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HomeMy WebLinkAboutResolution - 5951 - Fixed Base Operator Ground Lease Agreement - Lane Mclanahan - 07_30_1998Resolution No. 5951 Item No. 4 July 30, 1998 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 Fixed Base Operator Ground Lease Agreement with Lane McLanahan and all 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 30th day of July , 1998. WINDY SI N, MAY R ATTEST: _Ka 1e Daf ell, City Secret ary APPf,OVED AS CONTENT: a- hh i Mark Earle, Aviatio Manager APPROVED A AdWL. ssist City A0 ney }, ALS:dk/Lane McLanahan RES.doc July 20, 1998 �.' Resolution No. 5951 Item No. 4 July 30, 1998 FIXED BASE OPERATOR GROUND LEASE AGREEMENT THE STATE OF TEXAS § COUNTY OF LUBBOCK § This LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into at Lubbock, Texas„ by and between the CITY OF LUBBOCK, TEXAS, hereinafter referred to as "Lessor," and LANE MCCLANAHAN, hereinafter referred to as "Lessee." WITNESSETH: WHEREAS, Lessor owns and operates a public airport designated as Lubbock International Airport and hereinafter called "Airport;" and WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to lease unto Lessee the ground area herein described, on the west ramp, together with certain privileges, rights, uses and interests therein, as set forth below; and WHEREAS, Lessee intends to utilize the premises herein leased for the purpose of constructing an airplane hangar and such other purposes as might be enumerated below; and WHEREAS, the Airport Board of the City of Lubbock has approved and recommends that Lessee be granted this Agreement for the term designated below; and WHEREAS, the City Council of the City of Lubbock accepts the recommendation of the Airport Board and finds that execution of this Lease will properly serve the public interest of the citizens of the City of Lubbock; NOW THEREFORE, The Parties do hereby agree as follows: ARTICLE I DEMISE OF LEASED PREMISES 1.01. LEASED PREMISES In consideration of the mutual covenants and agreements of this lease, and other good and valuable consideration, Lessor demises and leases to Lessee, and Lessee leases from Lessor, certain property consisting of 11,000 square feet of ground area located on the west ramp, Lubbock International 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 "the Premises" or "the Leased Premises" in this Lease). 1.02. NON-EXCLUSIVE It is understood and agreed that nothing herein 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 an aeronautical activity. 1.03 PURPOSE Lessee's use of said Leased Premises shall be for the sole purpose as set out below unless otherwise stated herein. All such business operations at the Airport will be confined to the Leased Premises. (a) For sublease of the premises to Stratos Aviation, an FAA approved Flight School to be operated from the premises. In the event Lessee utilizes the leased premises for subleasing to individuals, partnerships and/or corporations for the storage of aircraft as provided for in paragraph 1.03 (b) below, Lessee's insurance coverage shall then include Hangar Keepers liability coverage in the amount of $1,000,000.00. (b) For sublease of the premises to individuals, partnerships and/or corporations for the purpose of storing aircraft. (c) For any other purpose approved by the Director of Aviation of Lessor. Fixed Base Operator Ground Lease Agreement Page 2 of 27 Lane McClanahan 1.04 RIGHTS OF OTHERS It is clearly understood by the Lessee that no right or privilege has been granted which would operate to prevent any person, firm or corporation operating aircraft on the Airport from performing any services on its own aircraft with its own regular employees including, but not limited to maintenance, repair and fueling that such person, firm or corporation may choose to perform. 1.05 PUBLIC BENEFIT Lessee agrees to conduct business on the Leased Premises for the use and benefit of the public and further agrees: 1. To furnish good, prompt and efficient services adequate to meet all the demands for its services at the Airport; 2. To furnish said services on a fair, equal and nondiscriminatory basis to all users thereof; and 3. To charge fair, reasonable 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 II 2.01 TERM The initial term of this Agreement shall be for a period of twenty-seven (27) years commencing on the day of and ending on the day of , , unless terminated sooner as proved in this lease. This agreement may be extended upon the mutual agreement of both Lessor and Lessee for one (1) additional three (3) year periods. The Lessor and/or Lessee may elect to not extend the term of this Agreement in their sole discretion. Fixed Base Operator Ground Lease Agreement Page 3 of 27 Lane McClanahan 2.02 TERMINATION This Agreement will terminate without further notice when the lease term (or any extension thereof) expires, and any holding over by Lessee after the term expires will not constitute a renewal of the Agreement or give Lessee any rights under this Agreement in or to the premises. 