Item Number: _5b Attach 1
Date of Meeting: November 5 2013
THIS SECOND AMENDMENT TO FUEL SYSTEM LEASE ("Second Amendment"), dated as of
as
,
2013, by and between the PORT OF SEATTLE, a Washington municipal corporation,
lessor (the "Port"), and SEATAC FUEL FACLLITIES LLC, a Delaware limited liability company, as lessee
the Lessee, dated as of May
("Lessee") amends the Fuel System Lease by and between the Port and 14,
dated August 31,
2003, as amended pursuant to the First Amendment to Fuel System Lease Agreement
2007 ("Lease").
RECITALS
A. Pursuant to Resolution No. 3504, as amended, adopted by the Commission of the Port on
April 22, 2003, the Port issued its $121,410,000 Port of Seattle Special Facility Lease Revenue Bonds
(SEATAC Fuel Facilities LLC), Series 2003 ("2003 Bonds") to finance costs of undergrounding the
Airport's aircraft fuel delivery system ("Fuel System"), located on the Premises leased to the Lessee
pursuant to the Lease.
B. Pursuant to Resolution No. 3680, amending and restating Resolution No. 3504 adopted by
its Port of
the Commission of the Port on May 14, 2013 (the "Bond Resolution"), the Port has issued
Seattle Series 2013
Special Facility Lease Revenue Refunding Bonds (SEATAC Fuel Facilities LLC),
("20 l 3 Bonds") to refund the 2003 Bonds.
C. The Port has constructed improvements that it desires be incorporated into the Fuel System
in connection with a realignment'of air carrier operations at the Airport.
D. The Port and the Lessee now desire to amend the Lease to provide for the incorporation of
the improvements by the Port into the Fuel System and, in consideration therefor, for additional rent to be
paid by the Lessee. This additional rent is to be paid directly to the Port and, consistent with other
additional rent paid directly to the Port under the Lease, will not constitute Pledged Lease Revenue under
the Bond Resolution.
E. Pursuant to Section 7(b) of the Bond Resolution, the Port and the Lessee may amend or
or concurrence of the Trustee or the
supplement the Lease from time to time and without the consent
inconsistent
Owner ofany Bond t to add covenants and agreements of the parties that are not contraly to or
with the covenants and agreements of the parties contained in the Lease, LLC Agreement, Interline
Agreement, Security Agreement or Guaranty ("Lessee Agreements").
F. An amendment of the Lease to provide for the payment of additional rent in consideration
for improvements to the Fuel System to be paid or nanced by the Port adds to the covenants and
with the covenants and agreements of the
agreements of the parties, and is not contrary to or inconsistent
parties contained in the Lessee Agreements.
G. The Port and Lessee have also agreed on the periodic readjustment of the Base Rent
payable by Lessee to the Port under Section 4.1(b)(ii) of the Lease.
NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein,
the parties agree as follows:
Section 1. Definitions; Rules of Construction. Except as otherwise dened in this Second
Amendment, capitalized terms and phrases used herein shall have the meanings set forth in Part I of
Appendix A attached to the Lease, unless the context or use indicates another meaning or intent. The
provisions of this Second Amendment shall be construed in accordance with the provisions of Part II of
Appendix A attached to the Lease.
Section 2. Definitions.
((1) Amended Denition. The denitions of "Fuel System" and "Premises" set forth in Part I of
Appendix A attached to the Lease are hereby amended and restated to read as follows:
Fuel System means any system for the receipt, storage, transmission and delivery
of Fuel at the Airport located on the Premises and all improvements, xtures and
personal property constructed and/or situated thereon and shall include the completed
portions of the Fuel Hydrant Project and the Fuel Hydrant System Additions Project,
which become a part of the Premises in accordance with the terms and conditions of this
Lease.
Premises means the real property consisting of the Land, Tank Farm
Improvements, the North Truck Rack, the Twelve-Inch Pipeline System and the Rightof"
Way, the Fuel Hydrant Project and the Fuel System Additions Project, together with any
additions, improvements, modications or extensions, and less any deletions, to the
Premises pursuant to Section 2.1 or Section 2.2.
