HomeMy WebLinkAboutContract 24383 CITY SECRETARY
- >- > t,.i : CONTRACT NO.
CONSENT TO LEASEHOLD DEED OF TRUST,
SECURITY AGREEMENT AND FIXTURE FILING
This CONSENT TO LEASEHOLD DEED OF TRUST,SECURITY AGREEMENT
AND FIXTURE FILING("Agreement") is made and entered into by and between the CITY
OF FORT WORTH (the "City"), a home rule municipal corporation situated in portions of
Tarrant and Denton Counties,Texas;AIRPORT BUILDING PARTNERS,LTD. ("Lessee"),
a Texas limited partnership; GALAXY AEROSPACE COMPANY, L.P. ("Galaxy"), a
Delaware limited partnership;and PARIBAS,CHICAGO BRANCH, a bank organized under
the laws of France, as agent for itself and certain lenders identified in the Credit Agreement
described herein (collectively "Paribas").
WHEREAS,the City and Alliance Aviation Investors,L.P.previously entered into City
Secretary Contract("CSC")No. 23512 ("Lease"),a Ground Lease Agreement under which the
City has leased to Lessee certain real property at Fort Worth Alliance Airport ("Airport")
identified as Lease Parcels 2 and 5 and specifically described in the Lease (the "Leased
Premises"); and
WHEREAS, in accordance with the conditions and provisions of the Lease,Alliance
Aviation Investors,L.P. assigned all of its rights,titles and interest in the Lease to Lessee, as
further reflected in an Assignment of Ground Lease executed as of January 30, 1998 between
Alliance Aviation Investors, L.P. and Lessee; and
WHEREAS, in accordance with the conditions and provisions of the Lease and with the
City's consent, Lessee subsequently subleased the Leased Premises to Galaxy Aerospace
Corporation("Galaxy Corp."),predecessor to Galaxy,pursuant to a Lease Agreement in a form
substantially and materially similar to that attached to City Secretary Contract No. 23511
("Sublease"); and
WHEREAS, in accordance with the conditions and provisions of the Lease and except
as provided by Section 12.1 of the Lease,no party may create a Leasehold Mortgage, as defined
in the Lease, unless the City first consents in writing to such Leasehold Mortgage; and
WHEREAS,Galaxy,the lenders named in the Credit Agreement,as defined herein and
Paribas, as agent for such lenders have entered into a Credit Agreement dated as of September
30, 1998 ("Credit Agreement") under which such lenders will lend Galaxy funds for various
purposes related to the operation of Galaxy's business on the Leased Premises, and, pursuant
to such Credit Agreement, Galaxy and Paribas desire the City to consent to the execution by
Galaxy of a Leasehold Deed of Trust, Security Agreement and Fixture Filing as more
specifically described in this Agreement, and to Paribas' exercise of certain rights pertaining to
the assets of Galaxy,defined as"Collateral"under the Credit Agreement and in this Agreement;
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing ,, „n ,� ,��D Page 1
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NOW,THEREFORE,THE PARTIES AGREE AS FOLLOWS:
1. The City hereby consents to the execution and delivery by Galaxy to Paribas of a
Leasehold Deed of Trust, Security Agreement and Fixture Filing ("Deed of Trust") and, in
accordance with the terms and conditions of the Deed of Trust, hereby acknowledges an
assignment of Galaxy's rights,titles and interest in the leasehold estate created by the Lease and
the Sublease and the creation of a deed of trust lien upon such leasehold estate, including,but
not limited to, all buildings,fixtures,equipment, inventory and personal property on the Leased
Premises. The Deed of Trust is attached hereto as Exhibit "A". Notwithstanding anything to
the contrary in the Deed of Trust, Lessee, Galaxy and Paribas acknowledge, understand and
agree that neither Lessee nor Galaxy have the right to convey any interest in real property at the
Airport than that granted by the Lease. The City does not adopt,ratify or approve of any of the
particular provisions of the Deed of Trust and does not consent to any right,privilege or use to
Paribas that is different from or more extensive than any right,privilege or use granted to Lessee
by the Lease. In the event of any conflict between the Deed of Trust and the Lease,the Lease
shall control as to the City.
2. Paribas shall not in any manner delay or cause the delay of the enforcement or
protection of any of the City's lawful rights as to the Leased Premises (other than as expressly
permitted by this Agreement with respect to Paribas' rights of entry onto the Leased Premises).
Paribas or its authorized representatives or agents may at any reasonable time enter onto the
Leased Premises to inspect the Collateral, or take possession of or remove any or all of the
Collateral from the Leased Premises or exhibit for sale and/or conduct one or more sales of the
Collateral on the Leased Premises. During any possession and occupancy by Paribas or its
authorized representatives or agents, Paribas agrees that it will assume all of the duties and
obligations of Galaxy under the Sublease to pay rent during the continuance of such possession
and occupancy, if and to the extent that rent is not being otherwise paid.
3. Paribas hereby agrees promptly to notify the City in writing when Paribas has released
its rights under the Deed of Trust. This Agreement will automatically terminate on the date that
Paribas has released such rights.
4. Any notices to any party to this Agreement shall be conclusively determined to have
been delivered when (1) hand-delivered to a party hereto, its agents, employees, servants or
representatives, or (2) deposited in the United States Mail, postage prepaid, addressed as
follows:
To THE CITY:
With a copy to:
City of Fort Worth City of Fort Worth
Attn: Aviation Director Dept. of Law
4201 N Main St Ste 200 1000 Throclunorton
Fort Worth,TX 76106-0976 Fort Worth, TX 76102
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing Page 2
To LESSEE:
Airport Building Partners,Ltd.
c/o Alliance Development Co.
2421 Westport Pkwy. Ste. 200
Fort Worth, TX 76177
To GALAXY:
Galaxy Aerospace Co.
One Galaxy Way
Alliance Airport
Fort Worth, TX 76177
To PARIBAS:
Paribas, Chicago Branch
227 W. Monroe St. Ste. 3300
Chicago,IL 60606
5. The parties hereto understand and agree that all structures and improvements on the
Leased Premises shall become the sole property of the City, free of all liens,upon termination
or expiration of the Lease in accordance with its terms and provisions. In the event that the
Lease expires or is terminated in accordance with the Lease,Lessee covenants and agrees that
nothing herein shall obligate the City to assume in any way any obligations created by the Deed
of Trust or Credit Agreement or to relieve Galaxy or any successor of any obligation to liquidate
and discharge, at Galaxy's or its successor's sole cost and expense, any lien on the Leased
Premises and/or any structures or improvements thereon.
6. In the event of any conflict between this Agreement and the Deed of Trust, the
conditions and provisions of this Agreement shall control.
7. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by the parties hereto and approved by the City's City Council. Galaxy and
Paribas covenant and agree that they will not amend the Deed of Trust or assign any rights or
obligations thereunder without the prior written consent of the City.
8. This Agreement shall be construed in accordance with the laws of the State of Texas.
Venue for any action arising under the provisions of this Agreement shall lie in the state courts
of Tarrant County,Texas,or the United States District Court for the Northern District of Texas,
Fort Worth Division.
9. This written instrument, including any documents attached hereto and/or incorporated
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing Page 3
herein, contains the entire understanding and agreement between the City, Lessee, Galaxy and
Paribas as to the matters contained herein. Any prior or contemporaneous oral or written
agreement concerning such matters is hereby declared null and void to the extent in conflict with
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
multiples effective on the last date indicated below.
CITY OF FORT WORTH: ATTEST:
By: By:
Ramon Guajardo Glori I ear scn
Assistant City Manager City Secretary
Date:
APPROVED AS TO FORM AND LEGALITY:
By:
Peter Valcy
Assistant City Attorney
M&C: G-1233 9
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME,the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared Ramon Guajardo,known to me to be the person whose name
is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of
the City of Fort Worth and that he executed the same as the act of the City of Fort Worth for
the purposes and consideration therein expressed and in the capacity therein stated.
r)%N E MY HAND AND SEAL OF OFFICE this <0- day
1998.
Notary Public in a d for the State of Texas
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing � � SARAH JANE ODLE Page 4
'� w NOTARY PUBLIC
�,,,,,,J State of Texas
�� Comm. Exp.01-29-2002
AIRPORT BUILDING PARTNERS,
LTD., a Texas limited partnership:
By: Hillwood Operating,L.P.,
a Texas limited partnership, and
its general partner
By: Hillwood Development Corp.,
a Texas corporation, and
its ene al Ter
By; K .-
Name: 0 _a p-,y
Title: VP
Date: dept
'' C+ fD/3Ic r Z 1171le
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of
Illinois, on this day personally appeared /C w'mc.../ V yknown to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to me that
the same was the act of the Hillwood Development Corporation., a Texas corporation, on
behalf of Hillwood Operating, L.P., a Texas limited partnership, on behalf of Airport
Building Partners,Ltd., a Texas limited partnership, and that s/he executed the same as the
act of the Hillwood Development Corporation for the purposes and consideration therein
expressed and in the capacity therein stated.
GI EN UNDER MY HAND AND SEAL OF OFFICE this 2Q day
n 4j� /2__. , 1998.
$e00000�000e00000000
RV PVi
�'-:zo."••••ec� BRENDA G. LACY v
.;. Notary Public,State of Texas Notary Public in an for the at of xas
N •.• � '
My Commission Expires 11-01-99
pOC�tx�+ ? i6
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing Page 5
GALAXY AEROSPACE
COMPANY,L.P.,
a Delaware limited partnership:
By: Galaxy Aerospace III,LLC,
a Delaware limited liability company
and its general partner:
4ame: an arents
Date: October .4, 1998
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME,the undersigned authority, a Notary Public in and for the State of Texas
on this day personally appeared Brian E.Barents,known to me to be the person whose name
is subscribed to the foregoing instrument,and acknowledged to me that the same was the act of
Galaxy Aerospace III, LLC, a Delaware limited liability company, on behalf of Galaxy
Aerospace Company,L.P., a Delaware limited partnership, and that he executed the same as
the act of the said Galaxy Aerospace Company, L.P., for the purposes and consideration
therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this W'- day
October, 1998. , .
SYLVIA R OCHOA
':SHY AU i
�; „? •' Notary Public,state of Texas
:, ;�a (`ty Commission Expires
�a Yk�, November 03,2001
Nota ublic in and for the State of Texas
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing Page 6
GALAXY AEROSPACE
COMPANY,L.P.,
a Delaware limited partnership:
By: Galaxy Aerospace III,LLC,
a Delaware limited liability company
and its general partner:
B
V n E. Barents
ent
Date: October (P, 1998
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME,the undersigned authority, a Notary Public in and for the State of Texas
on this day personally appeared Brian E. Barents, known to me to be the person whose name
is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of
Galaxy Aerospace III, LLC, a Delaware limited liability company, on behalf of Galaxy
Aerospace Company,L.P., a Delaware limited partnership, and that he executed the same as
the act of the said Galaxy Aerospace Company, L.P., for the purposes and consideration
therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this — day
October, 1998.
SYLVIA R.OCHOA
Notary Public,State of Texas
y '+' My Commission Expir
November 03,2001
No ublic in and for the State of Texas
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing Page 6
OCT-01-98 11:53 From:JENKENS & GILCHRIST 2148554201 T-958 P.21/21 Job-827
PARIBAS, CBrJCAGO BRANCH;:
By: c
N
Tit ice President
Date: September 30, 1998
By:
Name: STE . HEINEN
Title: DIRECTOR
Date: September 30, 1998
STATE OF ILLINOIS §
COUNTY OF COOK §
BEFORE ME, the undersigned aut,h--o;�ity, a otary Public in and for the State of
linois, on this day personally appeared' 946;,! and
6 , known to me to be the persons whose names are s bscribed to the foregoing
instrument,and acknowledged to me that the same was the act of Paribas, Chicago Branch
and that they executed the same as the act of Paribas,Chicago Branch for the purposes and
consideration therein expressed and in the capacity therein stated.
i
IVEN UNDER MY HAND AND SEAL OF OFFICE this _ day {
' 1998,
I
No Public in and for the State of Illinois
VD
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L Killion
,1 swr 01 a.g;r<,ia>_
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing - Page 7
Exhibit"A"
to
Consent to Leasehold Deed of Trust,
Security Agreement and Fixture Filing
Leasehold Deed of Trust, Security
Agreement and Fixture Filing
After recording, return to:
Robert P. Nash,Esq.
Jenkens & Gilchrist,P.C.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202-2799
LEASEHOLD DEED OF TRUST,
SECURITY AGREEMENT,
AND FIXTURE FILING
THIS DEED OF TRUST(herein "Instrument") is made as of September 30, 1998, by and
among the Grantor, GALAXY AEROSPACE COMPANY,LP, a Delaware limited partnership,
whose address is One Galaxy Way, Alliance Airport, Fort Worth; Texas 76177 (herein "Borrower"),
in favor of ROBERT P. NASH,ESQ., whose address is c/o Jenkens & Gilchrist, P.C., .1445 Ross
Avenue, Suite 3200,Dallas, Texas 75202-2799(herein"Trustee"), for the benefit of the Beneficiary,
PARIBAS, CHICAGO BRANCH, a bank organized under the laws of France acting through its
Chicago branch, as Agent for itself and certain other Lenders (hereinafter defined) parties to the
Credit Agreement referred to below,whose address is 227 West Monroe Street, Suite 3300, Chicago,
Illinois 60606 (herein "PARIBAS").
Borrower, in consideration of the indebtedness herein recited and the trust herein created,
irrevocably grai2ts, conveys and assigns to Trustee, in trust, with power of sale, all of Borrower's
estate,right,title and interest, now owned or hereafter acquired, including any reversion or remainder
interest, in the real property located in the Tarrant County, Texas described on Exhibit A attached
hereto and incorporated herein including all heretofore or hereafter vacated alleys and streets abutting
the property, and all easements, rights, appurtenances, tenements, hereditaments, rents, royalties,
mineral, oil and gas rights and profits,,water, water rights, and water stock appurtenant to the
property(collectively "Premises"); and
All of Borrower's rights and subleasehold_interest under the Lease.Agreement dated January
30, 1998,by and between Alliance Airport Building Partners, Ltd. ("Landlord") and Borrower(the
"Lease") as amended by the First Amendment to the Lease Agreement date arch 31, 1998.
TOGETBER with all of Borrower's estate, right, title and interest, now owned or hereafter
acquired, in:
a. all buildings, structures,improvements, parking areas,landscaping, equipment, fixtures
and articles of tangible personal property (excluding items of personal property, other than
replacements or substitutions of or for the personal property covered hereby, which are leased by
Borrower)now or hereafter erected on, attached to, or used or adapted for use in the operation of
the Premises; including but without being limited to, all heating, air conditioning and incinerating
apparatus and equipment; all boilers, engines, motors, dynamos, generating equipment, piping and
plumbing fixtures, water heaters, ranges, cooking apparatus and mechanical kitchen equipment,
restaurant and bar equipment, refrigerators, freezers, cooling, ventilating, sprinkling and vacuum
cleaning systems, fire extinguishing apparatus, gas and electric fixtures, carpeting, floor coverings,
underpadding, elevators, escalators, partitions, mantels, built-in mirrors, window shades, blinds,
draperies, screens,storm sash, awnings, signs, furnishings of public spaces, halls and lobbies, and
FINS2DAL:59960.1 27729-00010
shrubbery and plants, and including also all interest of any owner of the Premises in any of such items
hereafter at any time acquired under conditional sale contract, chattel mortgage or other title retaining
or security instrument, all of which property mentioned in this clause(a) shall be deemed part of the
realty covered by this Instrument and not severable wholly or in part without material injury to the
freehold of the Premises (all of the foregoing together with replacements and additions thereto are
referred to herein as "Improvements");
b. all compensation, awards, damages, rights of action and proceeds, including interest
thereon and/or the proceeds of any policies of insurance therefor, arising out of or relating to a
(i)taking or damaging of the Premises or Improvements thereon by reason of any public or private
improvement, condemnation proceeding (including change of grade), sale or transfer in lieu of
condemnation, or fire, earthquake or other casualty, or(ii) any injury to or decrease in the value of
the Premises or the Improvements for any reason whatsoever;
C. return premiums or other payments upon any insurance any time provided for the
benefit of or naming PARIBAS, and refunds or rebates of taxes or assessments on the Premises;
d. all the right,title and interest of Borrower in, to and under all written and oral leases
and rental agreements (including extensions, renewals and subleases; all of the foregoing shall be
referred to collectively herein as the "Leases") now or hereafter affecting the Premises including,
without limitation, all rents, issues, profits and other revenues and income therefrom and from the
renting, leasing or bailment of Improvements and equipment, all guaranties of tenants'performance
under the Leases, and all rights and claims of any kind that Borrower may have against any tenant
under the Leases or in connection with the termination or rejection of the Leases in a bankruptcy or
insolvency proceeding; and Borrower's leasehold estate;
e. plans, specifications, contracts and agreements relating to the design or construction
of the Improvements;Borrower's rights under any payment, performance, or other bond in connection
with the design or construction of the Improvements; all landscaping and construction materials,
supplies, and equipment used or to be used or consumed in connection with construction of the
Improvements, whether stored on the Premises or at some other location; and contracts, agreements,
and purchase orders with contractors, subcontractors, suppliers, and materialmen incidental to the
design or construction of the Improvements;
f. all contracts, accounts, rights, claims or causes of action pertaining primarily to or
affecting the Premises or the Improvements, including, without limitation, all options or contracts to
acquire other property for use in connection with operation or development of the Premises or
Improvements, management contracts, service or supply contracts, deposits, bank accounts, general
intangibles (including without limitation trademarks, trade names and symbols), permits, licenses,
franchises and certificates (excluding any of the foregoing items of personal property to the extent
they relate to or are used by Borrower for or in connection with business operations conducted other
than on the Premises), and all commitments or agreements, now or hereafter in existence, intended
by the obligor thereof to provide Borrower with proceeds to satisfy the loan evidenced hereby or
improve the Premises or Improvements, and the right to receive all proceeds due under such
commitments or agreements including refundable deposits and fees;
FINS2DAL:59W.1 27729.00010 2
g. all books, records, surveys, reports and other documents related to the Premises, the
Improvements, the Leases, or other items of collateral described herein; and
h. all additions, accessions, replacements, substitutions, proceeds and products of the real
and personal property, tangible and intangible, described herein.
The Premises,the Improvements,the Leases and all of the rest of the foregoing property are
herein referred to as the "Property."
TO SECURE TO PARIBAS and such Lenders (a)the repayment of the indebtedness under
or pursuant to the $55,000,000 Senior Secured Revolving Credit and Term Loan Facility Credit
Agreement dated as of September 30, 1998 (the "Credit Agreement") among Borrower, PARIBAS,
as Agent, and the Lenders named therein(the "Lenders"); (b)the repayment of any future advances,
with interest thereon made by the Lenders to Borrower pursuant to the Credit Agreement (the
"Future Advances");(c)the payment of all other sums,with interest thereon, advanced in accordance .
herewith to protect the security of this Instrument or to fulfill any of Borrower's obligations hereunder
or under the other Loan Documents (as defined below); (d) the performance of the covenants and
agreements of Borrower contained herein or in the other Loan Documents; and (e)the repayment of
all sums now or hereafter owing to PARIBAS by Borrower pursuant to any instrument which recites
that it is secured hereby. The indebtedness and obligations described in clauses (a)-(e) above are
collectively referred to herein as the "Indebtedness." The Credit Agreement, this Instrument, and all
other documents evidencing, securing or guarantying the Indebtedness, as the same may be modified
or amended from time to time, are referred to herein as the "Loan Documents." The terms of the
Credit Agreement secured hereby may provide that the interest rate or payment terms or balance due
may be indexed, adjusted, renewed, or renegotiated from time to time, and this Instrument shall
continue to secure the Indebtedness notwithstanding any such indexing, adjustment, renewal or
renegotiation.
Borrower represents and warrants that Borrower has good, indefeasible and insurable title to,
and the right to convey the leasehold estate and that the Lease is in full force and effect without
modification except as noted above and without default on the part of either lessor or lessee
thereunder, and the right to convey the other Property, that the Property is unencumbered except as
disclosed in writing to and approved by PARIBAS prior to the date hereof and except for Permitted
Liens(as such term is defined in the Credit Agreement and herein so called), and that Borrower will
warrant and forever defend unto Trustee the title to the Property against all claims and demands,
subject only to the permitted exceptions set forth in Exhibit B attached hereto.
Borrower represents,warrants, covenants and agrees for the benefit of PARIBAS as follows:
1. PAYMENT OF PRINCIPAL AND INZMREST. Borrower shall promptly pay when
due the principal of and interest on the Indebtedness, any prepayment and other charges provided in
the Loan Documents and all other sums secured by this Instrument.
2. PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS.
Borrower(a)shall not commit waste or permit impairment or deterioration of the Property, (b) shall
not abandon the Property, (c)shall restore or repair promptly and in a good and workmanlike manner
FINS2DAL:59960.1 27729-00010 3
all`or any part of the Property to the equivalent of its original condition, ordinary wear and tear
excepted, or such other condition as PARIBAS may approve in writing, in the event of any damage,
injury or loss thereto, whether or not insurance proceeds are available to cover in whole or in part
the costs of such restoration or repair, (d) shall keep the Property, including all improvements,
fixtures, equipment, machinery and appliances thereon, in good repair and shall replace fixtures,
equipment, machinery and appliances on the Property when necessary,to keep such items in good
repair, (e)shall comply in all material respects with all laws, ordinances, regulations and requirements
of any governmental body applicable to the Property, and(f)shall give notice in writing to PARIBAS
of and, unless otherwise directed in writing by PARIBAS, appear in and defend any action or
proceeding purporting to affect the Property, the security of this Instrument or the rights or powers
of PARIBAS hereunder. Neither Borrower nor any tenant or other person, without the written
approval of PARIBAS, shall remove, demolish or alter any improvement now existing or hereafter
erected on the Property or any fixture, equipment, machinery or appliance in or on the Property in
an aggregate value o $1.00,000.0.01 or more except when incident to the replacement of fixtures,
equipment, machinery and appliances with items of like kind.
