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HomeMy WebLinkAboutResolution - 2022-R0310 - Non-aeronautical Lease Agreement with Marco Steel & Aluminum - AirportResolution No. 2022-R0310 Item No. 5.9 July 12, 2022 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Lease Agreement by and between the City of Lubbock and Marco Steel & Aluminum Co. for certain real property located at Lubbock Preston Smith International Airport (LPSIA), and related documents. Said Lease Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council on July 12, 2022 ATTEST: 0 JA�-� 'r Rebe ca Garza, City Secre APPROVED AS TO CONTENT: Kelly Campbell, Executive Director of Aviation APPROVED AS TO FORM: Mitch atterwh�,ir City Attorney ccdocs/RES.LeaseAgrmt- Marco Steel & Aluminum Co June 27, 2022 Resolution No. 2022-R0310 THE STATE OF TEXAS § COUNTY OF LUBBOCK KNOW ALL MEN BY THESE PRESENTS: LEASE AGREEMENT This LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into at Lubbock, Texas, by and between the CITY OF LUBBOCK (referred to herein as Lessor) and MARCO STEEL & ALUMINUM CO. (referred to herein as Lessee). WITNESSETH: WHEREAS, Lessor owns, controls, and operates the Lubbock Preston Smith International Airport (referred to herein as Airport), situated at Lubbock, Lubbock County, Texas, and has the authority to grant certain rights and privileges with respect thereto, including those hereinafter set forth: and WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to lease unto Lessee the premises described herein, together with certain privileges, rights, uses and interests therein, as hereinafter set forth; and WHEREAS, Lessee intends to utilize the office space described herein for insurance business and other approved purposes'; and WHEREAS, Lessee desires to lease office space at the office complex on the west side of the Airport from which to conduct its business; NOW THEREFORE, for and in consideration of the mutual promises, covenants, terms and conditions, both general and special, as hereinafter set forth, Lessor hereby grants to Lessee the rights and privileges hereinafter described; Lessee agrees to accept the duties, responsibilities, and obligations as hereinafter set forth; and the parties hereto, for themselves, their successors, and assigns, agree as follows: Page 1 ARTICLE ONE DEMISE OF LEASED PREMISES 1.01 LEASED PREMISES. Lessor does hereby lease unto Lessee the premises described and being: Warehouse space and land as shown on Exhibit "A" attached hereto and incorporated herein by reference, which warehouse space and land are hereinafter referred to as "leased premises" or "premises." Building #714, 5612 N. David Avenue: 16,000 square feet Building #716, 5618 N. David Avenue: 16,000 square feet Building #718, 5620 N. David Avenue: 16,000 square feet Adjacent Land East of Building #716: 16,200 square feet 1.02 PURPOSE AND PRIVILEGES. Lessee shall use the leased premises solely for the purpose of storing and processing steel and steel products. Nothing in this Agreement shall be construed as granting to Lessee any right to operate any other business or concession on the Airport premises except as enumerated herein. 1.03 PUBLIC BENEFIT. If Lessee is authorized by this Lease to conduct business of any nature on the Airport, Lessee agrees to operate the Leased Premises for the use and benefit of the public and further agrees: a. To use reasonable efforts to furnish good, prompt, and efficient services adequate to meet all the demands for its services at the Airport; b. To furnish said services on a fair, equal, and not unjustly discriminatory basis to all users thereof; and c. If applicable, to charge fair, reasonable, and nondiscriminatory prices for each unit of sale or service, provided that the Lessee may make reasonable nondiscriminatory discounts, rebates, or other similar types of price reductions for volume purchases. Page 2 ARTICLE TWO TERM 2.01 TERM. The term of this Agreement shall be for a period of five (5) years, commencing on and ending on Lessee shall have the option to extend this Agreement for two (2) additional three (3) year periods. Written notice of Lessee's intent to exercise or not to exercise a renewal option must be received in the office of the Executive Director of Aviation (referred to herein as "Director") at least thirty (30) days prior to the expiration date of the original term or expiration of the first three (3) year option whichever applies. 2.02 HOLDOVER. In the event the Lessee should hold over and remain in possession of the Leased Premises after the expiration of term of the Agreement, the rents, fees, and other charges paid during the holding over period shall be equal to a minimum of 150% of the monthly rents, fees, and other charges that were charged by the City at the time the Agreement expired. In no case shall a holdover by Lessee be construed to be a renewal or extension of the Lease. ARTICLE THREE RENTALS AND FEES 3.01 RENTAL. In consideration of the rights and privileges herein granted, Lessee shall pay to the Lessor the following rentals and fees: A. Building rental of #714: 16,000 square feet @ $1.40 per square foot per year. The annual rental being TWENTY TWO THOUSAND FOUR HUNDRED AND NO/100 DOLLARS ($22,400.00), which shall be due and payable, in twelve (12) equal monthly installments of ONE THOUSAND EIGHT HUNDRED SIXTY SIX AND 67/100 DOLLARS ($1,866.67) per month. B. Building rental of #716: 16,000 square feet @ $1.40 per square foot per year. The annual rental being TWENTY TWO THOUSAND FOUR HUNDRED AND N0/100 DOLLARS ($22,400.00), which shall be due and payable, in twelve (12) equal monthly installments of ONE THOUSAND EIGHT HUNDRED SIXTY SIX AND 67/100 DOLLARS ($1,866.67) per month. Page 3 C. Building rental of #718: 16,000 square feet @ $1.40 per square foot per year. The annual rental being TWENTY TWO THOUSAND FOUR HUNDRED AND NO/100 DOLLARS ($22,400.00), which shall be due and payable, in twelve (12) equal monthly installments of ONE THOUSAND EIGHT HUNDRED SIXTY SIX AND 67/100 DOLLARS ($1,866.67) per month. D. Land rental east of #716: 16,200 (180' X 90') square feet @ $0.2490 per square foot per year. The annual rental being FOUR THOUSAND THIRTY THREE AND 80/100 DOLLARS ($4,033.80) per year, which shall be due and payable, in twelve (12) equal monthly installments of THREE HUNDRED THIRTY SIX AND 15/100 DOLLARS ($336.15) per month. 3.02 ADJUSTMENT OF RENTS. The parties hereto mutually agree that during the term of this Agreement, all rents shall be adjusted every five years thereafter based on the findings of a Rent Study. The City shall engage an Appraiser to determine market value. The Appraiser shall use current appraisal methods that are appropriate for appraising Airport land and/or improvements. Appraiser shall use an appropriate and justifiable rate of return for Airport properties. The subject property shall be appraised assuming that highest and best use is aviation related. Additionally, the appraisal shall meet the Uniform Standards of Professional Appraisal Practice. The first such Rent Study and rent adjustment in accordance with this provision shall not occur before in the first five years following the effective date of this Agreement. 