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HomeMy WebLinkAboutResolution - 2002-R0497 - Lease Agreement - Coachella Valley Aviation, Inc. - 11/14/2002Resolution No. 2002-RO497 November 14,2002 Item No. 41 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Lease Agreement by and between the City of Lubbock and the Coachella Valley Aviation, Inc. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this ATTEST: Reb cca Garza, City Secretary APPROVED AS TO CONTENT: le, Director APPROVED AS TO FORM: L. 14th day of November , 2002. ALS:tk/Lease Agreement/ Coachella Valley Aviation, Inc. ccdocs/November 4, 2002 Resolution No. 2002-RO497 November 14, 2002 Item No. 41 THE STATE OF TEXAS § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LUBBOCK § LEASE AGREEMENT This LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into at Lubbock, Texas, by and between the CITY OF LUBBOCK (referred to herein as Lessor) and COACHELLA VALLEY AVIATION, INC. (referred to herein as Lessee). WITNESSETH: WHEREAS, Lessor owns, controls and operates the Lubbock International Airport (referred to herein as Airport), situated at Route 3, Lubbock, Lubbock County, Texas, and has the authority to grant certain rights and privileges with respect thereto, including those hereinafter set forth: and WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to lease unto Lessee the premises described herein, together with certain privileges, rights, uses and interests therein, as hereinafter set forth; and WHEREAS, Lessee intends to utilize the office space herein leased for aircraft refurbishment, charter, and fractional aircraft ownership; and WHEREAS, Lessee desires to lease certain office space of the Lubbock International Airport from which to conduct its business; 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: Coachella Valley Aviation, Inc. Page 1 ARTICLE ONE DEMISE OF LEASED PREMISES 1.01 LEASED PREMISES Lessor does hereby lease unto Lessee the premises described and being: Office Space located on the Westport District: 768 square feet as shown on Exhibit "A" attached hereto and incorporated herein by reference, which space is hereinafter referred to as "leased premises" or "premises." 1.02 PURPOSE AND PRIVILEGES Lessee shall use the leased premises solely for the purpose of aircraft refurbishment, charter, and fractional aircraft ownership. Nothing in this Agreement shall be construed as granting to Lessee any right to operate any other business or concession on the Airport premises except as enumerated herein. 1.03 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 that the Lessee may make reasonable nondiscriminatory discounts, rebates or other similar types of price reductions for volume purchases. Coachella Valley Aviation, Inc. Page 2 ARTICLE TWO TERM 2.01 TERM. The term of this Agreement shall be for a period of six (6) months, commencing on November 1, 2002, and ending on May 31, 2003. This Agreement shall automatically renew monthly thereafter up to a period of one (1) year unless terminated by Lessee or Lessor with thirty (3 0) days written notice. 2.02 HOLDOVER. This Agreement will terminate without further notice when the lease term (or any extension thereof) expires, and if the Lessee holds over after the term expires such hold over will not constitute a renewal of the Agreement. If Lessee holds over and continues in possession of the premises after the lease term (or any extension thereof) expires, Lessee shall be considered to be occupying the premises on an at will tenancy, subject to all terms of this Lease. ARTICLE THREE RENTALS AND FEES 3.01 RENTAL. In consideration of the rights and privileges herein granted, Lessee shall pay to the Lessor the following rentals and fees: A. Office Space Rental: 768 square feet @ $9.00 per square foot per year. The annual rental being SIX THOUSAND NINE HUNDRED TWELVE AND NO/100 DOLLARS ($6,912.00), which shall be payable, in equal monthly installments of FIVE HUNDRED SEVENTY-SIX AND NO/100 DOLLARS ($576.00) per month. B. Hazard And Extended Insurance: Lessee agrees to pay an annual payment to Lessor for Hazard and Extended Coverage insurance for the duration of this Lease, including any extension thereof. The annual cost being TWO HUNDRED FIFTY-THREE AND 44/100 DOLLARS ($253.44) (768 sq. ft. @ $.33 per sq. ft. per year) for the first year of this Agreement. Lessor may adjust said payment for the subsequent years of this Lease and any extension thereof in order to reflect the actual reasonable cost to Lessor to provide coverage of said insurance. Such payment shall be payable on or before the 20t1' day of each month in the amount of TWENTY-ONE AND Coachella Valley Aviation, Inc. Page 3 12/100 DOLLARS ($21.12) per month for the first year of this Lease in equal monthly payments. The subsequent payments due to Lessor during the remaining years of this Lease, including any extension thereof, shall be payable on or before the 20th day of each month and said payments shall be apportioned over each year in the amount of one -twelfth (1/12) of each annual payment. 