Borrower represents,warrants and covenants that the Property is and shall be in compliance
with the Americans with Disabilities Act of 1990 and.all of the regulations promulgated thereunder,
as the same may be amended from time to time.
Borrower(i) shall comply with the provisions of the Lease, (ii) shall give immediate written
notice to PARIBAS of any default by Landlord under the Lease or of any notice received by
Borrower from such Landlord of any default under the Lease by Borrower, (iii) shall exercise any
option to renew or extend the Lease and give written confirmation thereof to PARIBAS within thirty
(30)days after such option becomes exercisable,.(iv) shall give immediate written notice to PARIBAS
of the commencement of any remedial proceedings under the Lease by any party thereto and, if
required by PARIBAS after the occurrence and during the continuance of an Event of Default (as
hereinafter defined), shall permit PARIBAS sa Borrower's attorney-m-fact to control and act for
Borrower in any such remedial proceedings and (v) shall within thirty (30) days after request by
PARIBAS use its best efforts to obtain from the Landlord under the Lease and deliver to PARIBAS
a Landlord's estoppel certificate in form and substance reasonably acceptable to PARIBAS.
Borrower hereby expressly transfers and assigns to PARIBAS the benefit of all covenants contained
in the Lease, whether or not such covenants run with the land, but PARIBAS shall have no liability
with respect to such covenants or any other covenants contained in the Lease.
Borrower shall neither surrender the leasehold estate and interests herein conveyed nor
terminate or cancel the Lease creating said estate and.interests, and Borrower shall not, without the
express written consent of PARIBAS, alter or amend said Lease. There shall not be a merger of the
Lease, or of the leasehold estate created thereby, with the fee estate covered by the Lease by reason
of said leasehold estate or said fee estate, or any part of either, coming into common ownership,
unless PARIBAS shall consent in writing to such merger; if Borrower shall acquire such fee estate,
then this Instrument shall simultaneously and without further action be spread so as to become a lien
on such fee estate.
3. USE OF PROPERTY. Unless required by applicable law or unless PARIBAS has
otherwise agreed in writing, Borrower shall not allow changes in the use for which all or any part of
FINS2DAL::59960.1 27729-00010 4
the Property was intended at the time this Instrument was executed. Borrower shall not, without
PARIBAS' prior written consent, (i) initiate or acquiesce in a change in the zoning classification
(including any variance under any existing zoning ordinance applicable to the Property), (ii) permit
the use of the Property to become a non-conforming use under applicable zoning ordinances, (iii)file
any subdivision or parcel map affecting the Property, or (iv) amend, modify or consent to any
easement or covenants, conditions and restrictions pertaining to the Property.
4. PROTECTION OF PARIBAS' SEC If Borrower fails to perform any of the
covenants and agreements contained in this Instrument, or if any action or proceeding is commenced
which affects the Property or title thereto or the interest of PARIBAS therein, including, but not
limited to, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving
a bankrupt or decedent, then PARIBAS at PARIBAS' option may make such appearances, disburse
such sums and take such action as PARIBAS deems necessary, in its sole discretion, to protect
PARIBAS'interest, including, but not limited to, (i) disbursement of attorneys'fees, (ii) entry upon
the Property to make repairs, (iii) procurement of satisfactory insurance as provided in Section 5
hereof; and(iv) exercise of any option to renew or extend the Lease on behalf of Borrower and the
curing of any default of Borrower in the terms and conditions of the Lease.
Any amounts disbursed by PARIBAS pursuant to this Section 4, with interest thereon, shall
become additional Indebtedness of Borrower secured by this Instrument. Unless Borrower and
PARIBAS'agree to other terms of payment, such amounts shall be immediately due and payable and
shall bear interest from the date of disbursement at the highest rate which may be collected from
Borrower under applicable law. Borrower hereby covenants and agrees that PARIBAS shall be
subrogated to the lien of any mortgage or other lien discharged, in whole or in part, by the
Indebtedness. Nothing contained in this Section 4 shall require PARIBAS to incur any expense or
take any action hereunder.
5. INSPECTION. PARIBAS may make or cause to be made reasonable entries upon
the Property to inspect the interior and exterior thereof.
6. BORROWER AND LIEN NOT RELEASED. From time to time, PARIBAS may,
at PARIBAS' option, without giving notice to or obtaining the consent of Borrower, Borrower's
successors or assigns or of any junior lienholder or guarantors, without liability on PARIBAS' part
and notwithstanding Borrower's breach of any covenant or agreement of Borrower in this Instrument,
extend the time for payment of the Indebtedness or any part thereof, reduce the payments thereon,
release anyone liable on any of the Indebtedness, accept an extension or modification or renewal note
or notes therefor, modify the terms and time of payment of the Indebtedness, release from the lien
of this Instrument any part of the Property, take or release other or additional security, reconvey any
part of the Property, consent to any map or plan of the Property, consent to the granting of any
easement,join in any extension or subordination agreement, and agree in writing with Borrower to
modify the rate of interest or period of amortization of the Indebtedness or decrease the amount of
the monthly installments payable thereunder. Any actions taken by PARIBAS pursuant to the terms
of this Section 6 shall not affect the obligation of Borrower.or Borrower's successors or assigns to
pay the sums secured by this Instrument and to observe the covenants of Borrower contained herein,
shall not affect the guaranty of any person, corporation, partnership or other entity for payment of
the Indebtedness, and shall not affect the lien or priority of the lien hereof on the Property. Borrower
F1NS2DAL:59960.1 27729-00010 5
shall pay PARIBAS a reasonable service charge, together with such title insurance premiums and
attorneys' fees as may be incurred at PARIBAS' option, for any such action if taken at Borrower's
request.
7. FORBEARANCE BY PARIBAS NOT A WAIVER Any forbearance by PARIBAS
in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any other right or remedy. The acceptance by PARIBAS of
payment of any sum secured by this Instrument after the due date of such payment shall not be a
waiver of PARIBAS' right to either require prompt payment when due of all other sums so secured
or to declare a default for failure to make prompt payment. The procurement of insurance or the
payment of taxes or other liens or charges by PARIBAS shall not be a waiver of PARIBAS' right to
accelerate the maturity of the Indebtedness secured by this Instrument.
8. UNIFORM COMAMRCIAL CODE SECURITY AGREEMENT. This Instrument
is intended to be a security agreement pursuant to the Uniform Commercial Code for any of the items
specified above as part of the Property which, under applicable law, may be subject to a security
interest pursuant to the Uniform Commercial Code, and Borrower hereby grants and conveys to
PARIBAS, for the benefit of the Lenders, a first and prior (except as allowed by the Credit
A Bement es per
security interest in all of the Property that constitutsonalty, whether now owned
or hereafter acquired. Borrower agrees that PARI13AS may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index, as a financing statement for any of the
items specified above as part of the Property. Any reproduction of this Instrument or of any other
security agreement or financing statement shall be sufficient as a financing statement. In addition,
Borrower agrees to execute and deliver to PARIBAS, upon PARIBAS' request, any financing
statements, as well as extensions, renewals and amendments thereof, and reproductions of this
Instrument in such form as PARIBAS may require to perfect a security interest with respect to the
foregoing items. Borrower shall pay all costs of filing such financing statements and any extensions,
renewals, amendments and releases thereof, and shall pay all costs and expenses of any record
searches for financing statements PARIBAS may require. Without the prior written consent of
PARIBAS, Borrower shall not create or suffer to be created pursuant to the Uniform Commercial
Code any other security interest in said items, including replacements and additions thereto. Upon
Borrower's breach of any covenant or agreement of Borrower contained in this Instrument, including
the covenants to pay when due all sums secured by this Instrument,PARIBAS shall have the remedies
of a secured party under the Uniform Commercial Code, and PARIBAS may also invoke the remedies
provided in Section 14 of this Instrument as to such items. In exercising any of said remedies
PARIBAS may proceed against the items of real property and any items of personal property
specified above separately or together and in any order whatsoever, without in any way affecting the
availability of PARIBAS'remedies under the Uniform Commercial Code or of the remedies provided
in Section 14 of this Instrument. Within twenty (20) days following any request therefor by
PARIBAS which shall not be made more frequently than annually,Borrower shall prepare and deliver
to PARIBAS a written inventory specifically listing all of the tangible personal property covered by
the security interest herein granted, which inventory shall be certified by Borrower as being true,
correct, and complete.
9. LEASES OF THE PROPERTY. As used in this Section 9, the word "Lease" shall
include subleases if this Instrument is on a leasehold. Borrower shall comply with and observe
FINS2DAL:59960.1 27729-"10 6
Borrower's obligations as landlord under all Leases of the Property or any part thereof. All Leases
now or hereafter entered into will be in form and substance subject to the approval of PARIBAS.
10. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is distinct
and cumulative to all other rights or remedies under this Instrument or afforded by law or equity, and
may be exercised concurrently, independently, or successively, in any order whatsoever.
11. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY•
AGENTS; CAPTIONS. The covenants and agreements herein contained shall bind, and the rights
hereunder shall inure to, the respective heirs, successors and assigns of PARIBAS and Borrower.
If Borrower is comprised of more than one person or entity, whether as individuals, partners,
partnerships or corporations, each such person or entity shall be jointly and severally liable for
Borrower's obligations hereunder. In exercising any rights hereunder or taking any actions provided
for herein,PARIBAS may act through its employees, agents or independent contractors as authorized
by PARIBAS. The captions and headings of the sections of this Instrument are for convenience only
and are not to be used to interpret or define the provisions hereof.
E 12. CREDIT AGREEMENT TO CONTROL CONFLICTS. Notwithstanding anything
ined in his Instrument to the contrary, the parties understand and agree that the terms and
ions of the Credit Agreement are primaly and take precedence over the terms and conditions
Instrument and any modifications or qualifications of representations, warranties, covenants
reements §et forth in the Credit Agreement shall apply to similar representations, warranties,
ants or agreements contained in this Instrument.
13. WAIVER OF MARSHALLING. Notwithstanding the existence of any other security
interests in the Property held by PARIBAS or by any other parry, PARIBAS shall have the right to
determine the order in which any or all of the Property shall be subjected to the remedies provided
herein. PARIBAS shall have the right to determine the order in which any or all portions of the
Indebtedness secured hereby are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any party who consents to this Instrument and any parry who
now or hereafter acquires a security interest in the Property and who has actual or constructive notice
hereof hereby waives any and all right to require the marshalling of assets in connection with the
exercise of any of the remedies permitted by applicable law or provided herein.
14. RIGHTS AND REMEDIES ON DEFAULT.
Upon the occurrence of any Event of Default (as such term is defined in the Credit
Agreement, and herein so called) and at any time thereafter, Trustee or PARIBAS may exercise any
one or more of the following rights and remedies:
(a) PARIBAS may declare the entire Indebtedness,the accrued but unpaid interest
thereon, court costs and attorney's fees hereunder immediately due and payable, without notice,
presentment,protest, demand or action of any nature whatsoever(each of which hereby is expressly
waived by Borrower),whereupon the same shall become immediately due and payable. Additionally,
PARIBAS shall not be required to make any further advances on the Loan Documents upon the
FINS2DAL:59960.1 27729-00010 7
occurrence of an Event of Default or an event which, with the giving of notice or passing of time,
would constitute an Event of Default.
(b) PARIBAS may enter upon the Property and take exclusive possession thereof
and of all books, records and accounts relating thereto without notice and without being guilty of
trespass, and hold,lease, manage, operate or otherwise use or permit the use of the Property, either
itself or by other persons, firms or entities, in such manner, for such time and upon such other terms
as PARIBAS may deem to be prudent and reasonable under the circumstances (making such repairs,
alterations, additions and improvements thereto and taking any and all other action with reference
thereto, from time to time, as PARIBAS shall deem necessary or desirable), and apply all rents and
other amounts collected by PARIBAS in connection therewith in accordance with the provisions of
subsection(h)of this Section 14. Borrower hereby irrevocably appoints PARIBAS as the agent and
attorney-in-fact of Borrower, with full power of substitution, and in the name of Borrower, if
PARIBAS elects to do so,to(i)endorse the name of Borrower on any checks or drafts representing
proceeds of the insurance policies, or other checks or instruments payable to Borrower with respect
to the Property, (ii) prosecute or defend any action or.proceeding incident to the Property, and (iii)
take any action with respect to the Property that PARIBAS may at any time and from time to time
deem necessary or appropriate. PARIBAS shall have no obligation to undertake any of the
foregoing actions, and if PARIBAS should do so, it shall have no liability to Borrower for the
sufficiency or adequacy of any such actions taken by PARIBAS.
(c) (i) PARIBAS may,by and through Trustee, or otherwise, sell or offer for
sale the Property in such portions, order and parcels as PARIBAS may determine, with or without
having first taken possession of same, to the highest bidder for cash at public auction in accordance
with the requirements of Section 51.002 of the Texas Property Code. In instances where the
Property is located in the State of Texas, such sale shall be made at the courthouse of the county in
which the Property(or any of that portion thereof to be sold) is located, whether the parts or parcels
thereof, if any, in different counties are contiguous or not (and without the necessity of having any
personal property present at such sale) in the area designated by the county commissioners for
foreclosure sales(or, if no area has been designated, at the location at the courthouse designated by
PARIBAS by or through Trustee in the written notice hereinafter described) on the first Tuesday of
a month between the hours of 10:00 a.m. and 4:00 p.m. after advertising the time, place and terms
of sale and that portion of the Property to be sold by posting or causing to be posted written or
printed notice thereof at least twenty-one(21)days before the date of the sale both at the courthouse
door of each county in which the Property is located and with the county clerk of each county in
which the Property is located,which notice shall be posted at the courthouse door and filed with the
county clerk by the Trustee, or by any person acting for him. The written notice shall include the
earliest time at which the sale will be held. PARIBAS shall serve, or shall cause to be served at least
twenty-one (21) days before the date of sale, written or printed notice of the proposed sale by
certified mail on each debtor obligated to pay the Indebtedness according to the records of PARIBAS
by the deposit of such notice in the United States mail, postage prepaid and addressed to each debtor
at such debtor's last known address as shown by the records of PARIBAS. The affidavit of a person
knowledgeable of the facts to the effect that service was completed is prima facie evidence of service.
(ii) PARIBAS, may, at its option, accomplish all or any of the aforesaid in such
manner as permitted or required by Section 51.002 of the Texas Property Code relating to the sale
FINS2DAL:59960.1 27729-00010 8
of real property or by Chapter 9 of the Texas Business and Commerce Code relating to the sale of
personalty after default by a debtor (as said section and chapter now exist or may be hereinafter
amended or succeeded), or by any other present or subsequent articles or enactments relating to
same. At any such sale:
A. whether made under the power herein contained,the aforesaid Section 51.002,
the Texas Business and Commerce Code, any other legal requirement or by virtue of any
judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for
Trustee to have physically present, or to have constructive possession of, the Property
(Borrower shall deliver to Trustee any portion of the Property not actually or constructively
possessed by Trustee immediately upon demand by Trustee), and the title to and right of
possession of any such property shall pass to the purchaser thereof as completely as if the
same had been actually present and delivered to purchaser at such sale;
B. each instrument of conveyance executed by Trustee shall contain a general
warranty of title, binding upon Borrower;
C. each and every recital contained in any instrument of conveyance made by
Trustee shall conclusively establish the truth and accuracy of the matters recited therein,
including,without limitation, nonpaym6nt of the Indebtedness, advertisement and conduct of
such sale irr the manner provided herein and otherwise by law and appointment of any
successgr Trustee hereunder;
D. any and all prerequisites to the validity thereof shall be conclusively presumed
to have been performed;
E. the receipt by Trustee or of such other party or officer making the sale of the
full amount of the purchase money shall be sufficient to discharge the purchaser or purchasers
from any further obligation for the payment thereof, and no such purchaser or purchasers, or
his or their assigns or personal representatives, shall thereafter be obligated to see to the
application of such purchase money or be in any way answerable for any loss, misapplication
or nonapplication thereof,
F. to the fullest extent permitted by law, Borrower shall be completely and
irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at
law or in equity, in and to the property sold, and such sale shall be a perpetual bar, both at law
and in equity, against Borrower and against all other persons claiming or to claim the property
sold or any part thereof by, through or under Borrower; and
G. to the extent and under such circumstances as are permitted by law, PAR.IBAS
may be a purchaser at any such sale.
(d) After sale of the Property, or any portion thereof, Borrower will be divested
of any and all interest and claim thereto, including any interest or claim to all insurance policies,
bonds, loan commitments and other intangible property covered hereby. Additionally, Borrower will
be considered a tenant at sufferance of the purchaser of the Property, and said purchaser shall be
FINS2DAL:59960.1 27729-00010 9
entitled to immediate possession thereof, and if Borrower shall fail to vacate the Property
immediately, the purchaser may and shall have the right, without further notice to Borrower, to go
into any justice court in any precinct or county in which the Property is located and file an action in
forcible entry and detainer, which action shall lie against Borrower or its assigns or legal
representatives, as a tenant at sufferance. This remedy is cumulative of any and all remedies the
purchaser may have hereunder or otherwise.
(e) (i) Upon, or at any time after, commencement of foreclosure of the lien
and security interest provided for herein or any legal proceedings hereunder, PARIBAS may make
application to a court of competent jurisdiction, as a matter of strict right and without notice to
Borrower or regard to the adequacy of the Property for the repayment of the Indebtedness, for
appointment of a receiver of the Property, and Borrower does hereby irrevocably consent to such
appointment. Any such receiver shall have all the usual powers and duties of receivers in similar
cases,including the full power to rent,maintain and otherwise operate the Property upon such terms
as may be approved by the court, and shall apply such rents in accordance with the provisions of
subsection(h) of this Section 14.
(ii) PARIBAS may exercise any and all other rights, remedies and recourses
granted under the Loan Documents or now or hereafter existing in equity, at law, by virtue
of statute or otherwise.
(f) Trustee and PARIBAS shall have all rights, remedies and recourses granted
in the Loan Documents and available at law or equity (including specifically those granted by the
Texas Business and Commerce Code in effect and applicable to the Property or any portion thereof)
and the same(i) shall be cumulative and concurrent; (ii) may be pursued separately, successively or
concurrently against Borrower, any guarantor of the Indebtedness or others obligated under the Loan
Documents, or against the Property, or against any one or more of them at the sole discretion of
PARIBAS; (iii) may be exercised as often as occasion therefor shall arise, it being agreed by
Borrower that the exercise or failure to exercise any of the same shall in no event be construed as a
waiver or release thereof or of any other right, remedy or recourse; and (iv) are intended to be, and
shall be; nonexclusive.
(g) To the fullest extent permitted by law, Borrower hereby irrevocably and
unconditionally waives and releases (i) all benefits that might accrue to Borrower by any present or
future laws exempting the Property from attachment, levy or sale on execution or providing for any
appraisement, valuation, stay of execution, exemption from civil process, redemption or extension
of time for payment; (ii) all notices of any Event of Default (except as may be specifically provided
for under the terms of the Credit Agreement), presentment, demand, notice of intent to accelerate,
notice of acceleration and any other notice of PARIBAS' or Trustee's election to exercise or the
actual exercise of any right, remedy or recourse provided for under the Loan Documents; (iii) any
right to appraisal or marshalling of assets or a sale in inverse order of alienation; (iv)the exemption
of homestead; and (v) the administration of estates of decedents, or other matter to defeat, reduce
or affect the right of PARIBAS. under the terms of this Instrument to sell the Property for the
collection of the Indebtedness secured hereby(without any prior or different resort for collection) or
the right of PARIBAS,under the terms of this Instrument,to receive the payment of the Indebtedness
out of the proceeds of sale of the Property in preference to every other person and claimant whatever
FINS2DAL:59960.1 27729-00010 10
(only reasonable expenses of such sale being first deducted). Borrower expressly waives and
relinquishes any right or remedy which it may have or be able to assert by reason of the provisions
of Chapter 34 of the Texas Business and Commerce Code pertaining to the rights and remedies of
sureties.
(h) The proceeds of any sale of and the rents, profits and other income generated
by the holding, leasing, operating or other use of the Property, shall be promptly applied by
PARIBAS (or the receiver,if one is appointed)to the extent that funds are so available therefrom in
the following orders of priority: (i) first, to the payment of the costs and expenses of taking
possession of the Property and of holding,using, leasing, maintaining, repairing, improving and selling
the same,including,without limitation, (A) receiver's fees; (B) costs of advertisement; (C) attorneys'
and accountants' fees; and (D) court costs; if any; (ii) second, to the payment of all Indebtedness,
together with interest thereon as provided therein, in such order and manner as PARIBAS may
determine; and(iii)third, to Borrower. Borrower, any guarantor of the Indebtedness and.any other
party liable on the Indebtedness shall be liable for any deficiency remaining in the Indebtedness
subsequent to any sale referenced in this subsection(h).
(i) PARIBAS shall have the right to become the purchaser at any sale of the
Property hereunder and shall have the right to be credited on the amount of its bid therefor all of-the
Indebtedness due and owing as of the date of such sale.
(j) If PARIBAS shall accelerate the Indebtedness following the occurrence of an
Event of Default, any payments received by PAIZIBAS following such acceleration, whether as the
result of voluntary payments made by Borrower or as a result of the sale of the Property by Trustee,
shall be deemed voluntary prepayments of the.Indebtedness.
(k) The purchaser at any trustee's or foreclosure sale hereunder may disaffirm any
easement granted, or rental, lease or other contract made in violation of any provisions of this
Instrument and may take immediate possession of the Property free from, and despite the terms of,
any such grant of easement, rental, lease or other contract.
15. RECONVEYANCE. Upon payment of all sums secured by this Instrument,
PARIBAS shall request Trustee to reconvey the Property and shall surrender this Instrument and all
notes evidencing Indebtedness secured by this Instrument to Trustee. Trustee shall reconvey the
Property without warranty to the person or persons legally entitled thereto. Such person or persons
shall pay Trustee's costs incurred in so reconveying the Property.
16. SUBSTITUTE TRUSTEE. Trustee shall not be liable for any error of judgment or
act done by Trustee, or be otherwise responsible or accountable under any circumstances whatsoever.