(b) New Definitions. In addition, new denitions are added to Part I of Appendix A attached to
the Lease as follows:
Fuel Hydrant System Additions Project means the Fuel Hydrant System
Additions Project as set forth in Part II of Exhibit A that become part of the Premises in
accordance with the terms and conditions of this Second Amendment and the Lease,
constructed as part of the Port's Exterior Gate Improvements Airline Realignment - (CIP
#C800472), to accommodate a realignment of air carrier operations at the Airport,
including (i) twelve (12) fuel hydrant valve pits to accommodate aircraft gate
reassignments at Concourses A, B, D and the South Satellite; and (ii) related project
elements including demolition of concrete panels, soil excavation, installation of fuel pit
assemblies, addition of new pipe connections from new valve pits to existing pipes, and
pouring new concrete panels.
Fuel Hydrant System Additions Project Rent means additional rent of Sixteen
Thousand Two Hundred ThirtyThree Dollars and Fieen Cents ($16,233.15) per month
on the
beginning on the Fuel Hydrant System Additions Rent Connneneement Date and
rst (15') day of each month thereafter, calculated by the Port to reect the Fuel Hydrant
Five Thousand Two
System Additions Project cost of Two Million Two Hundred Eighty
Hundred Eight Dollars ($2,285,208), adjusted to include costs of change orders
representing (i) additional costs based on requests by individual Air Carriers for design
revisions associated with the placement of the fuel hydrant valve pits at terminal gateS,
and (ii) unforeseen circumstances discovered after commencement of construction of the
Fuel Hydrant System Additions Project.
Fuel Hydrant System Additions Project Rent Conunencement Date means April
1, 2013.
Section 3. Premises. Section 2.1 (a) (ii) of the Lease (Connnencement of Possession) is
hereby amended and restated to read as follows:
The Lessee shall be entitled to possession of the existing Premises (including the
Tank Farm Land, the Tank Faun Improvements, the North Truck Rack and the South
Tiuek Rack) on the Lease Commencement Date. The Lessee shall be entitled to exercise
its rights in the Right-ofWay containing the Twelve-Inch Pipeline System on the Lease
Commencement Date. The Lessee shall be entitled to possession of the Operations
Center Land upon Completion of the Operations Center that is part of the Fuel Hydrant
are
Project. The Lessee shall be entitled to possession of the Tank Farm Renovations that
such Tank Faim Renovations. The
part of the Fuel Hydrant Project upon Completion of
Lessee shall be entitled to possession of the remainder of the Fuel Hydrant Project and to
exercise its rights in the Right-ofWay containing the pipelines, hydrant pits, vaults that
remainder of the Fuel
are part of the Fuel Hydrant Project upon Completion of the
Hydrant Project. The Lessee shall be entitled to possession of the Fuel Hydrant System
Additions Project and to exercise its rights in the Rightof-Way containing the pipelines,
as of the
hydrant pits, vaults that are part of the Fuel Hydrant System Additions Project
Fuel Hydrant System Additions Project Rent Commencement Date. The Port and Lessee
agree that the South Truck Rack has been demolished and is deleted from the Premises as
of July 26, 2006.
Section 4. Acceptance of the Improvements. Section 2.2 of the Lease is hereby amended
and restated to read as follows:
The Lessee acknowledges and agrees that the Lessee is leasing from the Port real
property consisting of the Tank Farm Land, the Tank Farm improvements and the North
Truck Rack, and acquiring rights in the Twelve~Inch Pipeline System in their present
condition and that the Port has made and will make no representations as to the condition
of the Premises and no representations as to the tness or suitability for the Lessee's use
for the operation of the Fuel System. The Lessee has examined the Tank Farm Land, the
Tank Fann Improvements, the North Truck Rack, and the Twelve-Inch Pipeline System
and accepts the foregoing in their current condition. Lessee agrees to make any changes
in the Tank Fann Land, the Tank Farm Improvements, the North Truck Rack and the
Twelve-111011 Pipeline System necessary to conform to known federal, state and local law,
except for the remediation of PreExisting Contamination. The Lessee also agrees that the
Premises are suitable for operation of the Fuel System. The Lessee has accepted the
Operations Center Land, the Operations Center, the Tank Farm Renovations and the
remaining pipelines, hydrant pits and vaults that became part of the Fuel System
following completion of the Fuel Hydrant Project. The Lessee also accepts the Fuel
Hydrant System Additions Project as part of the Premises. The parties agree that
acceptance of the Premises by the Lessee as provided in this Section 2.2 does not create
any liability for the Lessee in respect of Pie-Existing Contamination.