2.03 HOLDOVER If Lessee holds over and continues in possession of the premises after the lease term (or any extension thereof) expires, Lessee shall be considered to be occupying the premises on an at will tenancy, subject to all the terms of this Lease. ARTICLE III RENTALS AND FEES 3.01. RENTAL In consideration of the rights and privileges herein granted, Lessee shall pay to Lessor an annual rental for the 11,000 square feet of Leased Premises of ONE THOUSAND ONE HUNDRED FIFTY FIVE AND N01100 ($1,155.00) which rental shall be due and payable, in advance, in twelve (12) equal monthly installments of NINETY SIX AND 25/100 ($96.25) on or before the first (lst) day of each month this Agreement is in effect. The aforesaid rental rate shall be adjusted upward or downward on January 1 of each year this Agreement is in effect in direct proportion to the percentage increase or decrease for the preceding twelve (12) months in the Consumer Price Index and as published by the Bureau of Labor Statistics of the United States Department of Labor. 3.02. DEFAULT FOR FAILURE TO PAY RENTALS OR FEES If Lessee fails to pay any rentals or fees payable to Lessor hereunder within fifteen (15) days of their due date, the Director of Aviation of Lessor may, at his option, upon thirty (30) days written notice to Lessee (unless within such thirty (30) day period Lessee shall have Fixed Base Operator Ground Lease Agreement Page 4 of 27 Lane McClanahan corrected its failure to pay) immediately or at any time thereafter, enter into and upon the Leased Premises, or any part thereof in the name of the whole, and repossess the same without being deemed guilty of trespass. In the event the Director of Aviation gives Lessee notice to Lessee of intent to repossess the Leased Premises, Director of Aviation shall give the stated holder of the Deed of Trust Lien described in Exhibit `B", Lubbock National Bank, thirty (30) days written notice of such default and permit said holder the right to cure. 3.03. PAYMENTS All payments that become due and payable by Lessee shall be made to the City of Lubbock at the office of the Director of Aviation, Lubbock International Airport, Lubbock, Texas, 5401 N. Martin Luther King Blvd., Rt. 3 Box 389, Lubbock, Texas 79401. Lessee shall pay Lessor a late payment charge of five percent (5%) of the total amount of rental payable if payment is not made on or before the first (ls) day of each month. 3.04 DEPOSIT FOR SECURITY BADGES In addition to the above rental and fees, Lessee shall pay the City a processing fee and a deposit for security badges for each of Lessee's employees on the Leased Premises if it is determined by the Director of Aviation that badges are necessary to continue operations. Lessor's Director of Aviation shall also determine 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 Director of Aviation. ARTICLE IV RIGHTS RESERVED TO LESSOR The following rights are reserved unto Lessor, and Lessee agrees that all rights, powers and privileges granted under this Lease shall be subordinated to Lessor's rights as hereinafter stated: Fixed Base Operator Ground Lease Agreement Page S of 27 Lane McClanahan 4.01. AIRPORT HAZARDS 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 erecting or permitting the erection of any building or other structure on the Airport or constitute a hazard to aircraft and the right to remove any such obstructions. 4.02. AGREEMENT WITH UNITED STATES During time of war or national emergency, the Lessor shall have the right to enter into an agreement with the United States Government for military or naval use of all or part of the landing area, the publicly -owner air navigation facilities, and any other area or facilities of the Airport. If any such agreement is executed, the provisions of this Lease, insofar as they are inconsistent with the provisions of the agreement with the Government, shall be suspended. The original term of this Lease may be extended by mutual agreement between the Lessor and Lessee by the amount of the period of such suspension. 4.03. SUBORDINATION OF LESSEE'S RIGHTS This Agreement shall be subordinate to the provisions of any existing or future agreement between the Lessor and the United States pertaining to the operation and 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. 4.04. SUSPENSION OF LESSEE'S RIGHTS All rights, privileges and interests acquired herein by Lessee, at the option of the Director of Aviation of Lessor, following thirty (30) days written notice to Lessee, may be suspended if such suspension is found by the Director of Aviation, acting in good faith, to be necessary for the Lessor to secure federal financial aid for the development of the Airport, or further development of aeronautical operations thereon. Fixed Base Operator Ground Lease Agreement Page 6 of 27 Lane McClanahan 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. 