Trustee shall not be personally liable in case of entry by it or anyone acting by virtue of the powers
herein granted it upon the Property for debts contracted or liability or damages incurred in the
management or operation of the Property. All monies received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other monies (except to the extent required by law) and Trustee
shall be under no liability for interest on any monies received by it hereunder.
FIN52DAL:59960.1 27729-00010 1
Trustee may resign by giving of notice of such resignation in writing to PARIBAS. If Trustee
shall die, resign or become disqualified from acting, or shall fail or refuse to exercise its powers
hereunder when requested by PARIBAS so to do, or if for any reason and without cause PARIBAS
shall prefer to appoint a substitute trustee to act instead of the original Trustee named herein, or any
prior successor or substitute trustee, PARIBAS shall have full power to appoint a substitute trustee
and, if preferred, several substitute trustees in succession who shall succeed to all the estate, rights,
powers and duties of the aforenamed Trustee. Upon appointment by PARIBAS, any new Trustee
appointed pursuant to any of the provisions hereof shall,without any further act, deed or conveyance,
become vested with all the estates,properties, rights, powers and trusts of its predecessor in the rights
hereunder with the same effect as if originally named as Trustee herein.
17. USE OF PROPERTY. The Property is not currently used for agricultural, farming,
timber or grazing purposes. Borrower warrants that this Instrument is and will at all times constitute
a commercial trust deed, as defined under appropriate state law.
18. UV POSITION OF TAX BY STATE.
A. State Taxes Covered. The following constitute state taxes to which this Section
applies:
(i) A specific tax upon trust deeds or upon all or any part of the
indebtedness secured by a trust deed.
(ii) A specific tax on.a grantor which the taxpayer is authorized or required
to deduct from payments on the indebtedness secured by a trust deed.
(iii) A tax on a trust deed chargeable against the beneficiary or the holder
of the note secured.
(iv) A specific tax on all or any portion of the indebtedness or on payments
of principal and interest made by a grantor.
B. Remedies. If any state tax to which this Section applies is enacted subsequent to the
date of this Instrument, this shall have the same effect as an Event of Default, and PARIBAS may
exercise any or all of the remedies available to it unless the following conditions are met:
(i) Borrower may lawfully pay the tax or charge imposed by state tax, and
(ii) Borrower pays the tax or charge within thirty (30) days after notice
from PARIBAS that the tax law has been enacted.
19. ATTORNEYS'FEES. In the event suit or action is instituted to enforce.or interpret
any of the terms of this Instrument (including without limitation efforts to modify or vacate any
automatic stay or injunction),the prevailing party shall be entitled to recover all expenses reasonably
incurred at,before and after trial and on appeal whether or not taxable as costs, or in any bankruptcy
RNS2DAL:59960.1 27729-00010 12
proceeding including, without limitation, attorneys' fees, witness fees (expert and otherwise),
deposition costs, copying charges and other expenses. Whether or not any court action is involved,
all reasonable expenses, including but not limited to the costs of searching records, obtaining title
reports, surveyor reports,title insurance,trustee fees, and other attorney fees, incurred by PARIBAS
that are necessary at any time in PARIBAS' reasonable opinion for the protection of its interest or
enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear
interest from the date of expenditure until repaid at the highest lawful interest rate as provided in the
Credit Agreement. The term "attorneys' fees" as used in the Loan Documents shall be deemed to
mean such fees as are reasonable and are actually incurred.
20. GOVERNING LAW; SEVERABILITY. This Instrument shall be governed by the
law of the State of Texas applicable to contracts made and to be performed therein (excluding
choice-of-law principles). In the event that any provision or clause of this Instrument conflicts with
applicable law, such conflict shall not affect other provisions of this Instrument which can be given
effect without.the conflicting.provision, and to this end the.provisions of this Instrument are declared
to be severable.
21. TIME OF ESSENCE.. Time is of the essence of this Instrument.
22. CHANGES IN WRITING. ' This Instrument and any of its terms may only be
changed, waived, discharged or terminated by an instrument in writing signed by the parry against
which enforcement of the change, waiver, discharge or termination is sought. Any agreement
subsequently made by Borrower or PARIBA9 relating to this Instrument shall be superior to the
rights of the holder of any intervening lien or encumbrance.
23. NO OFFSET. Borrower's obligation to make payments and perform all obligations,
covenants and warranties under this Instrument and under the Credit Agreement shall be absolute and
unconditional and shall not be affected by any circumstance, including without limitation any setoff,
counterclaim, abatement, suspension, recoupment, deduction, defense or other right that Borrower
or any guarantor may have or claim against PARI13AS or any entity participating in making the loan
secured hereby. The foregoing provisions of this section, however, do not constitute a waiver of any
claim or demand which Borrower or any guarantor may have in damages or otherwise against
PARIBAS or any other person, or preclude Borrower from maintaining a separate action thereon;
provided,however,that Borrower waives any right it may have at law or in equity to consolidate such
separate action with any action or proceeding brought by PARIBAS.
FINS2DAL:59960.1 27729-00010 13
EXHIBIT A
DESCRIPTION OF PROPERTY
RNS2DAL:59960.1 27729-00010 15
EXHIBIT B
PERMITTED EXCEPTIONS
FINS2DAL:59960.1 27729-00010 16
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN
THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE
THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
IN WITNESS WI]EREOF, Borrower has executed this Instrument or has caused the same
to be executed by its representatives thereunto duly authorized.
BORROWER:
GALAXY AEROSPACE COMPANY, LP,
a Delaware limited partnership
By: Galaxy Aerospace III, LLC,
a Delaware limited liability company,
its general partner
By:
Name: Brian E. Barents
Title: President
THE STATE OF TEXAS §
COUNTY OF TARRANT §
This instrument was acknowledged before me on the day of September, 1998, by
Brian E. Barents, the President of Galaxy Aerospace III, LLC, a Delaware limited liability
company, on behalf of Galaxy Aerospace Company, LP, a Delaware limited partnership.
Notary Public in and for the
State of Texas
Printed Name of Notary Public:
My Commission Expires:
FINS2DAL:59960.1 27729-00010 14
City of Fort Worth, Texas.
"agorr and Commit 4:ommunication
DATE REFERENCE NUMBER LOG NAME PAGE.
9/29/98 **G-12339 1 12GALAXY 1 1 of 2
SUBJECT CONSENT TO LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING*BY GALAXY AEROSPACE COMPANY, L.P. FOR THE BENEFIT OF
PARIBAS, CHICAGO BRANCH
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute a Consent to Leasehold Deed of Trust, Security Agreement
and Fixture Filing by Galaxy Aerospace Company, L.P. ("Galaxy") for the benefit of Paribas,
Chicago Branch ("Paribas"); and
2. Authorize the City Manager to execute an Estoppel Certificate to Galaxy, Paribas and Airport
Building Partners, Ltd.
DISCUSSION:
Under City Secretary Contract No. 23512 ("Lease"), the City has leased approximately 6.639 acres of
land at Alliance Airport (identified as Lease Parcels 2 and 5) (the "Leased Premises") to Airport Building
Partners, Ltd. ("Lessee"). In accordance with the Lease, Lessee has sub-leased the Leased Premises
to Galaxy for the construction of Galaxy's corporate headquarters, and the operation by Galaxy of an
aircraft service and completion center.
Galaxy and Paribas have negotiated a credit agreement under which Paribas will provide Galaxy with a
$55 million dollar operating line for Galaxy to obtain the inventory and equipment necessary to initiate
its business operations on the Leased Premises ("Collateral"). Paribas will take a lien on the Collateral
and improvements on the Leased Premises. The Lease does not allow any party other than the Lessee
to enter into a leasehold mortgage on the Leased Premises without the City's consent. Therefore,
Galaxy and Paribas are requesting the City Council's consent to this transaction.
In addition, Paribas has requested the City to execute an Estoppel Certificate for its own benefit. The
Estoppel Certificate will provide that the Lease between the City and Lessee is in full force and effect
and that, to the best of the City's knowledge, neither party is in breach or default.
City of,Fort Worth, Texas
"n."Or 6111d -Councit .-Col"I"unle.C04100"
DATE REFERENCE NUMBER LOG NAME PAGE
9/29/98 -**G-12339 12GALAXY 2 of 2
SUBJECT CONSENT TO LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING .BY GALAXY AEROSPACE COMPANY, L.P. FOR THE BENEFIT OF
PARIBAS, CHICAGO BRANCH
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that approval of this action will have no material effect on City funds.
CB:k
Submitted for City Manager's FUND ACCOUNT CENTER AMOONT CITY SECRETARY
Office by: (to)
APPROVED
Charles Boswell 8511 CITY COUNCIL
Originating Department Head:
SEP 29 1999
Jim,K.eyes 8517 (from)
Additional Information Contact; of the
City Secretary
City of Fort Worth,Texas
Linda Brown 6030
with respect to the Pledged Collateral and any and all other
distributions made on or with respect to the Pledged
Collateral. if a Default shall have occurred and be
continuing, any interest income payable on the Pledged
Collateral, and any and all other distributions made on - or
with respect to the Pledged Collateral, shall be and become
part of the Pledged Collateral and shall be held in trust
for the benefit of. Fort Worth. Fort Worth shall have the
right, during the continuance of any Default, to direct
NationsBank to notify and direct, and NationsBank shall have
the right to notify and direct, the issuer of the Pledged
Collateral to make all payments and distributions directly
to NationsBank for the benefit of Fort Worth. The issuer of
the Pledged Collateral making any such payments or
distributions shall be fully protected in relying on the
written notice from NationsBank.
SECTION 7. EVENTS OF DEFAULT.
Lessee shall be in default under this Pledge Agreement
only upon the happening of any the following events (a
"Default") :
(a) default in the timely performance of the Secured
Obligations after written notice thereof has been given
to Lessee and NationsBank and such default is not cured
within the time periods provided in the Lease; .
(b) any warranty or representation made to Fort Worth
by Lessee in connection with this Pledge Agreement
proves to have been false in any material respect when
made; or
(c) default in delivery of the Additional Securities
as provided in Section 13 hereof.
SECTION 8. RIGHTS AND REMEDIES OF FORT WORTH UPON AND AFTER .
DEFAULT.
(a) Remedy. Upon the occurrence of a Default, Fort
Worth shall have the right to direct * NationsBank to
sell or otherwise dispose of all or any part of the
Pledged Collateral in accordance with normal banking
procedures. NationsBank is hereby authorized to sell
or otherwise dispose of the Pledged Collateral
immediately upon the receipt of a written statement
purporting to be executed by an authorized
representative of Fort Worth stating that:
(i) a Default by Lessee has occurred under the
Lease with respect to construction of the
Improvements; and
I�
NationsBank of Texas, N.A.
Attn: Ray Colvin, Trust Department
P. 0. Box 830241
Dallas, Texas 75283-0241
Any such notice shall be deemed to have been given
(whether actually received . or not) on the day
personally delivered as aforesaid or, if mailed, on the
day it is mailed as aforesaid. Any party may change
its address for notice by giving all other parties
hereto notice of such change in the manner set forth in
this Section 8 (c) not later than 10 days before the
effective date of such new address.
SECTION 9. CERTAIN OT= RIGHTS AND DUTIES OF FORT WORTH
AM ITATIONSBANX.
(a) Responsibility for Pledged Collateral. Fort Worth
and NationsBank shall not have a duty to fix or
preserve rights against parties who may have had a
prior interest in the Pledged Collateral or to collect
any amount payable with respect to the Pledged
Collateral, but shall be liable only to the account of
Lessee for what Fort Worth and NationsBank may actually
collect or receive thereon.
(b). Nondisclosure. In so far as permitted by Art.
6252-17, Texas Revised Civil Statutes, Fort Worth shall
not discuss or disclose the Pledged Collateral with any
persons who are not employed by Fort Worth, and then
only to the extent such discussion or disclosure is
absolutely required—
SECTION 10. NONEXCLUSIVE RIGHTS AND RE=IES.
If the Lessee fails to timely perform the Secured
Obligations, Fort Worth is entitled to exercise its rights
as set forth in Section 8 hereof.
SECTION 11. SUBSTITUTION OF COLLATERAL.
Notwithstanding any contrary provision in this Pledge
Agreement, Lessee shall have the right (without the consent
of Fort Worth) , at any time and from time to time, to obtain
releases of all or any part of the Pledged Collateral
(hereinafter called the "Released Collateral") upon
satisfaction of the following conditions:
(a) Lessee shall provide Fort Worth and NationsBank
written notice (the "Substitution Notice") that Lessee
desires to obtain Released Collateral (as specified and
described in such notice) in exchange for a
contemporaneous substitution of different Securities
for collateral (as also specified and described in the
Substitution Notice) ; and
(b) Lessee shall pledge to Fort Worth, and deliver to
NationsBank for the benefit of Fort Worth, substituted
Securities (the "Substituted Collateral") the Market
Value of which Substituted Collateral together with the
Market value of the remaining non-released Pledged
Collateral,..shall in the aggregate be at least equal to
3.00t of the cost to construct the improvements. All
Substituted Collateral shall be deemed to be Pledged
Collateral for .purposes of this Pledge Agreement.
Upon satisfaction of the above-specified conditions,
NationsBank shall be authorized (without the consent of Fort
Worth) to return to Lessee any original certificates or
instruments In NationsBank's possession that represent or
evidence the Released Collateral or take such other action
with respect to the Released Collateral as Lessee may
request or direct. Lessee shall pay the expenses incurred
by NationsBank in connection with obtaining each such
release and substitution.
SzcTION 12. pERIOnIC WITEDRAWAL- OF COLLATERAL.
Notwithstanding any contrary provision in this Pledge
Agreement, Lessee shall have the right- to monthly
withdrawals of the Pledged Collateral (hereinafter called
the "Withdrawn Collateral") , upon satisfaction of the
following conditions:
(a)' Lessee shall provide Fort. Worth and NationsBank
_- written notice (the "Withdrawal Notice") that Lessee
desires to obtain the Withdrawn Collateral; and
(b) the aggregate Market Value of the Pledged
Collateral after withdrawal of the Withdrawn Collateral
is at least equal to the estimated value of the Secured
Obligations__then.. remaining to be performed (such
remaining value is hereinafter called the "Estimated
Cost to Complete") .
The Withdrawal Notice shall include a description of the
Withdrawn Collateral and Lessee's calculation of the
Estimated Cost to Complete. Upon receipt of the Withdraw...
Notice, Fort Worth shall have ten (10) calendar days to
notify Lessee of Fort Worth' s calculation of the Estimated
li Cost to Complete. if Fort worth fails to so notify Lessee,
then Lessee' s calculation shall be deemed to have been
accepted and approved by Fort Worth. if Fort worth' s
calculation is less than, or not more than five percent (5*)
higher than, Lessee's calculation, then - Fort Worth's
calculation * shall be deemed to have been accepted and
approved by Lessee. if Fort Worth's calculation exceeds
Lessee's calculation by more than five percent (510 , Fort
Worth and Lessee shall jointly approve a Estimated Cost - to
Complete.
Within thirty days of receipt of Withdrawal Notice, Fort
Worth shall execute a release authorizing NationsBank to
return to Lessee any original certificates or instruments in
NationsBank's possession that represent or evidence the
Withdrawn Collateral or take such other action with respect
to the Withdrawn Collateral as Lessee may request or direct.
Lessee shall pay the expenses incurred by NationsBank in
connection with obtaining each such release.
SECTION 13. PERIODIC VALUATION or PLEDGED COLLATERAL.
At any time and from time to time (but not more
frequently than once each month) Fort Worth, at Lessee's
sole cost and expense, may request NationsBank to obtain or
provide the Market Value of the Pledged Collateral. Fort
Worth may cause Lessee to pledge additional Securities (the
"Additional Securities") as Pledged Collateral upon
satisfaction of the following conditions:
(a) Fort Worth shall provide Lessee and NationsBank a
written notice setting forth the Market Value of the
Pledged Collateral and requesting Lessee to pledge
Additional Securities having a specified Market Value;
and
(b) the aggregate Market Value of the Pledged
Collateral (including the Additional Securities) shall
be equal to (or, at Lessee's option, greater than) the
last-determined Estimated Cost to Complete (or the
estimated cost to construct the improvements if no
Estimated Cost to Complete has yet been determined
hereunder) .
Lessee shall have five days from receipt of such notice to
pledge to Fort Worth, and deliver to NationsBank for the
benefit of Fort Worth, all certificates or instruments
representing or evidencing Additional Securities, the market
value of which Additional Securities shall be confirmed by
NationsBank within five (5) business days after receipt Of
same-
SECTION 14. NON-ASSIGNABILITY OF FORT WORTH'S RIGHTS.
The rights, powers, and interest held by Fort Worth
hereunder in and to the Pledged Collateral may not be
transferred or assigned by Fort Worth in whole or in part.
Any attempted transfer or assignment shall be absolutely
void and shall entitle Lessee to a release of all Pledged
Collateral.
SECTION 15. NO WAIVER.
No waiver by Fort Worth of any Default shall be deemed
to be a waiver of any other subsequent Default. No delay or
omission by Fort Worth in exercising any right or power
hereunder shall impair any such right or power or be
construed as a waiver thereof, nor shall any single or
partial exercise of any such right or power preclude other
or further exercise thereof.
SECTION 16. BINDING EFFECT.
This Pledge Agreement shall be binding on the parties,
their successors and assigns. No provision of this Pledge
Agreement may be amended, waived, or modified except
pursuant to a written instrument executed by Fort Worth,
NationsBank, and Lessee.
sz==CN 17. CHOICE OF LAW.
This Pledge Agreement is to be construed and
interpreted in accordance with the laws of the State of
Texas.
SECTION 18. COMMRPARTS.
This Pledge Agreement may be executed in any number of
multiple counterparts and by different parties on separate
counterparts, all of which when taken toget her shall
constitute one and the same agreement.
SECTION 19. ITATIONSBANX INDEMNITY.
Lessee hereby agrees to release, hold harmless, and l'
indemnify NationsBank (and its directors, officers,
employees, agents and representatives) from and against all
claims, damages, expenses, costs, suits, and other liability
of any kind whatsoever that arise out of or are directly Or
indirectly related to the performance by NationsBank of
duties hereunder except for the gross negligence or willful
misconduct of NationsBank or its directors, officers,
employees, agents, or representatives.
ALLIANCE
By:
Title:
Date:
CITY OF FORT WORTH, TEXAS
By:
Title:
Date:
NATIONSBANK OF TEXAS, N.A.
By:
Title:
Date:
I
EXHIBIT A
United States Treasury Bills
CUSIP No.
Due
I
a
Schedule A
Lessee shall, at its own cost and expense, take out and maintain such insurance as Lessee
is required to take out and maintain under the Workers' Compensation Act; and also take
out and maintain such public liability and automobile liability insurance sufficient to fulfill
Lessee's indemnification obligations set forth in Article 9 of this Ground Lease. The
policies shall provide the amounts of insurance specified in this schedule A and shall name
the City and its Airport Operator as additional insureds for their own acts or omissions.
All insurance required by this Ground Lease shall be effective on the "made-and-entered-
into" date set forth on the first page of this Ground Lease; and upon full execution of this
Ground Lease by both the City and Lessee, certificates of insurance in form acceptable to
the City and marked "premium paid" must be submitted to the City. Each certificate shall
have endorsed thereon:
A clause naming the City of Fort Worth and its Airport Operator, Alliance Air
Services, Inc., as additional insureds under the policies.
"No cancellation or change in the policy shall become effective until after thirty
(30) days notice by registered mail to the City Manager, City of Ft. Worth, 1000
Throckmorton, Ft. Worth, TX. 76102."
Upon failure of Lessee to furnish, deliver and maintain such insurance as above provided,
the City may obtain such insurance and charge Lessee the cost of the insurance plus all
appropriate administrative charges and incidental expenses associated with the transaction.
Failure of Lessee to take out and/or maintain, or the taking out and/or maintenance of any
required insurance shall not relieve Lessee from any liability under this Ground Lease, nor
shall the insurance requirements be construed to conflict with the obligations of Lessee
concerning indemnification.
All required insurance must be in effect and so continue during the life of this Ground
Lease in not less than the following amounts:
A. Workers' Compensation Unlimited Statutory in compliance with the
Compensation Law of the State of Texas.
B. General Liability Insurance with a maximum combined single limit of
$3,000,000.00 per occurrence. This insurance shall indicate on the Certificate(s)
of Insurance, marked"premium paid," the following coverages:
Comprehensive General Liability
Premises/Operations
Contractual Liability
Independent Contractors
Products and Completed Operations
Galaxy Ground Lease-Revised-1/21/98 Page 41
07515.0092:0273045.12
I
Broad Form Property Damage
Personal Injury
Hangar Keepers Liability
C. Auto Liability (single limit or occurrence $500,000.00). Owned, Non-owned and
Hired Location of operation shall be "All locations in Tarrant and Denton
Counties, Texas".
The City reserves the right, from time to time, to change the types of coverages and
increase the coverage limits set forth above; which changes and increases must be
reasonable and must be based on ordinary and customary principles of risk management
adopted by the:City and applied to activities at the Airport similar to those activities
conducted on the Leased Premises. In the event the City considers it necessary to change
such coverages or increase such coverage limits, the City shall give written notice of to
Lessee, together with a reasonably detailed explanation,of the reason for the change or
increase. Lessee agrees that it shall comply with such changes or increases and that the
effective date of such changes or increases shall not be sooner than 30 days after the
written notice is given to Lessee.
Nothing herein contained shall prevent Lessee from taking out any other insurance for
protection of its interest which it deems advisable or necessary.
I
I
Galaxy Ground Lease-Revised-1/21/98 Page 42
07515.0092:0273045.12
I .
Appendix A
Construction by Lessee
1. Prior to the commencement of construction of any Leasehold Improvements,
Lessee shall submit to the City complete plans and specifications and an estimated
time table for such proposed construction.
2. The City may refuse to grant approval of Lessee's plans and specifications if, in its
reasonable opinion, the proposed facilities as laid out and indicated by Lessee on
such plans or constructed according to such plans and specifications:
2.1 will be structurally unsound or unsafe or hazardous for human occupancy;
2.2 will not substantially comply with all the requirements of this Ground Lease;
2.3 will be so located that there will not be sufficient clearances in respect to existing
or planned projecting aprons; runways or taxiways adjacent thereto;
2.4 will be in violation of any state code, OSHA-70, the National Electric and Fire
Protection Codes or any other laws, ordinances or regulations of any governmental
authority having jurisdiction over the Airport;
2.5 will not be at locations or not be oriented in accordance with the approved
comprehensive plans for the Airport.
