Loading...
HomeMy WebLinkAboutResolution - 2004-R0007 - Lease Agreement With Market Lubbock Economic Development Corporation - 01_08_2004Resolution No. 2004-R0007 January 8, 2004 Item No. 22 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Lease Agreement between the City of Lubbock and Market Lubbock Economic Development Corporation for the lease of land on which the FAA Hangar is located, and any other related documents. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 8th day of ___ J_an_ua_ry ____ , 2004. ATTEST: b ccaGarza, City Secretary D APPROVED AS TO CONTENT: ey rim Director of Aviation APPROVED AS TO FORM: Richard K. Casner First Assistant City Attorney ke/ccdocsMLI. Tyco.HangarLease.Res December 23, 2003 • J STATE OF TEXAS § COUNTY OF LUBBOCK § LEASE AGREEMENT KNOW ALL MEN BY THESE PRESENTS: Resolution No. 2004-R0007 January 8, 2004 Item No. 22 THIS LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into by the CITY OF LUBBOCK (referred to herein as "Lessor"), a Home Rule Municipality of Lubbock County, Texas, and MARKET LUBBOCK ECONOMIC DEVELOPMENT CORPORATION, a Texas not-for-profit corporation, (referred to herein as "Lessee"). WITNESSETH WHEREAS, Lessor owns, controls and operates the Lubbock International Airport (referred to herein as "Airport"), which includes, among other lands, the Leased Premises, as described below, situated at 310 E. Edinboro, 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 ground area described herein, together with certain privileges, rights, uses and interests therein, as hereinafter set forth; and WHEREAS, by Bill of Sale of even date, Lessor conveyed to Lessee certain existing improvements, consisting of an aircraft hangar, approximately 40,000 square feet in size (the "Existing Improvements") located on the Leased Premises, as defined below; and WHEREAS, in lieu of removing the Existing Improvements from the Leased Premises, Lessee desires to lease the Leased Premises on the terms and conditions set forth below; and WHEREAS, the City Council of the City of Lubbock finds that execution of this Lease will properly serve the public interest of the citizens of the City of Lubbock; and WHEREAS, Lessee conducts economic development activities within the City of Lubbock that benefit the citizens of the City; and WHEREAS, the lease of the Leased Premises to Lessee will aid in the elimination or reduction in unemployment or underemployment and the expansion of business and commerce to the City of Lubbock;and WHEREAS, the lease of the Leased Premises, as defined below, is consistent with the Economic Development Plan of Lessor. 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: 1.01 LEASED PREMISES ARTICLE ONE DEMISE OF LEASED PREMISES For and in consideration of the terms, conditions and covenants of this Lease to be performed by Lessee, all of which Lessee accepts, Lessor does hereby lease unto Lessee certain property located on the Airport, more particularly described in Exhibit "A" which is attached to this Lease, and is incorporated into and made a part of this Lease for all purposes (collectively referred to as "Premises" or "Leased Premises" in this Agreement). Description of Leased Premises: 74,487.60 square feet of land, as described on Exhibit "A", attached hereto. 1.02 PURPOSE AND PRIVILEGES The Lessee is entitled to use the Leased Premises for operations and activities consistent with the Airport Master Plan and the Minimum Standards for Aeronautical Activities for use of an aircraft hangar located upon airport property subject to approval by Lessor and Lessor's Director of Aviation. 1.03 USE OF AIRPORT During the term of this Lease, Lessee and its tenants shall have free use of, in common with others at the Airport, 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. If, during the term of this Agreement, the use of the Airport by Lessee is temporarily suspended, restricted or interfered with for a period of thirty (30) days or more for reasons beyond the practical control of the Lessor, in such manner so as to substantially affect the use of the Leased Premises or operation of aircraft by Lessee, 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. 1.04 PUBLIC BENEFIT 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; MLI Lease Page 2 of 19 B. To furnish said services on a fair, equal and not unjustly discriminatory basis to all users thereof; and C. 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. ARTICLE TWO TERM 2.01 TERM The term of this Agreement shall be for a period of forty (40) years commencing upon the date of execution of this Lease by Lessor. 