HomeMy WebLinkAboutContract 46423 CITY SECRETiAW � �3
COWPACT 190.
ASSIGNMENT OF PROPERTY MANAGEMENT AGREEMENT
This ASSIGNMENT OF PROPERTY MANAGEMENT AGREEMENT is entered
into by and between ALLIANCEAIPRORT AUTHORITY, INC. (the "Authority"), a Texas
industrial development corporation, and the CITY OF FORT WORTH (the "City"), a home
rule municipality organized under the laws of the State of Texas.
RECITALS
The Authority and the City hereby agree that the following statements are true and
correct and constitute the basis upon which the Authority and the City have entered into this
Agreement:
A. The Authority and AFWM Services, LLC previously entered into that certain
Property Management Agreement dated on or about February 4, 2015 (the "Agreement').
B. The Agreement specifically allows the Authority to assign its right, title and
interest in the Agreement to the City or any instrumentality or entity created by the City.
C. The Authority wishes to assign all of its right, title and interest in the Agreement
to the City, and the City is willing to accept such assignment.
ASSIGNMENT
The Authority hereby assigns, and the City hereby accepts, all right, title and interest in
the Agreement, effective on the date indicated below.
CITY OF FORT WORTH: ALLIANCEAIRPORT AUTHORITY, INC.
� .��M By: B y:
M Fernando Costa Jesus Chapa,
< Assistant City Manager its authorized representative
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Date: s Date: sem-
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Attested byo
$ o FICIAL RECORD
lTY SECRETARY
Mary J. ki916y14,S'EX A FT.WORTTX
PROPERTY MANAGEMENT AGREEMENT
This Property Management Agreement (the "Agreement") is entered into as of the 5`h day of February,
2015, by and between AllianceAirport Authority, Inc., a Texas nonstock, nonprofit industrial development
corporation("Owner")and AFWM Services,LLC, a Texas limited liability company("Manager").
1. Property. Owner is the owner of those certain real properties commonly known as Alliance Fort
Worth Airport Maintenance Base,as more particularly shown on Exhibit A attached hereto(the"Property"). For
purposes of this Agreement, the aviation jet fuel farm facility that supports and is connected to the Property by
means of associated piping is not considered part of the Property.
2. Appointment of Manager. Owner hereby appoints Manager as the manager of the Property
upon the terms and conditions set forth herein, and Manager hereby accepts such appointment. Manager
acknowledges that it is an independent contractor and not an employee of Owner. Manager shall have no right or
authority, express or implied, to commit or otherwise obligate Owner in any manner whatsoever, except to the
extent specifically provided in this Agreement. Manager shall have no right or interest in the Property, nor any
claim or lien with respect thereto, arising out of this Agreement or the performance of its obligations hereunder.
In this capacity,Manager agrees to deal at arm's length with all third parties to further the interests of Owner.
3. Term.
(a) Terni/Termination Without Cause. The term of this Agreement shall commence on
February 5,2015 and end on the last day of the 12th month thereafter("Initial Term"). The term of this
Agreement will be automatically extended for consecutive 12-month periods beginning on the date the
Initial Term expires (each,a "Renewal.Term"). Prior to the date this Agreement terminates, Owner and
Manager shall continue to perform all of their obligations under this Agreement. Notwithstanding
anything in this Agreement to the contrary, (i) Manager will have the right to terminate this Agreement
for any reason and at any time upon at least 180 days' prior written notice to Owner, provided,however,
if Manager receives a notice of termination regarding any Contract (defined below) and, in Manager's
sole discretion, such Contract is essential to Manager's duties under this Agreement, then Manager may
terminate this Agreement upon 90 days' prior written notice to Owner, and (ii) Owner will have the right
to terminate this Agreement for any reason and at any time upon at least 90 days' prior written notice to
Manager.
(b) Termination With Cause.
(i) Without Notice. Owner shall have the right to terminate this Agreement
immediately upon written notice to Manager upon the occurrence, in Owner's reasonable judgment, of any of the
following events:
(A) Manager is unable to account for funds it holds on Owner's behalf,
(B) Manager has failed to perform its obligations to Owner under this
Agreement and such failure has not been cured after thirty (30) days written
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Alliance Fort Worth Airport Maintenance Base
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notice from Owner to Manager (or, if such failure is not reasonably curable
within such thirty (30) day period, such longer period as may be reasonably
required to cure such failure, provided that Manager is diligently endeavoring to
cure such failure);
(C) A receiver, liquidator or trustee of Manager is appointed by court order,or a
petition to liquidate or reorganize Manager is filed against Manager under any
bankruptcy, reorganization or insolvency law, or Manager files a petition in
bankruptcy or requests reorganization under the provisions of any bankruptcy
reorganization or insolvency laws, or if Manager makes an assignment for the
benefit of its creditors,or if Manager is adjudicated bankrupt;or
(D) The consummation of a bona fide sale of the Property to a new owner not
affiliated with Owner.
(ii) Compensation. If this Agreement is terminated pursuant to Section 3(b)(i),
Manager shall not be entitled to receive any further Management Fees due under this Agreement beyond the
termination effective date.
(A) Obligations Upon Termination. Manager acknowledges and agrees that all
books, records, contracts, leases, files and correspondence relating to the
Property, including, but not limited to, correspondence with tenants or
prospective tenants, computations of rental adjustments and operating expenses,
maintenance or preventative maintenance programs, schedules and logs, tenant
finish and construction records, inventories of personal property and equipment
belonging to the Property, correspondence with vendors, correspondence with
federal, state, county and municipal authorities, and accounts held or maintained
by Manager for Owner are the sole property of Owner and shall be delivered to
Owner or Owner's designee within thirty(30) days after the date this Agreement
terminates. Manager further acknowledges and agrees that all furniture,
equipment,materials and other personal property delivered to Manager by Owner
or purchased by Manager with Owner's funds is the sole property of Owner and
shall be delivered to Owner or Owner's designee within thirty (30) days after the
date this Agreement terminates. In addition, within thirty (30) days after the
termination date, Manager shall (i) vacate any space in the Property provided by
Owner for the use of Manager; (ii) and remove all signs that are placed at any
location on the Property stating the name of Manager and repair any damage
caused by the removal of such signs.
4. Management Fee and Reimbursement for Expenses.
(a) Management Fee. The compensation to Manager for the management services it provides to
Owner hereunder shall be a monthly fee equal to three percent(3%)of the Effective Gross Revenues earned from
the Property each calendar month (the"Management Fee"). As used herein, "Effective Gross Revenues" shall
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mean all revenues for each month from the Property's business, including all monies paid by tenants of the
Property to Owner pursuant to their leases and not reduced by tenant credits, operating cost reimbursements,
charges for services and any other income, but shall not include direct billed utilities, insurance claims proceeds
(unless such insurance proceeds expressly derive from, or are intended to replace, lost gross revenues),
condemnation proceeds, proceeds from the sale of the Property and proceeds from any refinancing of the
Property.
The Management Fee shall be paid to Manager on a monthly basis from the operating
account, provided Manager is not in default of the terms of this Agreement beyond thirty (30) days after written
notice from Owner of such Manager default (provided, however, if Manager is incapable of curing such default
within such 30-day period,then Manager shall be entitled to the Management Fee so long as Manager commences
to cure such default within thirty (30) days of written notice from Owner and diligently pursues a cure of such
default to completion). The Management Fee shall be payable by the fifteenth(15th)day of each calendar month
based on the Effective Gross Revenues from the Property for the immediately preceding calendar month. In the
event of the termination of this Agreement, the final Management Fee shall be payable to Manager thirty (30)
days after the date this Agreement terminates and shall be based on the Effective Gross Revenues received by
Owner prior to the termination date in the calendar month in which the termination date occurs.
(b) Reimbursement of Expenses. Except for the cost of the items described on Exhibit B
attached hereto or as otherwise provided for in this Agreement, if any, the Management Fee shall compensate
Manager for all of the costs it incurs in providing management services hereunder in accordance with the terms of
this Agreement, including, but not limited to, general overhead expenses, salaries and other expenses incurred
with respect to Manager's corporate employees not involved in the direct management and operation of the
Property,the cost of all office supplies and office equipment used or consumed by Manager at its corporate office.
5.Management of Property.
