HomeMy WebLinkAboutResolution - 2006-R0160 - Lease Agreement - Chaparral Inc. - Lubbock International Airport - 04_13_2006Resolution No. 2006-RO160
April 13, 2006
Item No. 5.9
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 with
Chaparral, Inc. at Lubbock International Airport, and all related documents. Said
Lease Agreement is attached hereto and incorporated in this Resolution as if fully set
forth herein and shall be included in the minutes of the Council.
Passed by the City Council this 13th day of April , 2006.
UGAL, MAYOR
ATTEST:
Reb ca Garza, City Secretary
APPWVED AS TO ONTENT:
Jam Loomis,
ector of Aviation
APPROVED AS TO FORM:
Linda L. Chamales, Senior Attorney
Office Practice Section
Sh/cityatt/Linda&ccdocs/Res- Chaparral Lease -
March 9, 2006
CONTRACT a NO.
- -b849
Resolution No. 2006-R0160
§ April 13, 2006
STATE OF TEXAS Item No. 5.9
CITY OF LUBBOCK §
LEASE AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
THIS AGREEMENT entered into by the CITY OF LUBBOCK (referred to herein as
Lessor), a Home Rule Municipality of Lubbock County, Texas, and CHAPARRAL, INC.,
(referred to herein as Lessee).
WITNESSETH
WHEREAS, Lessor owns, controls and operates the Lubbock Preston Smith International
Airport (referred to herein as Airport), situated at Lubbock, Lubbock County, Texas, and has the
authority to grant certain rights and privileges with respect thereto, including those hereinafter
set forth; and
WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to
lease unto Lessee the premises described herein, together with certain privileges, rights, uses and
interests therein, as hereinafter set forth; and
WHEREAS, Lessee is a corporation primarily engaged in commercial aviation, retail
sales and the general activities of fixed base operation and aircraft sales; and
WHEREAS, Lessee has indicated a willingness and an ability to properly keep and
maintain and improve said premises in accordance with standards established by Lessor, and
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:
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 1
ARTICLE ONE
DEMISE OF LEASED PREMISES
1.01 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 together with improvements thereon together with
adjacent land area (hereinafter called "Leased Premises"), and certain attendant
privileges, uses and rights, as hereinafter specifically set forth. The location of
said Leased Premises is depicted on Exhibit A attached hereto and by this
reference made a part hereof.
A. Hangar Building #108: Building area 12,159 sq. ft. and adjacent land
area 26,132 sq. ft.
B. Hangar Building #302: Building area 12,034 sq. ft. and adjacent land
area 24,784 sq. ft.
C. Executive Terminal Building: Floor Space 4,569 sq. ft.
D. Lessee -owned T-Hangar: Land areal, 170 sq. ft.
In addition to the above -described premises, Lessee shall have the right of first
refusal to lease on such terms as are agreeable between the Lessor and Lessee,
any space in the Executive Terminal Building that may become vacant during the
term of this Agreement or during any subsequent renewal period.
1.02 PURPOSE AND PRIVILEGES
The Lessee is entitled to use the Leased Premises for those activities set out in
Section 1, Fixed Base Operator, I. Multiple Services of the Minimum Standards
for Aeronautical Activities, 1991; as may be amended from time to time.
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 Leased Premises, which right shall extend to Lessee's
employees, guests, invitees, tenants and patrons.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 2
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)
consecutive 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 or its tenants, all fees during such period shall
abate and the term of the Agreement shall, at the election of Lessee, be extended
for an equivalent period of time.
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;
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 initial term of this Agreement shall be for a period of four (4) years and one
month and shall begin on January 1, 2006, and terminate on January 31, 2010.
This Lease may be extended for two (2) additional five (5) year terms unless
Lessee notifies Lessor in writing at least sixty (60) days prior to the beginning of
any such term that Lessee no longer desires to renew the Agreement.
2.02 HOLDING OVER
In the event Lessee remains in possession of the Leased Premises after the
expiration of this Agreement or any extension thereof, without any written
renewal or extension of the Agreement, such holding over shall not be deemed as
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 3
a renewal or extension of this Lease, and may be terminated at any time by the
Director of Aviation of Lessor.
