HomeMy WebLinkAboutResolution - 2012-R0103 - Oil And Gas Lease Agreement - Four Sevens Exploration Co. LTD - 03/06/2012Resolution No. 2012—RO103
March 6, 2012
Item No. 5.12
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, an Oil and Gas Lease Agreement for
mineral interest on the airport property, by and between the City of Lubbock and Four
Sevens Exploration Co., LTD., and related documents. Said Agreement is attached
hereto and incorporated in this resolution as if fully set forth herein and shall be included
in the minutes of the City Council.
Passed by the City Council on _ March 6, 2012
, --: —)—, h -') �� - -
TOM MARTIN, MAYOR
ATTEST:
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Rebec. Garza, City Secretary
APPRO'V'ED AS TO C
Director of Aviation
APPROVED AS TO FORM:
Chad Weaver, Assistant City Attorney
vw:ccdocs'RES.Agrmt-Four Sevens Exploration -airport
February 14, 2012
Resolution No. 2012-RO103
Producers 88 (4-89) Paid Up Special
With 640 Acres Pooling Provision TEXAS STANDARD FORM
PAID UP OIL AND GAS LEASE
THIS LEASE AGREEMENT is made as of the 6ttuay of March 20 12, between The City of Lubbock. Texas. a Municipal Corporation, as Lessor (whether
one or more) whose address is P.O. Box 15100 Lubbock. Texas. 79350 and Four Sevens Exploratkxt Co Ltd as Lessee, whose address is 777 Taylor St. Fort Worth.
TX, 76102. Suite 1090. All printed portions of this lease were prepared by the parry hereinabove named as Lessee, but all other provisions (including the completion of
blank spaces) were prepared jointly by Lessor and Lessee.
1. In consideration of a cash bonus in harmi paid and the covenants herein contained, Lessor hereby grants, leases and lets exclusively to Lessee the following described land,
hereinafter called leased premises:
640 acres, more or less, being all of Section No.2 , Block D-3 , Abstract No. 654, G.C.& S.F. Ry. Co. Survey and Certificate No.
3/368, Lubbock County, Texas, and being described in that certain Warranty Deed dated May 22, 1942 from Allie Ebba Cockrell,
individually and as Executrix of the Will and Estate of Florence Jones, Deceased, joined by my husband Fred Cockrell to The City of
Lubbock Texas, a municipal corporation, recorded in Volume 267, Page 206, of the records of Lubbock County, Texas.
640 acres, more or less, in Section 28, Block A, Abstract No. 685, Lubbock County, Texas.
433.25 acres, more or less, being part of Section 32, Block A, Abstract No. 684,
Lubbock County, Texas, described by metes and bounds in Warranty Deed dated May
27, 1942 from Allie E. Cockrell, et al, to The City of Lubbock recorded in Volume
267, Page 206, and Deed dated January 4, 1949 from U.S.A. to The City of Lubbock
recorded in Volume 383, Page 144, and Petition for Condemnation dated October 31,
1957 from the Lubbock District Court to The City of Lubbock recorded in Volume 673,
Page 495, and Warranty Deed dated May 31, 1973, from Grace Jones, et al, to The City
of Lubbock recorded in Volume 1350, Page 747, in the Deed Records, Lubbock County,
Texas.
19.72 acres, more or less, being part of the N/2 of Section 36, Block A, in the G.C. & S.F. Railway Co. Survey, Abstract No.683,
Certificate No. 2/253 and being described by metes and bounds description in that Deed dated February 14, 1962, from the Board of
Directors of The Texas A&M University Systems to City of Lubbock and recorded in Volume 1366, Page 485, in the records of
Lubbock County, Texas.
