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HomeMy WebLinkAboutResolution - 2010-R0477 - Lubbock Preston Smith International Airport Lease Agreement - Chaparral, Inc. - 09/27/2010Resolution No. 2010-RO477 September 27, 2010 Item No. 5.28 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Lease Agreement by and between the City of Lubbock and Chaparral, Inc., and related documents. Said Lease Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council on September 27, 2010 TOM M RTIN, MAYOR ATTEST: a Re bec Garza, City Secretary APPROVED AS TO CONTENT: G #'� omis, Director of Aviation APPROVED AS TO FORM: - Chad Weaver. Assistant City Attorney vw:ccdocs/RES.Airport-Chaparral, Inc. Lease Agrmt September 8, 2010 Resolution No. 2010-RO477 STATE OF TEXAS § CITY OF LUBBOCK § LEASE AGREEMENT KNOW ALL MEN BY THESE PRESENTS: THIS LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into by the CITY OF LUBBOCK (referred to herein as Lessor), a Home Rule Municipality of Lubbock County, Texas, and 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 hangar and ground area 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, aircraft repair, aircraft maintenance, aviation fuel sales, and the general activities of fixed base operations; and WHEREAS, Lessee has indicated a willingness and an ability to properly keep and maintain said hangar and 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 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 T-310: Building area 33,696 sq. ft. B. Ground Area: Land area 48,386 sq. ft. 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 premises, which right shall extend to Lessee's employees, guests, invitees, tenants and patrons. If, during the term of this Agreement, the use of the Airport by Lessee is temporarily suspended, restricted or interfered with for a period of thirty (30) days or more for reasons beyond the practical control of the Lessor, in such manner so as to substantially affect the use of the Leased Premises or operation of aircraft by Lessee 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. Chaparral, Inc. Lease Agreement 2 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 2.01 TERM The initial term of this Agreement shall be for a period of four (4) years and five (5) months and shall begin on September 1, 2010 and terminate on January 31, 2015. This Lease may be extended for one (1) additional five (5) year period. Such option must be in writing thirty (30) days prior to expiration date of the original term of the Lease. 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 a renewal or extension of this Lease, and may be terminated at any time by the Director of Aviation of Lessor. Chaparral, Inc. Lease Agreement 3 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. HANGAR T-310 33,696 square feet at the rate of $0.8584 per sq. ft. per year. Annual rental will be TWENTY-EIGHT THOUSAND NINE HUNDRED TWENTY-FOUR AND 65/100 DOLLARS ($28,924.65) which shall be due and payable in twelve (12) equal monthly installments of TWO THOUSAND FOUR HUNDRED TEN AND 39/100 DOLLARS ($2,410.39). B. GROUND RENTAL 48,386 square feet at the rate of $0.1575 per sq. ft. per year. Annual rental will be SEVEN THOUSAND SIX HUNDRED TWENTY AND 80/100 DOLLARS ($7,620.80) which shall be due and payable in twelve (12) equal monthly installments of SIX HUNDRED THIRTY-FIVE AND 07/100 DOLLARS ($635.07). C. 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, 2011, 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. D. 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 Chaparral, Inc. Lease Agreement 4 consumption or re -sale at Lubbock Preston Smith International Airport. The aforesaid flowage fees, if not paid by the supplier, shall be due on or before the 10`h day of each month succeeding that in which the aircraft fuels and lubricants are received by Lessee. It is understood and agreed, the total gallons 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. E. FIXED BASE OPERATOR'S FEE TWO THOUSAND FIVE HUNDRED AND NO/100 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. Monthly payments for building, ground, fuel flowage and other rental become effective upon execution of this Agreement. Operators whose payment for ground and building rentals and fuel flowage fees do not satisfy the minimum Fixed Base Operator's fee will pay a monthly pro rata amount of TWO HUNDRED EIGHT AND 34/10 DOLLARS ($208.34) payable in advance on the first(l") business day of each month. F. SECURITY BADGES In addition to the above rental and fees, Lessee shall pay the Lessor a processing fee 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 the processing fee of which shall be reasonable and uniform for all similarly situated tenants at the Airport. 3.02 PAYMENTS All payments are due and payable on or before the 20`h day of each month this Agreement is in effect and shall be made to the Lessor at the Office of the Director of Aviation, Lubbock Preston Smith International Airport, 5401 N. Martin Luther King Blvd., Unit 389, Lubbock, Texas 79403. Lessee shall pay Chaparral, Inc. Lease Agreement 5 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 or fees 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 or fee 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. 