, including without limitation the existing recognized environmental
conditions , (v) any Environmental Condition that is in violation of Landlord's representations,
warranties and/or covenants under this Lease, (vi) any Release related to the operation of the Fuel
Farm or the acts or omissions of Landlord, Management Company, Fuel Services Company or
their respective officers, employees, or agents or (vii) any Environmental Condition, Release or
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violation of any Environmental Law arising out of or relating to PFAS present on the Leased
Premises and existing prior to the Effective Date, including but not limited to any PFAS
determined to exist in connection with the testing to be performed in connection with Section
10.3(a) (collectively, "Landlord Hazardous Material Liabilities"), Tenant shall have no
responsibility whatsoever for any such Landlord Hazardous Material Liabilities. Landlord hereby
forever releases and discharges Tenant and its officers, directors, partners, employees, agents and
contractors from any responsibility whatsoever for any Landlord Hazardous Material Liabilities.
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 term "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.
10.5 Exit Audit. At the termination or upon a transfer of this Lease, Tenant, at its sole cost
and expense, shall conduct a Tenant Exit Phase I ESA environmental testing of the Facility in a
manner and by a consultant acceptable to Landlord, in Landlord's discretion, which shall not be
unreasonably withheld ("Exit Audit"). The Exit Audit shall be performed and a complete copy of
the results of the Exit Audit shall be provided to each party, not more than one hundred and twenty
(120) days, but not less than sixty (60) days, prior to the actual termination or transfer date of this
Lease. So long as completed at least thirty (30) days before the termination or transfer date, either
party shall have the right to conduct additional environmental testing at its cost. Not less than
thirty (30) days prior to the termination fo the Lease, Landlord, at its sole cost and expense, may
conduct a final inspection of the Facility to verify that there has been no change in the
environmental condition of the Facility since the Exit Audit. Landlord reserves the right from time
to time, after reasonable notice to Tenant, to inspect the Facility and Tenant's operations on and
use of the Facility to: (a) evaluate Tenant's management of Hazardous Material; (b) conduct
subsurface or stormwater sampling; (c) evaluate compliance with Environmental Laws; and (d) to
facilitate Landlord's compliance with Environmental Laws.
10.6 Environmental Indemnification. TENANT AGREES TO INDEMNIFY,
DEFEND, AND HOLD LANDLORD AND ITS OFFICERS, CONTRACTORS,
DIRECTORS, 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, 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 FIRST ARISING AFTER THE
EFFECTIVE DATE OF THIS LEASE AND CAUSED BY TENANT, ITS EMPLOYEES,
AGENTS, CONTRACTORS, GUESTS, OR INVITEES, OR BY TENANT'S OPERATION
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OR OCCUPANCY OF THE FACILITY DURING THE TERM OF THIS LEASE
(COLLECTIVELY, "HAZARDOUS MATERIAL LIABILITIES"). NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, SPECIFICALLY EXCLUDED FROM THE
FOREGOING INDEMNIFICATION OBLIGATION OF TENANT ARE (1) THE LANDLORD
HAZARDOUS MATERIAL LIABILITIES. Without limiting the generality of the foregoing, this
indemnification shall survive the expiration of this Lease, and doesspecifically cover costs incurred
in connection with any investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal or state agency because of the presence of Hazardous
Materials in the environment, air, soil, groundwater or soil vapor on or under the Leased Premises
to the extent directly caused by Tenant, its employees, agents, contractors, guests, or invitees, or
Tenant's operation or occupancy of the Leased Premises during the Term of this Lease or
migrating to adjacent portions of the Base and any location where such Hazardous Materials from
Tenant, its employees, agents, contractors, guests, or invitees, or Tenant's operation or occupancy
of the Leased Premises and first arise during the Term of the Lease and are deposited, discharged,
or located where a state or federal governmental agency has determined liability relates directly to
the Tenant's operations on the Leased Premises, and specifically exclude Landlord Hazardous
Material Liabilities.
10.7 Additional Responsibilities. WITHOUT LIMITING THE GENERALITY OF
OTHER PROVISIONS OF THIS LEASE, 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
INCURRED IN CONNECTION WITH THE LANDLORD HAZARDOUS MATERIAL
LIABILITIES SHALL BE PART OF THE LANDLORD HAZARDOUS MATERIAL
LIABILITIES.
10.8 No Waiver. 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 any of 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.
10.9 Notices and Copies. Tenant shall deliver to Landlord, as soon as reasonably possible
after receipt, any written notices that Tenant actually receives indicating that Tenant is or may be
violating any Environmental Laws which are issued by any federal, state, or local environmental
regulatory agency. Tenant shall provide Landlord with copies of (i) any environmental
applications for permits or modifications contemporaneous with submission to such agency and
(ii) any environmental permits or amendments prior to commencing any construction,
modification, or operations under such permits.
ARTICLE XI
CONDITION, MAINTENANCE AND REPAIR
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11.1 Condition. TENANT ACCEPTS THE LEASED PREMISES IN ITS CONDITION
ON THE EFFECTIVE DATE AND SUBJECT TO 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, BUT SUBJECT IN ALL
RESPECTS TO ANY MATTER CONSTITUTING IN WHOLE OR IN PART A LANDLORD'S
HAZARDOUS MATERIAL LIABILITIES, WHICH SHALL BE THE SOLE OBLIGATION OF
LANDLORD. TENANT ACKNOWLEDGES THAT IT HAS INSPECTED THE LEASED
PREMISES EXCEPT FOR LANDLORD'S EXPRESS REPRESENTATIONS, WARRANTIES
AND COVENANTS PROVIDED HEREIN, 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 LEASED
PREMISES IN ANY RESPECT WHATSOEVER, AND TENANT IS LEASING THE LEASED
PREMISES "AS IS, WHERE IS AND WITH ALL FAULTS". EXCEPT FOR LANDLORD'S
EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS PROVIDED HEREIN,
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 LEASED PREMISES AND THE
SUITABILITY THEREOF AND OF THE LEASED PREMISES FOR ANY AND ALL
ACTIVITIES AND USES TENANT MAY ELECT TO CONDUCT THEREON; AND (lI) THE
COMPLIANCE OF THE LEASED PREMISES OR ITS OPERATION WITH ANY LAWS,
ORDINANCES OR REGULATIONS OF ANY GOVERNMENTAL AUTHORITY OR OTHER
BODY INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES
ACT AND RELATED RULES AND REGULATIONS. EXCEPT FOR LANDLORD'S
EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS PROVIDED HEREIN,
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 FOR LANDLORD'S EXPRESS REPRESENTATIONS, WARRANTIES AND
COVENANTS PROVIDED HEREIN, 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.
11.2 Tenant's Maintenance and Repair Obligations..
(a) Maintenance. 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
11.3, Tenant shall keep, maintain, and repair, at its expense, all aspects and parts of the Leased
Premises reasonably neat, clean, free from waste or nuisance, and in good order and condition,
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ordinary wear and tear excepted, and shall make all needed repairs and replacements thereto.
Tenant shall be responsible for all testing, repairs, and maintenance (but not full -system
replacement) of fire and life safety systems in the Leased Premises, provided that any repair of
such systems shall be coordinated in advance with Landlord to mitigate any impact to all fire and
life safety systems of the Base. Tenant shall provide to Landlord a copy of any and all inspections
of the fire and life safety systems in the Leased Premises, as soon as reasonably practicable after
Tenant's receipt thereof.