(a) Scope of Management Services. Manager hereby agrees that it shall be solely responsible
for the management of the Property and shall use commercially reasonable efforts to manage, operate and
maintain the Property efficiently and in a commercially reasonable manner satisfactory to Owner and in
conformance with the annual operating budget of the Property. Manager shall do and perform any and al] things
commercially reasonably necessary for the pleasure, comfort, service and convenience of the tenants of the
Property. Manager shall perform, in a timely manner and as instructed by Owner, all of Owner's obligations
under tenant leases, and to the extent provided to Manager, ground leases, mortgages and deeds of trust,
covenants,conditions and restrictions,easements and any other agreements affecting the Property. It is expressly
understood and agreed that during the term of this Agreement, Owner shall not have any obligation to involve
itself in any way with the day-to-day operation of the Property, and shall have no obligation except as otherwise
provided herein to give or communicate orders or instructions to employees or personnel employed by Manager
to manage the Property. Manager shall make available to Owner the full benefit of the judgment, experience and
advice of all members of Manager's organization and staff with respect to the management of the Property at no
additional charge to Owner. Manager shall consult with Owner at any reasonable time upon Owner's reasonable
request and keep Owner advised as to all material and extraordinary matters and decisions affecting the Property.
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(b) Bank Account. Manager shall assist Owner in establishing one(1)bank account in Owner's
name with Owner and Manager being the only parties authorized to withdraw monies from said account. The
account shall be known as the operating account, which shall be used to deposit all cash and rental receipts (via
Lockbox, if applicable, noted below), and to disburse the normal and reasonable expenses attendant to the
operation of the Property as incurred by Manager, including Manager's compensation under this Agreement.
Manager shall also assist Owner in establishing one (1) Lockbox, if applicable, where the tenants will be
instructed to send all of their payments. If Manager receives any funds with respect to the Property,those receipts
will be mailed to the Lockbox, if applicable. Manager shall not have the right to deposit monies derived from the
Property in any other account or to commingle funds derived from the Property with Manager's other funds.
Owner shall have the right to elect to move the account to a new bank at any time upon prior written notice to
Manager. The operating account shall be the sole property of Owner and shall be maintained in Owner's name,
and Manager's sole right with respect to the account shall be its right to issue checks for the payment of the
expenses of operating the Property that Manager is permitted to pay by this Agreement in accordance with the
approved annual operating budget or as otherwise approved by Owner. Manager shall pay all expenses of
operating the Property in accordance with Owner's instructions, subject to availability of funds in the operating
account. All checks drawn on, authorizations for wire transfers of, and other withdrawals of, funds in excess of
$5,000.00 in the operating account shall require two signatures, and all checks drawn on, authorizations for wire
transfers of, and other withdrawals of, funds in the operating account in excess of Twenty-Five Thousand and
no/100 Dollars ($25,000.00) (or the aggregate of concurrent amounts being paid to the same payee), but
specifically excluding any such actions with respect to tenant security deposits or transfers between subaccounts
within the operating account, must be approved,which approval may be via electronic mail,by a representative of
Owner unless the expenditure represented thereby is a recurring expense (such as monthly debt service) or a cost
specifically included in the current approved annual operating budget. A working capital balance shall be
maintained in the operating account of not less than 90 days'anticipated cash requirements for the Property. If at
any time the gross income from the Property collected by Manager is not sufficient to pay the current expenses of
the Property, Manager shall immediately notify Owner so that Owner shall have an adequate opportunity to
provide additional funds to pay necessary expenses.
(c) Collection of Monies. Manager shall use commercially reasonable efforts to collect in a
timely manner all rent, operating expenses,parking charges and other amounts payable by tenants of the Property
and any other amounts due with respect to the Property (hereinafter collectively referred to as "Rent"). Manager
is hereby authorized to request, demand, collect and receive all such Rent, but Manager shall not terminate any
lease without Owner's consent.
(d) Books and Records. On or before the fifteenth (15"') day of each calendar month, or in
accordance with any other schedule set by Owner,Manager shall provide Owner with certain financial statements
and property management reports for the prior month designated by Owner, in Owner's reasonable discretion. All
financial statements and property management reports shall be prepared utilizing the JD Edwards software. The
financial statements and reports shall be prepared using Manager's chart of accounts and shall include, but shall
not be limited to,a current reconciliation of all cash accounts accompanied by bank statements for the prior month
and such other supporting information and data as may be reasonably required by Owner. Manager shall prepare
all financiat reports and other reports in accordance with generally accepted accounting practices, consistently
applied, unless otherwise instructed by Owner, using the forms and procedures designated by Owner. Monthly
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information shall be emailed to Owner and, at Owner's request, a printed copy of the reports shall be provided to
Owner.The accounts receivable aging report shall show all accounts receivable owed with respect to the Property
and shall separately show which tenants of the Property, if any, have not paid rent due under their leases for the
reporting month with a description of the collection status of all material past due balances. Owner or its designee
shall have the right, at any time, with three(3) days' prior written notice to Manager,to examine all of the books
and records in Manager's possession relating to the operation of the Property and all such books and records shall
be the sole property of Owner. For purposes of this Agreement, "books and records" shall include, all current
information in Manager's possession or under the control of Manager relating to or affecting in any way the
Property, including, but not limited to, all profit and loss statements, all statements of cash flows, rent rolls,
variance reports, capital expenditure reports, leasing activity reports, budgets, checking account statements and
canceled checks, leases, lease amendments, documents in a tenant's lease file, operating expense information,
security deposit information, maintenance or service contracts, plans and specifications, insurance files or
information, construction contracts, equipment leases,purchase orders, petty cash receipts and reconciliation and
all information stored on computer disks, drives or other devices for the storage of computer information.
Manager shall keep the books and records relating to the Property segregated from Manager's other books and
records. Manager shall maintain the following for inspection by Owner or Owner's designee, in one location
approved by Owner:
(i)all bank statements,bank deposit slips and bank reconciliations;
(ii)detailed cash receipts and disbursement records;
(iii)all invoices and paid bills,which may be kept at the property management office;
(iv) summaries of all adjusting journal entries;
(v) supporting documentation for payroll,payroll taxes and employee benefits;and
(vi)all computerized reports.
At Owner's request, Manager shall promptly assemble any books and records relating to the Property that are not
described above, at one location approved by Owner for inspection by Owner or Owner's designee. From time to
time,at Owner's request and expense,Manager shall promptly deliver copies of all books and records to Owner.
(e) Computer Software and Licenses. The cost of property management software or licenses
shall be paid by the Owner at the Owner's or Property's expense. Prior to the date Manager begins managing the
Property, the personnel of Manager that will be using the software described above shall, at Manager's expense,
complete on-site training; provided, however, if Owner requires Manager to use software other than JD Edwards,
training costs will be at Owner's expense.
(f) Audit and Inspection Rights. Owner shall have reasonable access, at reasonable times and
only following three(3)days' advance written notice to Manager,to review Manager's books and records relating
to the Property, and Owner shall also have the right to audit such books and records, following three (3) days'
advance written notice to Manager,during the Term of this Agreement;provided,however,that any such audit(i)
shall be conducted only at Manager's offices in Fort Worth,Texas and/or, at Manager's option, at the Property and
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only during Manager's normal business hours, (ii) shall be conducted in accordance with Owner's instructions,
and (iii) shall be related only to those activities performed by Manager for Owner. The cost of any such audit
shall be borne solely by Owner.
(g) Budgets. Within ninety (90) days after the date Manager begins managing the Property,
unless otherwise instructed by Owner, and thereafter at least ninety (90) days prior to the beginning of each fiscal
year of the Owner, Manager shall prepare and submit to Owner on forms and using procedures designated by
Owner, in Owners' reasonable discretion, proposed budgets of (a) the estimated income and expenses of the
Property and (b) the estimated capital expenditures for the Property for the next fiscal year or other operating
period as may be determined by Owner. The budgets will be broken down by the month, will be made assuming
accrual basis accounting, and shall include as part thereof advertising, payroll and capital expenditure analysis,
energy management analysis, a current rent roll, recommendations for modifications to leasing guidelines and
such other information as may be requested by Owner, in Owner's reasonable discretion. The budgets shall have
attached to them (1) a separate report containing a market analysis of the Project's market area, which shall
include, but shall not be limited to, a detailed narrative which includes a vacancy rate and rental rate analysis for
the market area and a rental rate history and rental rate recommendations for the Property and(2)a separate report
setting forth the physical condition of the Property and recommendations, including the estimated costs thereof,
for preventive maintenance,routine maintenance and anticipated capital expenditures. Manager shall also provide
a detailed written explanation of the rationale used for making the various assumptions (numerical or otherwise)
used in the budgets and the accompanying reports. The budget, after written approval by Owner ("Approved
Budget"), shall be used by Manager as a guide for the actual operation of the Property during the period covered
by the Approved Budget, and Manager shall provide Owner on the fifteenth business day of each calendar month
with monthly comparisons of actual and budgeted income and expenses. If Manager reasonably believes that the
actual costs of maintaining and operating the Property shall exceed the Approved Budget, Manager shall submit
to Owner a revised budget proposal for Owner's written approval. Upon approval, the revised budget shall
become the Approved Budget.