3.03 CONSUMER PRICE INDEX. On an annual basis between each Rent Study, the parties hereto mutually agree that during the term of this Agreement, except as otherwise might be set out in this Agreement, the rental rates for the office space and common space will be adjusted upward or downward for each ensuing calendar year beginning January 1, 2023, in direct proportion to the fluctuation in the U. S. Department of Labor, Bureau of Labor Statistics Consumer Price Index (CPI) for All Urban Consumers. Any adjustment to the rental rates resulting from changes in the CPI shall be determined by calculating the increase or decrease in the CPI for the preceding twelve (12) months. 3.04 PAYMENTS. All rental payments are due and payable on or before the 15th day of each month this Agreement is in effect and shall be made at the office of the Director, Lubbock Preston Smith International Airport, 5401 N. MLK Blvd., Unit 389, Lubbock, Page 4 Texas 79403. Lessee shall pay Lessor a late payment charge of five percent (5%) of the total amount of rentals payable if payment of such rentals is not made when due. 3.05 DEFAULT FOR FAILURE TO PAY RENTALS OR FEES. If Lessee fails to pay any rent due and owing to Lessor hereunder within fifteen (15) days of the due date, the Director shall provide written notice to the Lessee. Thereafter, if the rent remains unpaid for more than fifteen (15) days after such notice is received, Lessor may exercise its rights under Article Seven of this Agreement. ARTICLE FOUR RIGHTS RESERVED TO CITY 4.01 SAFETY City reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from constructing or permitting construction of any building or other structure on or off the Airport which, in the opinion of City, would limit the usefulness of the Airport or constitute a hazard to aircraft. 4.02 MAINTENANCE OF PUBLIC AREA City reserves the right, but shall not be obligated to Lessee, to maintain and keep in repair the landing area of the Airport and all publicly -owned facilities of the Airport. Lessee will perform no maintenance activities outside the Leased Premises without the consent of the Director. 4.03 STANDARDS City reserves the right to establish reasonable standards for the construction and maintenance of and alterations, repairs, additions, or improvements of Lessee's facilities. This includes structural design, color, materials used, landscaping, and maintenance of Lessee's facilities and Leased Premises. Lessee shall comply with applicable statutes, ordinances, building codes, and rules and regulations of all governmental agencies as may have jurisdiction at the time. Subject to Lessee's Duty to Repair (5.02), City will not require Lessee to reconstruct or alter an existing improvement that has been constructed and maintained in good condition under a prior design standard. Page 5 4.04 TIME OF EMERGENCY During time of war or national emergency, the City shall have the right to lease the landing area and any other portion of the Airport to the United States for governmental use and if any such lease is executed, the provisions of this instrument and any associated rentals and fees, insofar as they are inconsistent with the provisions of the lease to the United States, shall be suspended. 4.05 DEVELOPMENT OF AIRPORT City reserves the right to further develop or improve the Airport. However, the City shall notify Lessee, in writing, prior to the planned development or improvement affecting Lessee's Leased Premises. 4.06 SPONSOR'S ASSURANCE SUBORDINATION This Lease shall be subordinate to the provisions of any existing or future agreement between the City and the United States concerning the operation or maintenance of the Airport, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development of the Airport. Should the effect of such agreement with the United States be to take any of the property under this Lease or otherwise diminish the commercial value of this Lease, the City shall not be held liable therefor. However, if the commercial value is appreciably diminished, City and Lessee shall engage in good faith negotiations to determine a fair and equitable adjustment to rentals and fees. The City covenants and agrees that it will during the term of this Agreement operate and maintain the Airport as a public facility consistent with and pursuant to the Assurances given by the City to the United States Government under federal law. 4.07 INSPECTION OF LEASED PREMISES City reserves the right to conduct inspections of the Leased Premises at reasonable times to ensure fire, safety, and sanitation regulations and other provisions contained in this Lease are being adhered to by the Lessee. 4.08 INSPECTION OF BOOKS & RECORDS The Lessee, following accepted accounting practices and procedures, will maintain true and accurate books, records and receipts, which will show Fuel flowage. Such books and records may be inspected at any time by City or its duly authorized representatives at Lubbock, Texas, upon reasonable notice to Lessee. In the event Lessee requests such inspection to be performed outside the Lubbock area, such request may be honored at Page 6 City's discretion; however, any and all expenses incurred by so doing shall be reimbursed by the Lessee. Lessee agrees to furnish facts and figures necessary to determine the amount to be paid City. ARTICLE SIX LESSEE'S RIGHTS, PRIVILEGES, AND OBLIGATIONS 5.01 LESSEE'S RIGHTS During the term of this Lease, Lessee, and its tenants shall have use of, in common with others at the Airport, and free of additional charge, all runways, taxiways, public ramps, and public parking areas available at the Airport, and the right of ingress to and egress from the above described Premises, which right shall extend to Lessee's Employees, guests, invitees, tenants, and patrons. Lessee has the right and privilege to control activity on its Leased Premises subject to applicable federal, state, and local rules and regulations. If, during the term of this Agreement and Lessee is in Good Standing, the use of the Airport by Lessee is temporarily suspended, restricted, or interfered with for a period of thirty (30) consecutive days or more for reasons beyond the practical control of the City, in such manner so as to substantially affect the use of the Leased Premises or operation of Aircraft by Lessee or its tenants, all fees during such period shall abate and the term of the Agreement shall, at the election of Lessee, be extended for an equivalent period of time. 5.02 LESSEE'S DUTY TO REPAIR Except as provided herein, any property of City, or for which City may be responsible, which is damaged or destroyed incident to the exercise of the rights or privileges herein granted, or which damage or destruction is occasioned by the negligence of Lessee, its Employees, agents, servants, patrons, or invitees shall be properly repaired or replaced by Lessee to the reasonable satisfaction of the Director. In lieu of such repair or replacement, Lessee shall, if so required by the Director, pay City the replacement cost of such property. 