2.02 HOLDING OVER In the event Lessee remains in possession of the Leased Premises after the expiration of this Agreement, without any written renewal or extension of the Agreement, such holding over shall not be deemed as a renewal or extension of this Lease, and may be terminated at any time by the Lessor's Director of Aviation. ARTICLE THREE RENTAL AND FEES 3.01 RENTALS In consideration of the rights and privileges herein granted, Lessee shall pay to the Lessor the following rentals and fees: A. GROUND RENTAL Land rental for 74,487.60 square feet of Leased Premises shall be at no cost unless and until Lessee shall utilize or occupy the Leased Premises ( other than for purposes of showing the Leased Premises to prospective permitted assignees or sublessees) (the "Occupation Time"). Land rental after the Occupation Time shall be at the rate of $.1182 per square foot per year. Annual rental will be EIGHT THOUSAND EIGHT HUNDRED FOUR AND 43/100 DOLLARS ($8,804.43) which shall be due and payable in (12) equal monthly installments of SEVEN HUNDRED THIRTY-THREE AND 70/100 DOLLARS ($733.70), beginning on the first day of the month following the Occupation Time. Nothing contained herein shall be construed to prohibit Lessee from obtaining consideration in excess of the rental prescribed herein in the event of a permitted sublessee as assignment of this Lease. B. CONSUMER PRICE INDEX MLI Lease The parties hereto mutually agree that after the Occupation Time during the term of this Agreement, except as otherwise might be set out in this Agreement, the rental rates will be adjusted upward or downward for each ensuing calendar year in direct proportion to the fluctuation in the U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index (CPI) for All Urban Consumers. Any adjustment to the rental rates resulting from changes in the CPI shall be Page 3 of 19 determined by calculating the increase or decrease in the CPI for the preceding twelve (12) months. C. FUEL FLOWAGE If Lessee requests and receives authorization to operate as a Fixed Base Operator selling fuel subject to the requirements of Minimum Standards, a fuel flowage fee payable to Lessor of four cents ($.04) per gallon for each gallon of aviation fuel delivered to Lessee or its agents for Lessee's own consumption or re-sale at Lubbock International Airport, excluding that sold or delivered by Lessee to a regularly certified airline under contract with Lessor as a part of the pecuniary consideration herefore and except flowage fees paid by the supplier on behalf of Lessee. The aforesaid flowage fees, if not paid by the supplier, shall be due on the twentieth (20th) day of each month succeeding that in which the aircraft fuels and lubricants are received by Lessee. It is understood and agreed that the total gallonage delivered to or purchased by Lessee, other than gasoline delivered to regularly scheduled airlines operating under a contract or lease with Lessor, may be reduced by an amount not to exceed two percent (2%) in computing charges as a maximum loss allowance from any and all causes. D. FIXED BASE OPERA TOR FEE If Lessee requests and receives authorization to operate as a Fixed Base Operator, TWO THOUSAND FIVE HUNDRED AND N0/100 DOLLARS ($2,500.00) is the established annual Fixed Base Operator's fee payable to Lessor; however, other applicable ground and building rentals and fuel flowage fees may be applied to satisfy the requirements of the Fixed Base Operator Fee. Amounts payable under this Agreement shall be paid as follows: Monthly payments for ground and other rental become effective upon execution of this Agreement. Monthly payments for fuel flowage fees also become effective upon execution of this Agreement and are payable during the month succeeding that in which the aircraft fuels and lubricants are received by Lessee. Operators whose payment for ground and building rentals and fuel flowage fees do not satisfy the minimum Fixed Base Operator's Fee will pay a monthly pro rata amount of TWO HUNDRED EIGHT AND 34/100 DOLLARS ($208.34). E. SECURITY BADGES In addition to the above rental and fees, Lessee shall pay the Lessor a processing fee and a deposit for security badges for each of Lessee's employees on the Leased Premises. Lessor's Aviation Director shall determine the time of payment and the amount of both the processing fee and deposit, each of which shall be reasonable and uniform for all similarly situated tenants at the Airport. Said deposit shall be refundable upon return of the badges to the Aviation Director. 