(b) Deferred Maintenance. Both parties agree that certain deferred
maintenance was not conducted by the previous tenant of the Leased Premises. The parties are
currently discussing how deferred maintenance will be handled under this Lease and have agreed
to enter into an amendment to this Lease, subject to Landlord's City Council approval, for
Landlord to either fund or provide such deferred maintenance. The details related to the type of
deferred maintenance and the manner in which it will be taken care of will be specifically identified
within the future amendment between the parties.
(c) Tenant's Removal of Improvements. If Tenant demolishes or removes
any improvements pursuant to the terms of this Lease, Tenant must also clear that portion of the
Leased Premises 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 Landlord 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 Leased Premises or damage to the Leased Premises, the provisions
of Article XIV shall apply.
11.3 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 Leased
Premises, nor any obligation to pay any costs or expenses, of any description, associated with the
operation of the Leased Premises, except Landlord, at its sole cost and expense, shall be
responsible for keeping the following in a good working condition and state of repair at all times
and for the ongoing maintenance, repair, and replacement thereof. (a) the roof, structural elements,
walls, and foundations of the Leased Premises; (b) the IWTF, the Fuel Farm and the Central Utility
Plant and any other facilities, equipment, wiring, piping, meters or submeters necessary to provide
the Uplift Services (including the IWTF) and the Central Utility Services, provided that the cost
of such repair and maintenance shall be passed through to Tenant as a Common Area Expense,
except when necessary 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; (c) all piping up to any applicable
meter or submeter at or on the Leased Premises; and (d) any metering and submetering equipment
for utilities to the Leased Premises and (e) any aspect of the Leased Premises that constitutes a
breach of any of Landlord's representations, warranties or covenants under this Lease. Landlord
shall not be obligated to make any repairs, maintenance, or replacement if such repair, replacement
and/or maintenance is required due to the sole negligence or willful misconduct of Tenant or
required to be performed by Tenant, including but not limited to Improvements related to the ADA
as set forth in Section 12.1.
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11.4 Landlord's Representations and Warranties. Landlord hereby represents and
warrants to Tenant that to the best of its knowledge as of the Effective Date the following:
(a) The Leased Premises is in broom clean condition and all structural,
roof, mechanical, electrical and plumbing elements and systems are in good condition and
working order.
(b) The Leased Premises complies with all applicable local building and
life -safety codes and requirements
ARTICLE XII
ALTERATIONS, IMPROVEMENTS ANDADDITIONS
12.1 Improvements. Subject to compliance with all applicable laws, the consent of
Landlord (not to be unreasonably withheld, conditioned or delayed), and any other restriction or
necessary approval 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 Improvements. Tenant shall be responsible, at its sole cost and
expense, for all Improvements required for the Leased Premises during the Term to comply with
the American with Disabilities Act of 1990, as amended ("ADA"), which Tenant acknowledges
may be required in the event of any other significant Improvements.
12.2 Plans. Tenant may not perform any Improvements that (i) are related to or would
affect the structural integrity of the Leased Premises or (ii) are estimated to cost more than One
Hundred Thousand Dollars ($100,000.00) unless it first submits all plans, specifications and
estimates for the costs of the proposed work ("Plans") in writing and also requests and receives in
writing approval from the Landlord for same, which approval shall not be unreasonably withheld,
conditioned or delayed. Landlord shall have thirty (30) days from the date of submission of all
required documentation to approve or disapprove Tenant's request to perform Improvements, and
if approval is granted, Landlord shall specify in writing whether Tenant will be required to remove
the Improvements and restore the Leased Premises to substantially the same condition as before
the Improvement, or whether Tenant shall not remove the Improvement, upon termination of this
Lease; provided, however, if at the time Tenant submits its plans, specifications and estimates to
Landlord Tenant requests the right to remove certain Improvements either upon termination of this
Lease or before, Tenant shall be entitled to so remove such Improvements unless, within said thirty
(30) day period, Landlord expressly denies such request in writing (Landlord's approval shall not
be unreasonably withheld, conditioned or delayed). Tenant's plans for construction for any
Improvement shall conform in all material respects to the architectural standards established by
Landlord. All plans, specifications, and work associated with any Improvement shall conform to
all federal, state and local laws, ordinances, rules and regulations in force at the time that the Plans
are presented for review, and the Improvements shall be constructed and maintained in compliance
with Landlord's health, safety, and environmental processes, rules, and policies for the Leased
Premises. Landlord shall have the right to inspect all work pursuant to its usual construction
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inspection procedures. The approval by Landlord of any plans or specifications shall not constitute
approval of the architectural or engineering design, and Landlord, by approving the plans and
specifications, assumes no liability or responsibility for the architectural or engineering design or
for any defect in any building or improvement constructed from the plans or specifications. Insofar
as Improvements are concerned, Tenant's surrender obligation under Section 2.2 shall be satisfied
by Tenant's compliance with this Section 12.2.
12.3 Work. Tenant is responsible with obtaining necessary permits for the Improvements,
provided that this agreement shall not constitute a waiver or alteration of the City of. Fort Worth's
processes and requirements for permits as the permitting authority. Tenant shall work diligently
toward completion of, and shall complete, any started Improvements, all substantially in
accordance with the approved plan specifications and using contractors reasonably acceptable to
Landlord. Any of Landlord's Adjacent Property that is damaged as a direct result of performing
an Improvement shall be repaired by Tenant and returned to its previous condition or better, at
Tenant's sole cost and expense.
12.4 Documents. As soon as practicable following the completion of the Improvements,
Tenant shall supply Landlord with:
(a) comprehensive sets of documentation relative to the Improvements,
including, at a minimum, as -built drawings. As -built drawings shall be new drawings or redline
changes to drawings previously provided to Landlord;
the Improvements;
(b) textual documentation in computer format as requested by Landlord;
(c) full lien releases for all contractors, subcontractors and suppliers for
(d) copies of all permits and warranties for the Improvements.
12.5 Ownership and Requirements for Improvements. All Improvements 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 Improvements shall be
and remain in Tenant during the Term hereof, but shall automatically transfer to Landlord upon
termination of this Lease, unless Landlord required or permitted pursuant to this Lease that such
Improvements be removed at the end of the Term, in which case Tenant shall remove such
Improvements and repair any damage to the Leased Premises caused by such removal, provided
however, Tenant shall be entitled to remove specific equipment and assets, at the end of the lease
term, which tenant brought into the premises and which have been affixed to the premises (e.g.
fixed cranes, machines etc.), including those items listed in Exhibit H Tenant shall have ninety
(90) days after the expiration or termination of the Term, subject to all requirements of Section
2_2, and adequate access to the Leased Premises to remove same following receipt of such written
request, and the ownership of any Improvements not so removed within ninety (90) days shall
automatically transfer to Landlord. Tenant acknowledges and agrees that changes to the exterior
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of the Leased Premises must comply with Landlord's then -current color and appearance
requirements as disclosed by Landlord to Tenant, and Tenant shall not make any alterations,
improvements or additions to the exterior of the Leased Premises (including painting the exterior
of the Leased Premises) without Landlord's prior written consent.