3.02 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 for buildings and land will be adjusted upward or downward for each ensuing calendar year beginning January 1, 2003, in direct proportion to the fluctuation in the U. S. Department of Labor, Bureau of Labor Statistics Consumer Prince Index (CPI) for All Urban Consumers. 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. 3.03 PAYMENTS. All rental payments are due and payable on or before the 20th day of each month this Agreement is in effect and shall be made at the office of the Director of Aviation, Lubbock International Airport, Rt. 3 Box 389, Lubbock, Texas 79403. Lessee shall pay Lessor a late payment charge of five percent (5%) of the total amount of rentals payable if payment of such rentals is not made when due. 3.04 DEFAULT FOR FAILURE TO PAY RENTALS OR FEES. If Lessee fails to pay any rent due and owing to Lessor hereunder within fifteen (15) days of the due date, the Lessor's Director of Aviation shall provide written notice to the Lessee. Thereafter, if the rent remains unpaid for more than fifteen (15) days after such notice is received, Lessor may exercise its rights under Article Seven of this Agreement. Coachella Valley Aviation, Inc. Page 4 ARTICLE FOUR RIGHTS RESERVED TO LESSOR The following rights are reserved unto Lessor, and Lessee agrees that all rights, powers and privileges granted under this Lease shall be subordinated to Lessor's rights as hereinafter stated: 4.01 AIRPORT 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 Lessor's Director of Aviation. 4.03 STANDARDS. Lessor reserves the right to establish reasonable standards for the construction, maintenance, alterations, repairs, additions or improvements of Lessee's facilities. This includes structural design, color, materials used, landscaping and maintenance of Lessee's facilities and leased premises. 4.04 TIME OF EMERGENCY. In the event of a war or national emergency, the Lessor shall have the right to lease the landing area and any other portion of the Airport to the United States for governmental use and, if 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 Agreement shall be subordinate to the provisions of any existing or future agreement between Lessor and the United States concerning the operation and maintenance of the Airport, the execution of Coachella Valley Aviation, Inc. Page 5 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 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 & LIMITATIONS OF LESSEE 5.01 ACCESS. Lessee is herein granted the right of ingress to and egress from the leased premises over and across common or public roadways serving the Airport. Such right of ingress and egress, however, shall be subject to all laws, ordinances, rules and regulations now existing or hereafter promulgated by the City of Lubbock or other lawful authority. 5.02 WAGES. To the extent that it is applicable, Lessee shall comply with Ch. 2258, Tex. Govt. Code. 5.03 LESSEE'S DUTY TO REPAIR. Any property of the Lessor or any property for which the Lessor may be responsible, which is damaged or destroyed incident to the exercise of the 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 the Lessee to the satisfaction of the Lessor's Director of Aviation, or in lieu of such repair or replacement, Lessee shall, if so required by the Director of Aviation, pay Lessor money in any amount reasonable to compensate Lessor for the loss sustained or expense incurred by the Lessor as a result of the loss of, damage to, or destruction of such property. 5.04 WARRANTY OF NO SOLICITATION. Lessee warrants that it has not employed any person employed by the Lessor to solicit or secure this Agreement upon any agreement for a commission, percentage, brokerage or contingent fee. Coachella Valley Aviation, Inc. Page 6 ARTICLE SIX GENERAL CONDITIONS This Lease is granted subject to the following provisions and conditions. Failure of the Lessee to comply with any requirement of Article Six shall be cause for immediate termination of this Agreement by Lessor. 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. Lessee shall pay for all licenses, permits, clearances, rights-of-way and other matters necessary to conduct business. Lessee shall pay all fees, taxes and charges assessed under State, local or Federal statutes or ordinances insofar as they are applicable. 