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HomeMy WebLinkAboutResolution - 2023-R0267 - Lease Agreement with Dera Holdings, LLC for real property at AirportResolution No. 2023-RO267 Item No. 5.29 May 23, 2023 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 Dera Holdings, LLC for certain real property located at Lubbock Preston Smith International Airport (LPSIA), and related documents. Said Lease Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council on May 23, 2023 AT1E ST: Courtney Paz, City Secretary APPROVED AS TO CONTENT: Kelly Caiiipbell, Executive Director of Aviation APPROVED AS�W FORM: First Assistant City Attorney cedocs.-RES.Lease Agrrnt-Dera Holdings, LLC May 9, 2023 Resolution No. 2023-RO267 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 "City"), a Home Rule Municipality of Lubbock County, Texas, and Dera Holdings, LLC (referred to herein as "Lessee"). WITNESSETH WHEREAS, City 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, City deems it advantageous to itself and to its operation of the Airport to lease unto Lessee the ground area described herein, together with certain privileges, rights, uses, and interests therein, as hereinafter set forth; and WHEREAS, Lessee intends to utilize the Premises herein for the purpose of storage of personal Aircraft and such other purposes as herein enumerated; 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, for and in consideration of the mutual promises, covenants, terms, and conditions, both general and special, as hereinafter set forth, City 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: 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, City does hereby lease unto Lessee certain property located on the west side of the Airport, more particularly described in Exhibit "A" which is attached to this Lease, and is incorporated into and made a part of this Lease for all purposes (collectively referred to as "Premises" or "Leased Premises" in this Agreement). Description of Leased Premises: 65,946 square feet of land for construction of a hangar as provided in Article Four herein. 1.02 PURPOSE AND PRIVILEGES The Lessee is entitled to use the Leased Premises for the following activities ("Lessee's activities"): A. Lessee may use the Leased Premises for construction of a hangar and storage of personal aircraft (referred to herein as "Aircraft"). B. Lessee, at its own expense, shall be responsible for securing all permits, clearances, rights -of -way, and other matters necessary to conduct business in a lawful manner. Any construction must pass a City of Lubbock inspection. C. The Lessee may be entitled to use the Leased Premises for those activities set out in the General Aviation Minimum Standards, 2017 (referred to herein as "Minimum Standards"); as may be amended from time to time, with prior written approval of the Director. D. The parties hereto acknowledge and agree that the capitalized terms in this agreement shall be consistent with the defined terms set forth in the primary management compliance documents herein "PMCDs". 1.03 USE OF AIRPORT During the term of this Lease, Lessee 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. Lease Agreement Page 2 of 31 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 City, in such manner so as to substantially affect the use of the Leased Premises or operation of Aircraft by Lessee or its tenants, all Fees and rent 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 If Lessee is authorized by this Lease to conduct business of any nature on the Airport, Lessee agrees to operate the Leased Premises for the use and benefit of the public and further agrees: A. To use reasonable efforts to furnish good, prompt, and efficient services adequate to meet all the demands for its services at the Airport; B. To furnish said services on a fair, equal and not unjustly discriminatory basis to all users thereof; and C. To charge fair, reasonable and nondiscriminatory prices for each unit of sale or service, provided the Lessee may make reasonable nondiscriminatory discounts, rebates or other similar types of price reductions for volume purchases. For clarification purposes, the parties do not intend for the Lessee's activities, as defined herein, to be deemed to be Lessee conducting business of any nature on the Airport. ARTICLE TWO TERM 2.01 TERM As determined by the amount of the Capital Investment ($2,129,598), the term shall be thirty-seven (37) years and shall begin on the day this Agreement is executed by City Council. Written notice of Lessee's intent to enter into a new agreement must be received in the office of the Executive Director of Aviation (referred to herein as "Director") at least one hundred eighty (180) days prior to the end of the term. When a Lessee makes additional Capital Investment in the Leased Premises and/or on the Airport during the term of the existing agreement (herein referred to as "Additional Capital Investment"), the term of the Agreement may be extended by the City based on the level of the Lease Agreement Page 3 of 31 Additional Capital Investment (plus 5-years) made by the Lessee, but shall not exceed 40 years total. The term of the Agreement shall be commensurate with the amount of Additional Capital Investment made by the Lessee in the Leased Premises and/or on the Airport, consistent with the Capital Investment made by the Lessee in the Leased Premises and/or on the Airport, consistent with the Capital Investment schedule. 2.02 HOLDING OVER In the event the Lessee should hold over and remain in possession of the Leased Premises after the expiration of the term of the Agreement, the rents, fees, and other charges paid during the holding over period shall be equal to a minimum of 150% of the monthly rents, fees, and other charges that were charged by the City at the time the Agreement expired. In no case shall a holdover by Lessee be construed to be a renewal or extension of the Lease. ARTICLE THREE RENTAL AND FEES 3.01 RENTALS In consideration of the rights and privileges herein granted as singularly related to its use and enjoyment of the Leased Premises, Lessee shall pay to the City the following: A. GROUND RENTAL Land rental for 65,946 square feet of Leased Premises at the rate of $0.2652 per square foot per year. Annual rental will be seventeen thousand four hundred eighty-eight and 88/100 dollars ($17,488.88) which shall be due and payable in (12) equal monthly installments of one thousand four hundred fifty seven and 41/100 dollars ($1,457.41). B. ADJUSTMENT OF RENT The parties hereto mutually agree that during the term of this Agreement, and during any renewal period, except as otherwise might be set out in this Agreement, all rents shall be adjusted every five years thereafter based on the findings of a "Rent Study" performed as provided below; provided the method will be uniform for all similar tenants. The City shall engage an aviation consultant or "Appraiser" (who is licensed by the Texas Appraiser Licensing and Lease Agreement Page 4 of 31 Certification Board and who has significant experience determining market value for rental rates for property similar to the Leased Premises) to determine market value. The Appraiser shall use current appraisal methods that are appropriate for appraising Airport land and/or improvements used for aviation nurnoses. Appraiser shall use an appropriate and justifiable rate of return for Airport properties. The subject property shall be appraised assuming the highest and best use is aviation