12.6 Indemnification. TENANT FURTHER AGREES TO DEFEND AND
INDEMNIFY LANDLORD FROM ANY CLAIM ASSERTED BY LIEN CLAIMANTS ON
THE LEASED PREMISES, ARISING OUT OF THE PERFORMANCE OF ANY
MAINTENANCE, REPAIR, REPLACEMENT, IMPROVEMENT OR ALTERATION BY
TENANT OR TENANT'S CONTRACTOR ON THE LEASED PREMISES.
12.7 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 Leased Premises, 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 after the same shall occur, all claims and demands against Tenant or because of work
contracted for or requested by Tenant for labor, materials, supplies or other items which, if not
satisfied, might by law become a Lien upon the Leased Premises, or any part thereof, 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 Leased Premises by reason of work, labor, services or materials supplied or
claimed to have been supplied to Tenant, on the Leased Premises, 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 Leased Premises, cause the same to be discharged of record, or effectively prevent the
enforcement or foreclosure thereof, by contest, payment, deposit, bond, order of court or otherwise.
If Tenant breaches its obligations under this Section 12.7, 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 Tenant's obligations shall be paid by Tenant to
Landlord promptly upon written demand therefore accompanied by appropriate documentation of
such expenditures.
12.8 Signs. Tenant may at its sole cost and expense install one (1) exterior, building -affixed
sign subject to prior written consent of Landlord not to be unreasonably withheld, conditioned or
delayed and subject to all legal requirements applicable to signage. Tenant shall not install or
place any additional exterior signage on the Leased Premises, or at the entrance thereto, without
the prior written consent of Landlord. To the extent an approval by parties other than Landlord is
required for any signage, Landlord agrees to reasonably cooperate with Tenant to assist Tenant in
securing the approval of such other party. Tenant shall keep its signs in good repair and operating
condition.
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ARTICLE XIII
INSURANCE
13.1 Tenant Insurance. During the Term, Tenant, at its expense, shall procure and maintain
in connection with its lease and use of the Leased Premises, the following insurance coverages and
in accordance with all other applicable terms and conditions of this Article XIII:
(a) Aviation liability insurance covering, without limitation, aircraft
products liability and covering bodily injury and property damage (with limits of 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 Leased
Premises 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 a "claims made" 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) All Risks Property insurance with respect to Tenant's interest in the Leased
Premises and all personal property of Tenant located at or within the Leased Premises, with
coverages in such amounts and against such risks as are customarily insured against, including,
without limitation, business interruption coverage with respect to Tenant's operations at the Leased
Premises, and
13.2 Workers Compensation and Employer's Liability Insurance. Tenant represents that
Workers Compensation and Employer's Liability insurance coverages are maintained by Tenant
for all personnel working at the Leased Premises with a limit of 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 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 Sections 13.1 and 13.2 may be adjusted
by Tenant upon no less than thirty (30) days prior written notice to Landlord to such coverages
and amounts as may be approved by Landlord, such approval to not be unreasonably withheld.
13.3 Tenant Insurance Policv Conditions. Each insurance policy required by Section 13.1
(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 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 forty (40) days prior written notice
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to Landlord. The liability policies and coverages set forth in clauses (a) through (c) of Section 13.1
shall each contain an endorsement naming Landlord as an additional insured as its interests may
appear. Tenant shall be named loss payee as its interests may appear with respect to the insurance
coverages maintained by Tenant pursuant to clause (c) on Section 13.1. 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 13.1.
13.4 Landlord Insurance. At all times during the Term Landlord, at Landlord's sole cost
and expense, shall maintain commercially reasonable property and casualty insurance on the
Leased Premises and all other portions of the Base. Without limiting the generality of the
foregoing, Landlord shall maintain full replacement value casualty insurance on the Leased
Premises.
13.5 Mutual Release. Waiver of Subrogation. To the extent of the existence of valid and
collectible insurance, Landlord and Tenant covenant not to assert claims against the other from all
claims for losses of or to (i) the Leased Premises, (ii) the Fuel Farm, the IWTF, and the Central
Utility Plant, (iii) Tenant's personal property, equipment and fixtures, and (iv) tenant's or
landlord's business or revenues, provided the losses are covered by the releasing party's insurance
to the extent of the limits as specified in section 13.1 and section 13.2 above. 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 XIV
CASUALTY AND CONDEMNATION
14.1 Total Destruction. This Lease shall automatically terminate if the Leased Premises
is totally destroyed.
14.2 Partial Destruction of Leased Premises.
(a) If the Leased Premises is damaged by any casualty and, in Landlord's
reasonable opinion, the Leased Premises (exclusive of any Improvements made to the Leased
Premises by Tenant) can be restored to its preexisting condition within one hundred eighty (180)
days after the date of the damage or destruction, Landlord shall, upon written notice from Tenant
to Landlord of such damage, except as provided in Section 14.4, promptly and with due diligence
repair the damage to the Leased Premises as provided in Section 14.4.
(b) If such repairs cannot, in the reasonable opinion of a construction
professional chosen by Landlord and reasonably acceptable to Tenant, be made within said one
hundred eighty (180) day period, then Tenant may, at its option, exercisable by written notice
given to Landlord within thirty (30) days after the date of the damage or destruction, elect to
terminate this Lease as of the date of the damage or destruction. In the event Tenant does not
elect to terminate this Lease as provided herein, Landlord shall, at Landlord's expense, repair and
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restore the Leased Premises as provided in Section 14.3, and, in such event this Lease shall remain
in full force and effect but the Rent shall be abated as provided in Section 14.3.
14.3 Repair and Restoration Obligation/ Rent Abatement. Landlord's restoration and
repair obligation contained herein shall consist of repairing or restoring the Leased Premises,
including all Improvements contained within the Leased Premises that were subsequently
constructed with Landlord's consent pursuant to this Lease; provided however such restoration
and repair obligation shall be limited to the amount of insurance proceeds received by Landlord
from the property insurance policy required to be maintained by Tenant pursuant to Section 13.1.
Landlord shall not be obligated to repair or restore any Improvements performed by the Tenant
that were not approved by the Landlord, and Landlord shall not be obligated to repair or restore
Tenant's personal property or trade fixtures or the Test Cell. Until such repairs or restoration are
completed, the Rent shall be abated from the date of damage or destruction in the same proportion
that the rentable area of the portion of the Leased Premises which is unusable by Tenant in the
conduct of its business bears to the total rentable area of the Leased Premises. Landlord will repair
and restore at its costs any adjacent facilities, which are essential for the use of the Leased
Premises.
14.4 Exceptions to Landlord's Obligations. Notwithstanding anything to the contrary
contained in this Article XIV, Landlord shall have no obligation to repair the Leased Premises if
either: (a) the Leased Premises is so damaged as to require repairs to the Leased Premises
exceeding fifty percent (50%) of the full insurable value of the Leased Premises; or (b) the damage
is caused in whole or in part by the gross negligence or intentional tort of Tenant or any person in
or about the Base with Tenant's express or implied consent; or (c) the damage or destruction occurs
less than two (2) years prior to the expiration date of the then -current term, exclusive of additional
option periods. In the event Landlord does not elect to repair the Leased Premises, this Lease shall
terminate upon notice to Tenant of Landlord's election not to repair or restore the Leased Premises.