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, together with the right to direct and control all activities of Lessee in this regard. ARTICLLE V GENERAL CONDITIONS This Lease is granted subject to the following provisions and conditions: 5.01. RULES AND REGULATIONS In conducting its business on the Leased Premises, Lessee shall comply with and ensure that all authorized activities conducted comply with all federal, state and local laws, ordinances, rules and regulations now in force or hereinafter prescribed or promulgated by authority or by law. Lessee further agrees that in the event 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 laws, ordinances, rules or regulations, Lessee shall immediately reimburse the Airport the full amount of the penalty or fine and 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 Lease by Lessor's Director of Aviation. Fixed Base Operator Ground Lease Agreement Page 7 of 27 Lane McClanahan 5.02 IMPROVEMENTS OR ALTERATIONS Lessee may not, absent the prior written consent of Lessor in principle to the proposed activities, erect, maintain, alter, remodel, reconstruct, rebuild, replace, and remove buildings and other improvements on the premises, and correct and change the contour of the premises; however, Lessee may construct that certain building as described in Exhibit "A" which is attached hereto as if fully incorporated herein. Lessee agrees that any said improvements or alterations approved by Lessor, including the building described in Exhibit "A," shall be subject and conform to the minimum standards as set forth by the Lessor's Director of Aviation and any amendments thereto. In the event Lessor shall consent in principle to the proposed activities of Lessee, such activities of Lessee are subject to the following: a. Lessee bears the cost of any such work. b. The premises must at all times be kept free of mechanics' and materialmen's Liens. Lessor must be notified of the time for beginning and the general nature of any such work, other than routine maintenance of existing buildings or improvements, at the time the work begins. 5.03 SIGNS Lessee will erect no signs and will distribute no advertising at the Airport without the prior written consent of the Director of Aviation of Lessor. However, Lessee shall have the right to place signs identifying Lessee's business at locations approved by the Director of Aviation. Said signs shall be of a type, size and design approved in writing by the Director of Aviation. The installation of such signs must comply with all applicable City ordinances and shall be without cost to the Lessor. Fixed Base Operator Ground Lease Agreement Page S of 27 Lane McClanahan 5.04 LIENS Lessee shall not cause or permit any Mechanics' liens or other liens to be filed against the fee of the premises or against Lessee's leasehold interest in the land or any buildings or improvements on the premises by reason of any work, labor, services, or materials supplied or claimed to have been supplied to Lessee or anyone holding the premises or any part of them through or under Lessee. If such a mechanic's lien or materialman's lien is recorded against the premises or any buildings or improvements on them, Lessee must either cause it to be removed or, if Lessee in good faith wishes to contest the lien, take timely action to do so, at Lessee's sole expense. If Lessee contests the lien, Lessee will indemnify Lessor and hold it harmless from all liability for damages occasioned by the lien or the lien contest and will, in the event of a judgment of foreclosure on the lien, cause to the lien to be discharged and removed before the judgment is executed. Lessor understands and consents to Lessee having that certain Deed of Trust lien as described in Exhibit "B" filed against Lessee's leasehold interest. Lessee further agrees that in the event 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 laws, ordinances, rules or regulations, Lessee shall immediately reimburse the Airport the full amount of the penalty or fine and 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 Lease by Lessor's Director of Aviation. 5.05 REMOVAL AND DEMOLITION Lessee shall not remove or demolish, in whole or in part, any improvements that already exist on the Leased Premises without prior written consent of the Director of Aviation of Lessor, who may, in his discretion, condition such consent upon the obligation of Lessee to replace the same improvements specified in such consent upon termination or expiration of this Lease. The Fixed Base Operator Ground Lease Agreement Page 9 of 27 Lane McClanahan Director of Aviation shall not withhold consent unreasonably and shall not impose unreasonable conditions on his consent. Fixed Base Operator Ground Lease Agreement Page 10 of 27 Lane McClanahan 5.06 INSPECTION OF LEASED PREMISES Lessor, acting by and through its Director of Aviation or his designated representatives, shall have the right to inspect the Leased Premises at all reasonable times during the initial term of this Lease and during any extension thereof. 