3. Upon approval of such plans and specifications by the City, Lessee shall proceed
expeditiously and with all reasonable diligence to construct, at its own expense and
cost, the facilities in accordance with such approved plans and specifications and
complete the facilities in accordance with the estimated time table (subject to
delays beyond Lessee's reasonable control).
3.1 (1) Prior to the date of commencement of any modification, renovation,
improvement or new construction of any Leasehold Improvements, Lessee shall
deliver to the City payment and performance bonds, executed by a corporate
surety in accordance with Texas Government Code, Chapter 2253, as amended, in
the full amount of each construction contract or project. The bonds shall
guarantee (i) satisfactory compliance by Lessee with all requirements, terms and
conditions of this Ground Lease, including, but not limited to, the satisfactory
completion of the Leasehold Improvements, and (ii) full payments to all persons,
firms, corporations or other entities with whom Lessee has a direct relationship for
the complete performance of such Leasehold Improvements.
Galaxy Ground Lease-Revised-1/21/98 Page 43
07515.0092:0273045.12
(2) In lieu of the bonds required in Section 3.1(1) of this Appendix A, Lessee
may provide the City with a cash deposit or a pledge of government securities (in
the form attached herewith as Exhibit B) and acceptable to Lessee in an amount
equal to 100% of the full amount of each construction contract or project. If
Lessee fails to complete the Leasehold Improvements, or if claims are filed by third
parties on grounds relating to such Leasehold Improvements, the City shall be
entitled to draw down the cash deposit or pledge of government securities, in
accordance with the terms and conditions of the attached Exhibit B.
(3) Prior to the commencement of any modification, renovation, improvement
or new construction of Leasehold Improvements, Lessee's respective contractor
shall execute and deliver to Lessee payment and performance bonds executed by a
corporate surety in accordance with Texas Government Code, Chapter 2253, as
amended, to cover the costs of all work performed under such contractor's
contract for such Leasehold Improvements. Lessee shall provide the City with
copies of such bonds prior to the commencement of such Leasehold
Improvements. The bonds shall guarantee (i) the faithful performance and
completion of all construction work in accordance with the final plans and
specifications as approved by the City and (ii) full payment for all wages for labor
and services and of all bills for materials, supplies and equipment used in the
performance of the construction contract. Such bonds shall name both the City
and Lessee as dual obligees. If Lessee serves as its own contractor, Sections
3.1(1) and (2) shall apply.
(4) The City will allow Lessee a dollar-for-dollar reimbursement from its cash
deposit account or reduction of its claim upon Lessee's pledge of government
securities upon (i) where Lessee serves as its own contractor, verification that
Lessee has completed construction work or (ii) where Lessee uses a contractor,
receipt of the contractor's invoice and verification that the contractor has
completed its work and released Lessee to the extent of Lessee's payment for such
work, including bills paid affidavits and waivers of liens.
Bonds shall be standard performance and payment bonds provided by a licensed
surety company in the State of Texas.
4. All construction work shall be done in accordance with the following terms and
conditions:
4.1 Lessee hereby assumes the risk of loss or damage to all of the construction work
prior to the completion thereof and the risk of loss or damage to all property of the
City arising out of or in connection with the performance of the construction work.
In the event of such loss or damage, Lessee shall forthwith repair, replace and
make good the construction work and the property of the City without cost or
expense to the City.
Galaxy Ground Lease-Revised-1/21198 Page 44
07515.0092:0273045.12
4.2 Lessee shall itself and shall require its contractors to indemnify, hold harmless and
defend the City, its officers, agents and employees from and against any and all
claims or suits for property damage and/or personal injury, including death, to any
and all persons, of whatsoever kind or character, whether real or asserted, arising
out of or in connection with any construction, maintenance or repair work
performed on or in connection with the Leased Premises, by Lessee, its officers,
employees, contractors, subcontractors, licensees, invitees, or tenants (and to
provide such insurance as required in Section 4.7 of this Appendix) covering the
acts and omissions of Lessee and its contractors; and Lessee shall itself assume and
shall require its contractors to assume all responsibility and liability for such claims
or suits. Lessee shall itself assume and shall require its contractors to assume all
responsibility and liability for, and shall indemnify and hold harmless the City for
any and all damage to or destruction of Airport property, the Leased Premises, and
their facilities, arising out of or in connection with any construction, maintenance
or repair work performed on or in connection with the Leased Premises, by
Lessee, its officers, employees, contractors, subcontractors, licensees, invitees, or
tenants.
4.3 Lessee shall identify a project manager during the construction period with whom
the City may communicate at all times.
4.4 The City shall have the right, through its duly designated representatives, to
inspect the construction work and the plans and specifications thereof, at any and
all reasonable times during the progress thereof and from time to time, in its
discretion, to take samples and perform testing on any part of the construction
work, but the taking of samples and testing shall be conducted so as to minimize
interference with the construction work.
4.5 Lessee agrees that it shall deliver to the City"as-built" drawings (capable of being
reproduced) of the construction work and shall during the term of this Ground
Lease keep said drawings current showing thereon any changes or modifications
which may be made. (No changes or modifications to be made without the City's
consent not to be unreasonably withheld or delayed.)
4.6 Lessee shall pay or cause to be paid all claims lawfully made against it by its
contractors, subcontractors, materialmen and workmen, and all claims lawfully
made against it by other third persons arising out of or in connection with or
because of the performance of any repair, maintenance or construction work, and
shall cause its contractors and subcontractors to pay all such claims lawfully made
against them, rop vided, however, that nothing herein contained shall be construed
to limit the right of Lessee to contest any claim of a contractor, subcontractor,
materialman, workman and/or other person and no such claim shall be considered
to be an obligation of Lessee within the meaning of this Section unless and until
the same shall have been finally adjudicated. Lessee shall use its best efforts to
Galaxy Ground Lease-Revised-1/21/98 Page 45
07515.0092:0273045.12
i
resolve any such claims and shall keep the City fully informed of its actions with
respect thereto.
4.7 Lessee shall procure and maintain comprehensive general liability insurance,
including automotive, with a contractual liability endorsement covering the
obligations assumed by Lessee in Sections 4.1 and 4.2 of this Appendix, which
shall be in addition to all policies of insurance otherwise required under this
Ground Lease; or Lessee may provide such insurance by requiring each contractor
engaged by it for the construction work to procure and maintain such insurance
including such contractual liability endorsement. Said insurance shall not contain
any care, custody or control exclusions, any exclusion for explosions, collapses or
damage, or any exclusions for bodily injury to or sickness, disease, or death of any
employee of Lessee or of any of its contractors which would conflict with or in
anyway impair coverage under the contractual liability endorsement. Said
insurance shall name the City, its officers, its employees and its agents as additional
insureds and be in not less than the following amounts:
(i) Bodily Injury Liability:
For injury to or wrongful death
toone person............................................................................$1,000,000
For injury or wrongful death of more
than one person for any one occurrence.....................................$5,000,000
Aggregate Products Completed Operations.....................................$3,000,000
(ii) Property Damage Liability:
For all damages arising out of injury
to or destruction of property in any
one occurrence..........................................................................$3,000,000
Aggregate Products Completed Operations.....................................$3,000,000
Aggregate Operations.....................................................................$370001000
Aggregate Productive......................................................................$3,000,000
Aggregate Contractual.................................... ...............................$3,000,000
The insurance required hereunder shall be maintained in effect during the
performance of the maintenance, repair or construction work. A certified copy of
each of the policies or a certificate or certificates' evidencing the existence thereof,
or binders, shall be delivered to the City at least fifteen (15) days prior to the
commencement of any work. In the event any binder is delivered, it shall be
replaced within thirty (30) days by a certified copy of the policy or a certificate.
Each such copy or certificate shall contain a valid provision or endorsement that
the policy may not be canceled, terminated, changed or modified without giving
fifteen (15) days' written advance notice thereof to the City.
Galaxy Ground Lease-Revised-1/21/98 Page 46
07515.0092:0273045.12
4.8 Lessee shall procure and maintain or cause to be procured and maintained
Builder's Risk Completed Value Insurance covering the construction work during
the performance thereof, including material delivered to the construction site but
not attached to the realty, in an amount and form satisfactory to the City. Such
insurance shall name the City, Lessee and its contractors and subcontractors as
additional insureds and such policy shall provide that the loss shall be adjusted in
accordance with Article 8 of this Ground Lease. The policies or certificates
representing this insurance shall be delivered by Lessee to the City prior to the
commencement of construction and each policy or certificate delivered shall bear
the endorsement of or be accompanied by evidence of payment of the premium
thereon and, also, a valid provision obligating the insurance company to furnish the
City fifteen (15) days' advance notice of the cancellation, termination, change or
modification of the insurance evidenced by said policy or certificate.
4.9 Nothing contained herein shall grant or be deemed to grant to any contractor,
architect, supplier, subcontractor or any other person engaged by Lessee or any of
its contractors in the performance of any part of the construction work any right of
action or claim against the City, its officers, agents and employees with respect to
any work any of them may do in connection with the construction work.
4.10 Nothing contained herein shall create or be deemed to create any relationship
between the City and any such contractor, architect, suppliers subcontractor or any
other person engaged by Lessee or any of its contractors in the performance of any
part of the construction work, and the City shall not be responsible to any of the .
foregoing for any payments due or alleged to be due thereto for any work
performed or materials purchased in connection with the construction work.
4.11 When the construction work is substantially completed and is ready for use by
Lessee, Lessee shall advise the City to such effect and shall deliver to the City a
certificate by an authorized officer of Lessee certifying that such construction work
has been constructed substantially in accordance with the approved plans and
specifications and the provisions of this Ground Lease and in compliance with all
applicable laws, ordinances and governmental rules, regulations and orders.
Thereafter, such construction work will be inspected by the City and if the same
has been completed as specified by Lessee, a certificate to such effect shall be
delivered to Lessee, subject to the condition that all risks thereafter with respect to
the construction and installation of the same and any liability therefor for
negligence or other reason shall be borne by Lessee.
Lessee shall not use or permit the use of the construction work for the purposes
set forth in this Ground Lease until such certificate is received from the City. The
date of delivery of the certificate by the City shall constitute the Completion Date
for the purposes of this Ground Lease.
Galaxy Ground Lease-Revised-1/21/98 Page 47
07515.0092:0273045.12
6. Other Construction by Lessee
Title to any construction, improvement, alteration, modification or addition
performed by Lessee at or on the Leased Premises in accordance with a City
approved building permit shall vest in Lessee and remain in Lessee until the
expiration or earlier termination of this Ground Lease.'
Galaxy Ground Least-Revised-1/21/98 Page 48
07515.0092:0273045.12
Exhibit"A"
to
Lessor Estoppel Certificate
Sublease
BASIC LEASE INFORMATION
Lease Date: January° 1998
Effective Date: JanuaryJ!S 1998
Tenant: Galaxy Aerospace Corporation, a Nevada corporation
Tenant's Address: One Galaxy Way
Fort Worth, TX 76177
Contact: Dave Edwards; Telephone: 817-837-3716
Landlord: Airport Building Partners, Ltd., a Texas limited partnership
Landlord's Address: c/o Alliance Development Company
2421 Westport Parkway, Suite 200
Fort Worth, Texas 76177
Attn: Rick Patterson
With copy to: Hillwood Development Corporation
1700 Lakeside Square
12377 Merit Drive
Dallas, Texas 75251
Attn: Frank Zaccanefli
Contact: Mike Berry; Telephone: (817)224-6000
Premises: The tract of land more particularly described on Exhibit "A!' attached to
the Lease (the "Land"), together with the building known, or to be known,
as the "Galaxy Building" (the "Buildin ') located or to be located on the
Land. The location of the Building is indicated by cross-hatching, on
Exhibit"A-l" attached hereto and made a part hereof
Project: Collectively, the Land, the Building and all other buildings, structures and
improvements situated on the Land at any time during the Term.
Term: Two Hundred Forty Six (246) months, commencing on the
Commencement Date and ending at 5:00 p.m. on the last day of the 246th
full month following the month in which such Commencement Date falls,
subject to adjustment, renewal and extension, and earlier termination as
provided in the Lease.
07515.0092:0300232.09
Base Rent: Monthly Base Rent shall be an amount equal to the sum of(i) the monthly
fixed rent amount set forth in the schedule below ("Fixed Rent"), plus (ii)
the Monthly Formula Rate Amount(hereinafter defined).
Fixed Rent Per
Square Foot of
Monthly Annual Area of the Land
Month Fixed Rent Fixed Rent Per Annum
1-120 $4,579.06 $54,948.76 $0.19
121-240 $5,723.83 $68,685.95 $0.2375
241-246 $7,152.98 $85,835.75 $0.2968
(Subject to adjustment as provided in the Lease)
Initial Tenant's proportionate
share of Taxes: $0.00 per month
Initial Tenant's proportionate
share of cost of insurance
under Paragraph 10A: $398.00 per month
Initial Tenant's proportionate
share of Common Area Charges: $1,460.00 per month
Security Deposit: The Letter of Credit (hereinafter defined) to be held
in accordance with the terms hereof.
Tenant's Proportionate
Share: 100%
Broker or Agent: None
The foregoing Basic Lease Information is incorporated into and made a part of the Lease
identified above. If any conflict exists between any Basic Lease Information and the Lease, then
the Lease shall control.
2 07515.0092:0300232.07
LANDLORD:
AIRPORT BUILDING PARTNERS, LTD., a
Texas limited partnership
By: Hillwood Operating, L. P.,
a Texas limited partnership,
its general partner
By: Mwood Development Corporation.,
a Texas corporation,
its general partner
S:
TENANT:
GALAXY AEROSPACE CORPORATION,
a Nevada corporation
i
/� rian E. Barent
Its: y president
3 07515.0092:0300232.07
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by Airport Building Partners, Ltd.,
a Texas limited partnership ("Landlord") and Galaxy Aerospace Corporation, a Nevada
corporation("Tenant");
WITNES SETH:
1. PREMISES AND TERM. In consideration of the mutual obligations of Landlord
and Tenant set forth herein, Landlord leases to Tenant, and Tenant hereby takes from Landlord,
the Premises situated within the County of Tarrant, State of Texas, more particularly described on
Exhibit"A' attached hereto and made a part hereof, together with the Building to be constructed
pursuant to the terms hereof and indicated by the cross-hatched area on Exhibit "A-1" attached
hereto and incorporated herein by reference, together with all rights, privileges, easements,
appurtenances, and amenities belonging to or in any way pertaining to the Premises, to have and
to hold, subject to the terms, covenants and conditions in this Lease. Tenant's rights under this
Lease shall be subject only to the following (collectively, the "Permitted Exceptions"): (i) those
matters described on Exhibit `B" attached hereto 'and made a part hereof and such other
easements, restrictions, covenants, conditions and restrictions and other matters as may hereafter
be imposed and which affect title to the Land (provided, however, that such subsequently imposed
title matters shall not interfere with Tenant's use of the Premises for the Permitted Use under
Paragraph 13 hereof or Tenant's Access Rights (hereafter defined) or cause a material increase in
the cost of Tenant's operations), and (ii) that certain Ground Lease Agreement dated as of July
29, 1997 between The City of Fort Worth ("Qff'), as lessor thereunder, and Alliance Aviation
Investors, L. P., as lessee thereunder (Landlord being the assignee of the rights of Alliance
Aviation Investors, L. P. under such Ground Lease Agreement), as such lease agreement may be
renewed, extended or amended from time to time to the extent amendment shall be permitted by
the terms of this Lease and shall bind Tenant pursuant to the terms of the Ground Lease
Agreement dated as of July 29, 1997 as originally executed by the City and Alliance Aviation
Investors, L. P., or of that one certain Estoppel Certificate in the form set forth of Exhibit "C"
attached hereto and incorporated herein by reference for all purposes, pursuant to which the City
of Fort Worth has agreed, or will agree, to certain restrictions on amendment of such Ground
Lease (as so renewed, extended or amended, the"Ground Lease") it being agreed that this Lease
is and shall at all times be subordinate to all the terms, conditions and covenants of the Ground
Lease. The term of this Lease("Term") shall commence on the Commencement Date (hereinafter
defined) and shall end on the last day of the 246th full month following the month in which the
Commencement Date falls.
Landlord grants to Tenant the right to renew the Termm on the terms and conditions set
forth on Exhibit"G" attached hereto and incorporated herein by reference for all purposes.
A. The "Commencement Date" shall be the date that is the earlier of(i) the date on
which Tenant first occupies the Premises for the purpose of conducting its business, or (ii) the
date on which the Premises are Ready for Occupancy (hereinafter defined). Landlord's approval
of any plans, specifications or working drawings for the Premises shall create no responsibility or
4 07515.0092:0300232.07
liability on the part of Landlord for their completeness or design sufficiency, provided that neither
Landlord's nor Tenant's approval of plans, specifications, and working drawings shall excuse
Landlord's obligations to design and construct the improvements to the Premises in accordance
with Legal Requirements (as that term is defined in Exhibit "D" hereto). Notwithstanding
anything to the contrary contained herein, in the event of Tenant Delays (as defined on Exhibit
"D" attached hereto) the Commencement Date shall be deemed to be the date that the Premises
would have been Ready for Occupancy if such Tenant Delays had not taken place. After the
Commencement Date, Tenant shall, upon demand, execute and deliver to Landlord a
memorandum of acceptance of delivery of the Premises in the form attached hereto as Exhibit
B. Notwithstanding the fact that the Term of this Lease does not commence until the
Commencement Date and Tenant's obligation to pay rent does not commence until such time as
provided in Paragraph 2A below, this Lease shall nevertheless be binding upon the parties in
accordance with its terms when executed by Landlord and Tenant.
C. Tenant has entered into this Lease in express reliance on the existence and
continuing enforceability of the Ground Lease by and for the benefit of the Tenant. Pursuant to
the Ground Lease, the City has granted to Landlord for Tenant's benefit, and Landlord hereby
assigns, sets over, transfers, and conveys to Tenant (on a non-exclusive basis it being agreed that
_ Landlord retains for its own benefit all such rights) certain rights and obligations concerning
utilization of Alliance Airport (the "Airport'), including, but not limited to the following to the
extent set forth in the Ground Lease: (i) the grant to Tenant of the right to use, and the
unobstructed right of ingress or egress to, public areas of the Airport (as therein defined) and
runways, taxiways, aprons, ramps, lighting, navigation aids, and other facilities necessary for the
operation of aircraft, as more particularly set forth therein (collectively, the "Access Rights'); (ii)
the right for Tenant to receive notice of defaults by Landlord occurring under the Ground Lease,
and the opportunity for Tenant to cure any such defaults prior to the City's enforcement of any
remedy for breach or default under the Ground Lease; (iii) the right for the Tenant to receive the
cooperation of the City in effecting suitable amendments to the Ground Lease for the purpose of
implementing the provisions thereof benefitting the Tenant; and (iv) the right for the Tenant to
assume the obligations of Landlord, in its capacity as Lessee under the Ground Lease, under
certain circumstances. Tenant acknowledges that, concurrently with the execution hereof, Tenant
has received from the City the Estoppel Certificate (herein so called) pertaining to the Ground
Lease in the form set forth on Exhibit "C" attached hereto and incorporated herein by reference
for all purposes:
D. Landlord hereby represents and warrants to Tenant that Landlord has been
assigned the leasehold estate under the Ground Lease and is the sole Lessee (as defined in the
Ground Lease)thereunder. Landlord hereby covenants and agrees that Landlord(i) shall have the
duty and obligation, for Tenant's benefit, to perform all obligations of the Lessee under the
Ground Lease at Landlord's sole cost and expense in order that the Ground Lease shall continue
in full force and effect, binding on and enforceable against the City, at all times during the term of
this Lease, and (ii) shall not modify or amend the Ground Lease in any manner without the prior .
written consent of Tenant, which shall not be unreasonably withheld so long as the proposed
5 07515.0092:0300232.07
modification or amendment would not interfere with Tenant's use of the Premises for the
Permitted Use under Paragraph 13 hereof or Tenant's Access Rights or cause a material increase
in the cost of Tenant's operations., Tenant hereby acknowledges that Tenant has received and
reviewed the Ground Lease. Notwithstanding the foregoing, Tenant hereby covenants and agrees
that Tenant shall not take any action which would constitute a breach or default under any
provision of the Ground Lease of which Tenant has received notice and which provision would be
binding on Tenant, in Tenant's capacity as Sublessee under the Ground Lease, in the event that
Tenant should ever be bound by the Ground Lease pursuant to the nondisturbance and attornment
provisions thereof set forth in Section 12.6 of the Ground Lease; provided that prior to Tenant's
assumption of obligations in connection with any attornment by Tenant to the City necessitated by
Landlord's default and/or nonperformance under the terms of the Ground Lease, Tenant shall
have no duty or obligation to pay rent or perform any other obligation of Lessee under the
Ground Lease, which shall be the sole and exclusive duty and obligation of Landlord.
2. BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.
A. Tenant agrees to pay to Landlord base rent ("Base Rent') for the Premises, in
advance, without demand, deduction or set off(except to the extent expressly otherwise set forth
herein), at the following rates and amounts during the Term hereof
Monthly Base Rent shall be an amount equal to the sum of(i) the monthly fixed
rent amount set forth in the schedule below ("Fixed Rent'), plus (ii) the Monthly
Formula Rate Amount(hereinafter defined).
Fixed Rent Per
Square Foot of
Monthly Annual Area of the Land
Month Fixed Rent Fixed Rent Per Annum
1-120 $4,579.06 $54,948.76 $0.19 .