5.03 PARKING Lessee shall at its sole cost and expense provide adequate and suitable parking areas for use by its customers, Employees, patrons, guests, and invitees upon its Premises. Page 7 5.04 WAGES The Parties hereto acknowledge and agree that any Improvements constructed on the Leased Premises by Lessee shall be considered Public Works for the purposes of determining applicability of Chapter 2258, Texas Government Code. The Parties further agree that all wages paid by Lessee in connection with the construction of said Improvements shall comply with the prevailing wage requirements set forth in state and federal law including Chapter 2258, Texas Government Code. 5.05 WARRANTY OF NO SOLICITATION Lessee warrants that it has not employed any person employed by City to solicit or secure this Agreement upon any agreement for a commission, percentage, brokerage, or contingent fee. 5.06 LESSEE'S OBLIGATIONS Lessee shall be responsible for maintaining an on -going business at the Airport and complying with the PMCDs throughout the term of the Agreement. Additionally, any modifications to the business or corporate structure of the Lessee shall be communicated in advance to the Director. Lessee shall be responsible for the conduct, demeanor, and appearance of Lessee's representatives, officers, officials, Employees, agents, and volunteers at the Airport and on the Lease Premises. Lessee shall be responsible for conducting Lessee's authorized Activities in a manner that does not interfere with or disturb others while also complying with applicable Legal Requirements. Lessee shall be responsible for promptly paying when due and owing all: A. UTILITIES - Lessee shall assume and pay for all costs or charges for metered utility services provided to Lessee at the Premises during the term of this Agreement. Lessee shall have the right, with written approval of City, to connect to any storm and sanitary sewers, and water, and utility outlets, the cost of usage, extension, installation, and meters, where required, to be paid by the Lessee. B. TRASH, GARBAGE, REFUSE, ETC. - Lessee shall provide a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage, and other refuse produced as a result of Lessee's business operations on the Leased Premises. C. PAYMENT OF TAXES, FEES, AND ASSESSMENTS - The Lessee agrees to pay promptly when due all federal, state, and local government taxes, license fees, and Page 8 occupation taxes levied on either the Leased Premises or on the business conducted on the Leased Premises or on any of Lessee's property used in connection therewith, except as provided herein. Taxation may be subject to legal protest in accordance with the provisions of the taxing authority whose levy is questioned. Any protest shall be at the sole expense of Lessee. Delinquency in payment of such obligations after any protest has been settled shall, at the option of the City, be cause for immediate termination of this Lease. D. PAYMENT OF EXPENSES - All costs, expenses, and other charges relating to the Leased Premises, Improvements, and/or Lessee's Activities. 5.07 BASED AIRCRAFT If Based Aircraft are located on the Leased Premises, the Lessee shall provide an annual Based Aircraft report to the Director in compliance with the PMCDs. 5.08 AMERICANS WITH DISABILITIES ACT Lessee shall be solely and fully responsible for complying with the Americans with Disabilities Act of 1990 as amended from time -to -time, with respect to the Leased Premises and its Activities at the Airport. 5.09 NON-DISCRIMINATION PRACTICES Lessee, its agents and Employees will not discriminate against any person or class of persons by reason of race, creed, color, national origin, age, sex, or disability in providing any services or in the use of any of its facilities provided for the public. Lessee further agrees to comply with such enforcement procedures as the United States Government might demand that the City take in order to comply with the Sponsor's Assurances. Lessee agrees not to discriminate against any Employee or applicant for employment because of race, creed, color, national origin, age, sex, or disability. 5.10 SECURITY ACCESS Lessee agrees to control all access to the Aircraft Operations Area (AOA) through the Leased Premises and through gates assigned to or controlled by Lessee so as to prevent unauthorized entry to the airfield by persons, animals, or vehicles. In the event that unauthorized access to the AOA is gained through the Leased Premises or any area which Lessee controls or is obligated to control, any fines or penalties assessed by the Transportation Security Administration (or other authorized Agency) shall be the responsibility of the Lessee and Lessee hereby agrees to promptly pay all such fines or Page 9 penalties without delay and make any and all requested changes in operations or facilities necessary to maintain Airport security and prevent reoccurrence of any unauthorized entry. Lessee shall place appropriate signage on all doors with AOA access to prevent unauthorized access. Failure to comply with this paragraph shall be cause for immediate termination of this Agreement by City ARTICLE SIX GENERAL CONDITIONS This Lease is granted subject to the following provisions and conditions. Failure of the Lessee to comply with any requirement of Article Six shall be cause for immediate termination of this Agreement by Lessor. 6.01 RULES AND REGULATIONS. City reserves the right to issue through its Director such reasonable rules, regulations and procedures for activities and operations conducted on the Airport as deemed necessary to protect and preserve the safety, security, and welfare of the Airport and all persons, property, and facilities located thereon. The Lessee's officers, agents, employees, and servants will obey all rules and regulations which may be promulgated from time to time by the City or its authorized agents at the Airport, or by other lawful authority, to ensure the safe and orderly conduct of operations and traffic on the Airport. Lessee shall pay for all licenses, permits, clearances, rights -of - way and other matters necessary to conduct business. Lessee shall pay all fees, taxes and charges assessed under State, local or Federal statutes or ordinances insofar as they are applicable. 6.02 ADDITITIONS, IMPROVEMENTS OR ALTERATIONS. Lessee shall not make, permit or suffer any additions, improvements or alterations to the leased premises which constitute any major structural change or changes without first submitting plans and specifications for such additions, improvements or alterations to the Director and securing prior written consent from the Director. Any such additions, improvements or alterations made with the consent of the Director shall be solely at the expense of the Lessee and, unless such consent provides specifically that title to the additions or Page 10 improvements so made shall vest in the Lessee, title thereto shall at all times remain in Lessor, and such additions or improvements shall be subject to all terms and conditions of this Agreement, provided however, that any trade fixtures installed by Lessee may be removed by Lessee at its expense. The Lessee agrees to hold Lessor harmless from all Mechanic's and Materialman's Liens arising from any construction, additions, improvements, repairs or alterations effected by the Lessee. Any property installed or added by Lessee which becomes permanently attached to the leased premises shall become the property of Lessor upon termination of this Agreement, provided however, that any trade fixtures installed by Lessee may be removed by Lessee at its expense. 