5.07 INSPECTION OF BOOKS AND RECORDS Lessee shall maintain complete books and records of all transactions, sales and income resulting from its business operations at the Airport, which books and records may be inspected at any time by the Director of Aviation or his designated representative at Lubbock, Texas, upon reasonable notice to Lessee. In the event Lessee request such inspection to be performed outside the Lubbock area, the Director of Aviation may honor such request; 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 Lessor, together with a fiscal -year-end signed statement certified by a Certified Public Accountant that such figures are correct and properly stated. 5.08 JANITORIAL SERVICES Lessee shall, at its own expense, provide janitorial services for the Leased Premises. Said services may be provided by Lessee alone, or by Lessee in conjunction with other tenants who are now or may hereafter by Lessees at the Airport. 5.09 MAINTENANCE Lessor assumes no responsibility for the condition of the Leased Premises and shall not assume any responsibility for maintenance, upkeep or repairs necessary to keep the Leased Premises in a safe and serviceable condition. Lessee shall, at its sole cost and expense, maintain the Leased Premises in a presentable condition consistent with good business practice. Lessee shall repair all damages to said Leased Premises caused by its employees, patrons and its Fixed Base Operator Ground Lease Agreement Page 11 of 27 Lane McClanahan business operations thereon; shall maintain and repair all improvements, facilities and equipment thereon, including any drainage installations, paving, curbs, building and other improvements; and shall repaint the hangars as necessary to maintain a clean and attractive appearance. All such maintenance and repairs shall be performed with quality materials and in a workmanlike manner. All paint colors and schemes shall harmonize and shall be subject to prior approval of the Director of Aviation for the Lessor. The Director of Aviation of Lessor shall be the sole judge of the quality of maintenance, and upon written notice by the Director of Aviation of Lessee, Lessee shall be required to perform whatever maintenance such Lessor's agent deems necessary. If said maintenance is not undertaken by Lessee within twenty (20) days after receipt of written notice, the Director of Aviation shall have the right to enter upon the Leased Premises and perform the necessary maintenance, the cost of which shall be borne by Lessee. 5.10 LESSEE'S DUTY TO REPAIR Except as provided herein, 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 properly repaired or replaced by Lessee to the satisfaction of the Director Aviation of Lessor, or in lieu of such repair or replacement, Lessee shall, if so required by the Director of Aviation, pay Lessor money in any amount deemed sufficient by him to compensate the Lessor for the losses sustained or expense incurred by Lessor as a result of the loss of, damage to, or destruction of such property. 5.11 TRASH DISPOSAL Lessee shall, at its sole expense, provide a complete and property arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse resulting from its business operations authorized by this Agreement. Fixed Base Operator Ground Lease Agreement Page 12 of 27 Lane McClanahan 5.12 UTILITIES Lessee shall pay or cause to be paid all charges for water, heat, gas, electricity, sewers, and all other utilities used on the premises throughout the lease term, including any connection fees. 5.13 TAXES, ASSESSMENTS AND LICENSES In addition to the rent specified in Article 3, Lessee will pay and discharge all taxes, general and special assessments, and other charges of any kind levied on or assessed against the premises and all interest in the premises and all improvements and other property on them during the lease term, whether belonging to Lessor or to Lessee. Lessee will pay all the taxes, charges, and assessments directly to the public officer charged with their collection not fewer than fifteen (15) days before they become delinquent, and Lessee will indemnify Lessor and hold it harmless from all such taxes, charges, and assessments. Lessee may, in good faith at its own expense contest any such taxes, charges, and assessments and must pay the contested amount, plus any penalties and interest imposed, if and when finally determined to be due. Lessee shall obtain and pay for all licenses and permits necessary or required by law for the construction of any additional improvements, the installation of equipment and fiunishings, and any other licenses necessary for the conduct of its business. 5.14 INDEMNITY AND RELEASE 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 OR NATURE, WHICH ARISE DIRECTLY OR INDIRECTLY, OR ARE RELATED TO, IN ANY WAY, MANNER OR FORM, THE ACTIVITIES CONTEMPLATED HEREUNDER, OR THE OMISSION OF THE ACTIVITIES CONTEMPLATED HEREUNDER, INCLUDING, BUT Fixed Base Operator Ground Lease Agreement Page 13 of 27 Lane McClanahan 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 SUCH CLAIM, AND TO PAY OR 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 Fixed Base Operator Ground Lease Agreement Page 14 of 27 Lane McClanahan 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. 