related. Additionally, the appraisal shall meet the Uniform Standards of Professional Appraisal Practice. Additionally, the appraisal shall exclude any Leasehold Improvement constructed upon the Leased Premises by Lessee and Lessee shall not be required to pay any rent on the Leasehold Improvements Lessee constructs upon the Leased Premises during any term or extended term of this Lease. On an annual basis between each Rent Study, all rents shall be adjusted based on the change in the Consumer Price Index (CPI). CPI shall mean the Consumer Price Index for All Urban Consumers published by the United States Department of Labor, Bureau of Labor Statistics. Beginning January 1, 2024, the rental rates shall be adjusted upward or downward for each ensuing calendar year in direct proportion to the fluctuation in the CPI. Any adjustment to the rental rates from changes in the CPI shall be determined by calculating the increase or decrease in the CPI for the preceding 12 months. C. CHARGES AND FEES The City may assess charges and fees to those using, occupying, or conducting operations at the Airport. Any such charges and fees shall be lawful, reasonable, and nondiscriminatory. Lessee understands and acknowledges Fuel flowage fees and public ramp parking fees (subject to Section 6.1 herein), which pertain to commercial activities rather than the lease of property, may be assessed on a non-discriminatory basis in accordance with Airport's rates and charges schedule, as approved by the City Council. If Lessee requests and receives authorization to perform self -fueling or operate as a Fixed Base Operator selling fuel subject to the requirements of Minimum Lease Agreement Page 5 of 31 Standards, a fuel flowage fee will be charged as identified in the Airport's Rents and Fees schedule and may be adjusted each year based on the Airport budget for each gallon of aviation fuel delivered to Lessee or its agents for Lessee's own consumption or re -sale at the Airport, excluding that sold or delivered by Lessee to a regularly certified airline under contract with City as a part of the pecuniary consideration therefor and except flowage fees paid by the supplier on behalf of Lessee. The aforesaid flowage fees, if not paid by the supplier, shall be due on the twentieth (201h) day of each month succeeding that in which the Aircraft fuels and lubricants are received by Lessee. It is understood and agreed the total gallonage delivered to or purchased by Lessee, other than gasoline delivered to regularly scheduled airlines operating under a contract or lease with City, 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. No later than sixty (60) days prior to the end of each calendar year, City shall notify Lessee in writing of changes in such charges or fees and the methodology of determining such charges and fees. D. SECURITY BADGES: In addition to the above rental and fees, Lessee shall pay the City a processing fee for fingerprint/background check and security badges for each of Lessee's Employees or Affiliates on the Leased Premises. A security badge deposit may be established and implemented at any time with thirty (30) days advance notice given to Lessee. The Director shall determine the amount of the processing fees 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. 3.02 PAYMENTS All payments shall become due and payable on or before the 20th day of each month by the Lessee under this Agreement and shall be made to Lubbock Preston Smith International Airport, 5401 N. MLK Blvd. Unit 389, Lubbock, Texas 79403. Lessee shall pay City a late payment charge of five percent (5%) of the total amount of rentals payable if payment of such rentals is not received by City on or before the 25th day of the month. Lease Agreement Page 6 of 31 3.03 DEFAULT FOR FAILURE TO PAY RENTALS OR FEES If Lessee fails to pay any rent due and owing to City hereunder within fifteen (15) days of the due date, the Director shall provide written notice to the Lessee. Thereafter, if the rent remains unpaid for more than fifteen (15) days after such notice is received, City may exercise its rights under Article Nine of this Agreement. ARTICLE FOUR CAPITAL IMPROVEMENTS 4.01 CONSTRUCTION OF CAPITAL IMPROVEMENTS Lessee's construction of the hangar depicted in "EXHIBIT A" shall be subject to the provisions of this Section and shall be at Lessee's sole cost and expense, without any reimbursement from the City. The construction of the hangar will be done by Lessee pursuant to the terms of this Lease. No part of the hangar shall be constructed, installed, expanded, modified, or removed; nor shall material modifications be made to the hangar without the prior written consent of the Director, which shall not be unreasonably withheld, conditioned, or delayed. The hangar and all approved improvements constructed by Lessee on the Leased Premises shall be referred to as the "Leasehold Improvements". 4.02 MINIMUM CAPITAL INVESTMENT It is expressly agreed and understood Lessee is leasing the Premises for the purpose of developing and constructing the hangar in accordance with Plans and Specifications as specified in this Section 4 of this Lease. It is expressly agreed and understood the Leasehold Improvements must meet or otherwise be subject to the enforcement described therein, and that Lessee shall expend no less than an amount equal to: two million one hundred twenty nine thousand five hundred ninety eight and NO/100 dollars ($2,129,598) to construct hangar depicted in "EXHIBIT A" at Lessee's sole cost and expense (herein referred to as "Capital Investment"). Capital Investment shall mean and include the following costs and expenditures made by Lessee: hard construction costs (including demolition, excavation, grading, and construction on the Premises and general contractor overhead and profit). Lease Agreement Page 7 of 31 4.03 DOCUMENTATION OF MINIMUM CAPITAL INVESTMENT Within ninety (90) days of completing construction of the Leasehold improvements or the issuance of a Certificate of Occupancy for each portion of the Leasehold Improvements, whichever occurs first, Lessee shall provide to the Director sufficient documentation, in such form and detail as the Director may require, to establish the amount Lessee has expended towards the Minimum Capital Investment on the Leasehold Improvements. Additionally, by ninety (90) days after the completing the last of the Leasehold Improvements, Lessee shall provide to the Director sufficient documentation, in such form and detail as the Director may require, to establish the total amount Lessee has expended towards meeting the Minimum Capital Investment on the Leasehold Improvements. The Director may, in that individual's sole discretion, expand the time for submitting said documentation by written notice to Lessee, and may require submittal of additional documentation. In the event that the Director determines that Lessee has failed to expend the total Minimum Capital Investment for the Leasehold Improvements, the Director shall notify Lessee of any such deficiency. If the Director notifies Lessee there was a deficiency in the costs expended in the construction of the Leasehold Improvements, then Lessee shall have twelve (12) months from the receipt of said notice to expend the amount of any such deficiency on additional improvements, additions, or betterments to the Leasehold Improvements, subject to all of the provisions of this Section 4. Lessee shall, within thirty (30) days after the expiration of said twelve (12) month