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. FUEL FLOWAGE:
A fuel flowage fee 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. The aforesaid
flowage fees, if not paid by the supplier, shall be due on or before the 20"
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.
B. HANGAR BUILDINGS:
Rental for the Buildings, described in Article I, Paragraph 1.01 and shown
on Exhibit A as follows:
Building #108: 12,159 sq. ft. @ $0.9510 per sq. ft. per year ($11,563.21
annually; $963.60 monthly)
Building #302: 12,034 sq. ft. @ $0.9510 per sq. ft. per year ($11,444.33
annually; $953.69 monthly)
Such rental for the Building Area, shall be payable each month in the
amount of NINE HUNDRED SIXTY-THREE AND 60/100 DOLLARS
($963.60) per month for Building # 108, and NINE HUNDRED FIFTY-
THREE AND 69/100 DOLLARS ($953.69) per month for Building
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 4
#302, which sums are approximately equal to one -twelfth (1/12) of said
annual rental for the Building Area, due hereunder.
C. GROUND/LAND AREA FOR HANGARS:
Ground rental for adjacent land area described in Article I, Paragraph 1.01
hereof and shown on Exhibit A thereto as follows:
1. Land Area -Hangar Building # 108: 26,132 sq. ft. @ $0.1436 per sq.
ft. per year ($3,752.56 annually; $312.71 monthly)
2. Land Area - Hangar Building #302: 24,784 sq. ft. @ $0.1436 per sq.
ft. per year ($3,558.98 annually; $296.58 monthly)
3. Land Area — Lessee -owned T-hangar: 1,170 sq. ft. @ $0.1436 per
sq. ft. per year ($168.01 annually; $14.00 monthly)
Such ground rental shall be payable each month in the amount of THREE
HUNDRED TWELVE AND 71/100 DOLLARS ($312.71) per month on
Building #108, TWO HUNDRED NINETY-SIX AND 581100
DOLLARS ($296.58) per month on Building #302, and FOURTEEN
AND NO/100 DOLLARS ($14.00) per month on Lessee -owned T-
hangar, which sums are approximately equal to one -twelfth (1/12) of the
annual ground rental due hereunder.
D. EXECUTIVE TERMINAL BUILDING:
Rental for the Executive Terminal Building, described in Article I,
Paragraph 1.01 and shown on Exhibit A as follows:
Floor Space: 4,569 sq. ft. @ $9.85 per sq. ft. per year ($45,004.65
annually; $3,750.39 monthly)
Such rental for the Executive Terminal Building shall be payable each
month in the amount of THREE THOUSAND SEVEN HUNDRED
FIFTY AND 39/100 DOLLARS ($3,750.39) per month, which sums are
approximately equal to one -twelfth (1/12) of said annual rental for the
Executive Terminal Building, due hereunder.
E. ABATEMENT FOR IMPROVEMENTS:
In consideration for improvements to be made by Lessee in the Executive
Terminal, Lessee shall receive a credit for rent due for $29,000
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 5
amortorized at 4.5% over the initial term of this lease. Improvements to
the Leased Premises include update of public areas, the removal of a wall,
floor covering, wall covering (paint and wallpaper), ceiling tiles, clean up
of pilot's lounge restrooms and making restrooms by the Customs office
ADA compliant. A rent credit of SIX HUNDRED SEVENTY-THREE
AND 63/100 DOLLARS ($673.63) per month will be applied beginning
February, 2006, and continuing for 48 consecutive months (four years).
F. CONSUMER PRICE INDEX:
The parties hereto mutually agree that during the initial term of this
Agreement, and during any renewal period, except as otherwise might be
set out in this Agreement, the rental rates will be adjusted upward or
downward for each ensuing calendar year beginning January 1, 2007, in
direct proportion to the fluctuation in the U.S. Department of Labor,
Bureau of Labor Statistics Consumer Price Index (CPI). Any adjustment
to the rental rates resulting from changes in the CPI shall be determined by
calculating the increase or decrease in the CPI for the preceding twelve
(12) months.