14.5 Property Insurance Deductible. In the event a claim is made by Tenant, Landlord,
or an additional insured under the property insurance policy required to be maintained by Tenant
pursuant to Section 13.1, the party making the claim shall be responsible for the amount of the
deductible for such policy, except to the extent that such insured claim arises from or is a result of
another party's gross negligence or willful misconduct.
14.6 Tenant's Termination Right. Notwithstanding anything in this Article XIV to the
contrary, in the event of a total loss of the Leased Premises or damage to the Leased Premises that
has a material adverse effect on Tenant's operation at the Leased Premises (as determined by
Tenant) or would require more than six (6) 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) effective as of the date of such damage and destruction (the "Casualty Date").
14.7 Termination of the Lease or a Portion Thereof. Upon any termination of this Lease
or portion thereof in accordance with this Article XIV, Landlord shall provide Tenant reasonable
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access to the Leased Premises or terminated portion thereof for a period of not more than ninety
(90) days following the Tenant's Notice, 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 Leased Premises,
the Base Rent, Additional Rent, and all other applicable charges due and payable by Tenant
hereunder will be equitably adjusted. If this Lease is not terminated pursuant to this Article XIV,
the Base Rent, Additional Rent and all other applicable charges due and payable by Tenant
hereunder shall be equitably reduced and abated during any period of time in which the Leased
Premises (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 Leased Premises (or such portion thereof) is unfit for the conduct of such operations.
14.8 Condemnation. If the Leased Premises 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 14.8. 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 property 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 Leased Premises 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 ninety (90)
days after such taking. If this Lease is not terminated pursuant to the terms of this Section 14.8,
then this Lease shall terminate only to the part of the Leased Premises so taken as of the date of
the taking, and the Base Rent, the Additional Rent and all other applicable charges due and payable
by Tenant hereunder shall be equitably adjusted.
14.9 Casualty or Condemnation Other than the Leased Premises. If all or any portion of
the IWTF, the Fuel Farm, the Central Utility Plant, or any other part of the Base necessary for
Tenant's operations at the Leased Premises 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 Leased Premises (as determined by Tenant) and would require
more than one hundred eighty (180) days to repair or rebuild, either party 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 Leased Premises 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
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vendors and customers. If this Lease is not terminated as provided by this Section 14.9, the Base
Rent, Additional Rent and all other 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
Leased Premises (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 without material additional cost or expense to Tenant, but only to the
extent the Leased Premises (or such portion thereof) is unfit for the conduct of such operations.
ARTICLE XV
INDEMNIFICATION RELATED TO SERVICES
15.1 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
EXPRESSLY AGREED TO BE RESPONSIBLE AND LIABLE FOR UNDER THIS
LEASE;
(b) ANY CONTAMINATION TO JET FUEL THAT OCCURS
AFTER THE JET FUEL ENTERS THE TENANT STORAGE AND THAT IS
CAUSED BY TENANT'S NEGLIGENCE; OR
(c) 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, (i) CAUSE A PASS THROUGH OR
INTERFERENCE AT THE CITY OF FORT WORTH'S PUBLICLY OWNED
TREATMENT WORKS OR AT THE IWTF, AS APPLICABLE, OR (ii) CAUSE A
VIOLATION OF THE WASTEWATER STANDARDS RESULTING IN
ADDITIONAL COSTS TO TREAT THE INDUSTRIAL OR HAZARDOUS WASTE
OR 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 OR THEIR RESPECTIVE AGENTS, EMPLOYEES,
CONTRACTORS, INVITEES AND LICENSEES.
15.2 Survival. This Article XV shall survive any termination of this Lease.
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ARTICLE XVI
GENERAL INDEMNITY
16.1 Tenant's Covenant. TENANT HEREBY AGREES TO DEFEND, INDEMNIFY
AND HOLD 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 LEASED
PREMISES BY TENANT, OR ITS EMPLOYEES, AGENTS, SUBTENANTS, OR
CONTRACTORS;
(b) 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
(c) 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, 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. THE
PROVISIONS OF THIS SECTION 16.1 SHALL SURVIVE THE EXPIRATION OR
EARLIER TERMINATION OF THIS LEASE.
16.2. Landlord's Covenant. LANDLORD HEREBY AGREES TO RELEASE TENANT
AND TENANT'S OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES, AND
AGENTS FROM AND AGAINST ANY AND ALL CLAIMS ARISING OUT OF OR
RESULTING FROM:
(a) THE POSSESSION, USE OR OCCUPANCY OF THE BASE OR ANY
PORTION THEREOF BY LANDLORD, THE MANAGEMENT COMPANY, FUEL
SERVICES COMPANY, ANY OTHER CURRENT OR FORMER TENANT OR
OCCUPANT OF ALL OR ANY PORTION OF THE BASE, AND THEIR RESPECTIVE
EMPLOYEES, AGENTS, TENANTS, LICENSEES, INVITEES OR CONTACTORS;
(b) ANY MATERIAL BREACH BY LANDLORD OF THE TERMS OF THIS
LEASE; AND
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(c) ANY NEGLIGENT ACT, OMISSION, WILLFUL MISCONDUCT, OR
UNLAWFUL ACT OF LANDLORD OR LANDLORD'S AGENTS, EMPLOYEES,
LICENSEES, SUBTENANTS, CONTRACTORS, OR INVITEES OCCURRING AT THE
BASE OR ANY PORTION THEREOF.
EXCLUDING IN EACH CASE, HOWEVER, SUCH CLAIMS ARISING OUT OF THE
NEGLIGENT ACTS, OMISSIONS, UNLAWFUL ACT, OR WILLFUL MISCONDUCT
OF TENANT, TENANT'S AGENTS, EMPLOYEES, LICENSEES, OR INVITEES, AND
ANY MANAGEMENT COMPANY (OR MANAGEMENT COMPANY'S AGENTS,
EMPLOYEES, LICENSEES, OR INVITEES), OR FUEL SERVICES COMPANY (OR
FUEL SERVICES COMPANY'S AGENTS, EMPLOYEES, LICENSEES, OR INVITEES)
IN CONTRACTUAL PRIVITY WITH TENANT. THE PROVISIONS OF THIS
SECTION 16.2 SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION
OF THIS LEASE.
ARTICLE XVII
EVENTS OF DEFAULT; REMEDIES
17.1 Default by Tenant: Event of Default. Any of the following events shall constitute an
"Event of Default" and a breach by Tenant under this Lease:
(a) Tenant fails to pay Base Rent, Additional Rent, or any other charges
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;
(b) 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 given 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; or
(c) Tenant abandons the Leased Premises (except for a Permitted Absence)
and fails to reoccupy the Leased Premises within thirty (30) days following Tenant's receipt
of written notice thereof from Landlord. Notwithstanding the foregoing, Tenant may abandon
or vacate the Leased Premises 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 Leased Premises by Tenant resulting
from an event of force majeure, casualty damage, or condemnation.
17.2 Remedies. Upon the occurrence of an Event of Default, Landlord may: (i) terminate
this Lease; (ii) terminate Tenant's right of possession of the Leased Premises, without terminating
this Lease, and relet the Leased Premises on behalf of Tenant; (iii) enter and take possession of the
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Leased Premises; (iv) remove and store all Tenant's furniture, fixtures, equipment, and personal
property in the Leased Premises; (v) enter the Leased Premises 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 Leased
Premises 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.