Section 5. Revisions to Legal Descriptions. Consistent with Section 2.1(d) of Lease, the Port
and the Lessee acknowledge and agree that (i) the description of the Premises as set forth in Part II of
Exhibit A to the Lease attached to this Second Amendment, revised to incorporate the Fuel Hydrant Project
and the Fuel Hydrant System Additions Project, is incorporated into the Lease in substitution for the
drawing originally attached as Part II of Exhibit A to the Lease, and (ii) the legal description of the South
Tiuck Rack originally attached as Part IV of Exhibit A to the Lease is deleted.
Section 6. Base Rent. Section 4.1(b)(i) of the Lease is hereby amended and restated to read
as follows:
Base Rent for the Land shall be paid monthly, in advance, on or before the lst day of each
month during the Term of this Lease, and shall be computed as follows: $0.64/sq. ft./yr. (based on
initial square footage of the Land, a total of 375,408 sq. ft., the amount of such monthly payment
shall be $20,021.76, prior to any adjustment pursuant to Section 2.1), subject to further adjustments
pursuant to Section 4.1(b)(ii). In the event that the square footage of Land to be leased under this
Lease is adjusted pursuant to Section 2.1, the dollar amount of Base Rent due hereunder shall
likewise be adjusted.
Section 7. Base Rent Adjustment. The Port and Lessee agree that, pursuant to adjustments in
accordance with Section 4. l (b)(ii) of the Lease, the Base Rent payable by the Lessee for the rental period
commencing June 1, 2012, is Forty~Nine Thousand Three Hundred EightyNine and 46/ [00 Dollars
($49,389.46) per month, computed as follows:
464,842 sq.ft. @ $l .275/sq.ft./yr. = $592,673.55/yr. + 12 = $49,389.46/mo.
Section 8. Additional Rent. Section 4.2(a) of the Lease is hereby amended and restated to read as
follows:
During the Term, Lessee shall pay the following as additional rent (such items
"Additional which term shall also include
are collectively referred to herein as Rent",
Facilities Rent, Base Rent,
any fee, charge, reimbursement or other amount (other than
and amounts due under Section 4.1(c)) required to be paid by Lessee under this
Lease):
(a) Additional Payments. Within thirty (30) days after written demand therefor
(by the Port or the Trustee, as the case may be) additional payments as follows; except that
Fuel Hydrant System Additions Project Rent under subsection (iv) shall be payable to the
Port at the times set forth in the denition thereof, without any need for written demand:
(i) To the Trustee or scal agency, as applicable, its reasonable fees
and expenses as trustee, bond registrar and paying agent, including the reasonable fees and
and any other amounts due to the Trustee under
expenses of its outside attorneys and agents
the Resolution or Supplemental Resolution ("Trustee Fees"), plus any Rebate Amount;
(ii) To the Port, reimbursement for all reasonable costs and expenses
paid or incurred by the Port, including reasonable fees and disbursements of counsel (both
in-house and outside), and for all other liabilities incurred by the Port, in each case in
satisfaction of any obligations of Lessee not performed by Lessee as required hereunder;
(iii) To the Port, as reimbursement for or prepayment of all costs,
expenses and liabilities paid or incurred, or to be paid or incurred, at the request of the
Lessee or as required by this Lease, by the Port or any of its members, ofcers, employees
fees and disbursements of counsel (both inhouse and
or agents, including reasonable
outside) and including costs of calculating any Rebate Amount; and
(iv) To the Port, Fuel Hydrant System Additions Project Rent.