(h) Repairs and Maintenance. Subject to the other terms and conditions of this Agreement,
Manager shall use commercially reasonable efforts to cause the Property to be maintained in accordance with
standards acceptable to Owner and shall cause all necessary repairs to be made to the Property in a timely and
efficient manner. Any repairs which are deemed necessary shall be limited to a cost not to exceed Fifteen
Thousand and no/100 Dollars ($15,000.00) if such repairs are not already allotted for in the operating budget.
Notwithstanding any provision to the contrary in this Agreement, in the event of emergencies, Manager may take
such actions as Manager in good faith believes are necessary or appropriate in light of such emergency. Owner
agrees that notwithstanding any provision in this Agreement to the contrary, whenever Manager is required to
obtain consent or approval of Owner prior to taking an action or incurring an expense under the terms of this
Agreement, Manager may take such action or incur such expense without obtaining such consent or approval of
Owner if an emergency exists that, in Manager's reasonable judgment, under the circumstances a delay would
result in a public calamity; impair preservation of the Property; harm the public health or safety of residents in the
City of Fort Worth; or likely cause damage to machinery, equipment or other property on the Property. In any
such situation, however, Manager shall, as soon as reasonably practicable thereafter, notify a representative of
Owner by telephone or electronic mail as to the existence of such emergency and the action taken and/or expense
incurred.
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(i) Due Diligence. In the event Owner requests Manager to assist in the due diligence work to
prepare the property for sale,and Manager is not handling the sale, Owner agrees to compensate Manager the rate
of Two Hundred Fifty Dollars($250.00)per hour for its services.
0) Compliance with Legal Requirements. Subject to the other terms and conditions of this
Agreement,Manager shall take,at Owner's expense,such actions as may be necessary to comply with any and all
laws, regulations, orders, or requirements which apply to the Property or its ownership or operation (hereinafter
"Applicable Laws"). If Manager obtains any information which indicates that the Property might be in violation
of any Applicable Law, Manager shall promptly give Owner written notice of the existence or potential existence
of such a violation. If the cost of complying with an Applicable Law is not authorized by an approved annual
budget and the cost of compliance will exceed Fifteen Thousand and no/100 Dollars ($15,000.00), prior to
complying with the Applicable Law, Manager shall obtain Owner's prior approval of the actions Manager desires
to take to comply with the Applicable Law. Manager shall,at Owner's cost,prepare,execute on behalf of Owner,
and, after obtaining the approval of Owner, file any reports and documents as may be required by any local,
county, state, or federal authority in order to comply with an Applicable Law. Manager represents and warrants
that it and its employees presently hold all licenses and permits legally required for it to perform its obligations
under this Agreement, and Manager hereby covenants and agrees to maintain all such licenses and permits during
the term of this Agreement.
(k) Insurance.
(i) Property Insurance. Owner shall, at Owner's expense, maintain "all risk" property
insurance for the Property which contains coverages and is issued by companies that are acceptable to Owner, in
Owner's sole discretion. Such policy(ies) shall name Owner as the named insured and any mortgagee(s) as loss
payee. Policy terms and conditions shall comply with the requirements of the applicable mortgage(s) and leases
affecting the Property. Owner shall waive its right of subrogation against the Manager, and the Owner's policy
shall be endorsed to prohibit subrogation against the Manager for any cause.
(ii) Personal Property of Manager. Owner shall not be liable to Manager, its
employees, agents, customers and invitees for loss or damage to their personal property and business records
located at the Property. Manager shall obtain and keep in full force and effect during the term of this Agreement
extended coverage property insurance covering one hundred percent(100%)of the replacement cost of Manager's
personal property. Manager shall procure from its insurers waivers of subrogation with respect to claims against
Owner under policies in which Owner is not named as an additional insured.
(iii) Liability Insurance. Owner shall at all times during the term of this Agreement
carry Commercial General Liability("CGL") insurance with respect to the Property in an amount of not less than
One Hundred Million Dollars ($100,000,000). Such insurance shall be primary and shall name Manager as
additional insured. Manager shall at all times during the term of this Agreement carry CGL insurance covering
the actions taken by Manager as excess insurance in performing its obligations under this Agreement with
minimum limits of at least Two Million Dollars ($2,000,000) issued by an insurance company acceptable to
Owner. Owner shall be named as an additional insured under Manager's CGL policy. If requested by Owner,
Manager shall cause to be placed and to be kept in force at Owner's expense Owner's CGL policy.
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(iv) Aviation Liability Insurance. Owner shall at all times during the term of this
Agreement cant' Aviation Liability Insurance with respect to the Property (including hangarkeepers liability
coverage),covering, without limitation, aircraft products and completed operations, airport premises liability,and
grounding liability in an amount of not less than One Hundred Million Dollars ($100,000,000) and covering
bodily injury and property damage with minimum limits of at least One Hundred Million Dollars($100,000,000)
per occurrence, and fire legal liability with minimum limits of at least One Hundred Million Dollars
($100,000,000), all on an `occurrence" basis with minimum limits of at least One Hundred Million Dollars
($100,000,000) in the aggregate. Such insurance shall be primary and shall name Manager as additional insured.
If requested by Owner, Manager shall cause to be placed and to be kept in force at Owner's expense Owner's
Aviation Liability Insurance.
(v) Premises Pollution Liability Insurance. Owner shall at all times during the term of
this Agreement cant' Premises Pollution Liability ("PPL") insurance covering environmental risks associated
with Owner's present or future activities at or in connection with the Property and the lease and use by Owner of
and the operations and activities conducted by Owner or its agents, tenants, and contractors at or in connection
with the Property in an amount of not less than Five Million Dollars ($5,000,000). Such policy shall be primary
and shall name Manager as additional insured. Owner shall as soon as reasonably possible following the date
hereof,at its sole cost and expense, have performed a Phase H Environmental Site Assessment("ESA").Promptly
upon completion of such ESA, Owner will use reasonable efforts to have the aforementioned PPL endorsed to
also cover past activities at or in connection with the Property.
(vi) Workers' Compensation and Employer's Liability Insurance. Manager shall
cant' Worker's Compensation insurance in statutory amounts. In addition, Manager shall cant' Employer's
Liability Insurance in not less than the following amounts:
(A)One Million Dollars($1,000,000)bodily injury by accident,each accident;
(B) One Million Dollars ($1,000,000) bodily injury by disease, each employee;
and
(C)One Million Dollars($1,000,000)bodily injury by disease,policy limit.
Manager shall furnish Owner with evidence of such insurance throughout the term of this Agreement. Manager's
policy shall be endorsed to waive its rights of subrogation against Owner by its insurance company.
(vii) Fidelity Bond/Crime Insurance. Manager shall obtain a fidelity bond or cant'
crime insurance in an amount of not less than One Million Dollars ($1,000,000.00)covering Manager and such of
Manager's employees who may handle or be responsible for monies or property of Owner.
(viii) Property Losses. Manager shall promptly investigate and report to Owner, and to
Owner's insurance carrier, all claims for damage to the Property. Manager is authorized to settle claims for
damage to Owner's property up to a maximum of One Thousand Dollars ($1,000). Property claims in excess of
One Thousand Dollars ($1,000) shall, at Owner's option, be settled by Owner or Owner's authorized
representative.
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(ix) Accidents. Manager shall promptly report all third party accidents/incidents to
Owner. All reports shall be in a form reasonably acceptable to Owner and Owners insurance company.
(x) Contractors and Vendors. Manager shall require that all parties performing work
on or with respect to the Property, including, without limitation, contractors, subcontractors, materialmen and
service vendors name Owner as an additional insured on any Commercial General Liability Insurance, Umbrella
Liability Insurance,and Automobile Insurance secured by such parties.
(xi) Use of Property. Manager agrees not to knowingly permit the use of the Property
for any purpose which might void or violate any policy of insurance relating to the Property or which might
render any loss thereunder uncollectible.
(xii)Waiver of Subrogation.Owner,on behalf of itself and its insurers, waives its rights
of recovery against Manager or Manager's partners, shareholders, officers, directors and employees, for damages
sustained by Owner as a result of any damage to the Property or damage to property of others or bodily injury or
death arising from any risk or peril to the extent covered by any insurance policy carried by or required to be
carried by Owner pursuant to the terms of this Agreement, and Owner agrees that no party shall have any such
right of recovery by way of subrogation or assignment with respect to same. Manager, on behalf of itself and its
insurers, waives its rights of recovery against Owner or any person who holds a direct or indirect ownership
interest in Owner and their respective officers, directors and employees, for damages sustained by Manager as a
result of any damage to its property or damage to property of others or bodily injury or death arising from any risk
or peril to the extent covered by any insurance policy actually carried by or required to be carried by Manager
pursuant to the terms of this Agreement, and Manager agrees that no party shall have any such right of recovery
by way of subrogation or assignment with respect to same. Owner and Manager shall each notify their respective
insurance carriers of the mutual waivers herein contained and shall cause their respective insurance policies
required hereunder to include an acknowledgement of and agreement to such waivers or to be endorsed, if
necessary,to prevent any invalidation of coverage as a result of the mutual waivers herein contained.