6.02 ADDITIONS, 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 or alterations to the Lessor's Director of Aviation and securing prior written consent from the Director of Aviation. Any such additions, improvements or alterations made with the consent of the Director of Aviation shall be solely at the expense of the Lessee and, unless such consent provides specifically that title to the additions 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 all Mechanic's and Materialman's Liens arising from any Coachella Valley Aviation, Inc. Page 7 construction, additions, improvements, repairs or alterations effected by the Lessee. Any property installed or added by Lessee which becomes permanently attached to the leased premises shall become the property of Lessor upon termination of this Agreement, provided however, that any trade fixtures installed by Lessee may be removed by Lessee at its expense. 6.03 ADVERTISING. The Lessee will erect no outdoor advertising or identification signs and will distribute no advertising on the Airport 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. 6.04 LIENS PROHIBITED. The Lessee shall not bind or attempt to bind the Lessor for payment of any money in connection with the construction, installations, alterations, additions or repairs on the leased premises or any Lessee's equipment or facilities located on the leased premises, and Lessee shall not permit any mechanic's, materialsman's or contractor's liens to arise against the leased premises or any improvements thereon, or any equipment, machinery or fixtures thereon belonging to the Lessor, and Lessee expressly agrees that it will keep and save the premises and the Lessor harmless from all costs and damages resulting from any liens of any character created or that may be asserted through any act or thing done by 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, suite or proceeding which may be brought thereon or for the enforcement of such lien or order. Failure of the Lessee to comply with any requirement of this section after having received fifteen days written notice thereof shall be cause for termination of this Agreement by the Lessor. 6.05 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, acting by and through the Director of Aviation or other designated representative, shall have the Coachella Valley Aviation, Inc. Page 8 right to conduct inspections of the leased premises at all reasonable times to ensure that fire, safety and sanitation regulations and other provisions contained in this Lease are being adhered to by the Lessee. 6.06 CUSTODIAL AND MAINTENANCE SERVICES. The Lessee shall, at its own cost and expense, maintain the leased premises, in a safe, clean, and 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. Lessee shall also maintain any drainage structures or other improvements installed for the benefit of Lessee, septic systems, ceilings, floor coverings, locks, doors, overhead doors, specialized ramp doors, window glass, parking lots, and/or surfaces used for employee and/or customer parking. The Lessor shall, at its own cost and expense, maintain the roof, foundation and structural floors and slabs, and load bearing walls, and utility connections to the point of disconnect. Lessor shall not, however, be responsible for repair to the extent that insurance coverage will provide payment. Upon written notice by Lessor to Lessee, Lessee shall be required to perform whatever reasonable maintenance Lessor deems necessary. If said maintenance is not undertaken by Lessee within twenty (20) days after receipt of written notice, Lessor shall have the right to enter upon the leased premises and perform the necessary maintenance, the cost of which shall be borne by Lessee. Lessee shall not, in any case, be required to pay for cost of mitigation, abatement or removal of asbestos not installed by Lessee. 6.07 UTILITIES. Lessor herein agrees to assume responsibility for the payment of all public utility charges connected with Lessee's use of the office space including, but not limited to water, gas, electricity, and sewer service. Lessee shall have the right, with written approval of Lessor, to connect to any storm and sanitary sewers and water and utility outlets, the cost of extension, installation and meters, where required, to be borne by the Lessee. 6.08 TRASH, GARBAGE, REFUSE, ETC. Lessee shall provide a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of Coachella Valley Aviation, Inc. Page 9 all trash, garbage and other refuse produced as a result of Lessee's business operations on the leased premises. 6.09 TAXES, FEES, ASSESSMENTS AND LICENSE. 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. 