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. Chaparral, Inc. Lease Agreement 6 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 govermnental 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 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 Chaparral, Inc. Lease Agreement 7 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 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 Chaparral, Inc. Lease Agreement 8 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 (15) 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 consent from the Director of Aviation. Any such additions, improvements or alterations made with the consent of the Director of Aviation shall solely be 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 Chaparral, Inc. Lease Agreement 9 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 Leased Premises or improvements thereon, or any equipment, machinery and fixtures thereon belonging to the Lessor, and Lessee expressly agrees that it will keep and save the Leased Premises and the Lessor harmless from all costs and damages resulting from any liens of any character created or that may be asserted through any act or thing done by the Lessee. In the event that, as a result of Lessee's actions, any mechanic's lien or other lien or order for payment shall be filed against the Leased Premises or improvements thereon, or against Lessor -owned property located thereon 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 (15) 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 Chaparral, Inc. Lease Agreement 10 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. 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 business operations thereon; shall perform all maintenance and repair to the interior, including all HVAC and venting systems; and shall repaint the hangar 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 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 Chaparral, Inc. Lease Agreement 11 not, in any case, be required to pay for cost of mitigation, abatement or removal of asbestos not installed by Lessee. 6.09 UTILITIES The Lessee shall assume and pay for all costs or charges for metered utility services provided to Lessee during the initial term hereof, and any subsequent extension. Lessee shall have the right to connect to any storm and sanitary sewers and water and utility outlets, the cost of usage, extension, installation and meters, where required, to be borne by the Lessee. 6.10 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 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 The Lessee shall be deemed to be an independent contractor and operator responsible to all parties for its respective acts and omissions, and the Lessor shall in no way be responsible therefore. 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 of Lessee Chaparral, Inc. Lease Agreement 12 contemplated hereunder, the omission of the Lessee's activities contemplated hereunder or the failure of Lessee to comply with any term or provision of this Lease provided the damages, or claims or liabilities are not caused by the Lessor. Lessee further covenants and agrees to defend any suits or administrative proceedings brought against Lessor and/or Lessor's respective officers, employees, elected officials and/or agents on account of any claim for which it is obligated to indemnify Lessor, and to pay or discharge the full amount of any and all penalties, fines or other obligations of any such claim incurred by, accruing to, or imposed on Lessor, or Lessor's respective officers, employees, elected officials and/or agents, as applicable, resulting from any such suits, claims, and/or administrative proceedings or any matters resulting from the settlement or resolution of said suits, claims, and/or administrative proceedings. In addition, Lessee shall pay to Lessor, Lessor's respective officers, employees, elected officials and/or agents, as applicable, all attorneys' fees incurred by such parties in enforcing Lessee's indemnity in this section. The Lessee shall carry and maintain insurance at all times that this Lease is in effect, at Lessee's sole expense and with an underwriter authorized to do business in the State of Texas and acceptable to the Lessor, against claims of general liability and workers' compensation, and/or other claims resulting from Lessee's business activities at the Airport or on the Leased Premises, as set forth below. General Liability Insurance — Lessee will carry and maintain General Liability Insurance for the protection of Lessor, naming Lessor as an 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 Liability Insurance; the above insurance coverage shall also include Hangar Keeper Liability Coverage. Chaparral, Inc. Lease Agreement 13 Workers' Compensation and Employer Liability — The Lessee shall elect to obtain worker's compensation coverage pursuant to Section 406.002 of the Texas Labor Code, as same may be amended. Further, Lessee shall maintain said coverage throughout the term of this Lease and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure that the Lessee maintains said coverage. Any termination of worker's compensation insurance coverage by Lessee or any cancellation or nonrenewal of worker's compensation insurance coverage for the Lessee shall be a material breach of this Lease. Employer Liability_— Lessee shall carry and maintain Employer Liability coverage for the protection of Lessor, naming Lessor as an additional insured, in an amount no less than FIVE HUNDRED THOUSAND AND N0/100 DOLLARS ($500,000.00). Hazard and Extended Coverage — Lessee shall procure from a company authorized to do business in the State of Texas and keep in force Hazard and Extended coverage insurance upon the building of the Leased Premises to 80% of the full insurable value and shall furnish Lessor with evidence that such coverage has been procured and is being maintained. Lessor shall be named as additional insured on the policy. To the extent permitted by law, the above-mentioned policies shall all include a waiver of subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be filed with the Lessor's Director of Aviation prior to entry upon the Leased Premises by the Lessee. The General Liability policies shall name the Lessor as an additional insured, require the insurer to notify the Director of Aviation of any alteration, renewal or cancellation, and remain in full force and effect until at least ten (10) days after such notice of alteration, renewal or cancellation is received by the Director of Aviation. 