(1) Taxes and Assessments. Manager shall verify bills for real estate taxes, personal property
taxes, gross receipts taxes, improvement assessments, and other like charges which are or may become liens
against the Property and recommend to Owner payment thereof or appeal therefrom. If requested by Owner,
Manager shall, at Owner's expense, undertake a review of, and submit a report on, all real estate taxes affecting
the Property. Manager shall pay on behalf of Owner and with Owner's funds all real estate taxes in a timely
manner.
(m) Reduction of Taxes and Eminent Domain. When requested by Owner, Manager shall
reasonably cooperate,at no cost to Manager,with Owner and/or Owner's consultants' negotiation and prosecution
of claims for the reduction or equalization of tax assessments affecting the Property and for awards for any taking
by eminent domain affecting the Property.
(n) Security Deposits. Unless Owner is required by Applicable Laws to deposit security
deposits in a separate account, Manager shall deposit in the operating account via the Lockbox all security
deposits obtained from tenants immediately after Manager's receipt thereof. If Applicable Law requires security
deposits to be deposited in a separate account,Manager shall notify Owner of the relevant legal requirements,and
all security deposits shall be deposited by Manager and held by Owner in compliance with such legal
requirements. Manager shall maintain a current list of the amount of each tenant's security deposit and, if any
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portion of a security deposit has been applied to the payment of any rent,cost or expense,Manager shall maintain
a log setting forth the amount of the security deposit so applied, the date of such application and a detailed
explanation of the reasons for such application.
(o) Personnel. Manager shall have in its employ at all times a sufficient number of capable
persons to enable it to operate, manage and maintain the Property (including providing all required accounting
information) in an efficient, safe, timely and economical manner, subject to the constraints and limitations of
applicable budgets. All matters pertaining to the employment, supervision, compensation, promotion and
discharge of the persons working at or providing services to the Property shall be the sole responsibility of
Manager.
(p) Competitive Bidding Procedures. All expenditures exceeding Fifty Thousand Dollars
($50,000.00)shall be awarded on the basis of competitive bidding solicited in compliance with:
(1) the procedures prescribed by Subchapters B and C, Chapter 252, Local Government
Code,for competitive sealed bidding or competitive sealed proposals;
(2) the reverse auction procedure, as defined by Section 2155.062(d), Government Code,
for purchasing;or
(3)a method described by Chapter 2269,Government Code.
6. Construction Management Services.
(a) Description of Services. At Owner's request, Manager shall supervise any contractor that
engages in construction activities at the Property. Construction activities include, but are not necessarily limited
to, the construction of improvements for tenants of the Property, the renovation of the common areas of the
Property and the repair and maintenance of the Property. Manager shall(i)assist in the preparation of space plans,
working drawings and other plans and specifications for the construction of improvements; (ii)obtain estimates of
the cost of completing improvements at such times as may be requested by Owner; (iii) assist Owner in selecting
qualified contractors to bid on the completion of construction jobs, in evaluating the bids received by Owner and
in awarding the contract; (iv) assist Owner in processing and approving change orders; (v) supervise the
construction of the improvements so that they are completed in accordance with the requirements of all plans and
specifications, tenant leases and construction contracts; (vi) review and approve all payment requests submitted
by any contractor and recommend to Owner whether or not the payment request should be honored; (vii) assist
Owner in making appropriate payments to any general contractor, subcontractor or materialman; and (viii)
attempt to obtain appropriate certificates of insurance from all contractors, subcontractors and materialmen before
they enter the Property. All construction contracts shall be prepared using a form of construction contract
approved by Owner in advance and shall be submitted by Manager to Owner for its approval and execution.
Manager shall have no authority to employ contractors for the construction of improvements without the prior
written consent of Owner.
(b) Construction Management Fee. If pursuant to Section 6(a) above, Owner requests to have
Manager supervise the construction activities,the sole compensation to Manager for the construction management
services described above shall be the construction management fee (the "Construction Management Fee") set
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 10 of 20
forth as Exhibit C to this Agreement. The Construction Management Fee described in Exhibit C shall be
calculated on the basis of the actual construction costs (the "Construction Costs") paid by Owner to contractors,
subcontractors, materialmen, and consultants (other than Manager) involved in the construction activities
described in Section 6(a) above. The Construction Management Fee shall be payable on the fifteenth (15th) day
of each calendar month based on the actual Construction Costs paid by Owner during the immediately preceding
calendar month. Except as otherwise provided in Section 3 above, in the event of the termination of this
Agreement, the final Construction Management Fee shall be payable to Manager thirty (30) days after the date
this Agreement terminates and shall be based on the Construction Costs actually paid by Owner prior to the
termination date.
7. Sale of Property. Owner shall have the right, in its sole discretion, to elect to have Manager act
as its sales agent for the purpose of selling the Property. Such an election by Owner shall only be effective upon
the execution by Owner and Manager of a separate written sales agreement, setting forth in detail Manager's
obligations with respect to the sale of the Property and the compensation which will be paid to Manager should
such a sale occur.Unless a separate written sales agreement is entered into by Owner and Manager,Manager shall
have no right to act as the real estate broker for the sale of the Property or to receive a commission or any other
compensation as a result of the sale of the Property. If Owner executes a listing agreement with an outside broker
for the sale of the Property, Manager shall reasonably cooperate with such broker to the end that the respective
activities of Manager and broker may be carried on without friction and without interference with tenants and
occupants. Manager shall permit the broker to exhibit the Property during reasonable business hours provided the
broker has notified Manager in advance, and subject to the terms and conditions of any applicable tenant leases.
Manager agrees that the failure on its part to extend cooperation to a broker desiring to show the Property is a
material default on its part under this Agreement and is grounds for the immediate termination of this Agreement.
8. Management Authority.
(a) Expenses. Manager shall be entitled to pay the expenses authorized in the annual budget
approved by Owner; provided, however, that Manager shall obtain Owner's prior approval for any expenditure
that by itself or when combined with future estimated expenditures would be likely to result in any line item of
the approved annual budget being exceeded by the greater of five percent(5%) or Fifteen Thousand and no/100
Dollars ($15,000.00). Notwithstanding the foregoing, if in the opinion of Manager, emergency action is
necessary in order to prevent damage to any person or to any property or to prevent Owner from committing a
default under a tenant lease or other agreement affecting the Property,Manager shall take whatever prudent action
is necessary to protect Owner's interests.
(b) Contracts. Subject to the other terms and conditions of this Agreement, Manager is
authorized to negotiate all contracts, equipment leases, and other agreements ("Contracts") as are reasonably
required in the ordinary course of business for the operation,maintenance, and service of the Property pursuant to
an Approved Budget (or otherwise authorized by Owner), with the express understanding that Manager does not
have authority to enter into any Contracts on behalf of Owner and that all Contracts must be executed by an
authorized representative of Owner in accordance with applicable laws. In the event of assignment of this
Agreement to the City of Fort Worth, all subsequent Contracts must be executed by the City Manager or an
Assistant City Manager in accordance with the Code of the City of Fort Worth and any other applicable laws.
Upon the termination of this Agreement, Owner shall continue to be responsible for all remaining obligations
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 11 of 20
arising after the termination of this Agreement pursuant to any Contracts that relate to the operation of the
Property. Owner acknowledges that Manager will enter into, at the direction of Owner, a Facilities Management
Operations and Maintenance Agreement ("TD Agreement") with TD Industries Inc. ("TD Industries") in the
form attached hereto as Exhibit "D" attached hereto. Upon the termination of this Agreement, Manager will
assign the TD Agreement to Owner, and Owner will assume all obligations thereunder arising after the
termination of this Agreement. Manager and any assignee of Manager will not amend the TD Agreement without
Owner's express written consent, which consent will not unreasonably be withheld. In the event Manager or
Owner terminates the TD Agreement prior to the expiration of the initial three(3) year term of the TD Agreement
and such termination is not the result of a default by TD Industries under the TD Agreement, Owner shall provide
funds to reimburse TD Industries for reasonable unamortized costs related to start-up expenses, tools, and
equipment. Such reimbursable costs will not to exceed$75,000.00 and will be amortized on a straight-line basis
from the effective date of the TD Agreement to the expiration of the 3-year initial term of the TD Agreement.
Notwithstanding the foregoing, Owner will not be liable to TD Industries for any costs related to any term or
provision of the TD Agreement that is not reflected in Exhibit"D"or in an amendment to the TD Agreement that
Owner has specifically approved in writing.