In the event the Port is represented by in-house attorneys in connection with (ii),
(iii) or (iv) above, such attorneys' fees shall be computed at hourly rates charged by
attorneys of comparable experience in private practice in Seattle; provided that, the Lessee
shall only be required to pay to the Port the difference between the total attorneys fees
owned by Lessee and the amount direct billed to the Port by its iii-house counsel.
Section 9. Security for Base Rent and Certain Additional Rent Payments. The third (3")
paragraph of Section 4.5 of the Lease is hereby amended and restated to read as follows:
The Port may apply all or part of the cash deposit or Surety to unpaid Base Rent and to
unpaid Additional Rent described in subsections 4.2(a)(ii), 4.2(a)(iii), 4.2(a)(iv), 4.2(b), 4.2(c), 4.2(d) and
9.2(b) or any other unpaid sum due hereunder (excluding Facilities Rent) including but not limited to
Termination Cleanup Costs or other amounts payable by Lessee pursuant to the Termination Assessment
Report required pursuant to Section 9.5, or to cure other defaults of Lessee. If the Port uses any part of the
cash deposit or Surety as permitted in this Lease, Lessee shall restore the cash deposit or Surety to an
,
amount acceptable to the Port within ten (10) days after the receipt of the Port's written request to do
so.
The Trustee shall not be entitled to receive or hold the cash deposit, Surety
or any proceeds thereof.
Section 10. Fuel Hydrant Pit Addition Project. Section 5.] of the Lease is hereby amended
and restated to read as follows:
Section 5.1 Payment of Costs. The Port shall cause the Fuel Hydrant Project to
be designed and constructed in accordance with the Construction Specications and the
terms of this Lease. The Costs of the Fuel Hydrant Project shall be nanced or renanced
with the proceeds of the Series 2003 Bonds and, if necessary, with the proceeds of
Completion Bonds. The Port also agrees that it will take whatever action is required and
legally available to terminate the United Farm Fuel Lease if at the time the Fuel Hydrant
Project is rst Completed the United fuel farm has access to Fuel through the SixInch
Delivery Lines and if United has access to the United fuel farm. The Port has caused the
Fuel Hydrant System Additions Project to be designed and constructed in accordance with
the Fuel Hydrant System Additions Project construction specications dated January 30,
2012, and the terms of this Lease. The Lessee acknowledges and agrees that it has approved
6
the construction specications dated January 30, 2012, for the Fuel Hydrant System
Additions Project.
Section 11. Amendment. Section 15.6 of the Lease is hereby amended and restated to read as
follows:
This Lease may not be amendcd or modied except by a written instrument
executed by both the Port and Lessee, and further subject to any additional limitations that
may be established in the Resolution. So long as the Bonds or any Reimbursement
Obligations are outstanding, this Lease may not be amended without the written consent of
the Bond Insurer; mmwithstanding Ilwfbregoing, Lease amendments solely for the purpose
of adjusting the Base Rent pursuant to Section 4.1(b), together with corresponding
adjustments to Section 4.5 of the Lease, and Lease amendments permitted by the terms of
Sections 2.1(d) or 6.14 of the Lease may be made without the approval of a Credit Facility
provider, if any, by written agreement of the Port and Lessee.
Section 12. Ratification and Confirmation. All other terms and conditions of the Lease are
hereby ratied and confirmed.
THE PORT OF SEATTLE
By:
Title:
SEATAC FUEL FACILITIES LLC
By:
Title:
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that is the person who
appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he
was authorized to execute the instrument and acknowledged it as the of the PORT OF
SEATTLE, to be the free and voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: ,2013.
Notary Public
Print Name
My commission expires
(Use this space for notarial stamp/seal)
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that is the person who appeared
before me, and said person acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument and acknowledged it as the of SEATAC FUEL
FACILITIES LLC, to be the free and voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: 2013.
,
Notary Public
Print Name
My commission expires
(Use this space for notarial stamp/seal)
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