6.13 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 Chaparral, Inc. Lease Agreement 14 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. 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. 6.17 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 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. Chaparral, Inc. Lease Agreement 15 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 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 Chaparral, Inc. Lease Agreement 16 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 thirty (30) days after receipt from Lessee of written notice to remedy the same. 5. Failure of Lessor to maintain the landing area of the Airport for a period of at least sixty (60) days, which results in Lessee's inability to conduct business operations. Lessee may 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 sixty-first (61") day after such notice is given. Rental due hereunder shall be payable only to the effective date of said termination. 7.03 TERMINATION BY 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. 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 Chaparral, Inc. Lease Agreement 17 remedy such default for a period of thirty (30) days after receipt from the Lessor's Director of Aviation of written notice to remedy the same. 7. 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. Lessor may exercise such right of termination by giving written notice to the Lessee to correct or cure such default, failure to perform or breach. 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 in a manner satisfactory to the Lessor, then in such event, Lessor shall have the right, at once and without further notice to Lessee, to declare this Agreement terminated. Once Agreement is terminated, Lessor's agents may enter upon the Leased Premises and take immediate possession of the same and remove Lessee's effects. Any rental due hereunder shall be payable to said date of termination. It is agreed that failure to declare this Lease terminated upon the default of Lessee for any of the reasons set forth above shall not be construed as a waiver of any of the Lessor's rights hereunder or otherwise bar or preclude Lessor from declaring this Agreement cancelled as a result of any subsequent violation of any of the terms or conditions of this Agreement. 7.04 REPLACEMENT AFTER DAMAGE It is agreed between the parties hereto that in the event the Leased Premises are damaged by fire or other accidental cause during the initial term of this lease so as to become totally or partially untenantable, the Lessor shall have the option to restore the 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 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 Chaparral, Inc. Lease Agreement 18 Lessor not exercise the option to restore the premises, the lease of such untenantable portion of the premises shall cease and terminate effective on the date of damage by fire or other accidental cause. 7.05 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 upon termination of this Agreement, whether upon expiration of the initial term, any extension thereof, or earlier under any provision of this lease, except 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 thirty (30) days after the termination of this lease, whether such termination comes upon expiration of the initial term, any extension or otherwise under any provision of this lease, to remove from the Leased Premises 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 Chaparral, Inc. Lease Agreement 19 Lessee having been paid in full. Unless a renewal agreement is executed, property left on the premises after thirty (30) days from the date of termination of this agreement shall be deemed abandoned and will become the property of the 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 sixty (60) 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 The Lessee covenants and agrees that at the expiration of the initial term of this lease, 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. 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 Chaparral, Inc. Lease Agreement 20 writing and mailed, registered or certified mail, postage prepaid, addressed to Chaparral Inc., 2201 E. Jamestown, Lubbock, Texas 79403. 8.02 ENTIRE AGREEMENT This lease constitutes the entire Agreement between the Lessor and Lessee, and any other written or parole agreement with the Lessor is expressly waived by Lessee. EXECUTED this 27th THE CITY OF LUBBOCK, LESSOR BY: �.. T M MARTIN, MAYOR ATTEST: Rebecaa Garza, City Secret 11VED AS TO NTENT: W. Loomis, Director of Aviation APP V AS FORM: ad Weaver, Assistant City Attorney day of September , 2010. CHAP AI� AL, INC., LESSEE: BY: Wallace Thrash President Date: 2 'as 10 Chaparral, Inc. Lease Agreement 21 Resolution No. 2010-RO477 Lubbock Airport Hangar 310 Preston Smith Int'I Airport, Lubbock, Ts BUILDING SKETCH East Airport District r I i I .I LEASED PREMISES s T- 310 EXHIBIT A