9. Indemnification. Owner hereby releases Manager from all claims, damages and costs (including
reasonable counsel fees) arising out of or in connection with the management of the Property and the operation
thereof, except for acts of Manager not authorized by this Agreement, acts of discrimination as defined by Title
VII of the Civil Rights act of 1964, acts of willful misconduct or the gross negligence of Manager,its employees
and agents (collectively "Unauthorized Acts"). To the extent permitted by law, Owner shall indemnify,defend,
and hold Manager and each of Manager's partners, directors, shareholders, members, officers, employees and
agents harmless from and against all claims,damages and costs(including reasonable counsel fees) made by third
parties in connection with the performance by Manager of its duties in accordance with the terms of this
Agreement, except to the extent caused by the Unauthorized Acts of Manager, its employees or agents. The
indemnities contained herein shall survive the termination of this Agreement for a period of time commensurate
with the expiration of the applicable statute of limitations period(s).
10. Governmental Entity. Manager acknowledges that Owner is a public entity, and as such is subject
to the Texas Open Meetings Act and the Texas Public Information Act. Further, certain of Owner's contracts,
agreements,expenditures, and other actions are subject to the approval of its governing body,in a public meeting,
which approval may be withheld for any reason or no reason. By execution of this Agreement, Owner does not
waive any of its governmental powers or immunities. Notwithstanding the foregoing, to the extent permitted by
law,Owner hereby waives its immunity from suit by Manager for any breach of this Agreement by Owner.
11. Waiver of Claims by Tenants. Owner will and shall cause each tenant to waive its rights of
recovery against Manager or Manager's partners, shareholders, officers, directors and employees, for damages
sustained by such tenant as a result of any damage to property or bodily injury or death arising from any risk or
peril(except to the extent caused by the gross negligence or willful misconduct of Manager).
12. General Provisions.
(a) Relationship. Manager and Owner shall not be construed as joint venturers or partners of
each other and neither shall have the power to bind or obligate the other party except as set forth in this
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 12 of 20
Agreement. This Agreement shall not deprive or otherwise affect the right of either party to own, invest in,
manage or operate property, or to conduct business activities which are competitive with the business of the
Property.
(b) Assignment. Manager shall not assign this Agreement without the prior written consent of
Owner, which may be given or withheld in Owner's sole discretion; provided, however, Manager may, without
Owner's consent,assign this Agreement to any one or more of the following persons (each of the following being
referred to as a"Hillwood Assignment"): (i) H.R. Perot, Jr.; (ii) any ascendant, descendant, spouse or sibling of
H.R. Perot, Jr.; (iii) any trust, family limited partnership or similar entity established primarily for the benefit of
one or more persons described in subparagraphs (i) and/or(ii)above, or the estate of any such person; and/or(iv)
any affiliate of the foregoing. Subject to the foregoing limitations,the covenants and agreements herein contained
shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, executors,
successors, and assigns. In the event of a permitted assignment including, without limitation, a Hillwood
Assignment, Manager shall be relieved of liability or obligation under this Agreement upon the effective date of
such assignment (other than liability or obligation that accrued prior to such date). Owner shall not assign this
Agreement without the prior written consent of Manager, which may be given or withheld in Manager's sole
discretion,except that Owner may assign this Agreement to the City of Fort Worth or any other instrumentality or
entity created by the City of Fort Worth without the consent of Manager.
(c) Notices. All notices required or permitted by this Agreement shall be in writing and may be
delivered(i)in person (by hand,by messenger or by courier service), (ii)by U.S. Postal Service regular mail, (iii)
by U.S. Postal Service certified mail, return receipt requested, (iv) by U.S. Postal Service Express Mail, Federal
Express or other overnight courier, or (v) by facsimile transmission, and shall be deemed sufficiently given if
served in a manner specified in this section. The addresses set forth beside the signatures of each party to this
Agreement shall be the addresses for notice purposes under this Agreement. From time to time, Owner or
Manager may by written notice to the other specify a different address for notice purposes. Any notice sent by
regular mail or by certified mail, return receipt requested, shall be deemed given three (3) days after deposited
with the U.S. Postal Service. Notices delivered by U.S. Express Mail, Federal Express or other courier shall be
deemed given on the date delivered by the carrier to the appropriate party's address for notice purposes. If any
notice is transmitted by facsimile transmission, the notice shall be deemed delivered upon telephone confirmation
of receipt of the transmission thereof at the appropriate party's address for notice purposes. If notice is received
on Saturday,Sunday or a legal holiday,it shall be deemed received on the next business day.
(d) Entire Agreement. This Agreement is the entire agreement between the parties with respect
to the subject matter hereof and no alteration, modification, or interpretation hereof shall be binding unless in
writing and signed by both parties.
(e) Severability. If any provision of this Agreement or its application to any party or
circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any
extent,the remainder of this Agreement shall not be affected thereby and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 13 of 20
(f) Applicable Law. This Agreement shall be construed and enforced in accordance with the
laws of the state in which the Property is located, and the exclusive venue for any action relating to this
Agreement shall be in Tarrant County,Texas.
(g) No Third Party Rights. The provisions and conditions of this Agreement are solely for the
benefit of Owner and Manager, and any lawful assignees thereof, and are not intended to grant any rights,
contractual or otherwise,to any other person or entity.
13. Counterparts. This Agreement may be executed in any number of counterparts. Each counterpart
shall be deemed an original, and all counterparts shall be deemed the same instrument with the same effect as if
all parties hereto had signed the same signature page.
14. Exhibits. The exhibits to this Agreement are incorporated herein by this reference.
15. Headings. The titles and headings of the various sections of this Agreement are intended solely for
convenience and shall not be construed as an explanation, modification or intended construction of any terms or
provisions of this Agreement.
[Signatures on Following Page]
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 14 of 20
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year
first above written.
OWNER:
AllianceAirport Authority, Inc.,
a Texas nonstock,nonprofit industrial development corporation
By:
Name: Jesus Chapa
Title: its duly authorized representative
MANAGER:
AFWM Services, LLC,
a Texas limited liability company
By:
Name:
Title:
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 15 of 20
IN WITNESS WHEREOF,the parties have caused this Agreement to be executed as of the day and year
first above written.
OWNER:
AllianceAirport Authority,Inc.,
a Texas nonstock,nonprofit industrial development corporation
By:
Name:
Title:
MANAGER:
AFWM Services,LLC,
a Texas limited liability company
By: C1'Q-.&')4
Name: 4
Title: V i Ge. P
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 15 of 20
Address for notices to Owner: OWNER:
AllianceAirport Authority,Inc.
1000 Throckmorton
Fort Worth,Texas 76102
Attn: Director,Housing&Economic Development Dpt.
With a Copy to:
City Attorney
City of Fort Worth
1000 Throckmorton
Fort Worth,Texas 76102
Address for notices to Manner: MANAGER:
AFWM Services,LLC
13600 Heritage Parkway, Suite 200
Fort Worth,Texas 76177
Attn: Property Manager
With a Copy to:
AFWM Services,LLC
13600 Heritage Parkway,Suite 200
Fort Worth,Texas 76177
Attn:Associate General Counsel
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 16 of 20
Exhibit A
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Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 17 of 20
Exhibit B
ITEMS PAID FOR BY OWNER
(a) Miscellaneous G&A expenses - as may be approved by Owner in annual operating budget of the property.
Miscellaneous G&A expenses are direct costs to manage the Property including but not limited to mileage,
delivery,tenant relations, training,PM software license fees, and other expenses approved by Owner.
(b) Contract services expenses — Manager shall be reimbursed by Owner for actual contract services expenses
approved by Owner or included within an Approved Budget.
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 18 of 20
Exhibit C
CONSTRUCTION MANAGEMENT FEE SCHEDULE
Manager shall be entitled to a Construction Management Fee in accordance with the following sliding scale fee
schedule calculated on total Construction Costs plus reimbursables.
For tenant improvements,capital expenditures or repair over Five Thousand Dollars ($5,000),the Manager shall
be entitled to a Construction Management Fee equal to the sum of:
• Five percent(5.0%)of the first Construction Costs of the job which are less than Five Hundred Thousand
Dollars($500,000);plus
• Four percent(4.0%)of next Construction Costs of the job which are Five Hundred Thousand Dollars
($500,000)or greater.
Reimbursables include architect reimbursables,engineer reimbursables,printing,travel expenses,food/lodging,
tolls and mileage.
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 19 of 20
Exhibit D
TD AGREEMENT
[follows]
Property Management Agreement
Alliance Fort Worth Airport Maintenance Base
Page 20 of 20
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
This Agreement entered into the 5th day of February, 2015 set forth below between TDlndustries Inc.,
through its Facility Management Services Group (hereinafter referred to as 7D"), with its principal place of
business at 13850 Diplomat Dr., Dallas, TX 75234, and AFWM Services, LLC (hereinafter referred to as
"Hillwood"), with its principal place of business at 13600 Heritage Pkwy., Suite 200, Fort Worth, TX 76177.