period, provide further documentation to the Director sufficient to establish Lessee has expended the amount of any such deficiency on additional improvements, additions, or betterments to the Premises via the Leasehold Improvements. If the Director determines, after such further documentation has been provided, that Lessee has failed to expend the Minimum Capital Investment, then the Director shall provide written notice to Lessee of the amount of such continuing deficiency, and Lessee shall have thirty (30) days from the date of such notice to pay to the City an amount equal to the difference between the Minimum Capital Investment and the actual sum expended. Payment of said sum as required herein shall be deemed to be additional Rental due and payable within said thirty (30) day period, and shall be subject to the payment provisions of Section 3 of this Lease. Lease Agreement Page 8 of 31 Construction shall be completed within 18 months from the beginning of the Term. The Parties hereto acknowledge and understand that a force majeure event may cause a delay for which a reasonable extension of time is necessary for completion of construction activities. Such reasonable extension may be requested of, and granted by, Director and Director's consent shall not be unreasonably withheld. ARTICLE FIVE RIGHTS RESERVED TO CITY 5.01 SAFETY City reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from constructing or permitting construction of any building or other structure on or off the Airport which, in the opinion of City, would limit the usefulness of the Airport or constitute a hazard to Aircraft. 5.02 MAINTENANCE OF PUBLIC AREA City reserves the right, but shall not be obligated to Lessee, to maintain and keep in repair the landing area of the Airport and all publicly -owned facilities of the Airport. Lessee will perform no maintenance activities outside the Leased Premises (except as required under Section 7.6 herein) without the consent of the Director. 5.03 STANDARDS City reserves the right to establish reasonable standards for the construction and maintenance of and alterations, repairs, additions, or improvements of Lessee's facilities. This includes structural design, color, materials used, landscaping, and maintenance of Lessee's facilities and Leased Premises. Lessee shall comply with applicable statutes, ordinances, building codes, and rules and regulations of all governmental agencies as may have jurisdiction at the time. Subject to Lessee's Duty to Repair (7.06), City will not require Lessee to reconstruct or alter an existing improvement that has been constructed and maintained in good condition under a prior design standard. 5.04 TIME OF EMERGENCY During time of war or national emergency, the City shall have the right to lease the landing area and any other portion of the Airport to the United States for governmental use and if any such lease is executed, the provisions of this instrument and any associated Lease Agreement Page 9 of 31 rentals and fees, insofar as they are inconsistent with the provisions of the lease to the United States, shall be suspended. 5.05 DEVELOPMENT OF AIRPORT City reserves the right to further develop or improve the Airport. However, the City shall notify Lessee, in writing, prior to the planned development or improvement affecting operations within Lessee's Leased Premises. 5.06 SPONSOR'S ASSURANCE SUBORDINATION This Lease shall be subordinate to the provisions of any existing or future agreement between the City and the United States concerning the operation or maintenance of the Airport, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development of the Airport. Should the effect of such agreement with the United States be to take any of the property under this Lease or otherwise diminish the commercial value of this Lease, the City shall not be held liable therefor. However, if the commercial value is appreciably diminished, City and Lessee shall engage in good faith negotiations to determine a fair and equitable adjustment to rentals and fees. The City covenants and agrees it will during the term of this Agreement operate and maintain the Airport as a public facility consistent with and pursuant to the Assurances given by the City to the United States Government under federal law. 5.07 INSPECTION OF LEASED PREMISES City reserves the right to conduct inspections of the Leased Premises at reasonable times to ensure fire, safety, and sanitation regulations and other provisions contained in this Lease are being adhered to by the Lessee. 5.08 INSPECTION OF BOOKS & RECORDS The Lessee, following accepted accounting practices and procedures, will maintain true and accurate books, records and receipts, which will show Fuel flowage. Such books and records may be inspected at any time during regular business hours by City or its duly authorized representatives at Lubbock, Texas, upon reasonable notice to Lessee. In the event Lessee requests such inspection to be performed outside the Lubbock area, such request may be honored at City's discretion; however, any and all expenses incurred by Lease Agreement �^ T Page 10 of 31 so doing shall be reimbursed by the Lessee. Lessee agrees to furnish facts and figures necessary to determine the amount to be paid City. 5.09 RESERVATION OF AVIGATIONAL EASEMENT City reserves to itself and its successors and assignees, for the use and benefits of the public, a right of avigation over the Leased Premises for the passage of Aircraft utilizing the Airport. ARTICLE SIX LESSEE'S RIGHTS PRIVILEGES AND OBLIGATIONS 6.01 LESSEE'S RIGHTS During the term of this Lease, Lessee, and its tenants shall have use of, in common with others at the Airport, and free of additional charge, all runways, taxiways, public ramps, and public parking areas available at the Airport, and the right of ingress to and egress from the above described Premises, which right shall extend to Lessee's Employees, guests, invitees, tenants, and patrons. Lessee has the right and privilege to control activity on its Leased Premises subject to applicable federal, state, and local rules and regulations. If, during the term of this Agreement and Lessee is in Good Standing, the use of the Airport by Lessee is temporarily suspended, restricted, or interfered with for a period of thirty (30) consecutive days or more for reasons beyond the practical control of the City, in such manner so as to substantially affect the use of the Leased Premises or operation of Aircraft by Lessee or its tenants, all Fees and rent 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. 6.02 LESSEE'S DUTY TO REPAIR Except as provided herein, any property of City, or for which City may be responsible, which is damaged or destroyed incident to the exercise of the rights or privileges herein granted, or which damage or destruction is occasioned by the negligence of Lessee, its Employees, agents, servants, patrons, or invitees shall be properly repaired or replaced by Lessee to the reasonable satisfaction of the Director. In lieu of such repair or replacement, Lessee shall, if so required by the Director, pay City the replacement cost of such property. Lease Agreement Page 11 of 31 6.03 PARKING Lessee shall at its sole cost and expense provide adequate and suitable parking areas for use by its customers, Employees, patrons, guests, and invitees upon its Premises. 