6.03 ADVERTISING. The Lessee will erect no outdoor advertising or identification signs and will distribute no advertising on the Airport without the prior written consent of the Director. Said consent will not be unreasonably withheld. However, such prior written consent shall not be required for advertising placed by Lessee with any other party having the right to sell, rent or offer Airport terminal advertising space. 6.04 LIENS PROHIBITED. The Lessee shall not bind or attempt to bind the Lessor for payment of any money in connection with the construction, installations, alterations, additions or repairs on the leased premises or any Lessee's equipment or facilities located on the leased premises, and Lessee shall not permit any mechanic's, materialsman's or contractor's liens to arise against the leased premises or any improvements thereon, or any equipment, machinery or fixtures thereon belonging to the Lessor, and Lessee expressly agrees that it will keep and save the premises and the Lessor harmless from all costs and damages resulting from any liens of any character created or that may be asserted through any act or thing done by Lessee. In the event that, as a result of Lessee's actions, any mechanic's lien or other lien or order for payment shall be filed against the leased premises or improvements thereon, or against Lessor -owned property located thereon during the initial term hereof, or during any subsequent extension, Lessee shall defend on behalf of the Lessor, at Lessee's sole cost and expense, any action, suite or proceeding which may be brought thereon or for the enforcement of such lien or order. Failure of the Lessee to comply with any requirement of this section after having received fifteen days written notice thereof shall be cause for termination of this Agreement by the Lessor. Page 11 6.05 INSPECTION OF LEASED PREMISES. Lessee agrees that the leased premises will be kept reasonably clean and free of all debris and other waste matter. Lessor, acting by and through the Director or other designated representative, shall have the right to conduct inspections of the leased premises at all reasonable times to ensure that fire, safety and sanitation regulations and other provisions contained in this Lease are being adhered to by the Lessee. 6.06 CUSTODIAL AND MAINTENANCE SERVICES. The Lessee shall, at its own cost and expense, maintain the leased premises, in a safe, clean, and presentable condition reasonably free of trash, debris and weeds and consistent with good business practices. Lessee shall repair all damages to said leased premises caused by its employees, patrons or business operations thereon; shall perform all maintenance and repair to the interior, including all HVAC and venting systems; and shall repaint the building as necessary to maintain a clean and attractive appearance. Lessee shall also maintain any drainage structures or other improvements installed for the benefit of Lessee, septic systems, ceilings, floor coverings, locks, doors, overhead doors, specialized ramp doors, window glass, parking lots, and/or surfaces used for employee and/or customer parking. Lessor shall assume no responsibility for the condition of the leased premises and shall not assume any responsibility for maintenance, upkeep or repair necessary to keep the premises in a safe and serviceable condition. The Lessor shall, at its own cost and expense, maintain the roof, foundation and structural floors and slabs, and load bearing walls, and utility connections to the point of disconnect. Lessor shall not, however, be responsible for repair to the extent that insurance coverage will provide payment. Upon written notice by Lessor to Lessee, Lessee shall be required to perform whatever reasonable maintenance Lessor deems necessary. If said maintenance is not undertaken by Lessee within twenty (20) days after receipt of written notice, Lessor shall have the right to enter upon the leased premises and perform the necessary maintenance, the cost of which shall be borne by Lessee. Lessee shall not, in any case, be required to pay for cost of mitigation, abatement or removal of asbestos not installed by Lessee. 6.07 UTILITIES. Lessee herein agrees to assume responsibility for the payment of all public utility charges connected with Lessee's use of the warehouse space including, but not Page 12 limited to water, gas, electricity, telephone and sewer service. Lessee shall have the right, with written approval of Lessor, to connect to any storm and sanitary sewers and water and utility outlets, the cost of usage, extension, installation and meters, where required, to be borne by the Lessee. 6.08 TRASH, GARBAGE, REFUSE, ETC. Lessee shall provide a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse produced as a result of Lessee's business operations on the leased premises. 6.09 TAXES, FEES, ASSESSMENTS AND LICENSE. The Lessee agrees to pay promptly when due all federal, state and local government taxes, license fees and occupation taxes levied on either the leased premises or on the business conducted on the leased premises or on any of Lessee's property used in connection therewith, except as provided herein. Taxation may be subject to legal protest in accordance with the provisions of the taxing authority whose levy is questioned. Any protest is at the sole expense of Lessee. Delinquency in payment of such obligations after any protest has been settled shall, at the option of the Lessor, be cause for immediate termination of this Lease. 6.10 INSURANCE. Lessee shall carry and maintain insurance at all times that this Lease is in effect, at Lessee's sole expense with an insurance underwriter authorized to do business in the State of Texas and acceptable to the Lessor, against claims of general liability and workers' compensation resulting from Lessee's business activities at the Airport. General Liability Insurance — The amount of insurance coverage shall not be less than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) for Combined Single Limit General Liability Insurance. Workers' Compensation — The Lessee shall elect to obtain worker's compensation coverage pursuant to Section 406.002 of the Texas Labor Code, as same may be amended. Further, Lessee shall maintain said coverage throughout the term of this Lease and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure that the Lessee maintains said coverage. Any termination of worker's compensation insurance coverage by Lessee or any cancellation or nonrenewal of worker's compensation insurance coverage for the Lessee shall be a material breach of this Lease. Page 13 Employer Liability — Lessee shall carry and maintain Employer Liability coverage for the protection of Lessor, naming Lessor as an additional insured, in an amount no less than FIVE HUNDRED THOUSAND AND N0/100 DOLLARS ($500,000.00). Hazard and Extended Coverage — Lessee shall procure from a company authorized to do business in the State of Texas and keep in force Hazard and Extended coverage insurance upon the Leased Premises to 80% of the full insurable value and shall furnish Lessor with evidence that such coverage has been procured and is being maintained. Lessor shall be named as additional insured on the policy. To the extent permitted by law, the above -mentioned policies shall all include a waiver of subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be fled with the Director prior to entry upon the Leased Premises by the Lessee. The General Liability policies shall name the Lessor as an additional insured, require the insurer to notify the Director of any alteration, renewal or cancellation, and remain in full force and effect until at least ten (10) days after such notice of alteration, renewal or cancellation is received by the Director. 