In consideration of the mutual covenants hereinafter set forth, and other good and valuable consideration,
the parties hereto agree as follows:
1. This Agreement, which includes the General Terms and Conditions set forth herein,shall be effective as
of the date first set forth below,and shall continue in force and effect for a period of three(3) years,with
two(2) additional,one (1) year options. Hillwood may at its discretion, at the end of the term choose to
renew the term with TD or release a new request for proposal.
2. The following are attached hereto and made a part of this Contract: Attachment A, Scope of Services;
Attachment B, Financial Arrangement; and other written Attachments as may be mutually agreed upon
in writing. The foregoing Attachments may be modified from time to time by a written Agreement
executed by both parties. Agreed-upon changes, which increase or decrease the scope of services to
be performed,will subject the contract price to an equitable adjustment. Should any changes to relevant
regulations, laws or codes substantially affect TD's services or obligations, Hillwood agrees to negotiate
with TD for appropriate changes to the scope or price of this Agreement or both. TD acknowledges and
agrees that any purchase order issued by Hillwood, in accordance with this Agreement, is intended only
to establish payment authority for Hillwood's internal accounting purposes. No purchase order shall be
considered to be a counteroffer, amendment, modification, or other revision to the terms of this
Agreement. No term or condition included in Hillwood's purchase order will have any force or effect.
3. TD is an Independent Contractor and is not an employee of, partner of, or in a joint venture with
Hillwood. TD shall exercise general and overall control over its employees. Should Hillwood have a
complaint regarding the performance of the services or the behavior of TD employees under this
Agreement, or request a change in the manner in which services are being performed, it shall transmit
same to TD,which shall take immediate action to resolve the problem.
4. All services to be performed hereunder by TD shall be in accordance with standard practices and
procedures,as disclosed and provided in writing to TD, or as otherwise specifically required by Hillwood
from time to time. TD may substitute its own standard practices and procedures upon written approval
of Hillwood. TD agrees to take such safety precautions as are customary in the industry for the services
to be performed.
5. The facilities and equipment provided to TD in connection with this Agreement are owned by
AllianceAirport Authority, Inc. (hereinafter referred to as "Owner'). To the extent in Hillwood's control
and Hillwood is able to do so,on behalf of Owner, Hillwood shall make available to TD such reasonable
facilities, equipment, and supplies as are required for TD to perform the services under this Agreement
as set forth by Attachment hereto. To the extent in Hillwood's control and Hillwood is able to do so, on
behalf of Owner, Hillwood will make provision within the facilities for controlled access and secure space
as is required to secure contractor owned tools, equipment, materials and supplies. The facilities and
equipment provided to TD hereunder shall remain the property of Owner; however, TD shall be
responsible for maintaining the cleanliness of such facilities and equipment unless otherwise instructed
by Hillwood.
Facilities Management O&M Agreement Page 1 of 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
6. If a dispute arises under this Agreement, the prevailing party shall recover all costs, including
reasonable attorney's fees, incurred as a result of the dispute. In the event of any conflict between the
terms and conditions of this Agreement and any of its Attachments, the order of precedence shall be:
first this Agreement with its General Terms and Conditions,then Attachment B,then Attachment A,then
other Attachments to this Agreement, if any. Any notice that is required to be given under this
Agreement must be in writing and sent to the party at the address above.
GENERAL TERMS AND CONDITIONS
This Agreement shall be governed by and construed in accordance with the laws of place of performance of
the Agreement. Any provisions of this Agreement, which may be prohibited or unenforceable in any
jurisdiction, shall be ineffective to the extent of such prohibition or unenforceability in such jurisdiction only,
and without invalidating the remaining provisions hereof in any other jurisdiction.
INDEMNITY
I. TD agrees that TD shall be responsible for such injury, loss, or damage caused by the intentional
misconduct or the negligent act or omission of TD. TD agrees to indemnify and to hold Hillwood and
Owner, including their officers,agents, directors,and employees, harmless from all claims,demands, or
suits of any kind, including all legal costs and attorneys fees, resulting from the intentional misconduct
of TD's employees or any negligent act or omission by TD's employees or agents. The obligations of
TD under this paragraph are further subject to paragraph 6.
2. Any notice required or permitted to be given pursuant to this Agreement shall be duly given, if sent by
fax,certified mail, or courier service,and received, in the case of notice to TD at:TDlndustries, Facilities
Management Services Division, Attention: John Regian, Regional Manager, 13850 Diplomat Drive,
Dallas, Texas 75234, with copies to Legal Counsel. And, in the case of Hillwood to Barney Herl,
Property Manager, 13600 Heritage Pkwy., Suite 200, Fort Worth,TX 76177.
3. TD shall invoice Hillwood, in arrears, on a monthly basis, or as otherwise agreed in writing by the
parties. Payment of invoices shall be due upon delivery of the invoice to Hillwood. Amounts which
have not been paid within thirty (30) days of the date of the delivery of the invoice to Hillwood may be
subject to a late payment fee of 1.5%per month, or any portion thereof, starting with the due date. TD
acknowledges that Hillwood is entering into this Agreement on behalf of Owner and at the direction of
Owner. In the event Owner does not provide funds for the payment of invoices, then TD's only recourse
against Hillwood is to terminate this Agreement.
4. TD agrees to Indemnify and hold harmless Hillwood and Owner, including their directors, officers,
employees, and agents from and against claims, liabilities, obligations, and expenses and costs relating
thereto, including reasonable attorneys fees and other legal expenses which are based on or imposed
by law upon Hillwood or Owner, for bodily injury (including death at any time resulting therefrom) and
property damage which is caused by or arises out of TD negligence, gross negligence or willful
misconduct in the performance of this Agreement. (B) TD further indemnifies and holds harmless
Hillwood and Owner, their directors, officers, employees, and agents from and against claims by TD's
employees to the extent that such claims are based on injuries arising from or relating to the work
performed under this Agreement.
5. (A) TD will obtain and continue in force, during the term of this Agreement, all insurance specified
below. Each insurance policy shall not be canceled or changed without thirty (30) days prior written
notice, given by the insurance carrier to Hillwood at the address set forth below. Before starting work
hereunder, TD shall deposit with Hillwood certificates evidencing the insurance it is to provide
Facilities Management O&M Agreement Page 2 of 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
hereunder: (i) Worker's Compensation and Occupational Disease Disability insurance as required by
the laws of the jurisdiction where the work is being performed, (ii) Employer's liability insurance in the
amount of $1,000,000 for each accident, (iii) comprehensive automobile liability insurance for vehicles
furnished by TD with a combined single limit of $2,000,000 for each occurrence, (iv) comprehensive
general liability insurance with a combined single limit of $2,000,000 for each occurrence/$2,000,000
aggregate. (B) TD shall cause the aforesaid insurance policies to include: (i) Hillwood and Owner as
additional insureds with respect to liability arising out of operations performed for Hillwood, by or on
behalf of TD, but only to the extent of damages directly caused by the negligence of TD; (ii) a standard
cross liability and severability clause; (iii) language that said insurance shall be primary with respect to
liability arising out of operations performed for Hillwood, by or on behalf of TD, but only to the extent of
damages directly caused by the negligence of TD; (iv)contractual liability coverage for liability assumed
under the terms of this Agreement; (v) thirty (30) days prior written notice of cancellation or change in
coverage.
6. Neither TD nor Hillwood will be responsible to the other for any punitive, special, indirect, or
consequential damages. Neither party will be responsible to the other for damage, loss, injury, nor
delay caused by conditions that are beyond the reasonable control, and without the intentional
misconduct or negligence,of that party. Such conditions include, but are not limited to: (A) acts of God;
(B) acts of Government agencies; (C) strikes; (D) labor disputes; (E) fire; (F) explosions or other
casualties; (G) thefts; (H) vandalism; (1) riots or war; or (J) unavailability of parts, materials, or supplies.
If this Agreement covers fire safety or security equipment, Hillwood understands that TD is not an
insurer regarding those services. TD shall not be responsible for any damage or loss that may result
from fire safety or security equipment that fails to perform properly or fails to prevent a casualty loss.