3.02 PAYMENTS All payments are due and payable on or before the 20th day of each month this Agreement (the "Due Date") is in effect and shall be made to the Lessor at the Office of the Director of Aviation, Lubbock International Airport, Rt. 3 Box 389, Lubbock, Texas MLI Lease Page 4 of 19 79403. Lessee shall pay Lessor a late charge of five percent (5%) of the total amount of rentals payable if payment of such rentals is not made when due. 3.03 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 after the Due Date, the Lessor's Director of Aviation 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. 4.01 SAFETY ARTICLE FOUR RIGHTS RESERVED TO LESSOR Lessor 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 Leased Premises which, in the opinion of Lessor, would limit the usefulness of the , Airport or constitute a hazard to aircraft. 4.02 MAINTENANCE OF PUBLIC AREA Lessor 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 Aviation Director. 4.03 STANDARDS Lessor 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. 4.04 TIME OF EMERGENCY During time of war or national emergency, the Lessor 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, insofar as they are inconsistent with the provisions of the lease to the United States, shall be suspended. 4.05 DEVELOPMENT OF AIRPORT Lessee agrees that Lessor has the right to further develop or improve the Airport as Lessor sees fit, regardless of the desires or views of the Lessee, and without interference or hindrance therefrom. 4.06 SPONSOR'S ASSURANCE SUBORDINATION This Lease shall be subordinate to the provisions of any existing or future agreement between the Lessor 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 MLI Lease Page 5 of 19 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 Lessor shall not be held liable therefor. The Lessor 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 Lessor to the United States Government under federal law. 5.01 WAGES ARTICLE FIVE RIGHTS RESERVED TO LESSEE To the extent that it is applicable, Lessee shall comply with Ch. 2258, Tex. Govt. Code. 5.02 LESSEE'S DUTY TO REPAIR Except as provided herein, the Existing Improvements, and any property of Lessor, or for which Lessor 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 promptly and properly repaired or replaced by Lessee to the reasonable satisfaction of the Lessor's Director of Aviation, or in lieu of such repair or replacement, Lessee shall, if so required by the Director of Aviation, pay Lessor money in any amount reasonable to compensate the Lessor for the loss sustained or expense incurred by Lessor as a result of the loss of, damage to, or destruction of such property. 5.03 PARKING Lessee shall, if additional parking is desired, at its sole cost and expense, provide such additional parking areas for use by its customers, employees, patrons, guests and invitees. 5.04 WARRANTY OF NO SOLICITATION Lessee warrants that it has not employed any person employed by Lessor to solicit or secure this Agreement upon any agreement for a commission, percentage, brokerage or contingent fee. ARTICLE SIX GENERAL CONDITIONS 6.01 RULES AND REGULATIONS Lessor reserves the right to issue through its Director of Aviation such reasonable rules, regulations and procedures for activities and operations conducted on the Airport, including without limitation, the Leased Premises, 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, servants, business invitees, invitees, and licensees will obey all rules and regulations which may be promulgated from time to time by the Lessor or its authorized agents at the Airport, or by MLI Lease Page 6 of 19 r' other lawful authority, to ensure the safe and orderly conduct of operations and traffic on the Airport. All of such rules and regulations shall have the same affect and import as if expressly included within the terms of this Lease. 6.02 OPERATION OF AIRCRAFT, COMPLIANCE WITH RULES AND REGULATIONS Lessee agrees to operate and conduct its business, including but not limited to the operation of aircraft (if applicable) and the occupancy of said Leased Premises, at all times in compliance with applicable federal, state and local rules and regulations and in compliance with all applicable statutes, ordinances, rules and regulations affecting the use, occupancy or operation of the Leased Premises and Airport. Lessee further agrees that in the event that a civil penalty or fine is levied against the Airport as a result of Lessee's failure to comply or act in accordance with said regulations, statutes and/or ordinances, Lessee shall within fifteen (I 5) days reimburse the Airport the full amount of the penalty or fine and immediately