6.10 INSURANCE. Lessee shall carry and maintain insurance at all times that this Lease is in effect, at Lessee's sole expense with an insurance underwriter authorized to do business in the State of Texas and acceptable to the Lessor, against claims of general liability and workers' compensation resulting from Lessee's business activities at the Airport. General Liability Insurance — The amount of insurance coverage shall not be less than THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00) for Combined Single Limit General Liability Insurance. Workers' Compensation and Employers Liability Insurance — Insurance coverage as required by State statute covering all employees whether employed by the Lessee or any subcontractor of Lessee on the lease premises with at least FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,00.00) Employer Liability Coverage. The above-mentioned policies shall all include a waiver of subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be filed with the Lessor's Director of Aviation prior to entry upon the premises by the Lessee. The General Liability policy 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. 6.11 INDEMNIFICATION. The Lessee shall be deemed to be an independent contractor and operator responsible to all parties for its respective acts and omissions, and the Lessor shall in no way be responsible therefor. Lessee shall indemnify and hold Coachella Valley Aviation, Inc. Page 10 harmless, to the fullest extent permitted by law, Lessor, and Lessor's respected officers, employees, elected officials and agents, from and against any and all losses, damages, claims or liabilities, of any kind or nature, which arise directly or indirectly, or are related to, in any way, manner or form, the activities of Lessee contemplated hereunder, or the omission of the Lessee's activities contemplated hereunder, including, but not limited to, losses, damages, claims or liabilities arising from or related to, in any way, manner or form, the act or omission of third parties on the premises herein leased. Lessee further covenants and agrees to defend any suits or administrative proceedings brought against Lessor and/or Lessor's respective officers, employees, elected officials and/or agents on account of any claim for which it is obligated to indemnify Lessor, and to pay or discharge the full amount or obligation of any such claim incurred by, accruing to, or imposed on Lessor, or Lessor's respective officers, employees, elected officials and/or agents, as applicable, resulting from any such suits, claims, and/or administrative proceedings or any matters resulting from the settlement or resolution of said suits, claims, and or administrative proceedings. In addition, Lessee shall pay to Lessor, Lessor's respective officers, employees, elected officials and/or agents, as applicable, all attorneys' fees incurred by such parties in enforcing Lessee's indemnity in this section. Both parties hereby agree to mutually release each other and their respective officers, employees, elected officials and agents, shall not be liable, and both parties hereby release each other, and their respective officers, employees, elected officials and agents, for, from and/or against any losses, damages, claims or liabilities to Lessee, on any theory of legal liability, including, but not limited to the negligence, of any type of degree, or fault, of either party, arising from or related to, in any way, manner or form, the unenforceability or voidance, for any reason, of all or any part of this Agreement. The indemnity and release provided herein shall survive the termination or voidance of this Agreement. Indemnification — Environmental Harm. Without limiting any provisions of this Agreement, Lessee shall also defend, indemnify and hold Lessor and its respective officers, employees, elected officials and agents harmless from and against all suits, actions, claims, demands penalties, fines liabilities, settlements, damages, costs and expenses (including but not limited to reasonable attorney's and consultant's fees, court Coachella Valley Aviation, Inc. Page 11 costs and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, brought against Lessor arising out of or in any way related to: 1. Any actual, threatened or alleged contamination by hazardous substances of the premises or contamination by hazardous substances of the Airport by Lessee or its agents; 2. The presence, disposal, release or threatened release of hazardous substances by Lessee or its agents at the Airport that is on, from or affects the soil, air, water, vegetation, buildings, personal property, persons, animals or otherwise; 3. Any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to hazardous substances by Lessee at the Airport; or 4. Any violation by Lessee of any Environmental Laws that affects the Airport. 