6.11 INDEMNIFICATION. The Lessee shall be deemed to be an independent contractor and operator responsible to all parties for its respective acts and omissions, and the Lessor shall in no way be responsible therefor. Lessee shall indemnify and hold harmless, to the fullest extent permitted by law, Lessor, and Lessor's respected officers, employees, elected officials and agents, from and against any and all losses, damages, claims or liabilities, of any kind or nature, which arise directly or indirectly, or are related to, in any way, manner or form, the activities of Lessee contemplated hereunder, or the omission of the Lessee's activities contemplated hereunder, including, but not limited to, losses, damages, claims or liabilities arising from or related to, in any way, manner or form, the act or omission of third parties on the premises herein leased. Lessee further covenants and agrees to defend any suits or administrative proceedings brought against Lessor and/or Lessor's respective officers, employees, elected officials and/or agents on account of any claim for which it is obligated to indemnify Lessor, and to pay or Page 14 discharge the full amount or obligation of any such claim incurred by, accruing to, or imposed on Lessor, or Lessor's respective officers, employees, elected officials and/or agents, as applicable, resulting from any such suits, claims, and/or administrative proceedings or any matters resulting from the settlement or resolution of said suits, claims, and or administrative proceedings. In addition, Lessee shall pay to Lessor, Lessor's respective officers, employees, elected officials and/or agents, as applicable, all attorneys' fees incurred by such parties in enforcing Lessee's indemnity in this section. Both parties hereby agree to mutually release each other and their respective officers, employees, elected officials and agents, shall not be liable, and both parties hereby release each other, and their respective officers, employees, elected officials and agents, for, from and/or against any losses, damages, claims or liabilities to Lessee, on any theory of legal liability, including, but not limited to the negligence, of any type of degree, or fault, of either party, arising from or related to, in any way, manner or form, the unenforceability or voidance, for any reason, of all or any part of this Agreement. The indemnity and release provided herein shall survive the termination or voidance of this Agreement. Indemnification — Environmental Harm. Without limiting any provisions of this Agreement, Lessee shall also defend, indemnify and hold Lessor and its respective officers, employees, elected officials and agents harmless from and against all suits, actions, claims, demands penalties, fines liabilities, settlements, damages, costs and expenses (including but not limited to reasonable attorney's and consultant's fees, court costs and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, brought against Lessor arising out of or in any way related to: 1. Any actual, threatened or alleged contamination by hazardous substances of the premises or contamination by hazardous substances of the Airport by Lessee or its agents; 2. The presence, disposal, release or threatened release of hazardous substances by Lessee or its agents at the Airport that is on, from or affects the soil, air, water, vegetation, buildings, personal property, persons, animals or otherwise; Page 15 3. Any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to hazardous substances by Lessee at the Airport; or 4. Any violation by Lessee of any Environmental Laws that affects the Airport. 6.12 NON-DISCRIMINATION PRACTICES. Lessee, its agents and employees will not discriminate against any person or class of persons by reason of age, sex, race, color, handicap, religion or national origin in providing any services or in the use of any of its facilities provided for the public, in any manner prohibited by Federal Aviation Administration Regulations. Lessee further agrees to comply with such enforcement procedures as the United States Government might demand that the Lessor take in order to comply with the Sponsor's Assurances. Lessee agrees not to illegally discriminate against any employee or applicant for employment because of age, sex, race, color, handicap, religion or national origin. 6.12 BUSINESS SOLICITATIONS. All of Lessee's business operations and solicitations will be confined to the leased premises or such other premises at the Airport that have been leased to Lessee. 6.13 NO ASSIGNMENT OR SUBLETTING. Lessee will not directly or indirectly assign, sublet, sell, hypothecate or otherwise transfer this Lease or any portion of the leased premises without the prior written consent of the Director. No such assignment or subletting shall affect Lessee's obligations to make all required rental payments hereunder. 6.14 EXCLUSIVITY. Lessee's right to conduct business at the Airport shall be nonexclusive. 6.15 WAIVER. The failure of Lessor to insist in any one or more instance upon performance of any of the terms, covenants or conditions of this Lease shall not be construed as a waiver or relinquishment of the future performance of any such terms, covenants or conditions, and Lessee's obligation with respect to such future performance shall continue to be in full force and effect. Furthermore, the acceptance of rentals or fees by Lessor after Lessee's failure to perform, keep or observe any of the terms, covenants or conditions of the Lease shall not be deemed a waiver by Lessor to cancel this Agreement for such failure. Page 16 6.16 TITLE TO LEASED PREMISES. Lessee agrees that it does not acquire any equity or title to the leased premises as a result of this Agreement and that the property herein leased shall remain the sole property of Lessor. Lessor grants Lessee a leasehold interest by and through this Agreement. 6.17 STORED CONTENTS. Lessee agrees to limit the outside storage of any and all materials, components, assemblies and repaired and manufactured products to the leased premises and to control the growth of vegetation and weeds on the leased premises extending outward a distance of ten (10) feet. ARTICLE SEVEN TERMINATION 7.01 TERMINATION The Agreement shall terminate at the end of the term. Lessee shall have no further right or interest in any of the Premises or improvements hereby demised, except as provided herein. 