6.04 WAGES The parties hereto acknowledge and agree that all wages paid by Lessee in connection with the construction of said Improvements shall comply with the prevailing wage requirements set forth in state and federal law including Chapter 2258, Texas Government Code. 6.05 WARRANTY OF NO SOLICITATION Lessee warrants that it has not employed any person employed by City to solicit or secure this Agreement upon any agreement for a commission, percentage, brokerage, or contingent fee. 6.06 LESSEE'S OBLIGATIONS Lessee or any assignee shall comply with the PMCDs throughout the term of the Agreement. Additionally, any modifications to the business or corporate structure of the Lessee shall be communicated in advance to the Director. Lessee shall be responsible for the conduct, demeanor, and appearance of Lessee's representatives, officers, officials, Employees, agents, and volunteers at the Airport and on the Leased Premises. Lessee shall be responsible for conducting Lessee's authorized activities in a manner that does not interfere with or disturb others while also complying with applicable laws, regulations, ordinances, rules and similar legal requirements ("Legal Requirements"). Lessee shall be responsible for promptly paying when due and owing all: A. UTILITIES - Lessee shall assume and pay for all costs or charges for metered utility services provided to Lessee at the Premises during the term of this Agreement. Lessee shall have the right, with written approval of City, which shall not be unreasonable delayed or withheld, to connect to any storm and sanitary sewers, and water, and utility outlets, the cost of usage, extension, installation, and meters, where required, to be paid by the Lessee. Lessee shall permit the City to erect, use, maintain, replace and repair pipes, cables, conduits, plumbing, vents, and telephone, electric and other wires or other items, in, to and through the Lease Agreement Page 12 of 31 Premises, as and to the extent that the City may now or hereafter deem necessary or appropriate for the proper operation and maintenance of the Leased Premises, provided the City shall not unreasonably interfere with Lessee's use and occupancy of the Premises. B. TRASH, GARBAGE, REFUSE, ETC. - Lessee shall provide a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage, and other refuse produced as a result of Lessee's business operations on the Leased Premises. C. PAYMENT OF TAXES, FEES, AND ASSESSMENTS - The Lessee agrees to pay promptly when due all federal, state, and local government taxes, license fees, and occupation taxes levied on either the Leased Premises or on the business conducted on the Leased Premises or on any of Lessee's property used in connection therewith, except as provided herein. Taxation may be subject to legal protest in accordance with the provisions of the taxing authority whose levy is questioned. Any protest shall be at the sole expense of Lessee. Delinquency in payment of such obligations after any protest has been settled shall, at the option of the City, be cause for immediate termination of this Lease. D. PAYMENT OF EXPENSES - All costs, expenses, and other charges relating to the Leased Premises, Improvements, and/or Lessee's activities. 6.07 BASED AIRCRAFT If Based Aircraft are located on the Leased Premises, the Lessee shall provide an annual Based Aircraft report to the Director in compliance with the PMCDs. 6.08 AMERICANS WITH DISABILITIES ACT Lessee shall be solely and fully responsible for complying with the Americans with Disabilities Act of 1990 as amended from time -to -time, with respect to the Leased Premises and Lessee's activities at the Airport. 6.09 NON-DISCRIMINATION PRACTICES Lessee, its agents and Employees will not discriminate against any person or class of persons by reason of race, creed, color, national origin, age, sex, or disability in providing any services or in the use of any of its facilities provided for the public. Lessee further Lease Agreement Page 13 of 31 agrees to comply with such enforcement procedures as the United States Government might demand that the City take in order to comply with the Sponsor's Assurances. Lessee agrees not to discriminate against any Employee or Applicant for employment because of race, creed, color, national origin, age, sex, or disability. 6.10 SECURITY ACCESS Lessee agrees to control all access to the Air Operations Area (AOA) through the Leased Premises and through gates assigned to or controlled by Lessee so as to prevent unauthorized entry to the airfield by persons, animals, or vehicles. In the event that unauthorized access to the AOA is gained through the Leased Premises or any area which Lessee controls or is obligated to control, any fines or penalties assessed by the Transportation Security Administration (or other authorized Agency) shall be the responsibility of the Lessee and Lessee hereby agrees to promptly pay all such fines or penalties without delay and immediately make any and all requested changes in operations or facilities necessary to maintain Airport security and prevent reoccurrence of any unauthorized entry. Lessee shall place appropriate signage on all doors with AOA access to prevent unauthorized access. ARTICLE SEVEN GENERAL CONDITIONS 7.01 RULES AND REGULATIONS City reserves the right to issue through its Director such reasonable rules, regulations and procedures for activities and operations conducted on the Airport as deemed necessary to protect and preserve the safety, security, and welfare of the Airport and all persons, property, and facilities located thereon. The Lessee's officers, agents, employees, and servants will obey all Rules and Regulations which may be promulgated from time to time by the City or its authorized agents at the Airport, or by other lawful authority, to ensure the safe and orderly conduct of operations and traffic on the Airport. 7.02 OPERATION OF AIRCRAFT, COMPLIANCE WITH RULES AND REGULATIONS Lessee agrees to operate and conduct its business upon the Leased Premises and at the Airport at all times in compliance with applicable federal, state, and local rules and Lease Agreement Page 14 of 31 regulations. Lessee further agrees 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 regulations, statutes, and/or ordinances, Lessee shall within fifteen (15) days reimburse the Airport the full amount of the penalty or fine and take reasonable steps to immediately correct the failure, act, or omission leading to, causing, or contributing to the violation. Provided, however, the duty of the Lessee to reimburse City is subject to City providing timely 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. 7.03 IMPROVEMENTS OR ALTERATIONS Lessee may not, absent the prior written consent of the Director 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. Lessee agrees any said improvements or alterations approved by City, shall be subject and conform to the PMCDs and all applicable Legal Requirements as set forth by the Director and any amendments thereto. All improvements, located on Airport property and within the legal boundaries as identified on the Airport Layout Plan, shall comply with the PMCDs and all applicable Legal Requirements. Lessee shall procure all necessary permits including, but not limited to, all City of Lubbock building, fire, safety, and other required permits for improvements located on Airport property and within the legal boundaries as identified on the Airport Layout Plan. Construction shall be completed within 18 months from the beginning of the Term and any future improvements shall be completed within 18 months from date of approval from Director. In the event City shall consent to the proposed activities of Lessee, Lessee shall bear the cost of any such work. City 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. Lessee shall comply with applicable statutes, ordinances, building codes, and rules and regulations of all governmental agencies as may have jurisdiction at the time. Lease Agreement Page 15 of 31 The Parties hereto acknowledge and understand that a force majeure event may cause a delay for which a reasonable extension of time is necessary for completion of construction activities. Such reasonable extension may be requested of, and granted by, Director and Director's consent shall not be unreasonably withheld. 