17.3 Measure of Damages.
(a) Performance of Tenant's Obligations. If Landlord cures Tenant's
Default, then Tenant will immediately pay Landlord (i) all reasonable expenses incurred by
Landlord in enforcing this Lease, including all legal costs (including attorneys' fees), (ii) all
reasonable expenses incurred by Landlord in curing Tenant's Default, and (iii) 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 Obligations. If Landlord terminates this Lease,
then Tenant will immediately vacate and surrender the Leased Premises and pay Landlord (i)
the reasonable cost of recovering the Leased Premises and removing and storing Tenant's
furniture, fixtures, equipment, and personal property or other property and (ii) the amounts
referenced in clauses (i) through (iii) of Section 17.3(a). All Base Rent or any other fee or
charge due and payable as required hereunder will continue to accrue and is to be payable in
accordance with the provisions in Section 17.3(c).
(c) Damages for Remainder of the Term. If Landlord terminates Tenant's
right to possess the Facility but not this Lease, then Tenant will pay to Landlord upon demand
in addition to the amounts set forth in Section 17.3(b), the present value of the amount (never
less than zero) by which (i) 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 (ii) the fair rental value of the Facility 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.
For purposes of this Section only, 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 Leased Premises, taking into account rental rates and concessions then
generally prevailing in the market place, the period of time the Facility is reasonably expected
to remain vacant before commencement of rental payments by a suitable new Tenant, and all
other relevant factors.
17.4 Mitigation of Damages. Upon termination of the Lease, Landlord will use reasonable
efforts to relet the Leased Premises. Landlord will be deemed to be acting reasonably if Landlord
refuses to lease the Leased Premises to a prospective new Tenant who (i) 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
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combine the Leased Premises with other space, (C) to take only a part of the Leased Premises, or
(D) to change the permitted use.
17.5 Default by Landlord. Landlord will in no event be charged with a default in the
performance of any obligations under this Lease unless and until Landlord has failed to perform
such obligations for a period of thirty (30) days, except in cases of emergency, to cure any such
default after written notice by Tenant is received by Landlord properly specifying Landlord's
failure to perform any such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance then Landlord shall
not be in default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion (but not to exceed an additional sixty (60)
days). If Landlord fails to perform Landlord's obligations within such timeframe after receipt of
written notice of such default, except in cases of emergency, Tenant may at its option (but shall
not be required to) perform such obligations on Landlord's behalf, and the actual and reasonable
costs thereof shall be due and payable by Landlord within thirty (30) days after written notice to
Landlord. Notwithstanding anything in this Lease to the contrary, in the event Tenant has not
received such payment within such thirty (30) day period, then Tenant may offset said amounts
against Base Rent subject to the Offset Limit (as such term is defined herein). The maximum
amount that Tenant may deduct in any one month (the "Offset Limit") shall be limited to the
greater of (i) twenty-five percent (25%) of the then monthly base rent or (ii) the amount necessary
to fully amortize in equal monthly amounts the amount due (including interest of 8% per annum)
over the remainder of the Term (including any shortened Term if this Lease is terminated prior to
its current expiration date, and assuming no extensions of the Term beyond its current expiration
date).
ARTICLE XVIII
MISCELLANEOUS
18.1 Assignment and Subleasing.
a) By Tenant. Except as expressly permitted below, Tenant shall not, without
the prior written consent of Landlord, not to be unreasonably withheld, conditioned or delayed,
including any necessary City Council approval, assign,'sublet, transfer, mortgage or hypothecate
this Lease or the right to use and occupy the Leased Premises, and any attempt to do any of the
foregoing without Landlord's consent shall be void. Consent to one assignment or subletting shall
not be deemed to be consent to any subsequent assignment or subletting. Upon any sublease or
assignment, including under Section 18.1(b) or Section 18.1(c), Tenant shall (i) remain liable for
the payment of all rent and fees, and the performance of all obligations under the Lease. Sublease
rights are personal to Tenant named herein and not to any assignee or subtenant and are not
appurtenant to the Leased Premises or this Lease.
b) Tenant's Permitted Assignee. Notwithstanding the provisions of Section
18.1(a) above, Landlord acknowledges that Tenant may, with prior written consent of Landlord,
assign the Lease to an Affiliate of Tenant. Tenant will promptly notify Landlord of any such
assignment and will provide Landlord with a copy of any executed subleases or assignments.
Tenant may assign any portion of its rights under this Lease to any party that Tenant may elect
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upon the written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed. Landlord's consent shall be dependent on objectively reasonable factors
including minimum employment levels being equal to or greater than those of Tenant and the
minimum tangible net worth of such assignee being equal to or greater than that of Tenant. In the
event of an assignment or subletting, Tenant shall remain liable for the payment of all rent and the
performance of all of Tenant's obligations under the Lease
c) Sublease. Tenant may sublease any portion of its rights under this Lease to
any party that Tenant may elect upon the written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Any authorized subtenant shall have a right of
quiet enjoyment, provided however, such subtenant is not in breach of its obligations. If there are
any discrepancies between a sublease and this Lease, then the terms and conditions of this Lease
shall prevail.
d) By Landlord. Landlord may, without Tenant's consent, sell, assign or
otherwise transfer or convey all of Landlord's interest in and to this Lease, the Base, the Leased
Premises, the Central Utility Plant, the Fuel Farm and the IWTF, and Tenant agrees to attom to
the new owner as "Landlord" for all purposes hereunder so long as 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 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.
18.2 Interest Charges. Should either party fail to pay any amount due to the other party
under this Lease when due, interest will accrue from 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.
18.3 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.
18.4 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.
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18.5 Entire Aareement: Amendments. This Lease constitutes the complete agreement
of the parties with respect to the subject ]natter 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.
18.6 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
obtained); (ii) one (1) business day after dispatch, if dispatched by a recognized express delivery
service which provides signed acknowledgments of receipt; or (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. 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 to Landlord:
City of Fort Worth
Property Management Department
900 Monroe Street, Suite 400 Street
Fort Worth, Texas 76102
Attention: Lease Management
With a copy to:
City Attorney
City of Fort Worth
200 Texas Street
Fort Worth, Texas 76102
If to Tenant:
MTU Maintenance Dallas, Inc.
Attn: General Manager
615 Westport Parkway, Suite 600
Grapevine, Texas 76051
With a copy to:
MTU Maintenance Berlin -Brandenburg GmbH
Attention: General Manager
Dr.- Ernst-Zimmermann-Str 2
14974 Ludwigsfelde
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Germany
18.7 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.
18.8 Binding Effect. This Lease shall be binding upon the parties, their personal
representatives, successors and assigns.
18.9 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.
18.10 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.
18.11 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.
18.12 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.
18.13 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.
18.14 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.
02475442-1
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18.15 Brokerage. Each party warrants to the other that it has had no dealings with any
broker, agent or consultant in connection with this Lease except Hillwood Realty representing the
Landlord and Reitz Realty Group, PLLC representing the Tenant, whose commission Landlord
shall pay pursuant to Exhibit Kin this Lease. Tenant shall have no obligation for any commission.