121-240 $5,723.83 $68,685.95 $0.2375
241-246 $7,152.98 $85,835.75 $0.2968
Notwithstanding the foregoing, the component of Base Rent constituting the Monthly
Formula Rate Amount (but not the component constituting the Fixed Rent) during months 1-6 of
the Term shall be abated. The first monthly installment of(i) the Fixed Rent component of Base
Rent, plus the other monthly charges set forth in Paragraph 2D below, shall be due and payable
upon the execution hereof and subsequently monthly instal'Iments of Fixed Rent and such monthly
charges shall be due and payable on the first day of each calendar month succeeding the
Commencement Date, and (ii) the Monthly Formula Rate Amount, shall be due and payable on
the first day of the seventh (7th) calendar month succeeding the Commencement Date (the "First
Formula Rent Installment Date"), and subsequent monthly installments shall be due and payable
6 07515.0092:0300232.07
on or before the first day of each calendar month succeeding the First Formula Rent Installment Date,
except that all payments due hereunder for any fractional calendar month shall be prorated.
B. The term"Formula Rate Amount"shall mean an amount equal to 12%of the Total Project
Cost.
For purposes of this Lease, the term "Total Project Cost" shall mean the aggregate out-of-pocket cost
incurred by Landlord in developing the Land and performing the Work (as that term is defined in Exhibit.
"D"hereto) which costs are categorized by line-item on Schedule CA-6 attached hereto and made a part
hereof; excluding, however, the following items: (i) the cost of acquiring and maintaining the Land and,
including as applicable, rents under the Ground Lease; (ii) all costs incurred in performing Correction
Work (as that term is defined in Exhibit "D" hereto), unless-the performance of the Correction Work is
necessitated by the acts or omissions of Tenant or its employees, agents or contractors; (iii) all fees of
accountants incurred by Landlord in connection with the Work or the financing thereof, or the Lease; (iv)
any overhead costs of Landlord;and(v)the Relocation Allowance(hereinafter defined).
The term"Monthly Formula Rate Amount" shall mean an amount equal to 1/12th of the Formula
Rate Amount.
C. Tenant shall deliver to Landlord,within three(3)days after the execution hereof,a letter of
credit in the amount of$3,413,621.00, naming Landlord as beneficiary, issued by a bank acceptable to
Landlord,and in the form of Exhibit"F".attached hereto and made a part hereof("Letter of Credit"). The
Letter of Credit shall constitute the security deposit hereunder and upon the occurrence of an Event of
Default Landlord shall be entitled to draw on the Letter of Credit and use the proceeds thereof to pay rent
or other payments due Landlord under this Lease, and the cost of any other damage, injury, expense or
liability caused by such Event of Default, without prejudice to any other remedy provided for herein or
provided by law. Such Letter of Credit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. The Letter of Credit shall be in a form so as to allow Landlord to
collaterally assign the same. Notwithstanding anything to the contrary contained herein, if the expiration
date of the Letter of Credit is prior to the 30th day following the l Oth anniversary of the First Formula Rent
Installment Date,then at least 30 days prior to the expiration of the Letter of Credit Tenant shall deliver to
Landlord a replacement Letter of Credit meeting the requirements of this Paragraph 2C and Tenant's
failure to so timely deliver the Letter of Credit shall entitle Landlord to draw on the Letter of Credit then
existing. Any replacement Letter of Credit furnished under the immediately preceding sentence shall (if it
expires prior to the 30th day following the 10th anniversary of the First Formula Rent Installment Date)be
subject to the terms of the preceding sentence. Subject to the foregoing, Landlord agrees that so long as (i)
-no Event of Default then exists (and no condition then exists that with the giving of notice or passage of
time,or both,could constitute an Event of Default),and(ii)Tenant's then existing credit rating(as rated by
Moody's or Standard and Poor's)is equal to or better than BBBBaa3,Landlord shall deliver the Letter of
Credit to Tenant on the tenth(1 Oth)anniversary of the First Formula Rent Installment Date.
D. In addition to Base Rent and Tenant's other obligations hereunder,Tenant agrees to pay its
proportionate share (as defined in the Basic Lease Information) of the following costs and expenses
(collectively,the"Reimbursable Expenses"): (i)Taxes (hereinafter defined) payable by Landlord pursuant
_ to Paragraph 4A below, (ii)the cost of jointly metered utilities payable pursuant to Paragraph 9 below, (iii)
the cost of maintaining insurance pursuant to Paragraph IOA below, (iv) Common Area Charges
(hereinafter defined) payable by Tenant in accordance with Paragraph 3 below, and (v) the cost of any
repair,replacement,or capital expenditures required under any governmental law or regulation that was not
applicable to the Premises at time of original construction. During each month of the Term of this Lease,
on the same day that Base
7 07515.0092:0300232.07
Rent is due hereunder, Tenant shall escrow with Landlord an amount equal to 1/12th of Tenant's
proportionate share of such Reimbursable Expenses, as estimated by Landlord. Tenant authorizes
Landlord to use the funds deposited with Landlord under this Paragraph 2D to pay such
Reimbursable Expenses. Landlord shall be entitled to revise its projection of such Reimbursable
Expenses at any time on no less than sixty (60) days' notice and if Landlord so revises such
projection, Tenant shall pay to Landlord, on the same day as Base Rent is due hereunder, an
amount equal to 1/12th of Tenant's proportionate share of such Reimbursable Expenses pursuant
to Landlord's revised estimate thereof. By April 30 of each calendar year (or as soon thereafter
as may be practicable) during the Term hereof Landlord shall determine the actual Reimbursable
Expenses for the preceding calendar year and shall notify Tenant thereof. If the Tenant's total
escrow payments are less than Tenant's actual proportionate share of all such Reimbursable
Expenses, Tenant shall pay the difference to Landlord within ten (10) days after demand. If the
total escrow payments of Tenant are more than Tenant's actual proportionate share of all such
Reimbursable Expenses, Landlord shall retain such excess and credit it against Tenant's next
annual escrow payments.
With respect to the cost of replacements or capital expenditures (as opposed to repairs)
required under governmental law or regulation pursuant to Paragraph 2(D)(v) above, it is agreed
that if the replacement or expenditure is applicable to building owners generally at Alliance
Airport (and is not necessitated due to Tenant's particular use of the Premises for the Permitted
Use), then the cost of any such item shall be amortized over its useful life (at a per annum interest
rate equal to the prime rate of interest announced from time to time by Bank One Texas, N.A.
plus two percentage points) and the portion of the cost that shall be included within Paragraph
2(12)(v) above shall be equal to the product of(i)the actual cost of such item (together with such
interest), multiplied by (ii) a fraction of the numerator of which is the number of years (including
partial years) remaining in the Lease Term as of the date of such replacement or expenditure
including the number of years in any renewal term under Exhibit "G" attached hereto if the
renewal option therefor has been exercised by Tenant prior to the replacement or expenditure (up
to but not greater than the following described denominator), and the denominator of which is the
useful life 'of the item in question; provided that if subsequent to any such replacement or
expenditure Tenant exercises any renewal option, the portion of the cost included within
Paragraph 2(D)Uv� above under this sentence shall be recalculated to include the length of the
renewal term in question. Notwithstanding anything to the contrary contained herein, it is agreed
that the cost of any replacement or capital expenditure under Paragraph 2(D)(v) above that is
necessitated due to Tenant's particular use of the Premises for the Permitted,Use shall not be so
amortized, or be allocated to Tenant based upon its proportionate share, but shall, instead, be paid
for in full by Tenant upon Landlord's demand therefor.
3. COMMON AREA CHARGES. In addition to other amounts required to be paid
by Tenant hereunder, Tenant shall pay to Landlord Tenant's proportionate share of the following
costs and expenses (collectively, the"Common Area Charges'):
A The cost of repair, maintenance and replacement of the exterior of the Building
(including painting), other than those structural repairs and replacements for which Landlord is
responsible pursuant to Paragraph 5A.
8 07515.0092:0300232.07
B. The cost of maintenance and replacement of the grass, shrubbery and other
landscaping on the Premises.
C. The cost of operating and maintaining in a good, neat, clean and sanitary condition
all parking areas, driveways, alleys and grounds on the Premises(including trash removal).
D. All costs and expenses incurred by Landlord in connection with performing the
Common Area Maintenance as required by Paragraph 5B hereof.
E. Security services (if furnished by Landlord) and management fees allocable to the
provision of services to the Project (or if no management company is engaged by Landlord for
the management of the Project, an allocable share of the wages and employee benefits payable to
employees of Landlord or affiliates of Landlord whose duties are connected with the operation
and maintenance of the Project, based on the amount of such employees' time spent in connection
with the Project); provided, however, that such management fees (or wages and employee
benefits to employees of Landlord or its affiliates, if no management company is engaged by
Landlord) shall not: (i) exceed (x) an amount equal to 1% of the Base Rent hereunder during
months 1-120 of the Lease Term, and (y) 2% of the Base Rent hereunder during months 121-246
of the Lease Term; and(ii)include any salaries of Landlord's executive level employees.
In the event that Tenant shall at any time during the term of the Lease determine to
assume the responsibility of performing Common Area Maintenance, Tenant shall give Landlord a
minimum of ninety (90) days' prior written notice, specifying the date ("Assumption Date") on
which Tenant assumes such responsibilities. From and after the Assumption Date, until such time
as Tenant shall elect to reimpose the responsibilities of Common Area Maintenance on Landlord
(upon 90 days' prior written notice to Landlord): (i) Landlord shall have no:further obligations
with respect to Common Area Maintenance, (ii) Tenant shall perform the Common Area
Maintenance in accordance with the Common Area Maintenance Standards (hereinafter defined),
and otherwise upon the same terms and conditions as are applicable to Landlord under Paragraph
5B below, and (iii) Tenant shall have no further obligation to pay the Common Area Charges
accruing after the Assumption Date until the date on which such Common Area Maintenance
duties are reimposed on Landlord in accordance with the terms hereof.
4. TAXES.
A. Landlord agrees to pay all taxes, assessments and governmental charges of any
kind and nature (collectively referred to herein as "Taxes") that accrue against the Premises,
and/or the Land and/or improvements which form a part of the Premises. If at any time during
the Term of this Lease, there shall be levied, assessed or imposed on Landlord a capital levy or
other tax directly on the rents received herefrom and/or an assessment, levy or charge measured
by or based, in whole or in part, upon such rent from the Premises(other than income taxes and
franchise taxes imposed on Landlord), then all such taxes or levies, or the part thereof so
measured or based, shall be deemed to be included within the term "Taxes" for the purposes
hereof. Landlord, at its sole cost and expense (and not as a reimbursable expense), shall have the
9 07515.0092:0300232.07
right to employ a tax consulting firm to attempt to assure a fair tax burden on the building and
grounds within the applicable taxing jurisdiction.
B. Tenant shall be liable for all taxes levied or assessed against any personal property
or fixtures placed in the Premises. If any such taxes are levied or assessed against Landlord or
Landlord's property and (i) Landlord pays the same or (ii) the assessed value of Landlord's
property is increased by inclusion of such personal property and fixtures and Landlord pays the
increased taxes, then, upon demand Tenant shall pay to Landlord such taxes.
C. Landlord agrees to provide to Tenant, within 10 days after receipt thereof by
Landlord, tax statements and notices of reappraisal relating to the Premises that are from time to
time received by Landlord. Tenant shall have the right (unless Landlord shall in good faith agree
to contest, at Tenant's sole expense, such tax increase) to contest or resist, in good faith,
diligently and by appropriate proceedings, the validity of the amount or rate of any increase or
proposed increase in the Taxes, all at Tenant's sole expense. If Landlord shall agree to contest
such Taxes, Landlord shall do so at Tenant's expense (the cost of which contest, if involving the
property of Landlord in addition to the Premises, shall be allocated to Tenant on a reasonable and
equitable basis), under the direction and control of Landlord (which shall make all decisions in
connection therewith, subject to Tenant's right to monitor Landlord's conduct of such contest
proceeding); if Landlord elects not to contest such Taxes or, having elected to contest such
Taxes, fails to contest such Taxes diligently and in good faith, and such failure continues uncured
beyond a reasonable time following written notice from Tenant to Landlord, or if Tenant.
reasonably determines that Landlord is not pursuing an adequately aggressive position with
respect to such tax contest and Landlord fails to comply with Tenant's reasonable request with
respect thereto, Tenant shall have the right to itself contest such Taxes. It shall be a condition
precedent to Tenant's right to contest any such Taxes that Tenant provide Landlord with security
(in a form reasonably acceptable to Landlord and Landlord's mortgagee) in an amount reasonably
necessary to assure full payment of such Taxes being contested, togeither with all penalties, fines
and interest and other fees and amounts that could be collected by the taxing authority in case the
contest is unsuccessful (but in any event not less than the amount reasonably required by
Landlord's mortgagee in connection with such contest of Taxes). In determining the security
required pursuant to the immediately preceding sentence, due regard shall be given to Tenant's
contractual obligations with respect to Taxes pursuant to Paragraph 2(M above. Tenant shall in
all events pay all such contested Taxes (together with all penalties, fines, interest and such other
fees and amounts) at least 30 days prior to the date on which the Premises (or any portion
thereof) are scheduled for any unstayed foreclosure on account of nonpayment thereof. Tenant
shall indemnify and hold harmless Landlord from and against any and all expenses, liabilities and
claims (including but not limited to attorneys' fees) incurred by or asserted against Landlord or
the Project arising as a result of any such contest by Tenant. Landlord and Tenant agree to
reasonably cooperate with one another in connection with all contests of Taxes under this Lease.
Notwithstanding the foregoing, if Tenant protests, challenges or appeals any valuation for
property tax purposes of all or any portion of the Premises and/or the Building, and such
valuation increases from the value protested, appealed or challenged, Tenant agrees to indemnify
Landlord on an after-tax basis for any property taxes due as a result of such increase.
10 07515.0092:0300232.07
5. LANDLORD'S MAINTENANCE AND REPAIRS. Tenant understands and
agrees that Landlord's maintenance, repair and replacement obligations are limited to those
expressly set forth in this Paragraph 5.
A. Landlord, at its own cost and expense, shall be responsible for repair and replacement
of the foundation, the roof and the structural members of the exterior walls of the Building,
reasonable wear and tear excluded. The term "walls" as used herein shall not include windows,
glass or plate glass, doors, special store fronts or office entries. Tenant shall immediately give
Landlord written notice of defect or need for repairs after which Landlord shall have reasonable
opportunity to repair same or cure such defect.
. B. In addition to the foregoing obligations, during the Term of the Lease (except as
otherwise expressly provided herein with respect to Tenant's election to assume the obligation to
perform Common Area Maintenance), Landlord shall have the additional obligation to perform
the following services (the "Common Area Maintenance") in accordance with the maintenance
standards (the"Common Area Maintenance Standards") set forth on Exhibit "IT' attached hereto
and incorporated herein by reference for all purposes; in accordance with all applicable laws,
ordinances, rules, and regulations promulgated by governmental authorities having jurisdiction; in
accordance with the requirements of the Ground Lease; and in accordance with all standards
imposed by property owners associations having jurisdiction over the Premises from time to time:
(1) Repair, maintenance and replacement, with reasonable frequency, of the
exterior portions of the Building (including painting) necessary in order to maintain the
Building in a serviceable, neat, clean, and first class condition.
(2) Maintenance and replacement of the grass, shrubbery and other landscaping
on the Premises, and the irrigation systems serving same, in a neat, clean, and first class
condition. Landscaping shall initially be planted in accordance with the plans and
specifications approved by the parties in accordance with Exhibit "D" attached hereto.
Thereafter, during the Term of the Lease, Landlord shall provide care for such landscaping
as is necessary to provide for its continuing health and growth, and shall replant plants and
sod, with the frequency required by the Common.Area Maintenance Standards.
(3) Repair, maintenance and replacement, with reasonable frequency, of all
parking areas, driveways, alleys and grounds on the Premises.
(4) Removal from the Premises and disposal in authorized locations off the
Premises of trash, rubbish, and other waste materials (other than hazardous or toxic
materials, the responsibility for which is addressed in Paragraph 24)
Common Area Charges incurred in connection with the Common Area Maintenance, shall be
paid by Landlord and reimbursed by Tenant in accordance with Paragraph 3.
11 07515.0092:0300232.07
6. TENANT'S REPAIRS AND MAINTENANCE.
A. Tenant, at its own cost and expense, shall (i) maintain all parts of the Premises
(including, but not limited to, the floor slab of the Premises and the mechanical, electrical,
plumbing, sewer, sprinkler and other life-safety equipment, fixtures and systems forming a part of
the Premises), in good, neat, clean, sanitary and operable condition, except for those portions of
the Premises to be maintained by Landlord pursuant to Paragraph 5A hereof, and (ii) promptly
make all necessary repairs and replacements to the Premises, except for those portions of the
Premises to be repaired by Landlord pursuant to Paragraph 5A hereof, in a good and
workmanlike manner. In addition to the foregoing, Tenant shall, at its sole expense, repair any
damage to the Premises or the Building caused by the negligent or intentional acts or omissions of
Tenant or Tenant's employees, agents or invitees, or caused by Tenant's default hereunder.
Without limiting the generality of the foregoing, with respect to the hot water, HVAC and
elevator systems serving the Premises, Tenant's repair and maintenance responsibilities shall
include the type, degree, quality and frequency of repair, maintenance and servicing as is
recommended by the applicable equipment manufacturer.
B. In addition to the foregoing, Tenant shall, at its sole expense, perform the
Common Area Maintenance in accordance with the Common Area Maintenance Standards, and
otherwise upon the same terms and conditions as are applicable to Landlord under Paragraph 5B
hereof, during such period of time as Tenant has elected to assume such responsibilities pursuant
to Paragraph 3 hereof.
7. ALTERATIONS. Tenant shall not make any alterations, additions, partitions, or
other improvements to the Premises (individually, an "Alteration") without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or delayed so long as such
Alteration does not impair the structural integrity of the Building or require installation of any
item on the roof of the Building which would invalidate or impair roof warranties; provided,
however, Tenant may, without Landlord's consent, make Alterations which are non-structural in
character, which do not involve any such roof installation and the cost of which does not exceed
$10,000 during the Term of the Lease ("Permitted Non-Structural Alterations"). Tenant shall be
obligated to provide Landlord with a minimum of ten.(10) business days' prior written notice
requesting approval of Tenant's contemplated Alterations (which notice shall be accompanied by
reasonably detailed plans and specifications for such proposed Alterations). Landlord's failure to
respond to Tenant's request within ten (10) business days after Tenant's notice is given shall be
deemed to constitute an approval of the proposed Alterations. When Tenant requests Landlord's
approval of Tenant's contemplated Alterations, Landlord shall inform Tenant whether such
Alterations must be removed at the end of the Term, including any renewals, of this Lease as
permitted by this Paragraph 7. Tenant, at its own cost and expense, may erect shelves, bins,
machinery and trade fixtures as it desires, as well as Alterations, which have been specifically
consented to in writing by Landlord, provided that (a) such items do not alter the basic character
of the Premises, (b) such items do not overload *or damage the same, (c) such items may be
removed without injury to the Premises, and (d) the construction, erection or installation thereof
complies with all applicable governmental laws, codes, ordinances, regulations, or any other
applicable authorities, including, without limitation the ADA, and with Landlord's details,
12 07515.0092:0300232.07
specifications and other requirements. Any architectural, engineering, construction management,
permits, inspections, or other cost or fee required to assure compliance with the conditions set
forth in this Paragraph 7 shall be paid by Tenant promptly within fifteen (15) days following
Landlord's written demand, accompanied by supporting invoices. All Alterations erected by
Tenant shall be and remain the property of Tenant during the Term of this Lease; provided,
however, at the termination of this Lease, to the extent Landlord shall have informed Tenant of
Tenant's obligation to remove an Alteration at the end of the Lease Term, Landlord shall have the
option, exercisable in Landlord's sole discretion, to require Tenant either (i) upon request to
remove, at Tenant's sole cost and expense, all or part of each Alteration, at which time Tenant
shall promptly restore the Premises to their original condition, or (ii) to keep in place the same at
which time such Alterations shall become the property of Landlord. All shelves, bins, machinery
and trade fixtures, as well as Permitted Non-Structural Alterations installed by Tenant,-shall be
removed on or before the earlier to occur of the date of termination of this Lease or vacating the
Premises, at which time Tenant shall restore the Premises to their original condition. All
Alterations, removals and restorations shall be performed in a good and workmanlike manner so
as not to damage or alter the primary structure or structural qualities of the Premises.
Notwithstanding anything to the contrary contained herein, it is agreed that the use of and access
to the roof of the Building is expressly reserved to Landlord and is expressly denied to Tenant.
Tenant shall not penetrate the roof of the Building in any manner, nor install or construct any
alterations, additions or improvements thereon, nor otherwise use or occupy the roof at any time
during the Term hereof. Notwithstanding the foregoing, Tenant may have access to the portions
of the roof on which are situated any roof-mounted HVAC equipment, any roof-mounted
equipment installed pursuant to Exhibit"D" attached hereto, and any Alterations which are roof
mounted and approved by Landlord pursuant to the preceding provisions (collectively, the"Roof-
Mounted Items") to the extent necessary for Tenant to discharge its repair and maintenance
obligations with regard to the Roof-Mounted Items; provided, however, the activities of Tenant
on the roof shall not invalidate or impair in any manner the warranty applicable to the roof.
8. SIGNS. Any signage Tenant desires for the Premises shall be subject to
Landlord's prior written approval which shall not be unreasonably withheld or delayed, and in no
event shall be withheld if such item(s) conform in all material respects to Landlord's criteria as
described below, or if such signs are required by applicable law. Tenant shall repair, paint, and/or
replace the Building fascia surface to which its signs are attached upon vacation of the Premises,
or the removal or alteration of its signage, all at Tenant's sole cost and expense. Tenant shall not
(i) make any changes to the exterior of the Premises, (ii) install any exterior lights, decorations,
balloons, flags, pennants, banners or painting, or (iii) erect or install any signs, windows or door
lettering, placards, decorations or advertising media of any type which can be viewed from the
exterior of the Premises, without Landlord's prior written consent, which shall not be
unreasonably withheld or delayed, and in no event shall be withheld if such item(s) conform in all
material respects to Landlord's criteria as established below, or if such signs are required by
applicable law. All signs, decorations, advertising media, blinds, draperies and other window
treatment or bars or other security installations visible from outside the Premises shall conform in
all respects to reasonable criteria established by Landlord, if any, and to the requirements of all
covenants, conditions and restrictions applicable to the Premises and the Building which are
Permitted Exceptions, and to the requirements of the Alliance Development Guidelines.