7.04 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 Director. Said consent will not be unreasonably withheld. Lessee's signage shall be in compliance with applicable City of Lubbock code of ordinances. 7.05 LIENS PROHIBITED Lessee shall not bind or attempt to bind the City for payment of any money in connection with the construction, repairing, alterations, additions, or reconstruction work on the Leased Premises. 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 City. Lessee expressly agrees that it will keep and save the Premises and the City 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 City -owned property located thereon during the term of this Agreement, or during any subsequent extension, Lessee shall defend on behalf of the City, 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 City. 7.06 MAINTENANCE Lessee shall, at its own cost and expense, maintain the Leased Premises in a presentable condition, reasonable wear and tear expected reasonably free of trash, debris, and weeds, and consistent with good business practices. Lessee shall maintain landscaping surrounding the Leased Premises. Lessee shall repair all damages to Leased Premises Lease Agreement Page 16 of 31 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 hangar/building as necessary to maintain a clean and attractive appearance. Lessee shall also maintain any drainage structures or other improvements installed for the benefit of Lessee, septic systems, ceilings, floor coverings, locks, doors, overhead doors, specialized ramp doors, window glass, parking lots, and/or surfaces used for Employee and/or customer parking. Upon written notice by City to Lessee, Lessee shall be required to perform whatever reasonable maintenance, City deems necessary. If said maintenance is not undertaken by Lessee within twenty (20) days after receipt of written notice, City shall have the right to enter upon the Leased Premises and perform the necessary maintenance, the cost of which shall be paid by Lessee. 7.07 INDEMNIFICATION AND INSURANCE The Lessee shall be deemed an Independent Operator and contractor responsible to all parties for its respective acts and omissions, and the City shall in no way be responsible therefore. Lessee shall indemnify and hold harmless, to the fullest extent permitted by law, City, and City'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 Lessee's activities contemplated hereunder. Lessee further covenants and agrees to defend any suits or administrative proceedings brought against the City and/or City's respective officers, Employees, elected officials, and/or agents on account of any claim for which it is obligated to indemnify City, and to pay or discharge the full amount or obligation of any such claim incurred by, accruing to, or imposed on City, or City's respective officers, Employees, elected officials, and/or agents, as applicable, resulting from the settlement or resolution of said suits, claims, and or administrative proceedings. In addition, Lessee shall pay to City, City's respective officers, Employees, elected officials and/or agents, as applicable, all attorney fees incurred by such parties in enforcing Lessee's indemnity in this section. Indemnification -- Environmental Harm, Without limiting any provisions of this Agreement, Lessee shall also defend, indemnify, and hold City and its respective officers, Lease Agreement Page 17 of 31 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 City arising out of or in any way related to: I. 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. 7.8 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 City. To the extent permitted by law, the policies shall include a waiver of subrogation and name the City as additional insured. Commercial General Liability Insurance (CGL) $1,000,000 per occurrence to include products and completed operations, property damage, bodily injury and personal & advertising injury. $2,000,000 general aggregate Iimit shall apply separately to this location or the general aggregate limit shall be twice the required occurrence limit. $1,000,000 per occurrence for Unlicensed Vehicles. Automobile Liability $1,000,000 per occurrence covering any auto or if Lessee has no owned autos, hired and non -owned autos, with limit no less than $1,000,000 per accident for bodily injury and property damage, Lease Agreement Page 18 of 31 Han arkee ers LiabiIi With a limit not less than $10,000,000 combined single limit per Aircraft and $15,000,000 per occurrence and $15,000,000 aggregate. Em to er's Liabili $1,000,000 per accident for bodily injury or disease. Workers' Coin ensation: Limits based upon statutory requirements. Lessee shall obtain workers' compensation coverage pursuant to Section 407.002 of the Texas Labor Code. Further, Lessee shall maintain said coverage throughout the term of this Agreement and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure 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. To the extent permitted by law, the policy shall include a waiverof subrogation. Current Certificates of Insurance and Endorsements shall be provided to the City, or other satisfactory evidence of insurance shall be filed with the Director by the Lessee. The Lessee or its insurer shall notify the Director of any alteration, renewal, or cancellation of this coverage, which shall 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. ARTICLE EIGHT SUBLEASE SALE ASSIGNMENT OR TRANSFER 8.01 SUBLEASING Lessee shall not Sublease, sell, assign, or transfer the Agreement, in whole or in part, or any interest in the Agreement, or any rights or obligations the Lessee has under the Agreement, without the prior written consent by the Director which shall not be unreasonable delayed or withheld. A. SUBLESSEE OBLIGATIONS - If Lessee receives written consent from the Director, Sublessee shall comply with the PMCDs and all applicable Legal Requirements. B. SUBLEASING RESTRICTIONS - If Lessee receives written consent from the Director, Sublessee shall be subject to all applicable terms and conditions of the Lessee's Agreement governing the land and/or improvements being subleased. Any Sublease made contrary to the requirements of this section shall be null and void. Lease Agreement Page 19 of 31 8.02 SALE, ASSIGNMENT, OR TRANSFER Lessee shall not sell, assign, or transfer the Agreement, in whole or in part, or any interest in the Agreement, or any rights or obligations the Lessee has under the Agreement, without the prior written consent by the Director. A. If Lessee is desirous of such a sale, assignment, or transfer, the Lessee shall submit a written request to the Director for approval. The request shall be accompanied by a completed application by the entity requesting assignment (Assignee). B. At the time a sale, assignment, or transfer is approved in writing