5.15 PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE Lessee shall maintain at all times during the initial term of this Lease, during any extension thereof, at its sole expense, with an insurance underwriter acceptable to the Director of Aviation of Lessor and authorized to do business in the State of Texas, adequate insurance against claims of public liability and property damage resulting from Lessee's activities at the Airport. The amount of insurance coverage's shall not be less than ONE HUNDRED THOUSAND DOLLARS ($100,000) for property damages as a result in any one event, or less than THREE HUNDRED THOUSAND DOLLARS ($300,000) for personal injury or death of any one person in any one event, or less than FIVE HUNDRED THOUSAND DOLLARS ($500,000) for personal injury or death of two or more persons in any one event. All policies shall contain an agreement on the part of the respective insurers waiving the right of such insurer to subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be filed with Director of Aviation prior to the commencement of the initial term of this Lease. Each policy shall name the City of Lubbock as an additional insured as its interest may appear, require the insurer to notify the Director of Aviation of the City of Lubbock, Texas, or any alteration, nonrenewal or cancellation, and remain in full force and effect until at least ten (10) days after such notice of alteration, nonrenewal or cancellation is received by the Director of Aviation. Prior to the renewal date of each policy owned by Lessee, separate evidence of renewal shall be provided to the Director of Aviation of the Lessor. Fixed Base Operator Ground Lease Agreement Page 15 of 27 Lane McClanahan 5.16 FIRE AND HAZARD INSURANCE Lessee shall acquire fire and extended insurance coverage for the building and fixtures on the Leased Premises and shall keep such insurance in full force and effect during the entire term of this Lease, and during any extension thereof. Such insurance shall be in an amount equal to not less than eight percent (80%) of the replacement value of such building and fixtures. All fire insurance policies shall contain an additional insured endorsement in favor of the lessor. The policy shall also waive the right of subrogation against the Lessor. Lessee shall furnish evidence of certificates of insurance to the Director of Aviation prior to taking possession of the Leased Premises. 5.17 NONDISCRIMINATION Lessee, its agents and employees will not discriminate against any person or class of persons by reason of race, color, sex, religion or national origin in providing any services or in the use of any of its facilities provided for the public; nor shall Lessee discriminate against any person or class of persons on the basis of age in a manner that violates any prohibition against such discrimination under the Age Discrimination Act of 1975, 42 U.S.C. §§ 621 et. M. Lessee further agrees to comply with such enforcement procedures as the United States might demand that Lessor take in order to comply with the Sponsor's Assurances as evidenced by agreement by and between Lessor and the United States. Lessee agrees to not discriminate against any employees or applicants for employment because of race, color, age, sex, religion or national origin. Lessee also agrees to take affirmative action to ensure that applicants are employed without regard to their race, color, sex, religion or nation origin and that employees are treated as such during employment. Such action shall include, but not be limited to, employment, upgrading, demotion or transfer, recruitment, Fixed Base Operator Ground Lease Agreement Page 16 of 27 Lane McClanahan layoff, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Lessee will also conduct its activities in accordance with the requirements of Section 504 of the Rehabilitation Act of 1973, and will assure that no qualified handicapped person shall, solely by reason of his or her handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination, including discrimination in employment, under any program or activity of Lessee. Lessee also agrees that in the event facilities are constructed, maintained or otherwise operated on the Leased Premises for a purpose for which a Department of Transportation program or activity is extended, or for another purpose involving the provision of similar services or benefits, Lessee shall maintain and operate such facilities and services in compliance with all requirements imposed pursuant to 49 CFR Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said Regulation may be amended. 