G. FIXED BASE OPERATOR FEE:
TWO THOUSAND FIVE HUNDRED AND NO1100 DOLLARS
($2,500.00) is the established annual Fixed Base Operator's fee; 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 and are payable on the 20th day of each
month. Monthly payments for fuel flowage fees also become effective
upon execution of this Agreement and are payable on the 20th day of 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
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 6
EIGHT AND 34110 DOLLARS ($208.34) payable in advance on the first
(I") business day of each month.
H. 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 shall become due and payable on or before the 20`h day of each
month by the Lessee under this Agreement and shall be made to the Lessor at the
Office of the Director of Aviation, Lubbock International Airport, Lubbock,
Texas. Lessee shall pay Lessor a late payment charge of five percent (5%) of the
total amount of rentals payable if payment of such rentals is not made when due.
3.03 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 of the due date, the Director of Aviation of Lessor shall provide written
notice to the Lessee. Thereafter, if the rent remains unpaid for more than fifteen
(15) days after such notice is received, Lessor may exercise its rights under
Article Seven of this Agreement.
ARTICLE FOUR
RIGHTS RESERVED TO LESSOR
4.01 SAFETY
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 Airport which, in the opinion of Lessor, would limit
the usefulness of the Airport or constitute a hazard to aircraft.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 7
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 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
CHAPARRAL, fNC. LEASE AGREEMENT
PAGE 8
to the Assurances given by the Lessor to the United States Government under
federal law.
ARTICLE FIVE
RIGHTS RESERVED TO LESSEE
5.01 WAGES
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, 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 reasonable satisfaction of the
Director of 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
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 at its sole cost and expense provide adequate and suitable 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
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 9
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 as deemed necessary to protect and preserve the safety, security and
welfare of the Airport and all persons, property and facilities located thereon.
The Lessee's officers, agents, employees and servants will obey all rules and
regulations which may be promulgated from time to time by the Lessor or its
authorized agents at the Airport, or by other lawful authority, to ensure the safe
and orderly conduct of operations and traffic on the Airport.
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 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 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 Lease 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
without first submitting plans and specifications for such additions, improvements
of alterations to the Director of Aviation of the Lessor and securing prior written
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 10
consent from the Director of Aviation. Any such additions, improvements or
alterations made with the consent of the Director of Aviation shall solely at the
expense of the Lessee and, unless 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, and such additions or improvements shall be subject
to all terms and conditions of this Agreement, provided however, that any trade
fixtures installed by Lessee may be removed by Lessee at its expense. The Lessee
agrees to hold Lessor harmless from Mechanic's and Materialman's liens arising
from any construction additions, improvements, repairs or alterations effected by
the Lessee. Any property installed or added by Lessee which becomes
permanently attached to the Leased Premises shall become the property of Lessor
upon termination of this Lease 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, 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 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 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
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.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 11
In the event that, as a result of Lessee's actions, any mechanic's lien or other lien
or order for payment shall be filed against the Leased Premises or improvements
thereon, or against Lessor -owned property located thereon during the initial term
hereof, or during any subsequent extension, Lessee shall defend on behalf of the
Lessor, at Lessee's sole cost and expense, any action, suit or proceeding which
may be brought thereon or for the enforcement of such lien or order. Failure of
the Lessee to comply with any requirement of this section after having received
fifteen days written notice thereof shall be cause for termination of this
Agreement by the Lessor.
6.06 INSPECTION OF LEASED PREMISES
Lessee agrees that the Leased Premises will be kept reasonably clean and free of
all debris and other waste matter. Lessor 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.
6.07 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. 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 said figures are correct and properly stated.
6.08 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 its business operations thereon; shall
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 12
perform all maintenance and repair to the interior; and shall repaint the
hangars/buildings 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.
The Lessor shall, at its own cost and expense, maintain the roof, foundation and
structural floors and slabs, and load bearing walls, and utility connections to the
point of disconnect. Lessor shall not, however, be responsible for repair to the
extent that insurance coverage will provide payment.
Upon written notice by Lessor to Lessee, Lessee shall be required to perform
whatever reasonable maintenance Lessor deems necessary. If said maintenance is
not undertaken by Lessee within twenty (20) days after receipt of written notice,
Lessor shall have the right to enter upon the Leased Premises and perform the
necessary maintenance, the cost of which shall be borne by Lessee. Lessee shall
not, in any case, be required to pay for cost of mitigation, abatement or removal of
asbestos not installed by Lessee.