correct the failure, act or omission leading to, causing or contributing to the violation. Failure of the Lessee to comply with any requirement of this paragraph shall be cause for immediate termination of this Agreement by Lessor's Director of Aviation. Provided, however, that the duty of the Lessee to reimburse Lessor is subject to Lessor providing written notice of any potential fine or penalty. Lessee shall be provided notice to participate in the proceeding and defend itself, with counsel of its choice, at its own cost. 6.03 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, including any changes to the Existing Improvements, without first submitting plans and specifications for such additions, improvements or alterations to the Lessor's Director of Aviation and securing prior written consent from the Director of Aviation. Any such additions, improvements or alterations made with the consent of the Director of Aviation shall be made at the sole expense of the Lessee and, unless either the additional improvements or alterations shall be made to the Existing Improvements or such consent provides specifically that title to the addition or improvements so made shall vest in the Lessee, title thereto shall at all times remain in Lessor. Such additions or improvements shall be subject to all terms and conditions of this Agreement. The Lessee agrees to hold Lessor harmless from Mechanic's and Materialman's liens arising from any construction additions, improvements, repairs or alterations effected by the Lessee. Subject to Section 7.06, below, 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. 6.04 ADVERTISING The Lessee will erect no outdoor advertising or identification signs and will distribute no advertising in the Airport or on Airport property without the prior written consent of the Lessor's Director of Aviation. Said consent will not be unreasonably withheld. However, MLI Lease Page 7 of 19 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. 6.05 SECURITY PLAN Lessee shall submit a Security Plan (herein so called) to the Lessor's Director of Aviation, which is in form prescribed by and acceptable to the Director of Aviation, in his or her sole and absolute discretion. Notwithstanding anything to the contrary herein, failure to submit an acceptable Security Plan shall be grounds for immediate termination of this Agreement. 6.06 LIENS PROHIBITED The Lessee shall not bind or attempt to bind the Lessor for payment of any money in connection with the construction, repairing, alterations, additions or reconstruction work on the Leased Premises, and Lessee shall not permit any mechanic's, materialman's or contractor's liens to arise against the Leased Premises or improvements thereon, or any equipment, machinery and fixtures thereon belonging to the Lessor, and Lessee expressly agrees that it will keep and save the Leased 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 the 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, Lessee shall defend on behalf of the Lessor, at Lessee's sole cost and expense, any action, suit or proceeding which may be brought thereon or for the enforcement of such lien or order. Notwithstanding anything herein to the contrary, 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. 6.07 INSPECTION OF LEASED PREMISES Lessee agrees that the Leased Premises shall be kept reasonably clean and free of all debris and other waste matter. Lessor reserves the right to conduct inspections of the Leased Premises at reasonable times to ensure that fire, safety and sanitation regulations and other provisions contained in this Lease are being adhered to by the Lessee. Lessee shall comply with all environmentally related laws, rules and regulations, including, but not limited to, those related to the storage or accumulation of waste or hazardous waste, disposal or release of solid or hazardous waste, and storm water and activities related thereto. 6.08 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 Lessor 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 Lessor's discretion; however, any and all expenses incurred by so doing shall be reimbursed by the Lessee. MLI Lease Page 8 of 19 6.09 MAINTENANCE The Lessee shall, at its own cost and expense, maintain the Leased Premises in a 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 HV AC and venting systems; and shall repaint the improvements on the Leased Premises, including the Existing Improvements, 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. Upon written notice by Lessor to Lessee, Lessee shall be required to perform whatever reasonable maintenance Lessor deems necessary, including reasonable maintenance of the Existing Improvements. 