5.18 WARRANTY OF NO SOLICATION 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, and brokerage or contingent fee. 5.19 NO ASSIGNEMENT OR SUBLETTING Except as previously set forth in paragraph 1.03 above, or with the prior written consent of the Director of Aviation of the Lessor, Lessee shall not sublet any part of the Leased Premises or assign any of its rights hereunder. No such assignment or subletting made with the consent of the Director of Aviation shall affect Lessee's obligation to make all required rental and fee payments hereunder upon default of any assignee or subtenant. Except as set forth above, Lessee Fixed Base Operator Ground Lease Agreement Page 17 of 27 Lane McClanahan shall not at any time assign, sell, transfer, pledge or otherwise alienate this Agreement or any interest herein without the prior written consent of the Director of Aviation of Lessor. Lessor permits the holder of that certain Deed of Trust Lien described in Exhibit "B", Lubbock National Bank, to assume and succeed Lessee's rights, interests and obligations under this Agreement upon foreclosure of said lien. Furthermore, Lubbock National Bank may assign this Agreement subject to the approval of the Director of Aviation of the Lessor. 5.20 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. 5.21 DUTY TO PREVENT UNAUTHORIZED ACCESS Lessee shall prohibit unauthorized person, vehicles and animals from obtaining access or entry to the air operations area and any other sterile area at the Airport through those Airport premises which Lessee either controls or has possession of under this Agreement; and Lessee agrees that in the event that a civil penalty or fine is levied against the Airport or Lessor as a result of Lessee's failure to comply or act in accordance with this provision, or any other applicable federal, state or local statues, ordinances, rules and regulations affecting the use, occupancy or operation of any said premises, Lessee shall immediately reimburse the Lessor the full amount of the penalty or fine and correct the act or omission leading to, causing or contributing to the violation. 5.22 SECURITY PLAN Fixed Base Operator Ground Lease Agreement Page 18 of 27 Lane McClanahan Lessee shall submit a Security Plan to the Director of Aviation of Lessor, which is acceptable to the Director of Aviation, the Airport Security Coordinator and the Federal Aviation Administration. Failure to submit an acceptable Security Plan at the request of the Director of Aviation shall be grounds for immediate termination of this Agreement. 5.23 STANDARDS Lessor reserves the rights to establish standards for the construction and maintenance of and alterations, repairs, additions or improvements to Lessee's facilities. This includes structural design, color, material used, landscaping and maintenance of Lessee's facilities and the Leased Premises. Lessor also reserves the right to issue through its Director of aviation such 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. Lessee is hereby granted consent to construct the building described in Exhibit "A" when and only upon Lessee obtaining any and all necessary permits required for construction of said building. 5.24 ACCESS Lessee is herein granted the right of ingress to and egress from the Leased Premises over and across common or public roadways serving the Airport. Such right of ingress and egress, however, shall be subject to all laws, ordinances, rules and regulations now existing or hereafter promulgated by the City of Lubbock or other lawful authority. Lessee hereby is granted consent to construct the building described in Exhibit "A" after all required permits for said construction are acquired. 5.25 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. Fixed Base Operator Ground Lease Agreement Page 19 of 27 Lane McClanahan 5.26 STORED CONTENTS Lessee agrees that it will not store or permit storage of gasoline, oil paint or any other flammables on the leased premises and that no smoking or open flame will be permitted thereon. It is also understood that Lessee will not use or permit the use of the Leased Premises for any purpose other than that set forth in paragraph 1.03 above or uses authorized by the Director of Aviation. 5.27 LANDLORD'S LIEN Lessee hereby gives Lessor a contractual lien upon all of Lessee's property, now or at any time hereafter placed in or upon Leased Premises, to secure the prompt payment of the rentals and charges herein required, and Lessee hereby waives all exemptions for such property, and any portion thereof, insofar as permitted by law. Any such landlord's lien shall be subordinate to that certain Deed of Trust lien described in Exhibit "B". ARTICLE VI TERMINATION This Agreement is subject to termination for the reasons set forth below, provided that ten (10) days written notice is given to the nonterminating party. 6.01 LESSEE'S RIGHT TO TERMINATE Lessee may terminate upon the happening of any of the following: A. The permanent abandonment of the Airport as an air terminal by Lessor. B. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Leased Premises for at least thirty (30) days. C. The breach by Lessor of any of the terms, covenants or conditions of this Agreement to be kept, performed and observed by Lessor, and the failure of Fixed Base Operator Ground Lease Agreement Page 20 of27 Lane McClanahan Lessor to remedy such breach for a period of thirty (30) days after written notice from Lessee of the existence of such breach. D. The assumption by the United States Government, or any authorized agency of same, of the operation, control or use of the Airport and its facilities in such a manner as to substantially restrict Lessee from conducting its business under this Agreement, if such restriction is to continue or has continued for a period of three (3) months or more. 6.02 LESSOR'S RIGHT TO TERMINATE Lessor may terminate upon the happening of any of the following: A. If the Lessee makes an assignment for the benefit of creditors; or files a voluntary petition of bankruptcy; or if proceedings in bankruptcy are instituted against Lessee and Lessee is thereafter adjudicated as bankrupt pursuant to such proceedings, or if a receiver for the Lessee's assets is appointed; or if Lessee petitions or applies to any tribunal for the appointment of a trustee or receiver for Lessee under any bankruptcy, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect. B. If Lessee shall abandon and discontinue operations under this Agreement. C. If Lessee shall default in or fail to make any rental or fee payment at the time and in the amounts required under this Agreement. D. If Lessee shall fail to perform, keep and observe all of the covenants and conditions contained in this Agreement to be performed, kept and observed by Lessee. E. If Lessee shall fail to abide by all applicable laws, ordinances, rules and regulations of the United States, State of Texas, City of Lubbock and Director of Aviation of the City of Lubbock. Fixed Base Operator Ground Lease Agreement Page 21 of 27 Lane McClanahan F. If Lessor, acting in good faith, finds termination of the rights, privileges and interests of Lessee acquired under this Lease to be necessary to secure federal financial aid for the development of the Airport, or further development of aeronautical operations thereon. Except where this Lease provides for immediate termination, Lessor shall give written notice to Lessee and the holder of that Deed of Trust lien described in Exhibit `B", Lubbock National Bank, to correct or cure any such default, failure to perform or breach and if, within thirty (30) days from the date of such notice, the default, failure to perform or breach complained of shall not have been corrected n a manner satisfactory to the Director of Aviation of Lessor, then and in such event the Director of Aviation shall have the right, at once and without further notice to Lessee, to declare this Agreement terminated and to enter upon and take full possession of the Leased Premises. Furthermore, that upon the happening of any of the contingencies enumerated in Article VI, Section 6.02, number Paragraph A hereof, this Agreement shall be deemed to be breached by Lessee and without entry or any other action by Lessor, shall automatically terminate and be reinstated only if such involuntary bankruptcy or insolvency proceedings, trusteeship, receivership or other legal act divesting Lessee of its rights under this Agreement shall be denied, set aside, vacated or terminated in Lessee's favor within thirty (30) days from the happening of the contingency. Upon the happening of any of said latter events, this Agreement shall be reinstated as if there had been no breach occasioned by the happening of the contingency, provided that Lessee shall, within ten (10) days after the final denial, vacating or setting aside of such petition, or the vacating, terminated or setting aside of such appointment, pay or discharge any and all sums of money which may have become due under this Agreement in the interim and remain unpaid, and shall likewise fully perform and discharge all other obligations which may have accrued and become payable in the interim. 6.03 FIRE DAMAGE Fixed Base Operator Ground Lease Agreement Page 22 of 27 Lane McClanahan In the event the Leased Premises are damaged by fire or other accidental cause during the initial term of this Agreement or during any extension thereof, so as to become totally or partially unusable, Lessor shall have the option to restore such Leased Premises. If Lessor exercises its option to restore the same, Lessor shall proceed with due diligence. If the damage is so extensive as to amount practically to the total destruction of the utility of the Leased Premises for the purposes expressed in this Agreement, Lessee's obligation to pay rental and fees hereunder shall abate for the time and to the extent that the Leased Premises have been rendered unusable. Should Lessor not exercise its option to restore the Lease Premises, this Lease shall terminate, such termination to be effective on the date of damage by fire or other accidental cause, and all rentals and fees due pursuant to this Agreement shall be apportioned to that date. 6.04 VACATION OF LEASE AND OWNERSHIP OF FIXTURES Within thirty (30) days after expiration or termination of this Agreement, as herein provided, the Lessee, at Lessee's sole expense, shall remove all improvements constructed or placed on the Leased Premises such as buildings, equipment, goods, chattels, and fixtures belonging to Lessee and restore the Leased Premises to the condition in which they were received, reasonable wear and tear and damage by fire or