6.12 NON-DISCRIMINATION PRACTICES. Lessee, its agents and employees will not discriminate against any person or class of persons by reason of age, sex, race, color, handicap, religion or national origin in providing any services or in the use of any of its facilities provided for the public, in any manner prohibited by Federal Aviation Administration Regulations. Lessee further agrees to comply with such enforcement procedures as the United States Government might demand that the Lessor take in order to comply with the Sponsor's Assurances. Lessee agrees not to illegally discriminate against any employee or applicant for employment because of age, sex, race, color, handicap, religion or national origin. 6.13 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. 6.14 NO ASSIGNMENT OR SUBLETTING. 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. No such assignment or subletting shall affect Lessee's obligations to make all required rental payments hereunder. 6.15 EXCLUSIVITY. Lessee's right to conduct business at the Airport shall be nonexclusive. Coachella Valley Aviation, Inc. Page 12 6.16 WAIVER. The failure of Lessor to insist in any one or more instance upon performance of any of the terms, covenants or conditions of this Lease shall not be construed as a waiver or relinquishment of the future perfonnance of any such terms, covenants or conditions, and Lessee's obligation with respect to such future performance shall continue to be in full force and effect. Furthermore, the acceptance of rentals or fees by Lessor after Lessee's failure to perform, keep or observe any of the terms, covenants or conditions of the Lease shall not be deemed a waiver by Lessor to cancel this Agreement for such failure. 6.17 TITLE TO LEASED PREMISES. Lessee agrees that it does not acquire any equity or title to the leased premises as a result of this Agreement and that the property herein leased shall remain the sole property of Lessor. Lessor grants Lessee a leasehold interest by and through this Agreement. 6.18 STORED CONTENTS. Lessee agrees to limit the outside storage of any and all materials, components, assemblies and repaired and manufactured products to the leased premises and to control the growth of vegetation and weeds on the leased premises extending outward a distance of ten (10) feet. ARTICLE SEVEN TERMINATION This Agreement shall terminate at the end of the full term hereof and Lessee shall have no further right or interest in the premises hereby demised, except as provided herein. This Agreement is subject to termination for the reasons set forth below, provided that thirty (30) days written notice is given to the non -terminating party. Rental due hereunder shall be payable only to the effective date of said termination. 7.01 LESSEE'S RIGHT TO TERMINATE. The Lease shall be subject to cancellation by Lessee upon the occurrence of any one or more of the following events: A. The permanent abandonment of the Airport as an air terminal. B. The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the Airport Coachella Valley Aviation, Inc. Page 13 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. C. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Airport for a period of ninety (90) days. D. The default of the Lessor in the performance of any covenant or agreement herein required to be performed by the Lessor, and the failure of the Lessor to remedy such default for a period of sixty (60) days after written notice from the Lessee to remedy the same. 7.02 LESSOR'S RIGHT TO TERMINATE. The Lease shall be subject to cancellation by Lessor upon the occurrence of any one or more of the following events: A. If the Lessee shall file a voluntary petition of bankruptcy; or if proceedings in bankruptcy shall be instituted against Lessee and Lessee is thereafter adjudicated as bankrupt pursuant to such proceedings; or if a court shall take jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any federal reorganization act; or if a receiver for Lessee's assets is appointed; or if Lessee shall be divested of its rights, powers and privileges under this Agreement by other operation of law. B. The abandonment by Lessee of the premises at the Airport for a period of thirty (30) days or more. C. The failure by Lessee to pay any rentals or other charges hereunder after notice as specified above. D. If default by Lessee in the performance of any covenant or agreement herein required to be performed by Lessee and the failure of Lessee to remedy such default for a period of sixty (60) days after receipt from the Lessor's Director of Aviation of written notice to remedy the same. E. The Lessee's breach of any provision contained in Article Five, of this Lease. Coachella Valley Aviation, Inc. Page 14 F. If the Lessee shall fail to abide by all applicable laws, ordinances and rules and regulations of the United States, State of Texas, City of Lubbock and Lessor's Director of Aviation. If any of the aforesaid events occur, Lessor's agents may enter upon the leased premises and take immediate possession of the same and remove Lessee's effects. Upon said entry, this Lease shall terminate, and any rental due hereunder shall be payable to said date of termination. It is agreed that failure to declare this 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 Lease cancelled as a result of any subsequent violation of any of the terms or conditions of this Lease. 