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. 6.10 UTILITIES The Lessee shall assume and pay for all costs or charges for metered utility services provided to Lessee during the term hereof. Lessee shall have the right, with written approval of Lessor, to connect to any existing storm and sanitary sewers, if any, and water and utility outlets, the cost of usage, extension, installation and meters, where required, to be borne by the Lessee. 6.11 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. 6.12 PAYMENT OF TAXES, FEES, AND ASSESSMENTS 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. 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 Lessor, be cause for immediate termination of this Lease. 6.13 INDEMNIFICATION AND INSURANCE 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 respective officers, employees, elected officials and agents, from and against any and all losses, damages, claims or liabilities, of any kind MLI Lease Page 9 of 19 I : or nature, which arise directly or indirectly, or are related to, in any way, manner or form, the activities of Lessee contemplated hereunder, the omission of the Lessee's activities contemplated hereunder or the failure of Lessee to comply with any term or provision of this Lease. 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 discharge the full amount of any and all penalties, fines or other obligations 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. The Lessee shall carry and maintain insurance at all times that this Lease is in effect, at Lessee's sole expense and with an underwriter authorized to do business in the State of Texas and acceptable to the Lessor, against claims of general liability and workers' compensation, and/or other claims resulting from Lessee's business activities at the Airport or on the Leased Premises, as set forth below. General Liability Insurance -Lessee will carry and maintain General Liability Insurance for the protection of Lessor, naming Lessor as an additional insured and insuring against all claims, losses, costs and expenses arising out of injuries to persons whether or not employed by the Lessee, damage to property whether resulting from acts or omissions, negligence or otherwise of the Lessee or any of its agents, employees patrons or other persons, and growing out of the use of the said Leased Premises by Lessee, such policies to provide not less than FIVE HUNDRED THOUSAND AND N0/100 DOLLARS ($500,000.00) for Combined Single Limit General Liability Insurance. Prior to the placement of an aircraft owned by a party other than Lessee in or on the Leased Premises, the above insurance coverage shall also include Hangar Keeper Liability Coverage. 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. 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). Comprensive Automobile Liability Insurance -Lessee shall procure and maintain comprehensive automobile liability insurance with limits of not less than FIVE MLI Lease Page 10 of 19 HUNDRED THOUSAND AND N0/100 DOLLARS ($500,000.00) for bodily injury/property damage, combined single limit, to include all owned and non-owned vehicles including: Employees Nonownership Liability Hired and Nonowned Vehicles. 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 Lessee owned buildings located on 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 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 filed with the Lessor's Director of Aviation 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 Aviation 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 of Aviation. 6.14 NON-DISCRIMINATION PRACTICES Lessee, its agents and employees will not discriminate against any person or class of persons by reason of age, sex, race, religion or national origin 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 Lessor take in order to comply with the Federal Aviation Administration's Sponsor's Assurances. Lessee agrees not to illegally discriminate against any employee or applicant for employment because of age, sex, race, religion or national origin. 6.15 BUSINESS SOLICITATIONS All of Lessee's business operations and solicitations will be confined to the Leased Premises. 6.16 PROHIBITION OF SUBLEASES AND ASSIGNMENTS The Lessee will not directly or indirectly assign, sublet, sell, hypothecate or otherwise transfer any or all of this Lease or any portion of the Leased Premises without the prior written consent of Lessor which shall not be unreasonably withheld. As a condition to consent, Lessor may require, among any other assurances he or she may deem material or necessary, in his or her discretion, an express assumption of the terms and obligations of this Lease, and proof of insurance, as set forth herein, provided by the proposed sublessee or assignee. 