7.02 TERMINATION BY LESSEE The Lessee may, at the Lessee's option and provided the Lessee is Current and in Good Standing, terminate the Agreement on the occurrence of any one or more of the following events: 1. The permanent abandonment or closure of the Airport by the City as a commercial service airport. 2. The lawful assumption by the United States Government, or any authorized Agency thereof, of the operation, control or use of the Airport, or any substantial part or parts thereof, in such a manner that substantially restricts Lessee for a period of at least ninety (90) days from operating thereon. 3. In the event of acquisition by Condemnation or the exercise of the power of eminent domain (by any Agency permitted to take property for public use) of any land or improvements associated with Lessee's Leased Premises, Lessee shall not institute any action or proceeding or assert any claim against the City for Compensation or consideration of any nature. All Compensation or consideration awarded or paid to Lessee upon a total or partial acquisition of the Leased Premises to the extent not related to Lessee's improvements (which for Page 17 these purposes shall not include any Compensation or consideration from City) shall belong to the City without any participation of Lessee. 4. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use and operation of the Airport for a period of at least ninety (90) days. 5. The default of the Lessor in the performance of any covenant or agreement herein required to be performed by the Lessor and the failure of the Lessor to remedy such default for a period of sixty (60) days after receipt from Lessee of written notice to remedy the same. 6. Failure of Lessor to maintain the landing area of the Airport for a period of at least sixty (60) days, which results in Lessee's inability to conduct business operations. Lessee may recover directly from the condemning Agency the value of any claim relating to a taking of Lessee's improvements, provided that no such claim shall diminish or otherwise adversely affect the City's award. In the event of an acquisition by Condemnation or eminent domain of all interest in the Leased Premises, Lessee's obligation to pay rent shall cease and all leasehold interest created shall cease. In the event of an acquisition by Condemnation or eminent domain of a portion of interest in the Leased Premises, Lessee's obligation to pay rent shall cease as it pertains to the specific portion of the Leased Premises acquired. If the Condemnation or eminent domain substantially impairs the conduct of the Lessee's Activities and equates to more than 50% of the total Leased Premises, Lessee may terminate the Agreement by notifying the City. If the Agreement is not terminated by the Lessee, the rent shall be adjusted accordingly. Lessee may exercise such right of termination by giving sixty (60) days advance written notice to the City at any time after the lapse of the applicable periods of time and this Lease shall terminate as of the sixty first (61') day after such notice is given. Rental due hereunder shall be payable only to the effective date of said termination. 7.03 TERMINATION BY CITY Any default or breach of this Agreement by Lessee shall constitute a default or breach of all agreements between the City and Lessee. The City shall consider any of the following a default or breach under the Agreement: Page 18 1. Failure to comply with Legal Requirements, Assurances, PMCDs, Airport's policies, standards, rules, regulations, and directives. 2. Failure to perform any condition, obligation, or privilege contained in this Agreement. 3. Failure of a Lessee to obtain prior written consent from the Director before conducting additional Activities. 4. Failure to obtain prior written consent from the Director before making any improvements to the Leased Premises and/or at the Airport. 5. Failure to obtain prior written consent of the Director to sublease ( or attempt to sublease) any portion of the Leased Premises. 6. Any sale or assignment of the Leased Premises or Agreement made ( or attempted to be made) without the prior written consent of the Director 7. Any change in controlling ownership of Lessee made (or attempted to be made) without the prior written consent of the Director. 8. Any encumbrance of the Leased Premises or Improvements on the Leased Premises made (or attempted to be made) without the prior written consent of the Director. 9. Failure to properly maintain the Leased Premises or promptly pay all utilities, insurance, and taxes when due and owing. 10. The filing of bankruptcy and/or assignment of substantially all Lessee's assets for the benefit of Lessee's creditors. 11. The filing of a lien against the leased Premises. 12. The voluntary abandonment of the Leased Premises. 13. Falsification of any record so as to deprive the City of any rights, privileges, rents, fees, or other charges under the Agreement. 14. Failure to remain Current or in Good Standing. The failure of Lessee to observe or perform any of the terms and conditions of the Agreement, or the failure of Lessee to perform any of the terms and conditions of any other agreement with the City in any material respect such failure which shall have continued for thirty (30) days after written notice from the Director, and without meaningful steps having been taken by Lessee to cure such default. Page 19 Once the Agreement is terminated, City's agents may enter upon the Leased Premises and take immediate possession of the same and remove Lessee's effects. Any rental due hereunder shall be payable to said date of termination. It is agreed failure to declare this Lease terminated upon the default of Lessee for any of the reasons set forth above shall not be construed as a waiver of any of the City's rights hereunder or otherwise bar or preclude City from declaring this Agreement terminated as a result of any subsequent event of default under this Agreement. The acceptance of rentals or fees by City for any period or periods after a default of any of the terms, covenants, or conditions herein contained shall not be construed to be or act as a waiver by City of any subsequent default by the Lessee. 7.04 REPLACEMENT AFTER DAMAGE It is agreed between the parties hereto that in the event the Leased Premises are damaged by fire or other accidental cause during the initial term of this Lease so as to become totally or partially untenantable, the City shall have the option to restore the Premises to their former condition. If the City elects to exercise the option, the City shall give Lessee notice in writing of its election within thirty (30) days of the occurrence of such damage. If the City elects to restore the Premises, the City shall proceed with due diligence and there shall be an abatement of the rent until repairs have been made for the time and to the extent for which the Premises, or part thereof, have been untenantable. Should the City not exercise the option to restore the Premises, the lease of such untenantable portion of the Premises shall cease and terminate effective on the date of damage by fire or other accidental cause. 