7. Hillwood acknowledges that employees assigned by TD to perform services pursuant to this Agreement
represent a valuable resource for TD. Hillwood agrees that during the terms of this Agreement, or any
renewal thereof, it shall not offer to employ or accept for employment any such employees of TD without
the prior written consent of TD. In the event this Agreement is terminated by Hillwood for any reason at
any time, other than for default by TD pursuant to this Agreement, Hillwood agrees that it shall not offer
to employ or accept for employment any such employees of TD for a period of one hundred twenty
(120) days following termination of this Agreement. In the event that Hillwood hires any employees of
TD in contravention of the provisions of this Agreement, Hillwood agrees to pay TD a sum equal to one
year's salary of the employee calculated at the rate paid by TD to the respective employee on the date
of his/her termination of employment with TD.
8. Upon the occurrence of any default or breach of this Agreement by either party, and as long as the
same shall be continuing, the injured party may,at its option, upon notice to the other in writing, declare
this Agreement to be in default, and any time thereafter, so long as the other party shall not have
remedied or caused to be remedied all outstanding defaults and/or breaches, the injured parry may by
notice in writing to the defaulting party, cancel or terminate this Agreement, per the requisite notice as
described on Page 3 #9 herein. To the extent Owner does not provide funds for the payment of
invoices under this Agreement, Hillwood shall have no liability to TD for any payments due under this
Agreement, and TD's sole and exclusive remedy against Hillwood for a default under this Agreement is
to terminate this Agreement.
9. The Agreement may be terminated by Hillwood for any reason upon written notice delivered to TD
giving at least ninety (90) days notice of termination. The Agreement may be terminated by TD for any
reason upon written notice delivered to Hillwood giving at least one hundred eighty(180) days notice of
termination. By such termination, neither parry may nullify obligations or liabilities already incurred for
performance or failure to perform prior to the date of termination; however Hillwood shall have no liability
for payment obligations to TD to the extent Hillwood is not provided adequate funds from Owner.
Facilities Management O&M Agreement Page 3 of 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
10. In the event Hillwood or Owner terminates this Agreement prior to the expiration of the initial three (3)
year term and such termination is not the result of a default by TD under this Agreement, to the extent
Owner provides funds for such reimbursements, TD will be reimbursed for reasonable unamortized
costs related to start-up expenses, tools, and equipment. Such reimbursable costs shall not exceed
$75,000.00 and will be amortized on a straight-line basis from the effective date of this Agreement to the
expiration of the 3-year initial term.
11. TD agrees to comply with any and all applicable federal, state or local regulatory requirements and to
secure such licenses as may be required for its employees and to conduct business in the state,
municipality, province, or location. TD agrees to pay all applicable municipal, state, county or local
sales, use, gross receipts or other related taxes arising out of, or relating to, the performance of this
Agreement. Hillwood shall reimburse'FD the amount of any such tax(es)paid.
12. TD shall not assign, sublet, sell, or transfer its interest in this Agreement without the written consent
Hillwood.
13. Hillwood shall have the right at any time to assign this Agreement to (i) Owner, (ii) the City of Fort
Worth, or (iii) any other instrumentality or entity created by the City of Fort Worth, upon written notice to
TD. If this Agreement is assigned by Hillwood, Hillwood will be released from all obligations under this
Agreement and the assignee will be held to the same contract period and all conditions herein.
14. This Agreement represents the entire understanding between the parties hereto, and any modification
or amendment hereof must be made in writing,executed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be executed this day of
,2015.
TDlndustries,Inc.(TD) AFWM Services,LLC(Hillwood)
BY: BY:
NAME:John Regian PRINTED NAME:
TITLE: Regional Manager TITLE:
Facilities Management O&M Agreement Page 4 of 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
Attachment "A"
I. Facilities Management Contract Scope Overview
TDlndustries, Inc. (referred to hereinafter as `TD") shall provide Facilities Management Operations and
Maintenance services (referred to hereinafter as O&M), to AFWM Services, LLC (referred to hereinafter
as "Hillwood") and the required personnel to operate and maintain the facilities located at 2030 Eagle
Pkwy., Fort Worth, TX 76117. TD acknowledges that such facilities are owned by AllianceAirport
Authority, Inc. (referred to hereinafter as "Owner"). TD will perform maintenance and repair services as
required assuring the proper operations of the systems to include systems operations to support the
ongoing operations of the buildings. The definition of services required to maintain the facility and assure
protection of the physical assets may vary over the course of this Agreement. Hillwood is entering into this
Agreement on behalf of Owner.
II.Term of the Agreement
A.The Agreement Term will be for a three (3) year period beginning the 5th of February 2015, with two (2)
additional, one (1) year options. Hillwood may at its discretion, at the end of the term choose to renew the
term with TD.
B. Termination: Hillwood may cancel this Agreement upon ninety (90) days prior written notice at any
time during the term of this Agreement. TD may cancel this Agreement upon one hundred eighty (180)
days prior written notice at any time during the term of this Agreement. Cancellation of this Agreement will
not relieve Hillwood of its obligation to pay TD for all costs incurred in the delivery of services, provided,
however, Hillwood shall have no liability to TD for costs incurred in the delivery of services to the extent
Owner does not provide Hillwood with funds for such costs.
III.Scope of Services
A_The intent of this Agreement is to provide Hillwood operations and maintenance support for the Central
Utility Plant (CUP), 24 hours per day, 7 days per week, and the Industrial Waste Treatment Plant, 5 days
a week during regular work hours Monday—Friday.
B. For the purposes of this Agreement, "Normal" mode of operation for equipment shall consist of items
Including, but not limited to taking voltage, temperature, and pressure readings as may be necessary to
ensure correct equipment operation and exercising equipment and reconfiguring equipment and systems
to allow maintenance activities to be performed. TD shall maintain equipment and systems to design
specifications and configurations and will ensure components/systems are operating at the highest
possible efficiency level.
C. "Emergency" mode shall consist of items including, but not limited to, problem recognition, responding
to equipment alarms, corrective actions, following procedures to stabilize equipment, returning equipment
to normal mode of operation as soon as problems are corrected, and ensuring equipment is operating
correctly.
D. During any "Emergency" mode of operation, TD shall immediately communicate to Hillwood the status
of equipment and keep Hillwood updated on any change in the operating status of the equipment until it is
returned to normal operating mode. Current emergency contact lists for both Hillwood and TD will be
updated as necessary, by TD, and posted and provided to Hillwood's representative.
E. Any time a component fails or an automatic function does not work properly, or such failure could
potentially affect the building operation, or is a major system or equipment component, an incident report
shall be completed and turned into Hillwood within 4 hours after such failure. Additionally, TD shall track
such incidents and record them in facility logs. All facility logs will be available to Hillwood for review at
any time.
Facilities Management O&M Agreement Page 5 of 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
Attachment "A"
IV. Maintenance of Mechanical and Electrical Systems and Equipment
A. TD shall be responsible for performing the existing preventive maintenance tasks on all equipment as
required to assure proper systems operation for all building systems to include mechanical, electrical,
structural and plumbing. PM's will be performed based on industry standards and actual run times. TD
shall perform all maintenance as set forth in this Agreement in a professional manner, adhering to
manufacturers'recommendations and standard industry practices.
B.The following table defines those services as required to meet equipment manufacturers' maintenance
requirements. It is understood that the intent of this Agreement is to provide the primary building
operations and maintenance functions for the buildings and that those duties and requirements will vary
from time to time over the agreement period. In some cases both TD staff as well as subcontractors may
deliver some portion of the service. The specific service split will be defined by Hillwood's scope or in-
place agreements. TD may provide assistance with the following subcontracts to include scheduling,
when the work is to be performed and oversight or supervision of the work to ensure that it is completed
correctly. TD will be responsible for coordination with Hillwood's departments that may be affected by the
work.
C. Facilities Maintenance -Work by Third Parties in Conjunction with TD. Because of efficiencies in cost,
time,or expertise TD may elect to use a subcontractor to perform various maintenance items.
Description/Service Type Self Sub
Sampling Perform Contract
Technical Staffing X
—Quality Control Programs X
Vendor,Subcontractor and Consultant M mt. X
—Safety and Work Rules X
Emergency Response X
HVAC Equipment Preventive Maintenance X
Chillers Annual X
Boilers Annual X
Air Compressors Annual X
Fire Pump/Sprinkler X
Electrical Work X
—Plumbing Maintenance X
Switch Gear Work X X
Stand By Power/LIPS and Emergency Power Generator X X
Elevators X X
—Building Fire Alarm System X X
—Energy Management Consumption Tracking X X
Cher systems X X
V.Facility Maintenance Services
A. Facilities Maintenance and Inspection
TD shall perform routine maintenance of buildings/facilities and ancillary structures. TD shall maintain the
facilities in accordance with the requirement of the maintenance specifications detailed in the operation
and maintenance plans for each facility, equipment, equipment/material warranty provisions, local
building codes,and industry best practices.
Facilities Management 0&M Agreement Page 6 01 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
Attachment "A"
B. TD shall provide other miscellaneous services as required in support of operations. TD shall also
maintain a clean environment in all work areas, including mechanical and electrical rooms and conform to
Hillwood's operating procedures and protocols.