6.17 RIGHTS OF OTHERS It is clearly understood by the Lessee that no right or privilege has been granted herein which would operate to prevent any person, firm or corporation operating an aircraft at the Airport from performing any services on its own aircraft with its own regular MLI Lease Page 11 of 19 employees (including, but not limited to, maintenance and repair) that such person, firm or corporation may choose to perform. 6.18 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 Federal Aviation Administration shall be the responsibility of the Lessee and Lessee hereby agrees to pay all such fines or 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. Failure to comply with this paragraph shall be cause for immediate termination of this Agreement by Lessor. 6.19 VEHICULAR MOVEMENT Except as specifically authorized by the Lessor's Director of Aviation, Lessee will not permit the driving of vehicles by employees, customers, guests or invitees on the apron, taxiways or runways at the Airport. 6.20 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 aeronautical 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 aeronautical activity, 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 a aeronautical activity. 7.01 TERMINATION ARTICLE SEVEN TERMINATION AND CANCELLATION This Lease shall terminate at the end of the term hereof. Lessee shall have no further right or interest in any of the Leased Premises or improvements ( excepting the Existing Improvements) hereby demised, except as provided herein. 7.02 EVENTS OF DEFAULT AND TERMINATION BY LESSEE This Lease shall be subject to cancellation by Lessee upon the occurrence of any one or more of the following events: 1. The permanent abandonment of the Airport by the Lessor as an air terminal. 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. MLI Lease Page 12 of 19 ·-·: 3. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the Lessor's use and operation of the Aiiport for a period of at least ninety (90) days. 4. The default of the Lessor in the performance of any covenant or agreement herein required to be performed by the Lessor, except those described in 7.02(1) through 7.02(3), above. (The matters or events set forth herein are collectively referred to as a "Default" or "Event of Default") Lessee may exercise such right of termination, except as other notice periods are specifically provided herein, by giving written notice to the Lessor to correct or cure such Default. If within thirty (30) days from the date of receipt of such notice, the Default complained of shall not have been corrected or cured, then in such event, Lessee shall have the right at once and without further notice to terminate this Lease. Rental due hereunder shall be payable only to the effective date of said termination. Notwithstanding the termination remedy set forth herein, except as provided below, in the event the default by Lessor is that solely set forth in Section 7.02(4), the Lessee may exercise any other right or remedy available to it by law, equity, contract or otherwise. All of such remedies are expressly cumulative and the exercise of one or more remedies shall not preclude the simultaneous or subsequent exercise of different or additional remedies. Notwithstanding anything herein to the contrary, in the event that the default(s) set forth in Section 7.02(1), 7.02(2), and/or 7.02(3) are the default(s) of Lessor, Lessee may, as its sole and exclusive remedy, terminate this Agreement. 7.03 EVENTS OF DEFAULT AND TERMINATION BY LESSOR This Lease shall be subject to cancellation by Lessor after the happening of one or more of the following events: I. The talcing by a court of competent jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any federal reorganization act. 2. The appointment of a receiver for Lessee's assets. 3. The divestiture of Lessee's assets by other operation oflaw. 4. The abandonment by Lessee of the Leased Premises for a period of thirty (30) days or more. 5. The failure by Lessee to pay any rentals or other charges hereunder after notice as specified above. 6. The default by Lessee in the performance of any covenant or agreement herein required to be performed by Lessee. 