18.16 Compliance with Laws Tenant must at all times conduct its operations at and use
the Leased Premises in material compliance with all statutes, laws, rules, regulations and
ordinances as may exist from time to time. Landlord must at all times 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
Leased Premises that is generated by Tenant in the conduct of its operations at and use of the
Leased Premises, 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 Leased Premises.
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 CUP facilities, 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.
18.17 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.
18.18 Force Majeure. If either party is unable, either in whole or part, to fulfill its
obligations under this Lease due to acts of God; strikes, lockouts, or other industrial disturbances;
acts of public enemies; wars; blockades; insurrections; riots; epidemics; public health crises;
earthquakes; fires; floods; restraints or prohibitions by any court, board, department, commission,
or agency of the United States or of any state; declaration of a state of disaster or of emergency by
the federal, state, ' county, or city government in accordance with applicable law; issuance of a
Level Orange or Level Red Alert by the United States Department of Homeland Security; any
arrests and restraints; civil disturbances; or explosions; or some other reason beyond the Party's
reasonable control (collectively, "_Force Majeure Event"), the obligations so affected by such Force
Majeure Event will be suspended only during the continuance of such event.
18.19 Time is of the Essence. Time is of the essence under this Lease.
Exhibits:
• Exhibit A — Jet Fuel Specification
• Exhibit B-1— Site Plan
• Exhibit B-2 — Tenant Pipe Segment and Fuel Meter
• Exhibit C — Uplift Services
• Exhibit D — Fees for Uplift Services
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• Exhibit E — CUP Utilities and Services
• Exhibit F — CUP Utilities and Services Fees
• Exhibit G — Common Area Fees
• Exhibit H — Tenant Improvements and Deferred Maintenance
Exhibit I - Commencement Date Memorandum
• Exhibit J - Test Cell Audit by Safran & MTU; Building audit & inspection; and Phase I
ESA (environmental DD).
• Exhibit K — Broker Commissions Payment Schedule
[Signature Page Follows]
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The parties hereto have executed this Lease to be effective on J a n u a ry 27 , 2023 (the
"Effective Date").
LANDLORD:
CITY OF FORT WORTH,
a Texas home rule municipal corporation
By:
Name:
Title:
Dana Burghdoff
Assistant City Manager
TENANT:
MTU MAINTENANCE DALLAS,
Ini '
By:
Nan
Title
City of Fort Worth Contract Compliance Manager:
By signing I acknowledge that I am the person responsible
for the monitoring and administration of this contract, including
ensuring all performance and reporting requirements.
Mark (Jan 26, 20/3 08:35 CST)
Name of Employee
Lease Manager, Property Management Department
Title
Approved as to form and legality:
Thomas R. Hansen paa4FORra
o�°°°°°° °� o
Assistant City Attorney P� o ° oo a�
°
c -o a-+d
o
o
c
Attest: °�* �°
s �aaa °°°°°°°°°°°
nl�p�gga
Jannette S. Goodall C
City Secretary
Form 1295: 2022-953936
Contract Authorization:
M&C 22-1058
Date: 12/23/2022
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OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
Page 44 of 63 10
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 Leased Premises 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 Leased Premises, 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 Tenant 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 cause to be
inspected the equipment of Tenant and shall conduct such other inspections of each 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 product
Alliance Fort Worth Maintenance Base
Lease of Structures Building to Paramount Aerospace Systems USA, Incorporated
Page 45 of 63
to be delivered meets ASTM D1655 specification requirements with at least the following select
property values listed as measured by specified ASTM test methods:
(a) Visual Appearance in White Bucket
(b) Gravity, corrected to 60' F (15' C)
(c) Distillation
(i) 10% Recovered
(ii) 50% Recovered
(iii) 90% Recovered
(iv) Final Boiling Point
(i) Residue
(vi) Loss
(d) Flash Point
(e) Freezing Point
(f) Water Separation (MSEP)
(g) Copper Strip Corrosion
(h) Existent Gum
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.
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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 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 books 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. 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 or charges related to
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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
perpetual 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.
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EXHIBIT B-1
SITE PLAN
11 .14
Tenant Parking
100 Spot Exclusive
+ •.
R ,
• R R•♦ R
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Tenant Parking
Non -Exclusive
e
r
4 r;
t l Lease Premises
Page 49 of 63 /�/�
EXHIBIT B-2
TENANT PIPE SEGMENT AND FUEL METER
Segment And Fuel Meter
Quality Assurance and Maintenance Stop Point- Fuel Line into the UST
Description of Inbound Pipeline at
1 UST from the fuel farm hydrant line,
1, > Fuel Flow Meter- Owned and
maintained by landlord/Fuel Services
Company
2. Inbound hydrant line to the tank
3 Landlord /Fuel Services Company Single
Point, Sump & Millipore test location &
Quality Assurance cutoff point
Maintenance obligation of landlord/Fuel Services
Company ends at and Inclusive of Meter ( i).
White Bucket test will be preformed an the
Inbound fuel line on a daily basis to ensure ATA
103 quality assurance standards are met, Records
will be maintained by AAS
Millipore testing will be performed as required by
ATA 103. Records will be maintained by AAS
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Direction of Fuel Flow
Page 50 of 63 xe
EXHIBIT C
UPLIFT SERVICES
The IWTF collects and processes wastewater, generates Reverse Osmosis (RO) water and
distributes treated water to the Base, including the Leased Premises. During the Term, 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 twenty-four (24) hours per day,
seven (7) days per week, three hundred sixty-five (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 Leased Premises, the Central
Utility Plant, 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
Landlord -held 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 of, 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 shall 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").
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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.
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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 43-45 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 Leased Premises 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 Leased Premises and all other
buildings and facilities receiving any CUP Utilities.
CUP Services
Fire Monitoring and Protection Services: Landlord must maintain both a monitoring
network and a suppression network up to the walls of Tenant's Lease Premises. 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.
Tenants is responsible for the cost of their pro -rated share of the fire monitoring and protection
services of the Leased Premises.
HVAC Control for the Leased Premises: Landlord shall continuously monitor and adjust
from the CUP as necessary the indoor air temperatures within the Leased Premises so as to assist
the Tenant in achieving the agreed target temperatures in all of the buildings located on the Leased
Premises. 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 snake such adjustment within four (4) hours of
Tenant's request.
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Emergency Response System
Tenant shall at all times (i.e., twenty-four (24) hours per day, seven (7) days per week, three
hundred sixty-five (365) days per year) maintain an emergency response system (the "EmergencX
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 separate fee schedule then in effect, as agreed upon in writing by
Landlord and Tenant.
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EXHIBIT F
CUP UTILITIES AND SERVICE 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" = (Total Steam Operating Costs / Total steam creation from the
Central Utility Plant) * Tenant's Actual Usage
"Tenant Chilled Water Fee" = (Total Chilled Water Operating Costs / Total chilled water
creation from the Central Utility Plant) * Tenant's Actual Usage. Tenant's average usage
rate shall not be less than $0.28/Ton-Hr. during the lease term.
"Tenant Compressed Air Fee" = (Total Compressed Air Operating Costs / Total
compressed air creation from the Central Utility Plant) * Tenant's Actual Usage.