6.09 UTILITIES
Lessee shall have the right to connect to any storm and sanitary sewers and water
and utility outlets, with prior written approval from the Director of Aviation. The
cost of usage, extension, installation and meters, where required, to be borne by
the Lessee.
6.10 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.
6.11 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
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 13
Premises or on the business conducted on the Leased Premises or on any of
Lessee's property used in connection therewith, except as provided herein.
Taxation may be subject to legal protest in accordance with the provisions of the
taxing authority whose levy is questioned. Any protest is at the sole expense of
Lessee. Delinquency in payment of such obligations after any protest has been
settled shall, at the option of the Lessor, be cause for immediate termination of
this Lease.
6.12 INDEMNIFICATION AND INSURANCE
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 Iaw, 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 of Lessee contemplated
hereunder, or the omission of the Lessee's activities contemplated hereunder.
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 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
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 14
losses, damages, claims or liabilities to Lessee, on any theory of legal liability,
including, but not limited to the negligence, of any type of degree, or fault, of
either party, arising from or related to, in any way, manner or form, the
unenforceability or voidance, for any reason, of all or any part of this Agreement.
The indemnity and release provided herein shall survive the termination or
voidance of this Agreement.
Indemnification — Environmental Harm. Without limiting any provisions of
this Agreement, Lessee shall also defend, indemnify and hold Lessor and its
respective officers, employees, elected officials and agents harmless from and
against all suits, actions, claims, demands penalties, fines liabilities, settlements,
damages, costs and expenses (including but not limited to reasonable attorney's
and consultant's fees, court costs and litigation expenses) of whatever kind or
nature, known or unknown, contingent or otherwise, brought against Lessor
arising out of or in any way related to:
1. Any actual, threatened or alleged contamination by hazardous substances of the
premises or contamination by hazardous substances of the Airport by Lessee or its
agents;
2. The presence, disposal, release or threatened release of hazardous substances by
Lessee or its agents at the Airport that is on, from or affects the soil, air, water,
vegetation, buildings, personal property, persons, animals or otherwise;
3. Any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to hazardous substances by Lessee at the
Airport; or
4. Any violation by Lessee of any Environmental Laws that affects the Airport.
Insurance.
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
aviation liability and workers' compensation resulting from Lessee's business
activities at the Airport. The insurance requirements may be reviewed by the
Lessor approximately every five (5) years and be adjusted accordingly.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 15
General Aviation Liability Insurance — Lessee will carry and maintain General
Aviation Liability Insurance that includes premises liability, naming Lessor as an
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 NO/100 DOLLARS ($500,000.00) for
Combined Single Limit General Aviation Liability Insurance; the above insurance
coverage shall also include Hangar Keeper Liability Coverage.
Workers' Compensation and Employer Liability - The Lessee shall elect to
obtain workers' compensation coverage pursuant to Section 406.002 of the Texas
Labor Code. Further, Lessee shall maintain said coverage throughout the term of
the Agreement 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
workers' compensation insurance coverage by Lessee or any cancellation or
nonrenewal of workers' compensation insurance coverage for the Lessee shall be
a material breach of this Agreement.
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 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.
Hazard and Extended Coverage — Lessee shall insure for fire and extended
coverage risks for all of the Improvements 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 or renewal thereof. Such insurance shall be in an amount
not less than eighty percent (80%) of the full insurable replacement value of such
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 16
improvements. All fire insurance policies shall contain loss payable
endorsements in favor of the parties as their respective interests may appear
hereunder, and an agreement on the part of the insurers waiving the right of such
insurers to subrogation. Lessee shall furnish evidence of certificates of insurance
to the Director of Aviation prior to Sublessee taking possession of the Leased
Premises.
6.13 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
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.
6.14 BUSINESS SOLICITATIONS
All of Lessee's business operations and solicitations will be confined to the
Leased Premises or such other premises at the Airport that have been leased to
Lessee.
6.15 PROHIBITION OF SUBLEASES AND ASSIGNMENTS
The Lessee will not directly or indirectly assign, sublet, sell, hypothecate or
otherwise transfer this Lease or any portion of the Leased Premises without the
prior written consent of Lessor's Director of Aviation which shall not be
unreasonably withheld. This clause is not intended to prohibit Lessee from
leasing space to third parties for aircraft storage.