7. The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the Aiiport, or any substantial part or parts thereof, in such a manner as to substantially restrict Lessee for a period of at least ninety (90) days from operating thereon. (The matters or events set forth herein are collectively referred to as a "Default" or "Event of Default".) MLI Lease Page 13 of 19 .. , Lessor may exercise such right of termination, except as other notice periods are specifically provided herein, by giving written notice to the Lessee to correct or cure such Default. If within thirty (30) days from the date of receipt of such notice, the Default complained of shall not have been corrected in a manner satisfactory to the Lessor, then in such event, Lessor shall have the right, at once and without further notice to Lessee, to declare this Agreement terminated. Once the Agreement is terminated, Lessor'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 that 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 Lessor's rights hereunder or otherwise bar or preclude Lessor from declaring this Agreement cancelled as a result of any subsequent violation of any of the terms or conditions of this Agreement. Notwithstanding the termination remedy set forth herein, the Lessor may exercise any other right or remedy available to it by law, equity, contract or otherwise. All of such remedies are expressly cumulative and the exercise of one or more remedies shall not preclude the simultaneous or subsequent exercise of different or additional remedies. Notwitstanding anything herein to the contrary, in the event that the Default set forth in Section 7 .03 (7) is the sole and only default of Lessee, Lessor may, as its sole and exclusive remedy, terminate this Agreement. 7.04 REPLACEMENT AFTER DAMAGE It is agreed between the parties hereto that in the event the Leased Premises, including without limitation, the Existing Improvements, are damaged by fire or other accidental cause during the term of this Lease, the Lessee shall restore the Leased Premises, and, if applicable, the Existing Improvements, to as near their former condition as reasonably practicable. 7.05 CONFLICT OF INTEREST The Lessee acknowledges that it has been informed that Texas law prohibits contracts between the City of Lubbock and its "officers" and "employees," and that the prohibition exteqds to officers . and employees of the City of Lubbock agencies, such as Lessor- 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. 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 of the initial term, any extension or otherwise under any provision of this Lease, to remove from the Leased Premises the MLI Lease Page 14 of 19 .\ Existing Improvements and all of Lessee's furniture, equipment, furnishings, trade fixtures, and other personal property which has not become the Property of the Lessor, but Lessee shall restore the Leased Premises to the original condition, normal wear and tear excepted. The Lessor, however, shall have a lien, and Lessee expressly hereby grants a lien, on all of Lessee's property to secure any unpaid rentals or other revenue due the Lessor; and Lessee's right to remove property, including without limitation, the Existing Improvements, from the Leased Premises is conditioned upon all amounts due Lessor from Lessee having been paid in full. Property including, without limitation, the Existing Improvements, remaining on the premises after ninety (90) days from the date of termination of this Lease shall be deemed abandoned and will become the Property of the Lessor, and may be disposed of as the Lessor sees fit, without any liability to the Lessee to account for the proceeds of any sale; and the Lessor, at its option, may require Lessee to remove the abandoned property and may charge rent from the date of the expiration or termination of this Lease 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 Lessor, as the case may be. 7.07 TERMINATION OF LEASE AND SURRENDER OF LEASED PREMISES The Lessee covenants and agrees that at the expiration of this Lease, or upon earlier termination as provided elsewhere in this Agreement, Lessee will quit and surrender the Leased Premises and the improvements not owned by it in good condition, reasonable wear and tear excepted, and the Lessor shall have the right to take possession of the Leased Premises and such improvements, subject to the limitations expressed in Article Seven, of this Lease, with or without process oflaw. 