"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)] * $.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 output 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 Leased
Premises. 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 Steam Operating Costs" shall
• "Total Chilled Water Operating_ Costs" shall
• "Total Compressed Air Operating Costs" shall
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.
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EXHIBIT G
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 the Leased Premises. It is agreed that Tenant's Building
Footprint is 21,624 square feet.
"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. It is agreed that Tenant's Base
Footprint is 21,624 square feet.
"Total 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, Leased Premises roof repair and replacement, 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 Leased
Premises, 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 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;
02475442-1
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Page 56 of 63 A
5. Costs, including permit, license and inspection costs, incurred with respect
to an Adjoining Tenant or other occupants of the Base or incurred in
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;
8. The depreciation of any capital improvements on the Base except the
Leased Premises roof replacement depreciation; and
9. Any cost incurred due to the negligence or willful misconduct of Landlord,
Tenant, Management Company, Fuel Services Company or any Adjoining
Tenant.
Proration: If for any reason other than the default of Tenant, this Lease terminates on a
day other than the last day of a calendar year, the amount of Common Area Fees payable
by Tenant applicable to the calendar year in which such termination occurs will be prorated
on the basis that the number of days from the commencement of such calendar year to and
including such termination date bears to three hundred sixty-five (365) days.
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Page 57 of 63
EXHIBIT H
Tenant Improvements
Tasks
Location
I Area
Test Cell control pannel and computer upgrade
Test Cell
rr & Efectr lml
Engine prep area fixed a,ncl automated adapter & support
Test Cell
Mechanical
systerm�
Air compressor upgrade with Air Dryer. Inspect and certify Test Cell
Mechanical
Test Cell
Mechanical &
Gill delivery system repair, leak check & certification
Hydraulic
CCTV
Test Cell
Electrical
Test Cell &
Building access control (8 locations)
O
Electrical
Securitycamera .and monitoringsystem(internal&
Test Cell&
external)
MCO
Electrical
Test Cell &
Mechanical &
over head Crane repair and upgrade
MCO
Electrical
MCC)
Mechanical
Relocation of ne%v cranes from exi'stmg facility to Alliance
New office space on shop floor I
MCO
Structure
Repair, paint & upgrade shop floor bathrooms
MCO
Structure
Strip,:seal & mark concrete floor
MCO'
Structure
Upgrade lights with LED
MCO
Electrical
I
MCO
Electrical
Repair & upgrade IT infrastructure
Elctrical &
MCC)
infrastructure
Repair & upgrade fire protection system
_Scrub and paint exhause stack (External)
Test Cell
Structure
,Adclitional building security entrance (facing parking)
MCG
Structure
02475442-1
Alliance Fort Worth Maintenance Base Lease —
MTU Maintenance Dallas, Incorporated
Page 58 of 63 110
EXHIBIT I
COMMENCEMENT DATE MEMORANDUM
THIS MEMORANDUM is made as of , by and between City of Fort Worth
("Landlord") and MTU Maintenance Dallas, Incorporated ("Tenant").
Recitals:
WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement, City Secretary No.
dated (the "Lease") for certain leased premises (the "Leased
Premises") located at the Alliance Fort Worth Maintenance Base: and
WHEREAS, Tenant and Landlord agree the Tenant Improvementsmprovements are completed
and approve of the final condition of the Leased Premises; and
WHEREAS, Tenant has provided Landlord a list of the improvements and equipment, with
associated costs, that Tenant has made and installed in the Leased Premises; and
WHEREAS, Tenant has provided to Landlord a list of the improvements and equipment that will
remain and what will be removed from the Leased Premises upon termination of the Lease, and
the parties are in agreement of what will remain and what will be removed upon termination of
the Lease; and
WHEREAS, Tenant is in possession of the Leased Premises and the Term of the Lease has
commenced; and
WHEREAS, Landlord and Tenant desire to enter into this Memorandum confirming the
Commencement Date, the expiration date of the Term, and other matters under the Lease.
NOW THEREFORE, Landlord and Tenant agree as follows:
1. The actual Commencement Date is
2. The actual Expiration Date is
Capitalized terms not defined herein shall have the same meaning as set forth in the Lease.
[SIGNATURES ON FOLLOWING PAGE]
02475442-1
Alliance Fort Worth Maintenance Base Lease —
MTU Maintenance Dallas, Incorporated
Page 59 of 63
LANDLORD:
City of Fort Worth,
a home rule municipal corporation
LIN
Dana Burghdoff
Assistant City Manager
Date:
TENANT:
MTU Maintenance Dallas,
Incorporated
By: _
Name:
Title:
Date:
02475442-1
Alliance Fort Worth Maintenance Base Lease —
MTU Maintenance Dallas, Incorporated
Page 60 of 63
EXHIBIT J
TEST CELL AUDIT BY SAFRAN & MTU; BUILDING AUDIT AND INSPECTION;
AND PHASE I ESA (ENVIRONMENTAL DD)
02475442-1
Alliance Fort Worth Maintenance Base Lease —
MTU Maintenance Dallas, Incorporated
Page 61 of 63
EXHIBIT K
A. Landlord shall pay to broker representing Landlord, Hillwood Realty
Services ("Landlord Broker") and Reitz Realty Group, PLLC, broker representing Tenant
("Tenant Broker"), collectively referred to as brokers, commissions of the Net Rental
(hereinafter defined) at the commission rates below during the first ten years of the primary
term of the lease per the payment schedule below:
Landlord Broker Commission Rate: 2.25% of Net Rental
Tenant Broker Commission Rate ; 4.5% of Net Rental
TERM
BASE RENT
HILLWOOD
REITZ REALTY
GROUP PLLC
TOTAL
YEAR
MONTHS
COST
0.022S
0.04S
11-18
$ -
$ -
$
2
19-24
$ 264,900.00
$ 5,960.25
$ 11,920.50
3
25-36
$ 529,800.00
$ 11,920.50
$ 23,841.00
4
37-48
$ 529,800.00
$ 11,920.50
$ 23,841.00
5
49-60
$ 529,800.00
$ 11,920.50
$ 23,941.00
6
61-72
$ 635,760.00
$ 14,304.60
$ 28,609.20
7
73-84
$ 635,760.00
$ 14,304.60
$ 28,609.20
8
85-96
$ 635,760.00
$ 14,304.60
$ 28,609.20
9
97-108
$ 635,760.00
$ 14,304.60
$ 28,609.20
10109-120
$ 635,760.00
$ 14,304.60
$ 28,609.20
TOTALS
$ 5,033,100.00
$ 113,244.75
$ 226,489.50
$ 339,734.25
COMMISSIONS PAYABLE AS FOLLOWS:
DUE WITHIN 30 DAYS AFTER LEASE EFFECTIVE DATE
HILLWOOD REALTY SERVICES
$ 56,622.38
REITZ REALTY GROUP, PLLC
1 $113,244.75
DUE WTHIN 30 DAYS BUT NO LATER THAN 60 DAYS AFTER
ISSUANCE OF CERTIFICATE OF OCCUPANCY
HILLWOOD REALTY SERVICES
$ 56,622.37
REITZ REALTY GROUP, PLLC
$113,244.75
Brokers will be paid a commission for the entire term of the Lease notwithstanding any
right of early termination by Tenant.