6.16 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 and repair) that
such person, firm or corporation may choose to perform.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 17
6.17 SECURITY ACCESS
Lessee agrees to control all access to the aircraft operations area (AOA) through
the Leased Premises and through gates assigned to or controlled by Lessee so as
to prevent unauthorized entry to the airfield by persons, animals or vehicles. In
the event that unauthorized access to the AOA is gained through the Leased
Premises or any area which Lessee controls or is obligated to control, any fines or
penalties assessed by the 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 Lease Agreement by Lessor.
6.18 VEHICULAR MOVEMENT
Except as specifically authorized by the Director of Aviation of Lessor, Lessee
will not permit the driving of vehicles by employees, customers, guests or invitees
on the apron, taxiways or runways.
6.19 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.
ARTICLE SEVEN
TERMINATION, CANCELLATION
7.01 TERMINATION
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 18
This Lease shall terminate at the end of the term and any extension thereof.
Lessee shall have no further right or interest in any of the premises or
improvements hereby demised, except as provided herein.
7.02 TERMINATION BY LESSEE
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.
3. The issuance by any court of competent jurisdiction of an injunction in
any way preventing or restraining the use and operation of the Airport for
a period of at least ninety (90) days.
4. The default of the Lessor in the performance of any covenant or agreement
herein required to be performed by the Lessor and the failure of the Lessor
to remedy such default for a period of sixty (60) days after receipt from
Lessee of written notice to remedy the same.
Lessee may exercise such right of termination by giving sixty (60) days advance
written notice to the Lessor at any time after the lapse of the applicable periods of
time and this Lease shall terminate as of the sixtieth (60`h) day after such notice is
given. Rental due hereunder shall be payable only to the effective date of said
termination.
7.03 TERMINATION BY LESSOR
This Lease shall be subject to cancellation by Lessor after the happening of one or
more of the following events:
1. The taking by a court of competent jurisdiction of Lessee and its assets
pursuant to proceedings brought under the provisions of any federal
reorganization act.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 19
2. The appointment of a receiver for Lessee's assets.
3. The divestiture of Lessee's assets by other operation of law.
4. The abandonment by Lessee of the premises at the Airport 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 and the failure of Lessee to
remedy such default for a period of fifteen (15) days after receipt from the
Lessor's Director of Aviation of written notice to remedy the same.
7. The Lessee's breach of any provision contained in Article Four, of this
Lease.
8. 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 as to substantially
restrict Lessee for a period of at least ninety (90) days from operating
thereon.
If any of the aforesaid events occur, Lessor's agents may enter upon the Leased
Premises and take immediate possession of the same and remove Lessee's effects.
Upon said entry this Lease shall terminate, and any rental due hereunder shall be
payable to said date of termination.
It is agreed that failure to declare this Agreement 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 Lease cancelled as a result of any subsequent violation of any of the
terms or conditions of this Agreement.
The acceptance of rentals or fees by Lessor for any period or periods after a
default of any of the terms, covenants or conditions herein contained and to be
performed, kept or observed by Lessee shall not be deemed a waiver of any rights
on the part of Lessor to cancel this Agreement for failure by Lessee to so perform,
keep and observe any of the terms, covenants or conditions hereof to be
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 20
performed, kept or observed. No waiver by Lessor of any of the terms, covenants
or conditions of this Agreement to be kept, performed or observed by the Lessee
shall be construed to be or act as a waiver by Lessor of any subsequent default by
the Lessee.
7.04 REPLACEMENT AFTER DAMAGE
It is agreed between the parties hereto that in the event the Leased Premises are
damaged by fire or other accidental cause during the initial term of this
Agreement so as to become totally or partially untenantable, the Lessor shall have
the option to restore the Leased Premises to their former condition. If the Lessor
elects to exercise the option, the Lessor shall give Lessee notice in writing of its
election within thirty (30) days of the occurrence of such damage. If the Lessor
elects to restore the Leased Premises, the Lessor shall proceed with due diligence
and there shall be an abatement of the rent until repairs have been made for the
time and to the extent for which the premises, or part thereof, have been
untenantable. Should the Lessor not exercise the option to restore the premises,
the lease of such untenable portion of the premises shall cease and terminate
effective on the date of damage by fire or other accidental cause.