13 07515.0092:0300232.07
9. UTILITIES. Tenant shall timely pay for all water, gas, heat, light, power,
telephone, sewer, sprinkler charges and other utilities and services used on or at the Premises
(including, but not limited to, the cost of utilities consumed in connection with providing electrical
power for the Building's canopy lighting, the lighting of the parking facilities and other common
areas and facilities associated with the Building, the Building's fire pump room and irrigation
system, as well as other electricity gauged by the "house meter"), together with any taxes,
penalties, deposits, surcharges or the like pertaining to the Tenant's use of the Premises, and any
maintenance charges for utilities. Tenant shall pay all fees associated with utility hook-ups, meter
installations, or services to the Premises (but, as part of Landlord's obligations under Exhibit"D"
hereto, Landlord shall extend such utilities to the point of entry into Building). Landlord shall not
be liable for any interruption or failure of utility service on the Premises, provided that to the
extent that Landlord contracts,to receive such utility services on Tenant's behalf, Landlord shall
use its commercially reasonable efforts to restore services following an interruption or failure of
same (provided that if such interruption or failure is caused by Tenant or its agents, employees,
contractors or invitees, such efforts shall be undertaken at Tenant's sole expense).
10. INSURANCE.
A. Landlord shall procure and maintain insurance covering the Building and other
parts of the Premises in an amount not less than 100% of the "replacement cost" thereof insuring
against the perils and costs of Fire, Lightning, Extended Coverage, Vandalism and Malicious
Mischief and such other insurance as Landlord or Tenant shall deem necessary and as would be
carried by a prudent owner of property similar to the Premises.
B. Tenant, at its own expense, shall maintain during the Term of this Lease a policy or
policies of worker's compensation and comprehensive general liability insurance, including
personal injury and property damage, with contractual liability endorsement, in the amount of
$2,000,000 for property damage and $2,000,000 per occurrence for personal injuries or deaths of
persons occurring in or about the Premises. Tenant, at its own expense, also shall maintain during
the Term of this Lease fire and extended coverage insurance covering the replacement cost of all
alterations, additions, partitions and improvements installed or placed on the Premises by Tenant
or by Landlord on behalf of Tenant, and all of Tenant's personal property contained within the
Premises. Said policies shall (i) name Landlord as an additional insured and insure Landlord's
contingent liability under this Lease (except for the worker's compensation policy, which instead
shall include a waiver of subrogation endorsement in favor of Landlord), (ii) be issued by an
insurance company which is reasonably acceptable to Landlord and which has an A.M. Best's
rating of A/X or better, (iii) provide that said insurance shall not be canceled unless thirty (30)
days prior written notice shall have been given to Landlord. In addition, such insurance provided
by Tenant shall be primary coverage for Landlord when any policy issued to Landlord is similar or
duplicate in coverage, and Landlord's policy shall be excess over Tenant's policies. All insurance
policies carried by Tenant hereunder shall expressly provide (by endorsement or otherwise) that
Landlord's rights thereunder shall be assignable to Landlord's mortgagee who shall be shown as
an additional insured thereon. Said policy or policies or certificates thereof shall be delivered to
14 07515.0092:0300232.07
Landlord by Tenant upon commencement of the Term of the Lease and upon each renewal of said
insurance.
C. Except for activities and actions constituting a part of the Permitted Use (as
hereinafter defined), including, without limitation, the presence of airplane fuels, paints, solvents,
de-icers, aerosols and other chemicals and substances used in connection with the Permitted Use
(but subject to Paragraph 24 relating to hazardous or toxic materials (as defined therein)), Tenant
will not permit the Premises to be used for the receipt, storage or handling of any product,
material or merchandise that is explosive or highly inflammable. Tenant shall not permit the
Premises to be used for any purpose or in any manner that would void the insurance thereon. If
any increase in the cost of any insurance on the Premises or the Building of which the Premises
are a part is caused by Tenant's use of the Premises, or because Tenant vacates the Premises, then
Tenant shall pay the amount of such increase to Landlord.
11. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the Building should be damaged or destroyed by fire or other
peril, Tenant immediately shall give written notice to Landlord. If the Building should be totally
destroyed by any peril which would be covered by the insurance required to be maintained under
Paragraph l0A above, or if it should be so damaged thereby that rebuilding or repairs cannot be
completed within 240 days after Landlord's receipt of all insurance proceeds with respect to such
damage, this Lease shall terminate and the rent shall be abated during the unexpired portion of this.
Lease, effective upon the date of the occurrence of such damage.
B. If the Building should be damaged by any peril which would be covered by the
insurance required to be maintained under Paragraph l0A above, and rebuilding or repairs can be
substantially completed within 240 days after the date of receipt of all insurance proceeds with
respect to such damage, this Lease shall not terminate, and Landlord 'shall restore the Premises to
substantially its previous condition, except that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions and other improvements that may have been
constructed, erected or installed in, or about the Premises for the benefit of, or by or for Tenant
after the Commencement Date. Effective upon the date of the occurrence of such damage and
ending upon substantial completion if the Premises are untenantable to Tenant in whole or in part
during such period, the rent shall be abated if the Premises are so wholly untenantable, or
otherwise reduced to such extent as may be fair and reasonable under all of the circumstances. If
such repairs and rebuilding have not been substantially completed within 240 days after the date
of Landlord's binding settlement with respect to payment of all insurance proceeds (subject to
Force Majeure Delays [hereinafter defined] and any delays caused by Tenant or its employees,
agents or contractors), Tenant, as Tenant's exclusive remedy, may terminate this Lease by
delivering written notice of termination to Landlord in which event the rights and obligations
hereunder shall cease and terminate(except as expressly provided to the contrary herein).
C. Notwithstanding anything herein to the contrary (i) in no event shall Landlord be
required to expend a sum greater than the net insurance proceeds actually received by Landlord
with respect to the damage in question in connection with Landlord's repair and restoration
15 07515.0092:0300232.07
obligations hereunder, and (ii) in the event the holder of any indebtedness secured by a mortgage
or deed of trust covering the Premises requires that the insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement is made known by
any such holder, and all rights and obligations hereunder shall cease and terminate (except as
expressly provided to the contrary herein) on the date specified in such notice, but in no event
earlier than one hundred twenty (120) days after delivery of such notice to Tenant. Landlord
agrees to use its commercially reasonable efforts to satisfy any applicable requirements under its
mortgage loan documents that are necessary to give Landlord the right to use the insurance
proceeds for the purpose of repair and restoration of the Premises.
D. Landlord and Tenant hereby waive and release each other (but only to the extent
of the insurance coverage required to be maintained by the respective parties hereunder) of and
from any and all rights of recovery, claim, action or cause of action, against each other, their
agents, officers and employees, for any liability, loss or damage that may occur to the Premises,
improvements or the Building, or personal property(building contents) within the Building and/or
Premises as the result of any fire or other casualty required to be insured against under this Lease.
Each parry to this Lease agrees immediately after execution of this Lease to give each insurance
company, which has issued to it policies of fire and extended coverage insurance, written notice of
the terms of the mutual waivers contained in this subparagraph and to have the insurance policies
properly endorsed to reflect such waivers.
12. LIABILITY AND INDEMNIFICATION. EXCEPT FOR ANY CLAIMS,
RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT TENANT HAS
RELEASED, LANDLORD SHALL HOLD HARMLESS AND DEFEND TENANT, ITS
AGENTS, EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS,
ATTORNEYS, AND ANY AFFILIATES OF THE ABOVE-MENTIONED PARTIES
(COLLECTIVELY THE "TENANT AFFILIATES")AGAINST ANY AND ALL CLAIMS
OR LIABILITY FOR ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS,
ACTIONS, DAMAGES, CLAIMS OR LIABILITY (INCLUDING, WITHOUT
LIMITATION, ALL COSTS, ATTORNEYS' FEES AND EXPENSES INCURRED IN
CONNECTION THEREWITH) IN CONNECTION WITH ANY LOSS, INJURY OR
DAMAGE TO ANY PERSON OR PROPERTY WHATSOEVER IN, ON OR ABOUT
THE PREMISES, THE BUILDING, OR ANY PART THEREOF, WHEN SUCH INJURY
OR DAMAGE SHALL BE CAUSED BY THE ACT,NEGLECT, FAULT, OR OMISSION
OF ANY DUTY WITH RESPECT TO THE SAME BY LANDLORD, ITS AGENTS,
SERVANTS AND EMPLOYEES (UNLESS THE INDEMNIFIED LOSS IS CAUSED
WHOLLY OR IN PART BY THE NEGLIGENCE OR INTENTIONAL ACTS OF
TENANT OR ANY OF THE TENANT AFFILIATES, IN WHICH EVENT THIS
INDEMNITY SHALL NOT APPLY TO THE ALLOCABLE SHARE OF SUCH LOSS
RESULTING FROM THE NEGLIGENCE OR INTENTIONAL ACTS OF TENANT OR
ANY OF THE TENANT AFFILIATES). EXCEPT FOR ANY CLAIMS, RIGHTS OF
RECOVERY AND CAUSES OF ACTION THAT LANDLORD HAS RELEASED,
TENANT SHALL INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND
LANDLORD, ITS AGENTS, EMPLOYEES, CONTRACTORS, PARTNERS,
16 07515.0092:0300232.07
DIRECTORS, OFFICERS AND ANY AFFILIATES OF THE ABOVE-MENTIONED
PARTIES (COLLECTIVELY THE "LANDLORD AFFILIATES") FROM AND
AGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS, ACTIONS,
DAMAGES, CLAIMS OR LIABILITY (INCLUDING, WITHOUT LIMITATION, ALL
COSTS, ATTORNEYS' FEES, AND EXPENSES INCURRED IN CONNECTION
THEREWITH) IN CONNECTION WITH ANY LOSS, INJURY OR DAMAGE TO ANY
PERSON OR PROPERTY WHATSOEVER IN, ON OR ABOUT THE PREMISES OR
ANY PART THEREOF AND/OR OF THE BUILDING WHEN SUCH INJURY OR
DAMAGE SHALL BE CAUSED BY THE ACT, NEGLECT, FAULT OF, OR OMISSION
OF ANY DUTY WITH RESPECT TO THE SAME BY TENANT, ITS AGENTS,
SERVANTS, EMPLOYEES, OR INVITEES, UNLESS THE INDEMNIFIED LOSS IS
CAUSED WHOLLY OR IN PART BY THE NEGLIGENCE OR INTENTIONAL ACTS
OF LANDLORD AND/OR LANDLORD AFFILIATES, IN WHICH EVENT THIS
INDEMNITY SHALL NOT APPLY TO THE ALLOCABLE SHARE OF SUCH LOSS
RESULTING FROM SUCH NEGLIGENCE OR INTENTIONAL ACTS OF LANDLORD
OR LANDLORD'S AFFILIATES. IF ANY CLAIM IS MADE AGAINST LANDLORD
OR LANDLORD AFFILIATES, TENANT, AT ITS SOLE COST AND EXPENSE,
SHALL DEFEND ANY SUCH CLAIM, SUIT OR PROCEEDING BY OR THROUGH
ATTORNEYS SATISFACTORY TO TENANT AND IF ANY CLAIM IS MADE
AGAINST TENANT OR TENANT'S AFFILIATES, LANDLORD, AT ITS SOLE COST
AND EXPENSE, SHALL DEFEND ANY SUCH CLAIM, SUIT OR PROCEEDING BY
OR THROUGH ATTORNEYS ACCEPTABLE TO' LANDLORD. THE PROVISIONS
OF THIS PARAGRAPH 12 SHALL SURVIVE THE EXPIRATION OR TERMINATION
OF THIS LEASE WITH RESPECT TO ANY CLAIMS OR LIABILITY OCCURRING
PRIOR TO SUCH EXPIRATION OR TERMINATION.
13. USE. (a) The Premises shall be used for the purposes of (i) receiving, storing,
manufacturing, painting, refurbishing, finishing, refinishing, shipping and selling aircraft and
related parts (both wholesale and retail), (ii) repair, restoration, maintenance and servicing
aircraft, and other activities necessary for or incidental to aircraft operations or aviation-related
activities; (iii) fueling, defueling and refueling of aircraft which are manufactured, refurbished,
serviced or maintained by Tenant at the Premises and aircraft of parties otherwise doing business.
with Tenant (other than by reason of such fuel sales), but not sale or distribution of airplane fuel
or providing related services for any other aircraft, provided that such fueling, defueling and
refueling shall be a Permitted Use only if such aviation fuel sales by Tenant is permitted by the
City of Fort Worth and subject to Tenant's satisfying all then existing requirements and
specifications of the City of Fort Worth with respect to such fuel sales, (iv) general office
purposes, including accessory uses such as vehicular parking, (v) general warehouse purposes,
ancillary to Tenant's other permitted uses of the Premises, and (vi) such other lawful purposes as
may be incidental to the foregoing ("Permitted Use"). Notwithstanding the fact that the sale of
aviation fuel is a Permitted Use under the terms and conditions set forth in clause (iii) of the
immediately preceding sentence, it is acknowledged and agreed that nothing contained herein shall
be construed as Landlord's grant of any right or authority to Tenant to engage in such fuel sales
(but said clause (iii) instead shall only be Landlord's consent to such fuel sales as one of the
Permitted Uses upon the terms and conditions set forth in said clause (iii) above). Outside
17 07515.0092:0300232.07
storage, including without limitation, storage of trucks and vehicles (other than temporary storage
of trucks and vehicles not exceeding 48 hours) is prohibited without Landlord's prior written
consent. Tenant shall comply with (i) all governmental laws, ordinances and regulations
applicable to the use and occupancy of the Premises, and promptly shall comply with all
governmental orders and directives for the correction, prevention and abatement of nuisances in
or upon, or connected with, the Premises, all at Tenant's sole expense, (ii) the requirements of all
deed restrictions, restrictive covenants and other covenants, conditions and restrictions (if any)
affecting the Building and/or the Land, which are Permitted Exceptions, and (iii) the requirements
of the "Alliance Development Guidelines" as may exist from time to time and all amendment
thereto (provided that any amendments to such deed restrictions, restrictive covenants and other
covenants, conditions and restrictions as well as amendments to the "Alliance Development
Guidelines" shall not interfere with Tenant's use of the Premises for the Permitted Use under this
Paragraph 13, or with Tenant's Access Rights, nor cause a material increase in the costs of
Tenant's operations). In addition, Tenant shall not through any act or omission cause a default to
occur under the Ground Lease and hereby indemnifies and agrees to hold Landlord harmless from
and against any and all claims, liabilities, damages, losses, costs and expenses incurred by or
asserted against Landlord in connection with any default under the Ground Lease that is
attributable to the acts or omissions of Tenant. Except as a consequence of any Permitted Use,
Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or
vibrations to emanate from the Premises, nor take any other action that would constitute a
nuisance or would disturb, unreasonably interfere with, or endanger Landlord or any other lessees
of the Building of which the Premises are a part.
In addition to Tenant's other obligations hereunder, Tenant shall comply with the non-
discrimination requirements set forth in Article 14 of the Ground Lease (which requirements are
incorporated herein by reference for all purposes), including providing assurances to Landlord
that Tenant will undertake affirmative action programs to the extent required by said Article 14.
In addition it is agreed that the City shall have the right to take such action as the United States of
America may allow or direct to enforce such covenants on the part of Tenant.
14. INSPECTION. Landlord and Landlord's agents and representatives shall have the
right to enter the Premises at any time, upon prior reasonable notice, to (i) inspect the Premises,
(ii) make such repairs as may be required or permitted pursuant to this Lease, and (iii) show the
Premises to prospective purchasers of, or parties who are anticipated to provide financing with
respect to, the Building. Notwithstanding the foregoing, Landlord shall have the right to enter the
Premises at any time, without notice to Tenant, in case of an emergency posing a threat to
persons or property. Except in case of an emergency, Landlord shall, at Tenant's request, be
accompanied by a representative of Tenant during any such entry onto the Premises which entry
shall occur during normal business hours without unreasonable interference with Tenant's
business. During the period that is six (6) months prior to the end of the Lease Term, upon
telephonic notice to Tenant, Landlord and Landlord's representatives may enter the Premises
during business hours for the purpose of showing the Premises. In addition, Landlord shall have
the right to erect a suitable sign on the Premises stating the Premises are available. No entry
allowed pursuant to this Lease shall unreasonably interfere with Tenant's use and enjoyment of
the Premises. Tenant shall notify Landlord in writing at least thirty (30) days prior to vacating the
18 07515.0092:0300232.07
sentence. Tenant shall also pay to Landlord all damages sustained by Landlord resulting from
retention of possession by Tenant, including the loss of any proposed subsequent tenant for any
portion of the Premises. The provisions of this paragraph shall not constitute a waiver by
Landlord of any right of re-entry as herein set forth; nor shall receipt of any rent or any other act
in apparent affirmance of the tenancy operate as a waiver of the right to terminate this Lease for a
breach of any of the terms, covenants, or obligations herein on Tenant's part to be performed. No
holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this
Lease except as otherwise expressly provided. The preceding provisions of this Paragraph 17
shall not be construed as consent for Tenant to retain possession of the Premises in the absence of
written consent thereto by Landlord.
18. QUIET ENJOYMENT. So long as Tenant pays all amounts due hereunder and
performs all other covenants and agreements herein set forth, Tenant shall peaceably and quietly
have, hold and enjoy the Premises and the Access Rights and each and every right, privilege, and
interest whatsoever inuring to Tenant's benefit under the Ground Lease, for the Term hereof
subject to the terms and provisions of this Lease. Notwithstanding anything to the contrary
contained herein, with respect to those portions of the Premises that are exterior to the Building,
Landlord reserves the right to (i) grant drainage, access, utility, temporary construction and other
easements and rights to third parties, (ii) plat and replat all or a portion of such areas (as well as
all other portions of the Land) in accordance with applicable law, and (iii) enter upon and
temporarily use such areas, so long as Tenant's use and enjoyment of the Premises for the
Permitted Use under Paragraph 13 hereof and Tenant's Access Rights are not unreasonably
interfered with and Landlord's exercise of such rights does not cause a material increase in the
cost of Tenant's operations.
19. EVENTS OF DEFAULT. The following events (herein individually referred to as
an"Event of Default") each shall be deemed to be an event of default by Tenant under this Lease:
A. Tenant shall fail to pay any installment of the Base Rent herein reserved when due,
or any other payment or reimbursement to Landlord required herein when due, and such failure
shall continue for 10 days after written notice thereof to Tenant; provided, however, Tenant shall
be entitled to such notice and opportunity to cure on only two (2) occasions during any 12-month
period.
B. The Tenant or any guarantor of the Tenant's obligations hereunder shall: (i)
become insolvent; (ii) admit in writing its inability to pay its debts; (iii) make a general assignment
for the benefit of creditors; (iv) commence any case, proceeding or other action seeking to have
an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution'or composition of it or
its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of
any substantial part of its property; or(v) take any action to authorize or in contemplation of any
of the actions set forth above in this Paragraph.
22 07515.0092:0300232.07
C. Any case, proceeding or other action against the Tenant or any guarantor of the
Tenant's obligations hereunder shall be commenced seeking: (i) to have an order for relief
entered against it as debtor or to adjudicate it a bankrupt or insolvent; (ii) reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors; (iii) appointment of a
receiver, trustee, custodian or other similar official for it or for all or any substantial part of its
property, and such case, proceeding or other action (a) results in the entry of an order for relief
against it which is not fully stayed within sixty (60) business days after the entry thereof or (b)
shall remain undismissed for a period of ninety(90) days.
D. Tenant shall (i) fail to take possession of the Premises by the Commencement
Date, or (ii) vacate or abandon the entirety of the Premises (other than for the purpose of
renovation, taking inventory or other purposes in the ordinary course of Tenant's business, not to
exceed_ 30 consecutive days or 60 days in the aggregate, whether or not consecutive, in any 12-
month'period during the Lease Term), whether or not Tenant is in default in payment of the rental
payments due under this Lease.
E. Tenant shall fail to discharge any lien placed upon the Premises in violation of
Paragraph 23 hereof within thirty (30) days after Tenant received written notice (or otherwise
obtained actual knowledge)that any such lien or encumbrance is filed against the Premises.
F. Tenant shall fail to comply with any term, provision or covenant of this Lease
(other than those listed above in this Paragraph 19), and shall not cure such failure within thirty
(30) days after written notice thereof to Tenant; provided, however, if such failure is not capable
of cure within thirty (30) days, Tenant shall have such additional time as is reasonably necessary
to cure such failure so long as Tenant commences its curative efforts within such 30 day period
and diligently prosecutes same to completion.
G. Any act by or on behalf of Tenant that causes a default under the Ground Lease as
prohibited by Paragraph I.D. of this Lease (other than the obligations of Landlord to perform all
obligations of the Lessee under the Ground Lease in order to maintain the Ground Lease in full
force and effect as more particularly provided in Paragraph I.D. of this Lease).
20. REMEDIES OF LANDLORD.
A. Upon each occurrence of an Event of Default, Landlord shall have the option to
pursue, without any notice or demand except as otherwise required by law, any one or more of
the following remedies and/or any other remedies to which Landlord is entitled at law or in equity:
(1) Terminate this Lease, in which event Tenant shall immediately surrender
the Premises to Landlord. If Tenant fails to do so, Landlord may, without any further
notice and without prejudice to any other remedy Landlord may have for possession or
arrearages in rental, enter upon and take possession of the Premises and remove Tenant
and its effects without being liable for prosecution or any claim for damages therefor, and
Tenant shall indemnify.Landlord for all loss and damage which Landlord may suffer by
23 07515.0092:0300232.07
reason of such termination, whether through inability to relet the Premises or otherwise,
including any loss of rental for the remainder of the Term.