by the Director, the Lessee shall reimburse the City for attorney's fees and expenses incurred by the City relating to the sale, assignment, or transfer in the sole discretion of the City. C. The Assignee shall satisfy all criteria set forth in all PMCDs and all applicable Legal Requirements. Written consent of the Director is not required in connection with: (a) the merger, consolidation, or reorganization of the Lessee with any Affiliate of the Lessee, (b) the sale of all or substantially all of the assets of the Lessee to any Affiliate of the Lessee, or (c) assignment to any Affiliate of the Lessee. Any sale, assignment, or transfer, with exception of the situations and/or circumstances noted in this section, made without the prior written consent of the Director shall be null and void. 8.03 CHANGE IN CONTROLLING OWNERSHIP Any change in the controlling ownership of a Lessee (i.e. the change of ownership of more than 50% of the voting control of Lessee, excluding any changes caused by the death of any owner of Lessee or any termination of any owner of Lessee) is subject to the prior written consent of the Director, which consent, subject to the process described below, shall not be unreasonably withheld, conditioned, or delayed. If a Lessee is desirous of changing its controlling ownership, the Lessee shall submit a completed application to the Director for review. If the application is acceptable to the Director, the Director shall submit the application and a recommendation to the City for review and consideration. Lease Agreement Page 20 of 31 • At the time the change in controlling ownership is approved in writing by the Director, the Lessee shall reimburse the City for attorney's fees and expenses incurred by the City relating to the application for change of controlling ownership in the sole discretion of the City. Any change in controlling ownership made without the prior written consent of the Director shall be considered null and void. 8.04 ENCUMBRANCES AND MORTGAGES Lessee shall not mortgage, pledge, assign as collateral, encumber or in any manner transfer, convey, or dispose of the Leased Premises or any interest therein without the prior written consent of the Director. If Lessee is desirous of mortgaging, pledging, assigning as collateral, encumbering or in any manner transferring, conveying, or disposing of the Leased Premises or any interest therein, the Lessee shall submit a written request to the Director for review. If the request is acceptable, the Director shall submit the request and a recommendation to the City for review and consideration. • At the time the request is approved in writing by the Director, the Lessee shall reimburse the City for attorney's fees and expenses incurred by the City relating to the encumbrance request in the sole discretion of the City. Any encumbrance made without the prior written consent of the City shall be null and void. 8.05 RELOCATION In the event that relocation is deemed necessary (e.g., to correct deviations from 14 CFR Part 77, to ensure consistency with the Airport Layout Plan, etc.), the City shall make best efforts to provide Airport land and the Leasehold Improvements that are similar to the Airport land and the Leasehold Improvements currently being occupied and/or used by the Lessee. Such Airport land and the Leasehold Improvements shall be leased to the Lessee under the same terms and conditions as stipulated in the existing Agreement. If similar Airport land and/or Improvements are not available, the City may, in its sole discretion, buyout the leasehold interest held by the Lessee at the market value determined by an Appraiser engaged by the City. If Lessee disagrees with the market Lease Agreement Page 21 of 31 value conclusion reached by the Appraiser, the Lessee shall have the right to initiate a dispute resolution process. If the relocation is solely for the benefit of the City, the City shall pay all reasonable (and verifiable) relocation costs and expenses associated with relocating the Lessee. Relocation shall follow all applicable federal, FAA, and Texas Legal Requirements for relocation proceedings and any appraisal report shall meet the requirements of such. 8.06 RIGHTS OF OTHERS It is clearly understood by the Lessee that any person, firm, or corporation operating Aircraft at the Airport has the right or privilege to perform any services on its own Aircraft with own regular Employees (including, but not limited to, maintenance and repair). The rights of said person, firm, or corporation are subject to the rights of Lessee as set forth in 1.02. 8.07 VEHICULAR MOVEMENT Except as specifically authorized by the Director, or designated other, Lessee will not permit the driving of vehicles by Employees, customers, guests, or invitees on the ramp, taxiways, and runways. 8.08 EXCLUSIVITY It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an Exclusive Right to conduct any activities, including, but not limited to charter flights, pilot training, Aircraft rental and sightseeing, aerial photography, crop dusting, aerial advertising and surveying, air carrier operations, Aircraft sales and services, sale of aviation petroleum products whether or not conducted in conjunction with other activities, repair and maintenance of Aircraft, sale of Aircraft parts, and any other activities which because of their direct relationship to the operation of Aircraft can be regarded as an Activity. 8.09 NO RESIDENTIAL USE It is understood and agreed Lessee shall not permit or enter into any arrangement that results in permission for the Leased Premises to be used as a residence. 8.10 STORAGE USE The Leased Premises shall be used solely for aviation -related purposes. Storage of non - aviation related property inside hangars is strictly prohibited. Lease Agreement �y Y Page 22 of 31 ARTICLE NINE TERMINATION CANCELLATION 9.01 TERMINATION The Agreement shall terminate at the end of the term. Lessee shall have no further right or interest in any of the Premises or improvements hereby demised, except as provided herein. 9.02 TERMINATION BY LESSEE The Lessee may, at the Lessee's option and provided the Lessee is Current and in Good Standing, terminate the Agreement on the occurrence of any one or more of the following events: 1. The permanent abandonment or closure of the Airport by the City as a commercial service airport. 2. The lawful assumption by the United States Government, or any authorized Agency thereof, of the operation, control or use of the Airport, or any substantial part or parts thereof, in such a manner that substantially restricts Lessee for a period of at least ninety (90) days from operating thereon. 3. In the event of acquisition by Condemnation or the exercise of the power of eminent domain (by any Agency permitted to take property for public use) of any land or improvements associated with Lessee's Leased Premises, Lessee shall not institute any action or proceeding or assert any claim against the City for Compensation or consideration of any nature. All Compensation or consideration awarded or paid to Lessee upon a total or partial acquisition of the Leased Premises to the extent not related to Lessee's improvements (which for these purposes shall not include any Compensation or consideration from City) shall belong to the City without any participation of Lessee. 4. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use and operation of the Airport for a period of at least ninety (90) days. 5. The default of the Lessor in the performance of any covenant or Agreement herein required to be performed by the Lessor and the failure of the Lessor to Lease Agreement Page 23 of 31 remedy such default for a period of sixty (60) days after receipt from Lessee of written notice to remedy the same. 6. Failure of Lessor to maintain the landing area of the Airport for a period of at least sixty (60) days, which results in Lessee's inability to conduct business operations. Lessee may recover directly from the condemning Agency the value of any claim relating to a taking of Lessee's improvements, provided that no such claim shall diminish or otherwise adversely affect the City's award. In the event of an acquisition by Condemnation or eminent domain of all interest in the Leased Premises, Lessee's obligation to pay rent shall cease and all leasehold interest created shall cease. In the event of an acquisition by Condemnation or eminent domain of a portion of interest in the Leased Premises, Lessee's obligation to pay rent shall cease as it pertains to the specific portion of the Leased Premises acquired. If the Condemnation or eminent domain substantially impairs the conduct of the Lessee's activities and equates to more than 50% of the total Leased Premises, Lessee may terminate the Agreement by notifying the City. If the Agreement is not terminated by the Lessee, the rent shall be adjusted accordingly. Lessee may exercise such right of termination by giving sixty (60) days advance written notice to the City at any time after the lapse of the applicable periods of time and this Lease shall terminate as of the sixty first (61") day after such notice is given. Rental due hereunder shall be payable only to the effective date of said termination. 9.03 TERMINATION BY CITY Any default or breach of this Agreement by Lessee shall constitute a default or breach of all Agreements between the City and Lessee. The City shall consider any of the following events a default or breach under the Agreement: 1. Failure to comply with Legal Requirements, Assurances, PMCDs, Airport policies, standards, rules, regulations, and directives. 2. Failure to perform any condition, obligation, or privilege contained in this Agreement. Lease Agreement Page 24 of 31 3. Failure of a Lessee to obtain prior written consent from the Director before conducting additional activities which are not included in the Lessee's activities set forth in Section 1.02 above. 4. Failure to obtain prior written consent from the Director before making any improvements to the Leased Premises and/or at the Airport. 5. Failure to obtain prior written consent of the Director to Sublease any portion of the Leased Premises. 6. Any sale or assignment of the Leased Premises or Agreement made without the prior written consent of the Director 7. Any change in controlling ownership of Lessee made without the prior written consent of the Director. 8. Any encumbrance of the Leased Premises or Improvements on the Leased Premises made without the prior written consent of the Director. 9. Failure to properly maintain the Leased Premises or promptly pay all utilities, insurance, and taxes when due and owing. 10. The filing of bankruptcy and/or assignment of substantially all Lessee's assets for the benefit of Lessee's creditors. 11. The filing of a lien against the Leased Premises. 12. The voluntary abandonment of the Leased Premises. 13. Falsification of any record so as to deprive the City of any rights, privileges, rents, fees, or other charges under the Agreement. 14. Failure to remain Current or in Good Standing. The failure of Lessee to observe or perform any of the terms and conditions of this Agreement, or the failure of Lessee to perform any of the terms and conditions of any other Agreement with the City, in any material respect, with any such failure having continued for thirty (30) days after written notice from the Director, and without meaningful steps having been taken by Lessee to cure such default. Once the Agreement is terminated by the City pursuant to Section 9.3, City's agents may enter upon the Leased Premises and take immediate possession of the same, but the City must allow Lessee to remove the Aircraft and all furniture, trade fixtures, machinery, equipment, furnishings, and other personal property located on or in the Leased Premises Lease Agreement Page 25 of 31 within thirty (30) business days of the City providing written notice to Lessee of such termination. Further, the City must allow Lessee and its agents reasonable access to the Leased Premises to remove its property during this thirty (30) day period. The City may then remove Lessee's property that Lessee fails to remove from the Leased Premises within such thirty (30) day period. Any rental due hereunder shall be payable to said date of termination. It is agreed failure to declare this Lease terminated upon the default of Lessee for any of the reasons set forth above shall not be construed as a waiver of any of the City's rights hereunder or otherwise bar or preclude City from declaring this Agreement terminated as a result of any subsequent event of default under this Agreement. The acceptance of rentals or fees by City for any period or periods after a default of any of the terms, covenants, or conditions herein contained shall not be construed to be or act as a waiver by City of any subsequent default by the Lessee. 9.04 REPLACEMENT AFTER DAMAGE It is agreed between the parties hereto that in the event the Leased Premises are damaged by fire or other accidental cause during the initial term of this Lease so as to become totally or partially untenantable, the City shall have the option to restore the Premises to their former condition. If the City elects to exercise the option, the City shall give Lessee notice in writing of its election within thirty (30) days of the occurrence of such damage. If the City elects to restore the Premises, the City shall proceed with due diligence and there shall be an abatement of the rent until repairs have been made for the time and to the extent for which the Premises, or part thereof, have been untenantable. Should the City not exercise the option to restore the Premises, Lessee shall have the option to restore the Premises to their former condition. If Lessee elects to exercise the option, Lessee shall give the City notice in writing of its election within sixty (60) days of the occurrence of such damage. If Lessee elects to restore the Premises, Lessee 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. If either the City or Lessee exercises its option to restore the Premises, the term of this Lease shall be extended by the amount of time required to restore the Premises. If neither the City nor Lessee exercises its option to restore the Premises, the Lease Agreement Page 26 of 31 lease of such untenantable portion of the Premises shall cease and terminate effective on the date of damage by fire or other accidental cause. 9.05 OWNERSHIP Within ninety (90) days after expiration of this Agreement as herein provided, the Lessee shall have the option to remove all Leasehold Improvements, constructed or placed thereon, except for any pavement area constructed by Lessee and return land to a clean and level condition. Lessee shall give City thirty (30) days written notice prior to expiration of the Agreement of Lessee's intent to exercise such option. In the event Lessee chooses not to exercise its option to remove from the Premises such improvements, title will be surrendered to City, subject to the approval of City. Lessee covenants and agrees to pay all reasonable costs, attorney's fees and expenses that shall be incurred by the City in enforcing the covenants and conditions of this Agreement, in the event the Lessee fails to pay expenses within thirty (30) days such property will be deemed abandoned and title will revert to the City; however, this in no way relieves the Lessee of the debt incurred. 