7.05 OWNERSHIP Within ninety (90) days after expiration of this Agreement as herein provided, the Lessee shall have the option to remove all improvements, constructed or placed thereon, except for any pavement area constructed by Lessee and return land to a clean and level condition. Lessee shall give City thirty (30) days written notice prior to expiration of the Agreement of Lessee's intent to exercise such option. In the event Lessee chooses not to exercise its option to remove from the Premises such improvements, Lessee may choose to surrender title to such improvements to City, subject to the approval of City. Lessee covenants and agrees to pay all reasonable costs, attorney's fees and expenses that shall be incurred by the City in enforcing the covenants and conditions of this Agreement, in the event the Lessee fails to pay expenses within thirty (30) days such property will be Page 20 deemed abandoned and title will revert to the City; however, this in no way relieves the Lessee of the debt incurred. 7.06 REMOVAL OF LESSEE'S PROPERTY The Lessee shall have the right, within thirty (30) days after the termination of this Lease, whether such termination comes upon expiration or under any provision of this Lease, to remove from the Leased Premises all of Lessee's furniture, fixtures, equipment, furnishings, and other personal property which has not become the property of the City. Lessee shall restore the Premises to the original condition, normal wear and tear excepted. The City, however, shall have a lien on all of Lessee's property to secure any unpaid rentals or other revenue due the City; and Lessee's right to remove property from the Leased Premises is conditioned upon all amounts due the City from Lessee having been paid in full. Unless a renewal agreement is executed, property left on the Premises after thirty (30) days from the date of termination of this Agreement shall be deemed abandoned and will become the property of the City, and may be disposed of as the City sees fit, without any liability to the Lessee to account for the proceeds of any sale; and the City, at its option, may require Lessee to remove the abandoned property and may charge rent from the date of expiration or termination of this Agreement through the day of final removal of the property, or of notification to the Lessee of the abandonment of the property and taking by the City, as the case may be. Lessee shall have ninety (90) days to remove any Lessee -owned buildings. 7.07 SURRENDER LEASED PREMISES The Lessee covenants and agrees that at the expiration of the term of this Lease, or upon earlier termination as provided elsewhere in this Agreement, Lessee will quit and surrender the Leased Premises and the improvements in good condition, reasonable wear and tear excepted. City shall have the right to take possession of the Leased Premises and the improvements, subject to the limitations expressed in Article Ten, of this Lease, with or without process of law. Page 21 ARTICLE EIGHT SUBLEASE, SALE, ASSIGNMENT, OR TRANSFER 8.01 SUBLEASING Lessee shall not sublease, sell, assign, or transfer the Agreement, in whole or in part, or any interest in the Agreement, or any rights or obligations the Lessee has under the Agreement, without the prior written consent by the Director. A. SUBLESSEE OBLIGATIONS If Lessee receives written consent from the Director, Sublessee shall comply with the PMCDs and all applicable Legal Requirements. B. SUBLEASING RESTRICTIONS If Lessee receives written consent from the Director, Sublessee shall be subject to all applicable terms and conditions of the Lessee's Agreement governing the land and/or improvements being subleased. Any Sublease made contrary to the requirements of this section shall be null and void. 8.02 SALE, ASSIGNMENT, OR TRANSFER Lessee shall not sell, assign, or transfer the Agreement, in whole or in part, or any interest in the Agreement, or any rights or obligations the Lessee has under the Agreement, without the prior written consent by the Director. • If Lessee is desirous of such a sale, assignment, or transfer, the Lessee shall submit a written request to the Director for approval. The request shall be accompanied by a completed Application by the entity requesting assignment (Assignee). • At the time a sale, assignment, or transfer is approved in writing by the Director, the Lessee shall reimburse the City for attorney's fees and expenses incurred by the City relating to the sale, assignment, or transfer in the sole discretion of the City. • The Assignee shall satisfy all criteria set forth in all PMCDs and all applicable Legal Requirements. Written consent of the Director is not required in connection with: (a) the merger, consolidation, or reorganization of the Lessee with any Affiliate of the Lessee, (b) the sale of all or substantially all of the assets of the Lessee to any Affiliate of the Lessee, or (c) assignment to any Affiliate of the Lessee. Any sale, assignment, or transfer, with exception of the situations and/or circumstances noted in this section, made without the prior written consent of the Director shall be considered null and void. Page 22 8.03 CHANGE IN CONTROLLING OWNERSHIP Any change in the controlling ownership of a Lessee is subject to the prior written consent of the Director, which consent, subject to the process described below, shall not be unreasonably withheld, conditioned, or delayed. If a Lessee is desirous of changing its controlling ownership, the Lessee shall submit a completed Application to the Director for review. If the Application is acceptable to the Director, the Director shall submit the Application and a recommendation to the City for review and consideration. • At the time the change in controlling ownership is approved in writing by the Director, the Lessee shall reimburse the City for attorney's fees and expenses incurred by the City relating to the application for change of controlling ownership in the sole discretion of the City. Any change in controlling ownership made without the prior written consent of the Director shall be considered null and void. 8.04 ENCUMBRANCES AND MORTGAGES Lessee shall not mortgage, pledge, assign as collateral, encumber or in any manner transfer, convey, or dispose of the Leased Premises or any interest therein without the prior written consent of the Director. If Lessee is desirous of mortgaging, pledging, assigning as collateral, encumbering or in any manner transferring, conveying, or disposing of the Leased Premises or any interest therein, the Lessee shall submit a written request to the Director for review. If the request is acceptable, the Director shall submit the request and a recommendation to the City for review and consideration. • At the time the request is approved in writing by the Director, the Lessee shall reimburse the City for attorney's fees and expenses incurred by the City relating to the encumbrance request in the sole discretion of the City. Any encumbrance made without the prior written consent of the City shall be considered null and void. 8.05 RELOCATION In the event that relocation is deemed necessary (e.g., to correct