(2) If the Event of Default relates to nonpayment of Base Rent or any other
monetary sum due hereunder, or the desertion, vacation or abandonment of the Premises,
terminate this Lease, in which event Tenant's default shall be deemed a total and entire
breach of Tenant's obligations under this Lease and Tenant immediately shall become
liable for damages in an amount equal to the excess of(i) the total rental for the remainder
of the Term, discounted at the Prime Rate (hereinafter defined) to the then present value,
together with all other expenses incurred by Landlord in connection with Tenant's default,
all sums due pursuant to Paragraph 20B below, and the unpaid rental due as of the date of
termination, over (ii) the fair market rental value of the Premises for the balance of the
Term, discounted at the Prime Rate to the then present value. For the purposes of clause
(i) above, the components of monthly rent(other than Base Rent) for the remainder of the
Term shall be deemed to be equal to the respective monthly amounts thereof as.were due
and payable during the'month in which the Lease was terminated. It is acknowledged,
intended and agreed that the amounts which Landlord is entitled to recover under this
Paragraph 20A(2) constitute liquidated damages and not a penalty for Tenant's defaults
related to nonpayment of rental, or the desertion, vacation or abandonment of the
Premises. Such amounts constitute the parties' best, good faith, and reasonable estimate
of the damages which would be suffered by Landlord in the event any such default occurs;*
the exact amount of such damages being difficult or impractical to calculate.
(3) Enter upon and take possession of the Premises as Tenant's agent without
terminating this Lease and without being liable for prosecution or any claim for damages
therefor, and Landlord may relet the Premises as Tenant's agent and receive the rental
therefor, in which event Tenant shall pay to Landlord on demand all sums due pursuant to
Paragraph 20B below, together with any deficiency that may arise by reason of such
reletting.
(4) Do whatever Tenant is obligated to do under this Lease and enter the
Premises, without being liable for prosecution or any claim for damages therefor, to
accomplish such purpose. Tenant shall reimburse Landlord immediately upon demand for
any expenses which Landlord incurs in thus effecting compliance with this Lease on
Tenant's behalf, together with interest thereon at the highest lawful rate from the date
Landlord incurs the expense in question until Landlord is reimbursed therefor.
(5) Without notice, alter the locks and any other security device or devices
which allow Tenant access to the Premises or the Building of which the Premises form a
part, and Landlord shall not be required to provide a new key or right of access to Tenant,
and restrict or terminate any right to use parking facilities associated with the Building as
well as utility services to the Premises. This Paragranh.20A(6) is intended to and shall
supersede the provisions of Section 93.002 of the Texas Property Code.
24 07515.0092:0300232.07
B. Upon the occurrence of an Event of Default, in addition to any other sum provided
to be paid herein, Tenant also shall be liable for and shall pay to Landlord: (i) brokers' fees
incurred by Landlord in connection with reletting the whole or any part of the Premises; (ii) the
costs of removing and storing Tenant's or other occupant's property; (iii) the costs of repairing,
altering, remodeling or otherwise putting the Premises into condition acceptable to a new tenant
or tenants; (iv) all reasonable expenses incurred in marketing the Premises and (v) all reasonable
expenses incurred by Landlord in enforcing or defending Landlord's rights and/or remedies. If
either party hereto institutes any action or proceeding to enforce any provision hereof by reason
of any alleged breach of any provision of this Lease, the prevailing party shall be entitled to
receive from the losing party all reasonable attorneys' fees and all court costs in connection with
such proceeding.
C. In the event Tenant fails to make any payment due hereunder when payment is
due, to help defray the additional cost to Landlord for processing such late payments, Tenant shall
pay to Landlord on .demand a late charge in an amount equal to five percent (5%) of such
payment; and the failure to pay such amount within five (5) days after demand therefor shall be an
additional Event of Default hereunder. The provision for such late charge shall be in addition to
all of Landlord's other rights and remedies hereunder or at law and shall not be construed as
liquidated damages or as limiting Landlord's remedies in any manner.
D. Exercise by Landlord of any one or more remedies hereunder granted or otherwise
available shall not be deemed to be an acceptance of surrender of the Premises by Landlord,
whether by agreement or by operation of law, it being understood that such surrender can be
effected only by the written agreement of Landlord and Tenant. Tenant and Landlord further
agree that forbearance by Landlord to enforce its rights pursuant to this Lease, at law or in equity,
shall not be a waiver of Landlord's right to enforce one or more of its rights in connection with
that or any subsequent default.
E. The term "Prime Rate" as used herein shall mean the per annum "prime rate" of
interest as published, on the date on which this Lease is terminated in accordance with this
Paragraph 20, by The Wall Street Journal, Southwest Edition, in its listing of"Money Rates," or
if The Wall Street Journal is not published on the date on which this Lease is terminated, then the
"prime rate" of interest as published in The Wall Street Journal on the most recent date prior to
the date on which this Lease is so terminated.
F. If Landlord repossesses the Premises pursuant to the authority herein granted, then
Landlord shall have the right to (i) keep in place and use or (ii) remove and store, all of the
furniture, fixtures and equipment at the Premises, including that which is owned by or leased to
Tenant at all times prior to any foreclosure thereon by Landlord or repossession thereof by any
landlord thereof or third party having a lien thereon. Landlord also shall have the right. to
relinquish possession of all or any portion of such furniture, fixtures, equipment and other
property to any person ("Claimant') who presents to Landlord a copy of any instrument
represented by Claimant to have been executed by Tenant(or any predecessor of Tenant) granting
Claimant the right under various circumstances to take possession of such furniture, fixtures,
equipment or other property, without the necessity on the part of Landlord to inquire into the
25 07515.0092:0300232.07
authenticity or legality of said instrument. The rights of Landlord herein stated shall be in addition
to any and all other rights that Landlord has or may hereafter have at law or in equity; and Tenant
stipulates and agrees that the rights herein granted Landlord are commercially reasonable.
G. Notwithstanding anything in this Lease to the contrary, all amounts payable by
Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as
rent, shall constitute rent.
H. This is a contract under which applicable law excuses Landlord from accepting
performance from(or rendering performance to) any person or entity other than Tenant.
I. Notwithstanding anything to the contrary contained herein, if an Event of Default
exists hereunder solely because of the event described in Paragraph 19(D) of this Lease (i.e., no
other Event of Default exists under this Lease except for the Event of Default described in said
Paragraph 19 M), and so long as Tenant keeps the Premises secure from vandalism and
unauthorized users, Landlord's sole remedy on account of such Event of Default shall be to
terminate this Lease by written notice delivered to Tenant (without pursuing any damages against
Tenant and without Tenant being required to indemnify Landlord against any damages suffered as
a result of any such termination) in which event this Lease shall terminate and the parties shall
have no further rights or obligations hereunder (other than such rights and obligations as have
accrued as of the effective date of such termination and such rights and obligations as are
expressly provided herein as surviving the expiration or termination of this Lease). The limitation
on Landlord's remedies contained in the immediately preceding sentence shall not apply if another
Event of Default (in addition to the Event of Default described in Paragraph 19(D)) exists, or if
Tenant fails to so keep the Premises secure from vandalism and unauthorized users, in which
event Landlord shall be entitled to pursue any one or more of its remedies under this Lease, at law
and/or in equity.
21. REMEDIES OF TENANT.
A. If Landlord fails to perform any of its obligations hereunder within thirty (30) days
after written notice from Tenant (the "Tenant Notice of Default") specifying in detail such failure
(or if the failure cannot be corrected, through the exercise of reasonable diligence, within such
30-day period,if Landlord does not commence to correct same within such 30-day period and
thereafter diligently prosecute same to completion), Tenant's sole and exclusive remedies (except
as provided in Paragraph 21B and C) shall be (i) an action for damages and/or specific
performance and Tenant may pursue a money judgment for such damages against Landlord
(subject to the last two sentences of this Paragraph 21A), or (ii) if such failure can be cured or
mitigated by the payment of money, and if Tenant in the Tenant Notice of Default has notified
Landlord that Tenant intends to cure or mitigate Landlord's failure, Tenant shall have the right to
cure or mitigate such failure on behalf of Landlord and, in connection therewith, expend such
reasonable sums as are reasonably necessary to cure or mitigate such failure (provided that Tenant
shall not have the right to make any repairs or modifications to areas outside the Premises, except
those solely serving the Premises). Unless and until Landlord fails to so cure any default after
such notice, Tenant shall not have any remedy or cause of action for damages or for specific
26 07515.0092:0300232.07
performance by reason thereof. In the event Tenant exercises its rights under clause (ii) of this
Paragraph 21A, then Landlord agrees to reimburse Tenant for all reasonable out-of-pocket costs
so expended by Tenant in curing or mitigating any such failure of Landlord (together with interest
thereon at an annual rate that is the lesser of(z) the Prime Rate plus two percentage points, or (y)
the maximum nonusurious interest rate permitted by applicable law)within 10 days after Landlord
receives a bill therefor (which bill shall set forth in reasonable detail the costs for which
compensation is claimed); provided, however, if Landlord fails to so reimburse Tenant within 30
days after such request for payment, Tenant may deduct such amounts from Base Rent until the
full amount has been satisfied (provided that in no event shall the amount so deducted from any
individual monthly installment of Base Rent exceed 25% of such monthly amount of Base Rent).
All notices by Tenant to Landlord under this Paragraph 21A shall simultaneously be given by
Tenant to the holders of any mortgages relating to the Premises, provided Tenant has been given
notice of the names and addresses of such mortgagees. Any mortgagee shall have the right, but
not the obligation, to cure, or commence to cure, any default of Landlord, and Tenant shall accept
performance by any mortgagee with the same force and effect as performance by Landlord.
Notwithstanding anything to the contrary contained herein, in no event shall Tenant have the right
to deduct any amounts so expended by Tenant to cure Landlord's defaults, as provided above,
from any Base Rent that becomes due at any time after the earlier of (a) any person or entity
succeeding to the interest of Landlord in the Premises as the result of or following a foreclosure
of any lien encumbering Landlord's interest in the Premises, a deed in lieu of such foreclosure or
any other similar event, or (b) Tenant's receipt of written notice from the holder of any
indebtedness secured by a lien encumbering Landlord's interest in the Premises sent pursuant to
the applicable loan documents directing Tenant to deliver payments of Base Rent directly to such
holder or its designee, it being agreed that Tenant's sole and exclusive remedy shall be to institute
a lawsuit for damages and to recover such sums (subject to the last two sentences of this
Paragraph 21A). In no event shall Tenant have the right to offset or deduct any sums or damages
which are owed by Landlord to Tenant against amounts that are owed by Tenant to Landlord
hereunder except as provided in the preceding provisions of this Paragraph 21A. All obligations
of Landlord hereunder will be construed as covenants, not conditions; and all such obligations will
be binding upon Landlord only during the period of its possession of the Premises and not
thereafter. The term "Landlord" shall mean only the owner, for the time being of Landlord's
interest in the Premises, and in the event of the transfer by such owner of its interest in the
Premises, such owner shall thereupon be released and discharged from all covenants and
obligations of the Landlord thereafter accruing, but such covenants and obligations shall be
binding during the Lease Term upon each new owner of Landlord's interest in the Premises for
the duration of such owner's ownership, except as otherwise specifically provided in this
Paragraph 21 with respect to the holders of liens encumbering Landlord's interest in the Premises.
Notwithstanding any other provision hereof, Landlord shall not have any personal liability
hereunder. In the event of any breach or default by Landlord of any term or provision of this
Lease, Tenant agrees to look solely to the offset rights specifically provided in(and subject to the
limitations provided in) this Paragraph 21A, to the remedies provided in Paragraphs 21B and C
and to the equity or interest then owned by Landlord in the Premises or of the Building of which
the Premises are a part; however, in no event, shall any deficiency judgment or any money
judgment of any kind (following Tenant's realization upon the equity or interest then owned by
Landlord in the Premises)be sought or obtained against any Landlord.
27 07515.0092:0300232.07
B. Nothing contained in Paragraph 21A shall be construed to limit or deny Tenant's
right to seek the common law remedy of constructive eviction in the circumstances where Tenant
is entitled to exercise such remedy under applicable law.
C. Notwithstanding anything contained in Paragraph 21A to the contrary, in the event
that Landlord shall breach the Quiet Enjoyment Provisions (hereinafter defined) of this Lease, and
such breach shall continue uncured following the Tenant Notice of Default procedures set forth in
Paragraph 21A, Tenant shall have the right to terminate this Lease by written notice to Landlord
(and simultaneously to the holders of any mortgages relating to the Premises, provided Tenant has
been given notice of the names and addresses of such mortgagees) on no less than 180 days prior
written notice to Landlord (and such mortgagees) notifying Landlord (and such mortgagees) of
Tenant's intention to terminate this Lease as the result of a breach described in this
Paragraph 21C. If such breach is cured within such 180 day period, then Tenant's right to
terminate its obligations under this Lease for such breach shall be ipso facto.null and void. Any
mortgagee shall have the right, but not the obligation, to cure, such breach by Landlord, and
Tenant shall accept performance by any mortgagee with the same force and effect as performance
by Landlord.
If this Lease shall be terminated pursuant to this Paragraph 21C, the Term of this Lease
shall end on the date stated in Tenant's notice, and upon any such cancellation Landlord and
Tenant shall have no further obligations or liabilities to each other under this Lease, except with
respect to obligations or liabilities which have accrued hereunder as of such cancellation date (in
the same manner as if such cancellation date were the date originally fixed in this Lease for the
expiration of the Term hereof) and except for those obligations and liabilities which, by the
express terms of this Lease, are to survive any expiration or termination hereof.
The phrase "Quiet Enjoyment Provisions" shall mean and refer to Landlord's
representation, warranty, covenants, and obligations under Paragraph 1D and Paragraph 18 of this
Lease.
22. MORTGAGES. Tenant accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a lien or charge upon
the Premises or the improvements situated thereon or the Building of which the Premises are a
part;provided, however, that if the mortgagee, trustee, or holder of any such mortgage or deed of
trust elects to have Tenant's interest in this Lease superior to any such instrument, then by notice
to Tenant from such mortgagee, trustee or holder, this Lease shall be deemed superior to such
lien, whether this Lease was executed before or after said mortgage or deed of trust. Tenant, at
any time hereafter on demand, shall execute any instruments, releases or other documents that
may be required by any mortgagee, trustee or holder for the purpose of subjecting and
subordinating this Lease to the lien of any such mortgage or deed of trust, which instrument,
release or document shall be reasonably acceptable to Tenant (Tenant hereby agreeing that an
instrument in the form of Exhibit "J" attached hereto and made a part hereof is acceptable to
Tenant for such purpose). As a condition precedent to the Lease becoming binding and effective,
on or before the date which is fifteen (15) days after the date hereof, Landlord shall obtain from
I�
28 07515.0092:0300232.07
all such mortgagees, trustees or holders having a lien on the Premises as of the date of execution
of this Lease a nondisturbance agreement, for the benefit of Tenant, and in form reasonably
acceptable to Tenant. If any future mortgagee or beneficiary under a mortgage or deed of trust
hereafter placed upon the Building desires to subordinate its mortgage or deed of trust to this
Lease, Tenant agrees that it shall promptly execute such instruments as may be reasonably
required by such mortgagee or beneficiary in order to effect such subordination, provided such
instrument is reasonably acceptable to Tenant.
23. MECHANIC'S LIENS. Tenant has no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind,
the interest of Landlord or Tenant in the Premises or to charge the rentals payable hereunder for
any claim in favor of any person dealing with Tenant, including those who may furnish materials
or perform labor for any construction or repairs. Tenant covenants and agrees that it will pay or
cause to be paid all sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises and that it will save
and hold Landlord harmless from any and all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right, title and interest of the
Landlord in the Premises or under the terms of this Lease. Tenant agrees to give Landlord
immediate written notice of the placing of any lien or encumbrance against the Premises. If any
mechanics' or materialmen's lien ( M&M Lien') is ever asserted or placed against or attaches to
the Premises, the Land, or any portion thereof, as a result of any act or omission of Tenant or its
agents, then in lieu of paying the claim relating to such M&M Lien Tenant shall have the right to
contest the assertion, placement or attachment of such M&M Lien so long as (i) prior to any such
contest (and no later than 30 days after such lien has been filed) Tenant at its sole expense
provides to Landlord a bond indemnifying against such M&M Lien that complies with Chapter
53, Subchapter H of the Texas Property Code (as amended from time to time) or its successor
law, and (ii)Tenant contests such M&M Lien diligently and in good faith; provided, however, the
foregoing right of Tenant to contest any such M&M Lien shall not impair or otherwise affect
Tenant's indemnification obligations with respect to such M&M Lien. If any lien is asserted
against the Premises due to acts of Landlord or its agents or contractors, Tenant shall not be
obligated to remove such lien (it being agreed that the cure or removal of such lien shall be
Landlord's obligation, subject to the same terms and conditions as Tenant's obligation to cure or
remove an M&M Lien hereunder).
24. HAZARDOUS MATERIALS. Tenant shall never incorporate into, or dispose of,
at, in or under the Premises, the Building or the Land any toxic or hazardous materials (as defined
hereafter) except that paints, solvents, de-icers and other chemicals used in connection with the
Permitted Use, fire suppression materials, and other toxic or hazardous materials used in
connection with the Permitted Use, may be used, placed in, stored at or otherwise located at the
Premises, Building, or Land so long as the same are stored, handled and disposed of in
accordance with applicable law. Tenant further agrees not to use at, place in, or store at the
Premises any toxic or hazardous materials, except for those toxic or hazardous materials that are
either (a) office supplies, (b) kitchen cleaning materials that are generally considered to be a
household cleaner and are purchased in a container not larger than five (5) gallons, or (c) other
toxic or hazardous materials used by Tenant in the ordinary course of conducting its business at
29 07515.0092:0300232.07
the Premises and then only if(i) all such toxic or hazardous materials, supplies and materials are
properly labeled and contained, (ii) all such toxic or hazardous materials are stored, handled,
transported and disposed of in accordance with all applicable laws, rules and regulations, and (iii)
if a material safety data sheet is required under applicable laws to accompany the toxic or
hazardous materials, supplies or materials, a copy of such current material safety data sheet is
made available to Landlord upon written request. For purposes of this Lease, "toxic or hazardous
materials" shall mean hazardous or toxic chemicals or any materials containing hazardous or toxic
chemicals at levels or content which cause such materials to be classified as hazardous or toxic as
then prescribed by the highest industry standards or by the then current levels or content as set
from time to time by the U:S. Environmental Protection Agency ("EPA") or the U.S.
Occupational Safety and Health Administration ("OSHA') or as defined under 29 CFR 1910 or
29 CFR 1925 or other.applicable governmental laws, rules or regulations. In the event there is a
spill of a toxic or hazardous materials (other than permitted office supplies and kitchen cleaning
supplies) at the Premises, the Building or the Land, Tenant shall notify Landlord of the method,
time-and procedure for any clean-up and removal of such toxic or hazardous materials; and,
Landlord shall have the right to require reasonable changes in such method, time or procedure. In
the event there is a spill of a toxic or hazardous material that comes from office supplies in the
Premises, Tenant shall notify Landlord if the spill would in any way endanger or pose a threat to
Tenant's employees, Building maintenance or custodial personnel, other Building tenants or the
general public. In the event of any breach of this provision by Tenant or any contamination of the
Premises, the Building or the Land, by Tenant, Tenant shall pay all costs for the removal or
abatement or clean-up of any toxic or hazardous materials at the Premises, the Building and the
Land. If any lender or governmental agency shall ever require testing to ascertain whether or not
there has been any release of hazardous materials, then the reasonable costs thereof shall be
reimbursed by Tenant to Landlord upon demand as additional charges if such requirement applies
to the Premises. In addition, Tenant shall execute affidavits, representations and the like from
time to time at Landlord's request concerning Tenant's best knowledge and belief regarding the
presence of hazardous substances or materials on the Premises. 'In all events, Tenant shall
indemnify Landlord in the manner elsewhere provided in this lease from any release of hazardous
materials on the Premises occurring while Tenant is in possession or elsewhere if caused by
Tenant or persons acting under Tenant. This Paragraph 24 shall survive the expiration or any
termination of this Lease.
25. MISCELLANEOUS.
A. Words of any gender used in this Lease shall be held and construed to include any
other gender, and words in the singular number shall be held to include the plural, unless the
context otherwise requires. The captions inserted in this Lease are for convenience only and in no
way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
B. The terms,provisions and covenants contained in this Lease shall run with the land
and shall apply to, inure to the benefit of, and be binding upon, the parties hereto and upon their
respective heirs, executors, personal representatives, legal representatives, successors and assigns,
except as otherwise herein expressly provided. Landlord shall have the right to transfer and
30 07515.0092:0300232.07
Premises and shall arrange to meet with Landlord for a joint inspection of the Premises prior to
vacating. If Tenant fails to give such notice or to arrange for such inspection, then Landlord's
inspection of the Premises shall be deemed correct for the purpose of determining Tenant's
responsibility for repairs and restoration of the Premises.
15. ASSIGNMENT AND SUBLETTING
A Tenant shall not assign (either voluntarily, or permit assignment by operation of
law), sublet, transfer or encumber this Lease, or any interest therein, without the prior written
consent of Landlord (which shall not be unreasonably withheld or delayed); provided, however,
Tenant may assign this Lease or sublet the Premises, without Landlord's consent, to any entity
that controls, is controlled by, or is under common control with Tenant (individually, an
"Affiliate"). In addition, Tenant shall have the right to sublet (a "Permitted Sublease") a portion
of the Premises on the following bases: (1) Tenant may sublease up to fifty percent (50%) of the
Premises to a third party, subject to Landlord's consent, which shall not be unreasonably withheld
or delayed provided the sublessee proposed by Tenant is at least as creditworthy as Tenant; and
(2) Tenant may license or sublease areas within the Premises, up to a maximum of 1500 square
feet per party, to suppliers, contractors, vendors, and other third parties who furnish services
and/or labor on a contract basis to Tenant in support of Tenant's operations on the Premises,
without the consent or approval of Landlord, provided that such sublessee's or licensee's
operations on the Premises are limited to services to Tenant. Any attempted assignment;'
subletting, licensing, transfer or encumbrance by Tenant in violation of the terms and covenants of
this Paragraph shall be void. Unless otherwise agreed in writing, no assignment, subletting or
other transfer, whether consented to by Landlord or not, shall relieve Tenant of its liability
hereunder. In the event Tenant desires to sublet the Premises, or any portion thereof, or assign
this Lease, Tenant shall give written notice thereof to Landlord within a reasonable time prior to
the proposed commencement date of such subletting or assignment, which notice shall set forth
the name of the proposed sublessee or assignee, the relevant terms of any sublease or assignment
and copies of financial reports and other relevant financial information of the proposed sublessee•
or assignee.