9.06 REMOVAL OF LESSEE'S PROPERTY The Lessee shall have the right, within thirty (30) days after the termination of this Lease, whether such termination comes upon expiration or under any provision of this Lease, to remove from the Leased Premises all of Lessee's Aircraft, furniture, trade fixtures, machinery, equipment, furnishings, and other personal property located on or in the Premises which shall thereafter become the property of the City against which the Lessee will have no claim or right. Lessee shall restore the Premises to the original condition, normal wear and tear excepted, except Lessee shall not be required to remove any Leasehold Improvements constructed upon the Premises pursuant to Article IV herein. The City, however, shall have a lien on all of Lessee's property to secure any unpaid rentals or other revenue due the City; and Lessee's right to remove property from the Leased Premises is conditioned upon all amounts due the City from Lessee having been paid in full. Unless a renewal agreement is executed, property left on the Premises after thirty (30) days from the date of termination of this Agreement shall be deemed abandoned and will become the property of the City, and may be disposed of as the City sees fit, without any liability to the Lessee to account for the proceeds of any sale; and the Lease Agreement Page 27 of 31 City, at its option, may require Lessee to remove the abandoned property and may charge rent from the date of expiration or termination of this Agreement through the day of final removal of the property, or of notification to the Lessee of the abandonment of the property and taking by the City, as the case may be. City reserves the right to demand all cost associated with demolition after the date of expiration or termination of this Agreement if the Leasehold Improvements and reasonable deemed uninhabitable by city officials. 9.07 SURRENDER LEASED PREMISES The Lessee covenants and agrees at the expiration of the term of this Lease, or upon earlier termination as provided elsewhere in this Agreement, Lessee will quit and surrender the Leased Premises and the Leasehold Improvements in good condition, reasonable wear and tear excepted. City shall have the right to take possession of the Leased Premises and the Leasehold Improvements with or without process of law. ARTICLE TEN MISCELLANEOUS PROVISIONS 10.01 CONFLICT OF INTEREST The Lessee acknowledges it is informed Texas law prohibits contracts between the City of Lubbock and its "officers" and "Employees," and the prohibition extends to officers and Employees of the City of Lubbock agencies, such as City -owned utilities, and certain City of Lubbock boards and commissions, and to contract with any partnership, corporation, or other organization in which the officers or Employees have a substantial interest. Lessee certifies (and this Agreement is made in reliance thereon) 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. 10.02 NO WAIVER City shall not waive the right to enforce the Agreement, in whole or in part. 10.03 LICENSES, CERTIFICATIONS, AND PERMITS Lessee shall have (and provide copies to the Director) all licenses, certifications, and permits required to conduct Lessee's activities within ninety (90) days of completing construction or the issuance of a Certificate of Occupancy for each portion of the Leasehold Improvements, whichever occurs first. Lease Agreement Page 28 of 31 10.04 INDEPENDENT ENTITIES This Agreement shall not be construed to establish a partnership or joint venture between the City and Lessee. 10.05 BINDING EFFECT This Agreement shall be binding on and for the benefit of the heirs, successors, and assigns of the City and the Lessee. 10.06 SUBORDINATION This Agreement is subordinate to any agreement between the City and the United States Government, the State of Texas, or any other Agency having jurisdiction. 10.07 NON -LIABILITY OF OFFICIALS AND EMPLOYEES OF CITY No officer, elected official, Employee, agent, or representative, etc. of City shall be personally liable for a default or liability under this Agreement. 10.08 GOVERNING LAW AND VENUE This Agreement shall be made in accordance with the laws of Texas and venue shall be in a court of competent jurisdiction in Lubbock County, Texas. 10.09 PARAGRAPH HEADINGS The paragraph headings in this Agreement shall only be used as a matter of convenience and/or reference. 10.10 SEVERABILITY If a provision of the Agreement is held to be unlawful, invalid, or unenforceable by final judgment of any Agency or court of competent jurisdiction, the invalidity, voiding, or unenforceability of such provision shall not in any way affect the validity of any other provisions of the Agreement, 10.11 COUNTERPARTS If this Agreement is executed in counterparts, each shall be deemed an original and which together shall constitute one and the same Agreement. 10.12 MODIFICATION Any change or modification to the Agreement shall not be valid unless made in writing, agreed to, and signed by the City and Lessee. Lease Agreement � Page 29 of 31 10.13 COMPLIANCE WITH CHAPTER 2271, SUBTITLE F, TITLE 10, TEXAS GOVERNMENT CODE The Lessee warrants that it is in compliance with Chapter 2271, Subtitle A, Title 8 of the Texas Government Code by verifying that: (1) it does not boycott Israel; and (2) it will not boycott Israel during the term of the Agreement. 10.14 NOTICES Notices to the City required or appropriate under this Agreement shall be deemed sufficient if in writing and hand delivered or mailed, registered or certified mail, postage prepaid, addressed to Lubbock Preston Smith International Airport, Attn: Director, 5401 N. MLK Blvd., Unit 389, Lubbock, Texas 79403. Notices to the Lessee shall be deemed sufficient if in writing and hand delivered or mailed, registered or certified mail, postage prepaid, addressed to: Dera Holdings, LLC r 5214 68'" Street 15\11TF Xo] Lubbock, Texas 79424 �1 10.15 NON -ARBITRATION The City reserves the right to exercise any right or remedy available to it by law, contract, equity, or otherwise, including without limitation, the right to seek any and all forms of relief in a court of competent jurisdiction. Further, City shall not be subject to any arbitration process prior to exercising its unrestricted right to seek judicial remedy. The remedies set forth herein are cumulative and not exclusive, and may be exercised concurrently. To the extent of any conflict between this provision and another provision in, or related to, this document, this provision shall control. 10.16 TIME OF THE ESSENCE The City and Lessee shall agree time is of the essence in performance of the Agreement. 10.17 ENTIRE AGREEMENT This Lease constitutes the entire Agreement between the City and Lessee, and supersedes and other written Agreement or verbal understanding as to the subject matter of the Lease. Lease Agreement Page 30 of 31 EXECUTED this 23rd day of THE CITY OF LUBBOCK APPROVED AS TO CONTENT: K�Cp'bell,_Ex cutive Director APPROVED AS Assistant City Lease Agreement May 2023. Dera Holdings, L C BY: Print' r Title: Ml4l, Date: SA 23 Page 31 of 31