7.05 CONFLICT OF INTEREST
The Lessee acknowledges that it is informed that Texas law prohibits contracts
between the City of Lubbock and its "officers" and "employees," and that the
prohibition extends to officers and employees of the City of Lubbock agencies,
such as 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 PROPERTY PERMANENTLY AFFIXED TO PREMISES
Any property belonging to Lessee which becomes permanently attached to the
Leased Premises (except trade fixtures) shall become the property of the Lessor
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 21
upon termination of this Agreement, whether upon expiration of the initial term,
any extension thereof, or earlier under any provision of this Lease.
Buildings constructed by or fuel storage and dispensing facilities installed or
placed by Lessee or any permitted sublessee shall remain the property of Lessee
or sublessee.
7.07 REMOVAL OF LESSEE'S PROPERTY
The Lessee shall have the right, within sixty (60) 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 all of Lessee's furniture, fixtures, equipment, furnishings, and
other property which has not become the property of the Lessor, but Lessee shall
restore the premises to the original condition, normal wear and tear excepted. The
Lessor, however, shall have 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
from the Leased Premises is conditioned upon all amounts due the Lessor from
Lessee having been paid in full. Unless a renewal agreement is executed,
property left on the premises after sixty (60) days from the date of termination of
this Agreement 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 expiration or termination of this Agreement through the day of final
removal of the property, or of notification to the Lessee of the abandonment of the
property and taking by the Lessor, as the case may be. Provided however, that
Lessee shall have ninety (90) days to remove any buildings or fuel storage tanks
or dispensing equipment. Lessee shall comply with. all state and federal
requirements for removal of fuel storage tanks and dispensing equipment and
shall obtain written certification from the appropriate governmental agency that
said tanks and equipment have been removed properly.
7.08 TERMINATION OF LEASE, SURRENDER OF LEASED PREMISES AND
OWNERSHIP OF IMPROVEMENTS
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 22
The Lessee covenants and agrees that at the expiration of the initial term of this
Agreement, or any extension, or upon earlier termination as provided elsewhere in
this Agreement, Lessee will quit and surrender the Leased Premises and the
improvements in good state and condition, reasonable wear and tear expected, and
the Lessor shall have the right to take possession of the Leased Premises and the
improvements, subject to the limitations expressed in Article Seven, of this Lease,
with or without process of law.
Lessee shall give written notice, delivered to the office of the Director of Aviation
of Lessor, at least sixty (60) days prior to the evacuation of any space within the
Executive Terminal or of any Hangar Building in whole.
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
8.01 NOTICES
Notices to the Lessor required or appropriate under this Agreement shall be
deemed sufficient if in writing and mailed, registered or certified mail, postage
prepaid, addressed to the Director of Aviation, Lubbock Preston Smith
International Airport, 5401 N. Martin Luther King Blvd., Unit 389,
Lubbock, Texas 79403. Notices to the Lessee shall be deemed sufficient if in
writing and mailed, registered or certified mail, postage prepaid, addressed to
Wallace Thrash, Chaparral, Inc., 2201 E. Jamestown, Lubbock, Texas 79403.
8.02 ENTIRE AGREEMENT
This Lease constitutes the entire Agreement between the Lessor and Lessee on the
space described in Article One, and any other written or parole agreement with
the Lessor is expressly waived by Lessee.
CHAPARRAL, INC. LEASE AGREEMENT
PAGE 23
EXECUTED this 13th day of April , 2006.
THE CITY OF LU BOC ESSOR CHAPA L, INC., LESS
BY: BY:
A c OU AL, MAYOR ce Thrash
Title:
Date:
ATTEST:
e ecca Garza, City Secretary
A OVED AS TO C NTENT:
Ja s W. Loomis, DirectKr of Aviation
APPROVED AS TO FORM:
inda L. hamales nior o ey
Office Practice Section
LC: cityatt/Linda/ CHAPARRAL AVAIA1TON Lease
February 27, 2006
CHAPARRAL, INC. LEASE AGREEMENT
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