C.TD shall be required to perform minor renovation or modification work that TD is qualified to perform.
This includes mechanical, electrical and HVAC work. This work must be performed utilizing the onsite
staff when time permits. Hillwood may request and approve the utilization of additional TD technical
resources. TD will be required to identify areas where additional resources are required, to include
pricing and present to Hillwood for approval.
D. TD shall be required to schedule and maintain equipment inspections by certified inspectors for the
building equipment such as, but not limited to:elevators, boilers and generators.
VI. Facility Maintenance Staffing
A. TD will hire the most fully qualified CUP Mechanics and IWTP Technicians to deliver the scope of
service defined herein. TD will make Hillwood aware of any changes in site-based personnel before
actually making such changes. Hillwood reserves the right to have any site-based TD employees
removed from the account at any time, solely at Hillwood's discretion. TD will maintain an active program
of performing background checks and drug screens prior to recommending any personnel for duties at
Owner's facilities.
B. The TD Mechanics will be required to work at the facility as required to assure proper operations of the
systems. Hillwood may request additional services at other hours from time to time as required by building
operations schedule changes. In these cases TD will make good faith efforts to provide secure or
otherwise provide the required service. This may include overtime or direct replacement resources.
C. TD will comply with applicable laws, regulations, and orders with respect to equal employment
opportunity as set forth in this Agreement.
D. TD O&M staff shall wear a uniform that is acceptable to Hillwood. TD staff will also wear TD badges
with a picture and name, or if preferred, a Hillwood badge with required documentation. The badges will
show identification of company and name.
E. Hours of Operation and Staff Adjustments: Required hours of operation shall be 24/7. Shifts will
consist of a total of 40 hours per week, with flexible start and end times to assist with the avoidance of
OT. TD is responsible for scheduling and maintaining required staff on a daily basis in order to meet
Hillwood's maintenance needs. TD is solely responsible for scheduling workers and subcontractors to
ensure compliance with all federal and state wage requirements.
F. TD's onsite staff shall observe the 8 Holidays and the accrual for paid time off, per the then current
TDlndustries' Partner Handbook and policies.
VII.Tools and Equipment
A. TD shall provide all hand tools necessary to perform the work. TD will purchase all material necessary
to complete the scope of work. These items will be invoiced to Hillwood at cost plus 10%.
B. An inventory of tools and equipment owned by Owner will be conducted within the first ninety (90) days
of the start of this Agreement as well as annually until the expiration of the contract. To the extent in
Hillwood's control and Hillwood is able to do so on behalf of Owner, Hillwood will provide a locked tool
storage area with sufficient safe guards to protect the tools and equipment. TD shall not be responsible
for tools, which TD is not in full control of.
Facilities Management O&M Agreement Page 7 of 10
TD Hillwood
r
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
Attachment "A"
C. Any new tools and equipment purchased for Hillwood shall be added to the current inventory list and
become the responsibility of TD to maintain.
D. TD will inventory all onsite supplies, material and critical spare parts. TD will review the list of existing
critical spares and secure any additional supplies deemed critical to the operation of the facility. This
inventory will also be done prior to exiting the site at the end of this Agreement.
E. Hillwood reserves the right to install, modify or delete any equipment or systems during the life of the
contract. Hillwood may use the contractor of its choice for such work if equipment is deleted or added and
a reduction in the labor force results. This decision will be a Hillwood decision.
VIII. Safety Requirements
A. In addition to all requirements in the Agreement, TD shall comply with all TD and Hillwood established
safety procedures and requirements. TD will also ensure compliance with OSHA, MSDS, Federal, State
and local laws and regulations and all applicable industry codes. TD shall be responsible for the safety
program ensuring all TD employees are complying with safety regulations as well as posting all
appropriate safety regulations in a conspicuous location for the technicians and emergency personnel. TD
shall manage hazardous waste removal in accordance with procedures developed by TD and approved
by Hillwood and Owner and ensure program is in compliance with State and Federal regulations.
B. Any unsafe conditions including, without limitation, the spilling or other release of any hazardous
substances or materials, shall be verbally reported to Hillwood immediately, with a written report to follow
within 4 hours.
C. TD will take all reasonable measures to ensure that the facilities are operated, managed, and
maintained in a safe manner, including providing employees and subcontractors with a safe work
environment,safety equipment and training.
D. TD staff will be required to attend all required safety training classes at the TD Fort Worth office and
hold bi-monthly safety meetings onsite.
E. TD will provide personal protective safety equipment to our onsite employees to consist of approved
work boots, safety glasses, ear plugs, lockout/tagout, etc.
IX. Office and Storage Space for TD
A. To the extent in Hillwood's control and Hillwood is able to do so, on behalf of Owner, Hillwood shall
provide TD with proper office and storage space in the building, which Hillwood deems appropriate to
operate the maintenance organization and parts inventory.
B. To the extent in Hillwood's control and Hillwood is able to do so, on behalf of Owner, Hillwood shall
provide TD with telephones and long distance call lines at no cost to TD. All long distance calls not
associated with the scope of work shall be at TD's cost. Any use of phone for personal calls or calls not
related to services hereunder is prohibited.
X. Future Scope Modifications
A. Hillwood may elect to change the scope of this Agreement at any time based on changes in business
requirements. However TD will be allowed ample time and opportunity to adjust their onsite workforce to
accommodate the required changes. In all cases TD will be compensated for normal and customary
operational expenses under the terms of this Agreement.
XI. Purchasing Requirements
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TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFWM Services, LLC
Attachment "A"
A. Hillwood is not obligated to purchase any parts,tools, equipment, consumables, additional services or
construction services from TD.
B. TD will order all supplies and materials required in the delivery of the contract at a 10% fee, to be
billed monthly. Hillwood may also at its discretion, choose to provide any or all supplies and materials
directly, without TD markup or fees. All purchases of spare parts will be through OEM
suppliers/distributors or through Hillwood-approved alternates.
C. All subcontractors invoiced from TD will be at cost plus 10%markup.
D. TD shall be responsible for securing any required rental equipment needed for the delivery of scope of
services within this Agreement. Hillwood will be billed at TD's cost plus the fee defined in Attachment"B"
of this Agreement.
E. All TD requests for compensation of materials and/or services purchased or secured through this
Agreement shall be presented to Hillwood for approval.
F. 'rD shall, from time to time, purchase materials, supplies and equipment in support of the operations,
but only with direct authorization from Hillwood.
Xll.Quality Management
A. TD will submit a monthly report to Hillwood highlighting key issues and documenting progress toward
implementing a Quality Management Program. This report will provide performance metrics in key areas
of the Quality Management Program. TD will use this data to audit and improve performance, compile
summary reports, identify trends, and actively support the project staff in resolving emerging issues and
concems.
Facilities Management O&M Agreement Page 9 of 10
TD Hillwood
Facilities Management Operations and Maintenance Agreement
AFW M Services, LLC
Attachment "B"
Summary of costs for the initial three(3) year term are listed below:
TDlndustries, Inc.
AFWM Services, LLC
Fort Worth,TX
' F�irt+ in :Sll�irnmt� `` al~ :Xr 4Z Year
Labor 1,298,290 1,337,238 1,377,356
Other Services/Subs 747,350 747,350 747,350
Equipment 16,194 16,194 16,194
1 :20�I,$1 2,101 2,140, 9
Labor-includes all base labor wages(2080 hours/yr.) and OT to complete the scope of services
for the CUP and IWTP described in the Contract and Attachment A. Paid time off will be billed to
Hillwood per TDlndustries' accrual policy in regards to years of service and time off earned, as it
is taken. Holidays will be observed to match TD's now &then current schedule, for future years,
of eight (8) holidays per year. Also included are all federal and state payroll taxes, workers
compensation and applicable health, life and retirement benefits.
Other Direct Costs- Uniforms, safety shoes and PPE are included in the labor number above.
Other Services/Subcontracts-The numbers provided above are for budgetary purposes. Actual costs
will be billed at cost plus 10%and will include administration and payment responsibility to the requested
subcontracts or for the additional services provided by our onsite staff.
Materials-Will be billed at TDlndustries cost plus 10%, as approved by manager.
Price does not include sales, use,gross receipts, or other related taxes that may be imposed by State,
County, and/or local authorities that have tax jurisdiction over the sites. Such taxes will be billed at cost
unless a tax exemption certificate or number is furnished to TDlndustries.
The information contained in this document is proprietary to TDlndustries Inc. Use or disclosure of this
information except for purposes of evaluation is prohibited without written permission of TDlndustries
Inc. Copyright TD 2015. All rights reserved.
Facilities Management O&M Agreement Page 10 of 10
TD Hillwood