the elements excepted. In the event of the failure on the part of Lessee to remove from the Leased Premises, all such above described property owned by Lessee under the requirements set forth in this paragraph, Lessor may effect such removal and store such property at Lessee's expense. Lessee covenants and agrees to pay all reasonable costs, attorneys' fees and expenses that shall be incurred by Lessor 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 deemed abandoned and title will vest in Lessor; however, this in no way relieves the Lessee of the debt incurred. Lessee shall pay a sum equal to the rental stipulated herein, prorated to the period of time that Lessee's property remains on the Leased Premises after expiration or termination of this Agreement. Fixed Base Operator Ground Lease Agreement Page 23 of 27 Lane McClanahan In the event Lessor terminates this Agreement for cause, as contained herein, or if Lessee discontinues its business on the Leased Premises at any time prior to expiration of the term, or the expiration of any subsequent extension, Lessor shall retain ownership of Lessee's improvements to the extent of the rentals due for the remainder of the term or extension. Furthermore, upon the expiration or termination of this Agreement, Lessee shall, remove any furniture, machinery, equipment, or other trade fixtures owned or placed by Lessee, in, under, or on the premises, or acquired by Lessee, whether before or during the lease term; provided, however, that Lessee's right to remove its property is subject to the condition that Lessee has paid in full all amounts due and owed to lessor under this Agreement. If Lessee shall fail or neglect to remove said property on or before said expiration or termination of the Agreement, then at the option of Lessor, said property shall either become the property of Lessor without compensation therefor, or the Director of Aviation of Lessor may cause such property to be removed at the expense of Lessee, and no claim for damages against the Lessor, or its officers, agents or employees shall be created or made on account of such removal and restoration. ARTICLE VII MISCELLANEOUS PROVISIONS 7.01 NOTICES Notices to the Lessor provided for herein shall be sufficient if sent certified mail, postage prepaid, addressed to the Director of Aviation, Rout 3, Box 389, Lubbock, Texas 79041, and notices to Lessee, if sent by certified mail, postage prepaid, to the address for Lessee on file with the Director of Aviation for Lessor. 7.02 MULTIPLE PARTIES If this lease names more than one Lessor or Lessee, service of any notice on any one Lessee or Lessor is considered service on all Lessees or Lessors, respectively. Fixed Base Operator Ground Lease Agreement Page 24 of 27 Lane McClanahan 7.03 PARTIES BOUND This agreement binds, and inures to the benefit of, the parties to the lease and their respective heirs, executors, administrators, legal representatives, successors, and assigns. Fixed Base Operator Ground Lease Agreement Page 25 of 27 Lane McClanahan 7.04 APPLICABLE LAW This agreement is to be construed under Texas law, and all obligations of the parties created by this lease are performable in Lubbock County, Texas. Venue for any action brought pursuant to this Agreement, or any activity contemplated hereby, shall lie exclusively in Lubbock County, Texas. 7.05 CONSTRUCTION If any one or more of the provisions contained in this lease are for any reason held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceablity will not affect any other provision of the lease, which will be construed as if it had not included the invalid, illegal, or unenforceable provision. 7.06 PRIOR AGREEMENTS This lease constitutes the parties' sole agreement and supersedes any prior understandings or oral agreements between the parties with respect to the subject matter. 7.07 AMENDMENT No amendment, modification, or alteration of this lease is binding unless in writing, dated subsequent to the date of this lease, and duly executed by the parties. 7.08 RIGHTS AND REMEDIES CUMULATIVE The rights and remedies provided by this lease agreement are cumulative, and either parry's using any right or remedy will not preclude or waive its right to use any other remedy. The rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance, or otherwise. Fixed Base Operator Ground Lease Agreement Page 26 of 27 Lane McClanahan 7.09 ATTORNEY'S FEES If, as a result of either party's breaching this agreement, the other party employs an attorney to enforce its rights under this lease, then the breaching or defaulting party will pay the other party the reasonable attorney's fee and costs incurred to enforce the lease. 7.10 TIME OF ESSENCE Time is of the essence of this agreement. Executed this Agreement on this the 30th day of July LESSOR CIT F LUB OCK, TEXAS BY: A ST: Ka Darnell, City Secretary APPROVED AS TO CONTENT: Mark N. Earle, Dir for of Aviation ALSALIJAMy1FBOGLA4, McCl.W—Aoc Am 24. 1"S LESSEE LANE Mc AHAN By- ATTEST: Secre t7 0 1998. Fixed Base Operator Ground Lease Agreement Page 27 Lane McClanahan