8.01 NOTICES ARTICLE EIGHT MISCELLANEOUS PROVISIONS Notices to the Lessor 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 the Director of Aviation, Lubbock International Airport, Route 3, Box 389, Lubbock, Texas 79403, or by telephone facsimile at (806) 775-3133. Notices to the Lessee shall be deemed sufficient if in writing and hand delivered or mailed, registered or certified mail, postage prepaid, addressed to Market Lubbock Economic Development Corporation, attn: Executive Director, 1301 Broadway, Suite 200, Lubbock, Texas 79401 or by telephone facsimile at (806) 749-4501. Notice shall be deemed received when delivered, if delivered in hand or by telephone facsimile, or three (3) days after posting the notice, if the notice is provided by mail. 8.02 ENTIRE AGREEMENT This Lease constitutes the entire Agreement between the Lessor and Lessee, and supercedes any other prior written or parole agreement, if any, between the Lessor and Lessee. This Agreement may only be amended in writing executed by the duly authorized individuals of the parties sought to be bound. MLI Lease Page 15 of 19 i 2-uoL}-~oou, EXECUTED this 8th day of _____ J_an_ua_ry=-----' 2004. ATTEST: APPROVED AS TO CONTENT: Jo irector of Aviation APPROVED AS TO FORM: Lft2-_ Richard K. Casner First Assistant City Attorney Richard/MLl.HangarLeaseAgreement. 72903.accpted 121703 December 17, 2003 MLI Lease MARKET LUBBOCK ECONOMIC DEVE~::ORATION, LESSEE: BY:~ Title: Chairman Date: January 7 • 2 004 CITY OF LUBBOCK, LESSOR Page 16 of 19 I ''· ,--A\ "(II: .... MLI Lease EXHIBIT A Resolution No. 2004~R0007 Field Notes for a l.71 Acre Tract out of Section 28, Block A Lubbock, County, Texas BEGINNING at a point in the existing fence line approximately 102 feet North of a point in the South survey line of the survey for a 2.79 acre tract of land out of Section 28, Block A. Lubbock County, Texu (attached for reference), said point bearing South oo• 02' 00" East 637.34 feet and Sou~ 89° S9' 30" West 89S.20 fcot; TIIENCE West a distance of 80.5 feet along the cxiatina fence line to a point being the Southwest comer of tbe existing fence fuw. nmNCE North a diatance of 245 feet along the exiatins fence line to a point in the North survey lino or the aurvey for a 2. 19 acre tnct of land out of Section 28, Block A. Lubbock County, Trm (attached forl'Dference}, said point beingll foot But oftbe Northwest comer of said survey; nmNCE But a distance of 129 feet along the North line of said survey to a point, said point being 160 feet But of the Northwest com« of said Slll'Vey; THENCE South a distance of8S feet alq the mating fence lino to a point 10 feet from the North wall of the Hangar, said point being 9 feet But and 10 feet North ofNortbweat corneroftheHanpr; · · TIIENCE East a diatance of245.5 feet along a line parallel to and 10 feet N9rtb oftbe North wall of the Hanpr to a point 5 feet East of the Northeast ~ of the'Hanpr; ' THENCE South a distance of J 75 feet along a line patallel to and 5 feet East of the Bast wall of the Hangar to a point 5 feet South of the Southeast comer of the Hangar; THENCE West a distance of261 feet along a line parallel to·and 5 feet ·south oftbe South wall of the banpr to a point 5 feet West oftbe Southwest comer of the Hangar; THENCE North a distance of 15 feet to a point m the mating fence line Aid point beinf 5 feet West of the West wall of the Hangar; THBNCE West a distance of33 feet along. the exiating fence liDe to tho POINT OP . BBOINNlNG Containing 1.71 acres. . ~ .. ; "1.41 ll•a 1tTIIUT ,. • 2 ,1.cw• ... ... . ... I. 1 I ~c.. ::; OI ,,1,· ,II I I ... .,. • ,.. .. " "' I '2 e •·••' i ' 9C'AL E I 11 a 1.D01 : ·.· o • , S 1:Jrige ~ 1JtoO I ; I '.) PLAT or SUltVBY OIi . Resolution No. 2004-ROOOJ ,. .. , .. , . ..... A 2.79 ACU nACT Of WO Otr.r OP SBCTIOII 28, BLOCK A, LUBBOCZ CODHn, DW EXHIBIT A.1 Attached for Reference , Purposes only - Point of Beginnin9 E.·W Tt50 1 lt.·kl S!to' rA,CIIAIA )-6 • I -• ~ " "' . 2 f'ftOW TMI• .-OINT TMa t.W. CQ, o, ~ac. 1.A lltC.IC, A aa,ias ti O' A' a Gl1.5;J f 9 69~9' lo"loJ1 &9S,"1.0\ • 9 •••• l'lBLD IIOTB8 SI.PT~&Ali 'lS9 1"!>~1 9CAL& 111 • '1001 • • SLT '/1." ROD aaGZIDIIWG at a 112• iron roe!, aet. for t:ha -Southveat aD4 bevinning corner of th.ia tract, whence th• Soui:hveat. corner of Section 28 ))ear• South 00•02•0~• But; 637.34 feet and South 19•59•30• treat., a,s.20 feet, l'IIBIICJI Mori:ll, 347.50 feet t:o a 112• J.roa rod, aet. for~· •a~'thweat. corner of tbi• t.raat., ftlAICB Baat., 350.oo·.feet. t.o • 112• iron roe!, ••1: for 1:he aorth•••t. corner of tbi• tract., 'tllBHCB Sou\;h, 347.so· feet t:o a 1/2• iron ro4, aet. for the Soutbeaa\ corner o~ thia tract., S'BBHCB Weat, 350.00 feet. to 1:he. point of be9.innin9. CONTAIIIIRG 2.79 acrea. 21,010 Page 18 of 19 Resolution No. 2004-R0007 EXHIBIT A.2 PLAT OF IMPROVEMENTS FOR 1. 71 ACRE TRACT 11------"-""'e.,,:...' ~·------ SURVEY BOUNDARY MLI Lease Page 19 of 19