deviations from 14 CFR Part 77, to ensure consistency with the Airport Layout Plan, etc.), the City shall provide Airport land and/or Improvements that are similar to the Airport land and/or Improvements currently being occupied and/or used by the Lessee. Such Airport land Page 23 and/or Improvements shall be leased to the Lessee under the same terms and conditions as stipulated in the existing Agreement. If similar Airport land and/or Improvements are not available, the City may, in its sole discretion, buyout the leasehold interest held by the Lessee at the market value determined by an Appraiser engaged by the City. If Lessee disagrees with the market value conclusion reached by the Appraiser, the Lessee shall have the right to initiate a dispute resolution process. If the relocation is solely for the benefit of the City, the City shall pay all reasonable (and verifiable) relocation costs and expenses associated with relocating the Lessee. Relocation shall follow all applicable federal, FAA, and Texas Legal Requirements for relocation proceedings and any appraisal report shall meet the requirements of such. 8.06 RIGHTS OF OTHERS It is clearly understood by the Lessee that any person, firm, or corporation operating Aircraft at the Airport has the right or privilege to perform any services on its own Aircraft with its own regular Employees (including, but not limited to, maintenance and repair). The rights of said person, firm, or corporation are subject to the rights of Lessee as set forth in 1.02. 8.07 EXCLUSIVITY It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an Exclusive Right to conduct any Activities, including, but not limited to charter flights, pilot training, Aircraft rental and sightseeing, aerial photography, crop dusting, aerial advertising and surveying, air carrier operations, Aircraft sales and services, sale of aviation petroleum products whether or not conducted in conjunction with other Activities, repair and maintenance of Aircraft, sale of Aircraft parts, and any other Activities which because of their direct relationship to the operation of Aircraft can be regarded as an Activity. 8.08 NO RESIDENTIAL USE It is understood and agreed Lessee shall not permit or enter into any arrangement that results in permission for the leased premises to be used as a residence. 8.09 STORAGE USE The Leased Premises shall be used solely for aviation -related purposes. Storage of non - aviation related property inside hangars is strictly prohibited. Page 24 ARTICLE NINE MISCELLANEOUS PROVISIONS 9.01 CONFLICT OF INTEREST The Lessee acknowledges that it is informed that Texas law prohibits contracts between the City of Lubbock and its "officers" and "Employees," and that the prohibition extends to officers and Employees of the City of Lubbock agencies, such as City -owned utilities, and certain City of Lubbock boards and commissions, and to contract with any partnership, corporation, or other organization in which the officers or Employees have a substantial interest. Lessee certifies (and this Agreement is made in reliance thereon) that neither the Lessee nor any person having an interest in this Agreement is an officer or Employee of the City of Lubbock or any of its agencies, boards, or commissions. 9.02 NO WAIVER City shall not waive the right to enforce the Agreement, in whole or in part. 9.03 LICENSES, CERTIFICATIONS, AND PERMITS Lessee shall have (and provide copies to the Director upon request) all licenses, certifications, and permits required to conduct Lessee's Activities. 9.04 INDEPENDENT ENTITIES This Agreement shall not be construed to establish a partnership or joint venture between the City and Lessee. 9.05 BINDING EFFECT This Agreement shall be binding on and for the benefit of the heirs, successors, and assigns of the City and the Lessee. 9.06 SUBORDINATION This Agreement is subordinate to any agreement between the City and the United States Government, the State of Texas, or any other Agency having jurisdiction. 9.07 NON -LIABILITY OF OFFICIALS AND EMPLOYEES OF CITY No officer, elected official, Employee, agent, or representative, etc. of City shall be personally liable for a default or liability under this Agreement. 9.08 GOVERNING LAW AND VENUE This Agreement shall be made in accordance with the laws of Texas and venue shall be in a court of competent jurisdiction in Lubbock County, Texas. 9.09 PARAGRAPH HEADINGS Page 25 The paragraph headings in this Agreement shall only be used as a matter of convenience and/or reference. 9.10 SEVERABILITY If a provision of the Agreement is held to be unlawful, invalid, or unenforceable by final judgment of any Agency or court of competent jurisdiction, the invalidity, voiding, or unenforceability of such provision shall not in any way affect the validity of any other provisions of the Agreement. 9.11 COUNTERPARTS If this Agreement is executed in counterparts, each shall be deemed an original and which together shall constitute one and the same Agreement. 9.12 MODIFICATION Any change or modification to the Agreement shall not be valid unless made in writing, agreed to, and signed by the City and Lessee. 9.13 COMPLIANCE WITH CHAPTER 2271, SUBTITLE F, TITLE 10, TEXAS GOVERNMENT CODE The Lessee warrants that it is in compliance with Chapter 2271, Subtitle A, Title 8 of the Texas Government Code by verifying that: (1) it does not boycott Israel; and (2) it will not boycott Israel during the term of the Agreement. 9.14 NOTICES Notices to the City required or appropriate under this Agreement shall be deemed sufficient if in writing and hand delivered or mailed, registered or certified mail, postage prepaid, addressed to Lubbock Preston Smith International Airport, Attn: Director, 5401 N. MLK Blvd., Unit 389, Lubbock, Texas 79403. Notices to the Lessee shall be deemed sufficient if in writing and hand delivered or mailed, registered or certified mail, postage prepaid, addressed to: MARCO STEEL & ALUMINUM CO. 9.15 NON -ARBITRATION The City reserves the right to exercise any right or remedy available to it by law, contract, equity, or otherwise, including without limitation, the right to seek any and all forms of relief in a court of competent jurisdiction. Further, City shall not Page 26 be subject to any arbitration process prior to exercising its unrestricted right to seek judicial remedy. The remedies set forth herein are cumulative and not exclusive, and may be exercised concurrently. To the extent of any conflict between this provision and another provision in, or related to, this document, this provision shall control. 9.16 TIME OF THE ESSENCE The City and Lessee shall agree that time is of the essence in performance of the Agreement. 9.17 ENTIRE AGREEMENT This Lease constitutes the entire Agreement between the City and Lessee, and any other written or parole agreement with the City is expressly waived by Lessee. Page 27 EXECUTED this 12th day of LESSOR: CITY OF BY: ray Pa a or ATTEST: -9Q Rebef ca Garza, City Secrets k� APPROVED AS TO CONTENT: Kelly Campbell, Executive Director of Aviation APPROVED AS TO FORM: Mit Sattefw Fit Assistant City Attorn July , 2022. LESSEE: MARCO STEEL & ALUMINUM CO. BY: A, . President DATE: 6/22/2022 Page 28