7.03 REPLACEMENT AFTER DAMAGE. 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, Lessor shall have the option to restore the premises to their former condition. If Lessor elects to exercise the option to restore the premises, 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 untenable. Should Lessor not exercise the option to restore the leased premises, the lease of such untenable portion of the premises shall cease and terminate, effective on the date of damage by fire or other accidental cause. 7.04 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. 7.05 VACATION OF LEASE AND OWNERSHIP OF FIXTURES. Within thirty (30) days after expiration or termination of this Agreement, as herein provided, Coachella Valley Aviation, Inc. Page 15 Lessee shall remove any furniture, machinery, equipment, chattels, goods, and other personal property owned or placed by Lessee, in, under, or on the premises, or acquired by Lessee, whether before or during the Lease tern and shall restore the Leased Premises to the condition in which they were received, reasonable wear and tear excepted. However, Lessee's right to remove its property is subject to the condition that Lessee has paid in full all amounts due and owed to Lessor under this Agreement. If Lessee shall fail or neglect to remove said property on or before said expiration or termination of the Agreement, then at the option of Lessor, said property shall either become the property of Lessor without compensation therefor, or the Director of Aviation of Lessor may cause such property to be removed at the expense of Lessee, and no claim for damages against the Lessor, or its officers, agents or employees shall be created or made on account of such removal and restoration. In the event Lessor terminates this Agreement for cause, as contained herein, or if Lessee discontinues its business on the Leased Premises at any time prior to expiration of the term, or the expiration of any subsequent extension, Lessor shall retain ownership of Lessee's property to the extent of the rentals due for the remainder of the term or extension if paid at the rate paid for the month prior to termination. 7.06 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 excepted, 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. Coachella Valley Aviation, Inc. Page 16 ARTICLE EIGHT MISCELLANEOUS PROVISIONS 8.01 NOTICES. Notices to the Lessor required or appropriate under this Lease shall be deemed sufficient if in writing and mailed by registered mail with postage prepaid to the Director of Aviation, Lubbock International Airport, Route 3, Box 389, Lubbock, Texas 79403. Notices to the Lessee required or appropriate under this Lease shall be deemed sufficient if in writing and mailed by registered mail with postage prepaid to Mr. Michael A. Ebbeler, President, Coachella Valley Aviation, Inc., 6401 N. Cedar Avenue, Suite #2, Lubbock, Texas 79403. 8.02 PARTIES BOUND. This Agreement binds, and inures to the benefit of, the parties to the Lease and their respective heirs, executors, administrators, legal representative, successors, and assigns. 8.03 APPLICABLE LAW. This Agreement is to be construed under Texas law, and all obligations of the parties created by this Lease are performable in Lubbock County, Texas. Venue for any action brought pursuant to this Agreement, or any activity contemplated hereby, shall lie exclusively in Lubbock County, Texas. 8.04 ATTORNEY'S FEES. Should Lessor institute legal action to collect rent due under this Agreement or damages for default of any covenant made herein, a reasonable sum shall be added to the amount of recovery for attorney's fees together with all costs of court. 8.05 PRIOR AGREEMENTS. Both parties hereby agree that this instrument constitutes the final Agreement of the parties and that all other previous agreements, leases and contracts between the parties which pertain to the property described herein are hereby declared null and void. 8.06 AMENDMENT. No amendment, modification, or alteration of this Lease is binding unless in writing, dated subsequent to the date of this Lease, and duly executed by the parties. Coachella Valley Aviation, Inc. Page 17 EXECUTED this 14th day of LESSOR: CI7 ATTEST: Rebecca Garza, City Secretary's Office PROVED CONTENT: Marls arle, Director of Aviation APPROVED AS TO FORM: Am is' City Attorney November 2002. LESSEE: COACHELLA VALLEY AVIATION, INC. i BY: Mic ael A. Ebbeler, President Coachella Valley Aviation, Inc. Page 18 RD C -A z 0 a a > LU J J a LU a a 0 W L) z . 2002-R 0497 Exhibit A