B. In addition to, but not in limitation of, Landlord's right to approve of any sublessee
or assignee on the terms set forth in this Paragraph, Landlord shall have the option, in its sole
discretion, in the event of any proposed subletting or assignment (other than an assignment or a
sublease to an Affiliate of Tenant or a Permitted Sublease), to terminate this Lease, or in case of a
proposed subletting of less than the entire Premises (other than sublease to an Affiliate of Tenant
or a Permitted Sublease) , to recapture the portion of the Premises to be sublet, as of the date the
subletting or assignment is to be effective. The option shall be exercised, if at all, by Landlord
giving Tenant written notice thereof within thirty (30) days following Landlord's receipt of
Tenant's written notice as required above. If this Lease shall be terminated with respect to the
entire Premises pursuant to this Paragraph, the Term of this Lease shall end on the date stated in
Landlord's notice as the effective date of the sublease or assignment as if that date had been
originally fixed in this Lease for the expiration of the Term hereof; provided, however, that
effective on such date Tenant shall pay Landlord all amounts, as estimated by Landlord, payable
by Tenant to such date with respect to taxes, insurance, repairs, maintenance, restoration and
19 07515.0092:0300232.07
other obligations, costs or charges which are the responsibility of Tenant hereunder. Further,
upon any such cancellation Landlord and Tenant shall have no further obligations or liabilities to
each other under this Lease, except with respect to obligations or liabilities which have accrued
hereunder as of such cancellation date (in the same manner as if such cancellation date were the
date originally fixed in this Lease for the expiration of the Term hereof) and except for those
obligations and liabilities which, by the express terms of this Lease, are to survive any expiration
or termination hereof. If Landlord recaptures only a portion of the Premises under this Paragraph,
the Base Rent during the unexpired Term hereof shall abate proportionately based on the rent per
square foot contained in this Lease as of the date immediately prior to such recapture. Tenant
shall, at Tenant's own cost and expense, discharge in full any outstanding commission obligation
on the part of Landlord with respect to this Lease, and any commissions which may be due and
owing as a result of any proposed assignment or subletting, whether or not the Premises are
recaptured pursuant hereto and rented by Landlord to the proposed tenant or any other tenant.
C. Upon the occurrence of an assignment or subletting, whether or not consented to
by Landlord, or mandated by judicial intervention, Tenant hereby assigns, transfers and conveys to
Landlord fifty percent(50%) of all rents or other sums.received or receivable by Tenant under any
such assignment or sublease, which are in excess of the sum of(i) rents and other sums payable by
Tenant under this Lease (or in case of a sublease, which are in excess of the rents and other sums
payable by Tenant with respect to the portion of the Premises that is subleased), plus (ii) Tenant's
out-of-pocket costs for brokers' commissions, constructing new leasehold improvements for the
assignee or sublessee in question, and Tenant's reasonable legal expenses incurred, in connection
with securing such sublease or assignment, and agrees to pay such amounts to Landlord within
ten(10) days after receipt.
D. If this Lease is assigned to any person or entity pursuant to the provisions of the
United States Bankruptcy Code, 11 U.S.C. §101 et. seq. (the `Bankruptcy Code'), any and all
monies or other consideration payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of Tenant within the meaning
of the Bankruptcy Code. Any and all monies or other considerations constituting Landlord's
property under the preceding sentence not paid or delivered to Landlord shall be held in trust for
the benefit of Landlord and be promptly paid or delivered to Landlord. Any person or entity to
which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, shall be deemed,
without further act or deed, to have assumed all of the obligations arising under this Lease on and
after the date of such assignment. Any such assignee shall upon demand execute and deliver to
Landlord an instrument confirming such assumption.
E. Any assignee, sublessee or transferee of Tenant's interest in this Lease (all such
assignees, sublessees and transferees being hereinafter referred to as "Transferees"), by accepting
any such assignment, sublease or transfer shall be deemed to have assumed Tenant's obligations
hereunder, and shall be deemed to have assumed liability to Landlord for all amounts paid to
persons other than Landlord by such Transferees. If an Event of Default occurs while the
Premises or any part thereof are assigned or sublet, then Landlord, in addition to any other
remedies herein provided, or provided by law, may collect directly from such Transferee all rents
20 07515.0092:0300232.07
payable to the Tenant and apply such rent against any sums due Landlord hereunder. No such
collection shall be construed to constitute a novation or a release of Tenant from the further
performance of Tenant's obligations hereunder.
F. Notwithstanding anything to the contrary contained herein, it is agreed that (i) the
merger or consolidation of Tenant with another entity, or (ii) the assignment of this Lease to the
purchaser of substantially all of the assets of Tenant as an entirety, shall not require Landlord's
consent so long as the surviving entity in any such merger or consolidation, or the purchaser of
substantially all assets of Tenant as an entirety (as applicable), has a net worth (determined in
accordance with generally accepted accounting principles, consistently applied) immediately
following such merger or consolidation, or the sale of substantially all assets of Tenant as an
entirety (as applicable), that is equal to or greater than the net worth of Tenant immediately prior
to such merger or consolidation, or sale of substantially all assets of Tenant(as applicable).
16. CONDEMNATION. If the entirety of the Premises is taken for any public or
quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain,
or by a conveyance in lieu thereof, or if a portion of the Premises is so taken and such partial
taking renders the remaining Premises untenantable, this Lease shall terminate and the rent shall
be abated during the unexpired portion of this Lease, effective on the date of such taking. If a
portion of the Premises is taken for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, or by a conveyance in lieu thereof, and the
partial taking does not render the remaining Premises untenantable, this Lease shall not terminate,
but the rent payable hereunder during the unexpired portion of this Lease shall be reduced to such
extent as may be fair and reasonable under all of the circumstances. All compensation awarded in
connection with or as a result of any of the foregoing proceedings shall be the property of
Landlord; and Tenant hereby assigns any interest in any such award to Landlord; provided,
however, Landlord shall have no interest in any award made to Tenant for loss of business or
goodwill or for the taking of Tenant's fixtures and improvements, if a separate award for such
items is made to Tenant. The term"untenantable" as used herein shall mean that following such
.taking the Premises would be unfit for Tenant's continued operation of its business in a manner
reasonably comparable to Tenant's conduct of its business at the Premises prior to such taking.
17. HOLDING OVER At the termination of this Lease by its expiration or otherwise,
Tenant immediately shall deliver possession of the Premises to Landlord with all repairs and
maintenance required herein to be performed by Tenant completed. If, for any reason, Tenant
retains possession of the Premises or any part thereof after such termination, or fails to complete
any repairs required hereby, then Landlord may, at its option, serve written notice upon Tenant
that such holding over constitutes either (i) the creation of a month to month tenancy, upon the
terms and conditions set forth in this Lease, or (ii) creation of a tenancy at sufferance, in any case
upon the terms and conditions set forth in this Lease; provided, however, that the monthly rental
(or daily rental under (ii)) shall, in addition to all other sums which are to be paid by Tenant
hereunder,whether or not as additional rent, be equal to 150% of the rental being paid monthly to
Landlord under this Lease immediately prior to such termination (prorated in the case of(ii) on
the basis of a 365-day year for each day Tenant remains in possession). If no such notice is
served, then a tenancy at sufferance shall be deemed to be created at the rent in the preceding
21 07515.0092-.0300232.07
assign, in whole or in part, its rights and obligations in the Building and property that are the
subject of this Lease. Upon any Landlord's conveyance of the Building or Landlord's interest in
the Land, and the assignment of its rights under this Lease, to another party ("Successor"), such
Landlord shall be released from its obligations hereunder and the Successor shall become the
"Landlord" hereunder from and after the date of any such conveyance and assignment and shall
thereafter have all of the rights and obligations of the Landlord hereunder, in accordance with the
terms hereof, during the period of its ownership of the Building. Each party agrees to furnish to
the other, promptly upon demand, a corporate resolution, proof of due authorization by partners,
or other appropriate documentation evidencing the due authorization of such parry to enter into
this Lease.
C. Neither Landlord nor Tenant shall be held responsible for delays in the
performance of its obligations hereunder when caused by material shortages, weather, acts of
God, labor disputes or other causes beyond the reasonable control of Landlord or Tenant, as
applicable (collectively, the "Force Mature Delays'); provided, however, the foregoing shall be
inapplicable to, and shall not in any way excuse, Tenant's failure to timely pay Base Rent, other
rent or other monetary amount due hereunder at the time such payments are due.
D. Tenant and Landlord each agree, from time to time, within ten (10) days after
request by either parry, to deliver to the other party or such party's designee, a certificate of
occupancy and an estoppel certificate stating (1) that this Lease is in full force and effect, (2) the
date to which rent is paid, (3)that there is no default on the part of Landlord or Tenant under this
Lease, (4) that neither Landlord nor Tenant has any right of offset, claims or defenses to the
performance of its obligations under this Lease, and (5) such other factual matters pertaining to
this Lease as may be requested by the requesting party. Each party may make such qualifications
to the estoppel certificate to be delivered by such party as are necessary to make the statements
contained therein factually accurate.
E. This Lease constitutes the entire understanding and agreement of the Landlord and
Tenant with respect to the subject matter of this Lease, and contains all of the covenants and
agreements of Landlord and Tenant with respect thereto. Landlord and Tenant each acknowledge
that no representations, inducements, promises or agreements, oral or written, have been made by
Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not contained
herein, and any prior agreements, promises, negotiations, or representations not expressly set
forth in this Lease are of no force or effect. This Lease may not be altered, changed or amended
except by an instrument in writing signed by both parties hereto.
F. All obligations of Tenant hereunder not fully performed as of the expiration or
earlier termination of the Term of this Lease shall survive the expiration or earlier termination of
the Term hereof, including without limitation, all payment obligations with respect to taxes and
insurance and all obligations concerning the condition and repair of the Premises. Upon the
expiration or earlier termination of the Term hereof, and prior to Tenant vacating the Premises,
Tenant shall pay to Landlord any amount reasonably estimated by Landlord as necessary to put
the Premises, including without limitation, all heating and air conditioning systems and equipment
thereon, in good condition and repair in light of the age and depreciated condition of the systems
31 07515.0092:0300232.07
and equipment, reasonable wear and tear excluded. Tenant shall also, prior to vacating the
Premises, pay to Landlord the amount, as estimated by Landlord, of Tenant's obligation
hereunder for real estate taxes and insurance premiums, common area maintenance, utility and
other charges for the year in which the Lease expires or terminates. All such amounts shall be
used and held by Landlord for payment of such obligations of Tenant hereunder, with Tenant
being liable for any additional costs therefor upon demand by Landlord, or with any excess to be
returned to Tenant after all such obligations have been determined and satisfied as the case may
be. Any security deposit held by Landlord shall be credited against the amounts due from Tenant
under this Paragraph 25F.
G. If any clause or provision of this Lease is illegal, invalid or unenforceable under
present or future laws effective during the Term of this Lease, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease shall not be affected thereby, and it
is also the intention of the parties to this Lease that in lieu of each clause or provision of this
Lease that is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be
possible and be legal, valid and enforceable.
H. All references in this Lease to "the date hereof' or similar references shall be
deemed to refer to the last date, in point of time, on which all parties hereto have executed this
Lease.
I. Landlord and Tenant each represent and warrant that it has dealt with no broker,"
agent or other person in connection with this transaction and that no broker, agent or other
person brought about this transaction, other than any broker or agent identified in the Basic Lease
Information, and each agrees to indemnify and hold the other harmless from and against any
claims by any other broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with the indemnifying party with regard to this leasing
transaction.
J. If and when included within the term"Landlord", as used in this instrument, there
is more than one person, firm or corporation, all shall jointly arrange among themselves for their
joint execution of a notice specifying some individual at some specific address for the receipt of
notices and payments to Landlord. If and when included within the term"Tenant", as used in this
instrument, there is more than one person, firm or corporation, all shall jointly arrange among
themselves for their joint execution of a notice specifying some individual at some specific address
within the continental United States for the receipt of notices and payments to Tenant. All parties
included within the terms "Landlord" and "Tenant", respectively, shall be bound by notices given
in accordance with the provisions of Paragraph 26 hereof to the same effect as if each had
received such notice.
K. By commencing operation of its business at the Premises, except as otherwise
provided in Exhibit "D" hereto, Tenant shall be deemed to have: (a) acknowledged that the
Premises and the improvements to be constructed pursuant to Exhibit "12" attached hereto are
substantially complete except for"punch list" items (if any) and are accepted "as is" and "with all
32 07515.0092:0300232.07
faults" (except for latent defects, Landlord's responsibility with respect to which shall be limited
to the correction of Defects as set forth in Exhibit "D" attached hereto and made a part hereon;
(b) accepted the Premises as suitable for the purposes for which the Premises are leased; and (c)
acknowledged that the Premises are in a good and satisfactory condition. Landlord expressly
disclaims, and Tenant hereby waives to the full extent permitted by law, any implied warranty that
the Premises or the Building are suitable for Tenant's intended commercial purpose, and any and
all other implied warranties (whether arising by virtue of statute, case law or otherwise). The
foregoing shall not be construed to relieve Landlord from its obligations which are expressly set
forth in this Lease (including but not limited to Paragraph 11 of the Construction Agreement
attached hereto as Exhibit"D" and made a part hereof).
L. Submission of this Lease shall not be deemed to be a reservation of the Premises.
Landlord shall not be bound hereby until its delivery to Tenant of an executed copy hereof signed
by Landlord, already having been signed by Tenant.
M. Landlord .and Tenant agree that the terms and conditions of this Lease are
confidential and the parties hereto agree not to disclose the terms of this Lease to any third party
(other than to its attorneys and accountants and other than to parties who propose to purchase or
finance the Building, or the Project, or who propose to become investors in Tenant or Landlord)
except as may be required by law or by the order of a court of competent jurisdiction.
26. NOTICES. Each provision of this instrument or of any applicable governmental
laws, ordinances, regulations and other requirements with reference to the sending, mailing or
delivering of notice or the making of any payment by Landlord to Tenant, or with reference to the
sending,mailing or delivering of any notice or the making of any payment by Tenant to Landlord,
shall be deemed to be complied with when and if the following steps are taken:
A. All rent and other payments required to be made by Tenant to Landlord hereunder
shall be payable to Landlord at the address for Landlord set forth in the Basic Lease Information
or at such other address as Landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant's obligation to pay rent and any other amounts to Landlord under
the terms of this Lease shall not be deemed satisfied until such rent and other amounts have been
actually received by Landlord. In addition to Base Rent due hereunder, all sums of money and all
payments due Landlord hereunder shall be deemed to be additional rental owed to Landlord.
B. All payments required to be made by Landlord to Tenant hereunder shall be
payable to Tenant at the address set forth in the Basic Lease Information, or at such other address
within the continental United States as Tenant may specify from time to time by written notice
delivered in accordance herewith.
C. Any written notice or document required or permitted to be delivered hereunder
shall be deemed to be delivered, whether actually received or not, when deposited in the United
States Mail, postage prepaid, Certified or Registered Mail, addressed to the parties hereto at the
respective addresses set out in the Basic Lease Information, or at such other address as they have
theretofore specified by written notice delivered in accordance herewith.
33 07515.0092:0300232.07
27. WAIVER OF LANDLORD'S LIEN. Landlord hereby waives any and all liens
and security interests provided to landlords under applicable law.
28. RELOCATION ALLOWANCE. Landlord shall pay to Tenant an allowance for
relocating up to 30 of its employees in an amount not to exceed $3,000.00 per employee, or
$90,000.00 in the aggregate for all 30 employees (said allowance, subject to the limitations set
forth above, is referred to herein as the "Relocation Allowance"). Landlord shall pay the
Relocation Allowance to Tenant, in cash, from time to time within 30 days after Tenant's written
request, provided Tenant has theretofore provided Landlord with written notice as to the number
of employees with respect to whom Tenant has elected to utilize the Relocation Allowance.
29. EXHIBITS. The following Exhibits "A!' through "J" are attached hereto and
incorporated herein by reference as if fully set forth herein:
Exhibit Description
44N) Premises Legal Description
"A-l" Site Plan--Building shown by cross-hatching
"B" Permitted Exceptions
CgC7) Lessor Estoppel Certificate for Ground Lease
"D" Construction Agreement
CCE77 Memorandum of Acceptance
477 Letter of Credit
C41Y Renewal Option
41112 Common Area Maintenance Standards
ccr [Intentionally Omitted]
Subordination, Nondisturbance and Attornment Agreement
34 07515.0092:0300232.07
EXECUTED BY LANDLORD, this V day of January, 1998.
AIRPORT BUILDING PARTNERS, LTD., a
Texas limited partnership
By: Hillwood Operating, L. P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Corporation.,
a Texas corporation,
its general partner
�� ,-,.'.'jam -----------------"""'�
EXECUTED BY TENANT, this 3° day of January, 1998.
GALAXY AEROSPACE CORPORATION,
a Nevada cration
v
y_ (' ian E. Barents
Title: President
35 07515.0092:0300232.07
All Exhibits
Omitted
From This Attachment
Amendment to
Lease
to
Lessor Estoppel Certificate
AMEI'MM.ENT M LEASE ACiREEME T
. This �esidtsa�e to Lase �r�aeRf`( �'°} is entered into as of zhe �� day c,r"
r`Llateta, 1998 Aa�ort Btiilding i'a�ners, Lui. �.*!&R r_dr ) and Galax,
y+ Aabr�s"pac� Crporad,�
Landlord wd Tit=xre4 intro e1Mt crrtsin Lease Ag=u=t data:d CiyuctivC hauary
rcUtang T ceUin g1004ses 40mled in'Tarrant County, TC= and be 3a, 1998
TU Capits.liwd W=not otber�+iaC deed I==sbali have d the sa�����te n,,
.the Lam. 17�e desirc 10 amend d m Lease and agree to certain otha:r tt as,, p�trtia ularly'
Now. Th=. ftv, .for and-in "Midcrat ou.of the mutual cov�ts con tai lira, and ®tl�r
a> CS hereby agree as follows:.
I=and atnleR4W-'b � sS th AUr�ch 31, 1993 date set.fa a is tlse
Y y,.(a�.
8z- a pat'd of pezaWap�i 3 of b- "ascached to the Lam Co ley 31, 1998;triad .
(b) &g the may 31, 199$ date see.fonds,in the sgCond ga mr Tical pasag ph ag 1 1?b 3 of
•qtr �' to tlse LWW to July 31, 1998.
Z- ` As OWCU&d hcMby,the Lease remaiaps in fta11 force and elect. YO evre�ttr+�f a o ie8
aar. 'Mr 1, .artd this Amaudment a perms of This dins shall in all
mil- This AM=dzuMt may be ezecuW in multiple catmtapazts.
GALAXY AFROSPACE
a Navz&caarporajion.
Ay:
Name .
Title: ,
AMP
CRT
x Texas limited pazt=bip
By= f€ Waad Opesming,L-h.,
It Texas limited pamckwlip,
By. .ifillwood Devel t Cor;b pm
a TeZ4 s CUrpaMijan,
its g=eral partner ..
13y,. .
-- . Name:
Title:
City of Fort Worth, Texas
4vag, or and Oouneil Communication
DATE REFERENCE NUMBER LOG,NAME I 11GE.
9/29/98 **G-12339 12GALAXY 1 of 2 1
SUBJECT CONSENT TO LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT AND
FIXTURE FILING*BY GALAXY AEROSPACE COMPANY, L.P. FOR THE BENEFIT OF
PARIBAS, CHICAGO BRANCH
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the City Manager to execute a Consent to Leasehold Deed of Trust, Security Agreement
and Fixture Filing by 'Galaxy Aerospace Company, L.P. ("Galaxy") for the benefit of Paribas,
Chicago Branch ("Paribas"); and
2. Authorize the City Manager to execute an Estoppel Certificate to Galaxy, Paribas and Airport
Building Partners, Ltd.
DISCUSSION:
Under City Secretary Contract No. 23512 ("Lease"), the City has leased approximately 6.639 acres of
land at Alliance Airport (identified as Lease Parcels 2 and 5) (the "Leased Premises") to Airport Building
Partners, Ltd. ("Lessee"). In accordance with the Lease, Lessee has sub-leased the Leased Premises,
to Galaxy for the construction of Galaxy's corporate headquarters, and the operation by Galaxy of an
aircraft service and completion center.
Galaxy and Paribas have negotiated a credit agreement under which Paribas will provide Galaxy with a
$55 million dollar operating line for Galaxy to obtain the inventory and equipment necessary to initiate
its business operations on the Leased Premises ("Collateral"). Paribas will take a lien on the Collateral
and improvements on the Leased Premises. The Lease does not allow any party other than the Lessee
to enter into a leagehold mortgage on' the Leased Premises without the City's consent. Therefore,
Galaxy and Paribas are requesting the City Council's consent to this transaction.
In addition, Paribas has requested the City to execute an Estoppel Certificate for its own benefit. The
Estoppel Certificate will provide that the Lease between the City and Lessee is in full force and effect
and that, to the best of the City's knowledge, neither party is in breach or default.
City of Fort Worth, Texas
"o."Or and -cound t --commu"i Cation
DATE REFERENCE NUMBER LOG NAME PAGE
9/29/98 **G®12339 12GALAXY 2 of 2
SUBJECT CONSENT TO LEASEHOLD DEED OF TRUST, SECURITY. AGREEMENT AND
FIXTURE FILING BY GALAXY AEROSPACE COMPANY, L.P. FOR THE BENEFIT OF
PARIBAS, CHICAGO BRANCH
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that approval of this action will have no material effect on City funds.
CB:k
Submitted for City Manager's FUND . ACCOUNT CENTER AMOUNT CYTY SECRUTARY
Offfceby: (to) APPROVED
Charles Boswell 8511 CITY COUNCIL
Originating Department Head:
SEP 29 1999
Jim-Keyes. 8517 (from)
I i-
Additional Information Contact: City�etary of the
City of Fort Worth,Texas
Linda Brown 6030