02475442-1
Alliance Fort Worth Maintenance Base Lease —
MTU Maintenance Dallas, Incorporated
Page 62 of 63
B. The term "Net Rental" means only the base monthly rent actually due and
payable under the Lease, and does not include any of the following: rent credits, percentage
rent; security deposits; free rent; amounts paid by Tenant to Landlord as the Tenant's share
of any taxes, utilities, insurance premiums, repairs, maintenance, other operating expenses,
Landlord's overhead or other "pass -through" payments related to the demised premises,
building, common areas and/or Property; escalations due landlord in excess of base rental
originally scheduled in the Lease (which excluded escalations include, but are not limited
to, rent increases based upon any cost of living increases, CPI indexing or similar formulas,
unless a minimum is provided); or amortization of special leasehold improvements.
C. In the event Tenant expands, extends or renews the Lease, within the terms
of the Lease, Landlord shall pay to brokers, within 30 days after the expansion, extension
or renewal becomes effective, commissions at the rates as described in paragraph A,.
herein, of the aggregate Net Rental received by Landlord from Tenant under the expansion,
extension or renewal in excess of the Net Rental for which a commission has already been
paid; provided, however, that Landlord shall not have any liability or obligation with
respect to any expansion, extension or renewal entered into at a time when Landlord is no
longer the owner of the Property, provided Landlord obtains from subsequent owner a
written agreement whereby subsequent owner assumes Landlord's commission obligations
herein and such agreement is delivered to brokers and any subsequent owner of the
Property shall not have any liability or obligation for such commission unless expressly
agreed to in writing by the subsequent owner. As an additional condition for brokers to be
entitled to receive a commission for any expansion, extension or renewal of the Lease,
brokers must take an active role in the negotiations for the expansion, extension or renewal
at Landlord's and Tenant's request and, at or prior to the first meeting between brokers and
the parties regarding the contemplated expansion, extension or renewal, brokers must
deliver to Landlord evidence of broker's authority to represent each party in the
negotiations in the form of a written exclusive authorization letter by each party specifically
relating to the contemplated expansion, extension or renewal.
02475442-1
Alliance Fort Worth Maintenance Base Lease —
MTU Maintenance Dallas, Incorporated
Page 63 of 63
M&C Review Page 1 of 2
Official site of the city of Fort Worth, Texas
CITY COUNCIL AGENDA(aRT'
Create New From This M&C
DATE: 12/13/2022 REFERENCE NO,: **M&C 22- LOG NAME: 21 MTU
1058 MAINTENANCE
CODE: L. TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: (CD 7) Authorize the Execution of a Lease Agreement with MTU Maintenance Dallas,
Incorporated for the Turbine Engine Overhaul Building, the Test Cell and the Heat, Treat,
Blast and Spray Shop, Located at 2112 Eagle Parkway, Fort Worth, Texas at the Alliance
Fort Worth Maintenance Facility 76177; and Authorize Payment of Brokerage
Commission to Reitz Realty Group, PLLC at a Rate of 4.50 Percent of the Base Rent of
the MTU Lease
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the execution of a lease agreement with MTU Maintenance Dallas for the Turbine
Engine Overhaul Building, the Test Cell and the Heat, Treat, Blast and Spray Shop, located at
2112 Eagle Parkway, Fort Worth, Texas at the Alliance Fort Worth Maintenance
Facility 76177; and
2. Authorize the City Manager or his designee to pay a brokerage commission to Reltz Realty
Group, PLLC at a rate of 4.50 percent of the base rent.
DISCUSSION:
On January 19, 2017, the City of Fort Worth (City) entered into a lease agreement with Rolls Royce
North America, Incorporated (RR) to lease the Engine Test Cell Facility, Turbine Overhaul Building,
and the Heat, Treat, Blast and Spray Building (Premises) consisting of approximately 444,000 square
feet of space, located at the Alliance Fort Worth Maintenance Base (AFWMB) (City Secretary
Contract No. 50094).
The lease was effective January 1, 2018 and provided for an early lease termination In year five (5) of
the term with a six (6) month notice.
Due to a change in business, RR provided the City with notice of early termination on June 30, 2022
with the Premises to be vacated by December 31, 2022.
As a result of discussions and negotiations between the City Property Management Department
(PMD), the City's property manager for the Premises, Hillwood Properties (Hillwood) and MTU
Maintenance Dallas, Inc. (MTU), the parties have agreed to lease the Premises upon RR vacation of
the Premises with the following terms:
Primary Term of 10 years with an effective date of January 1, 2023.
Two five-year renewal options at then current market rates
Base Rent for Primary Term to be paid as follows:
Months 1 -18: No base rent as credit toward Tenant Improvements
Months 19-60: $1.25 per square foot ($529,800.00 per year)
Months 61-120: $1.50 per square foot ($635,760.00 per year)
MTU assumes operating expenses for the premises during the term of the lease upon obtaining the
Certificate of Occupancy,
Total rental revenues, fees and reimburseable expenses resulting from the ten (10) year primary term
of this lease agreement are estimated to contribute approximately $24,000,000 toward the Alliance
http://apps.cfwnet.org/coune.il_pa.eket/inc—review,asp?ID=3061 I&councildate=l2/13/2022 1/10/2023
M&C Review Page 2 of 2
Maintenance Facility Fund.
Additionally revenues from Jet Fuel Sales to MTU from the AMF Fuel Farm are yet to be determined.
MTU intends to make up to $17M worth of improvements to the Test Cell and Premises to
accommodate testing a variety of jet engines which will increase the value of the Test Cell and
the improvements will be the property of the City upon expiration of the lease agreement.
As outlined in the Leasing Agreement between the Alliance Airport Authority and Hillwood Properties,
which was assigned to the City via M&C L-15748 on January 15, 2015, Hillwood brokerage
commission fees due will be 2.25 percent of the base rent. The Leasing Agreement also stipulates
that cooperating brokers in the transaction would be paid a separate commission fee of 4.5 percent of
the base rent. Reitz Realty Group, PLLC is the cooperating real estate broker assisting with the
negotiations and upon approval of this M&C and the execution of the lease, the City will pay Reitz
Realty Group, PLLC, for their commission fee as outlined in the MTU lease agreement.
This property is located in COUNCIL DISTRICT 7.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and execution of
the lease agreement, funds will be deposited into the Alliance Maintenance Facility Fund. The
Property Management Department (and Financial Management Services) Is responsible for
the collection and deposit of funds due to the City. Prior to any expense being Incurred, the Property
Management Department also has the responsibility to validate the availability of funds.
Irtment I Account I Project I Program I Activity I Budget I Reterence
ID ID Year I (Chartfield
irtment Account Project Program Activity Budget Reference # Amount
ID I I ID I I I Year I (Chartfield 21
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
Dana Burghdoff (8018)
Steve Cooke (5134)
Mark Brown (5197)
Marilyn Schoening (7581)
ATTACHMENTS
FID Table for MTU M and C.pdf (CFW Internal)
Form 1295 Certificate, 11-9-2022.pdf (CFW Internal)
Funds Availability .pdf (CFW Internal)
MTU M AND C MAP.pdf (Public)
0
littp:Happs.cfwnet.org/council_packet/mc—review.asp?ID=3061 I&councildate=12/ 13/2022 1 / 10/2023