151.276 acres, more or less, being part of the SW/4 of Section 36, Block A, in the G.C. & S.F. Railway Co. Survey, Abstract No.683,
Certificate No. 2/253 and being described by metes and bounds description in two (2) Warranty Deeds (1) dated March 26 1973,
from Cleo Thiel and her husband Robert W. Thiel to City of Lubbock, a Home Rule Municipal Corp. and recorded in Volume 1338,
Page 223, (2) Warranty Deed dated March 26 1973, from Cleobob, Incorporated, to City of Lubbock, a Home Rule Municipal Corp.
and recorded in Volume 1338, Page 225, of the records of Lubbock County, Texas.
160.00 acres more or less, being the SW/4 of Section 6, Block D-3, A-1299 and A-1300, D & W RR Co. Survey, Lubbock County,
Texas.
41.224 acres more or less, being part of Section 43, Block A, A-56, HE & WT RR Co. Survey, Lubbock County, Texas, and being
further described in Judgment dated November 29, 1971, between City of Lubbock vs. Arthur L. Cone, et al, and being recorded in
Volume 1288, Page 397, Deed Records, Lubbock County, Texas.
in the county of LUbbOCk, State of Texas, containing 2.085.47 gross acres, more or less (including any interests therein which Lessor may hereafter acquire
by reversion, prescription or otherwise), for the purpose of exploring for, developing, producing and marketing oil and gas, along with all hydrocarbon and nonhydrocarbon
substances produced in association therewith. The term "gas" as used herein includes helium, carbon dioxide and other commercial gases, as well as hydrocarbon gases. In
addition to the above-described leased premises, this lease also covers accretions and any small strips or parcels of land now or hereafter owned by Lessor which are
contiguous or adjacent to the above-described leased premises, and, in consideration of the aforementioned cash bonus, Lessor agrees to execute at Lessee's request any
additional or supplemental instruments for a more complete or accurate description of the land so covered. For the purpose of determining the amount of any shut-in royalties
hereunder, the number of gross acres above specified shall be deemed correct, whether actually more or less.
2. This lease, which is a "paid-up" lease requiring no rentals, shall be in force for a primary term of Three (3) years from the date hereof, and for as long thereafter as oil
or gas or other substances covered hereby are produced in paying quantities from the leased premises or from lands pooled therewith or this lease is otherwise maintained in
effect pursuant to the provisions hereof.
3. Royalties on oil, gas and other substances produced and saved hereunder shall be paid by Lessee to Lessor as follows: (a) For oil and other liquid hydrocarbons separated
at Lessee's separator facilities, the royalty shall be twenty-two and one-half percent (22.5%) of such production, to be delivered at Lessees option to Lessor at the wellhead or
to Lessors credit at the oil purchaser's transportation facilities, provided that Lessee shall have the continuing right to purchase such production at the wellhead market price
then prevailing in the same field (or if there is no such price then prevailing in the same field, than in the nearest field in which there is such a prevailing price) for production
of similar grade and gravity; (b) for gas (including casinghead gas) and all other substances covered hereby, the royalty shall be twenty-two and one-half percent (22.5%) of
the proceeds realized by Lessee from the sale thereof, less a proportionate part of ad valorem taxes and production severance, or other excise taxes and the costs incurred by
Lessee in delivering, processing or otherwise marketing such gas or other substances, provided that Lessee shall have the continuing right to purchase such production at the
prevailing wellhead market price paid for production of similar quality in the same field (or if there is no such price then prevailing in the same field, then in the nearest field
in which there is such a prevailing price) pursuant to comparable purchase contracts entered into on the same or nearest preceding date as the date on which Lessee
commences its purchases hereunder; and (c) if at the end of the primary tern or any time thereafter one or more wells on the leased premises or lands pooled therewith are
capable of producing oil or gas or other substances covered hereby in paying quantities, but such well or wells are either shut in or production therefrom is not being sold by
Lcsscc, such well or wells shall nevertheless be deemed to be producing in paying quantities for the purpose of maintaining this lease. If for a period of 90 consecutive days
such well or wells are shut in or production therefrom is not being sold by Lessee, then Lessee shall pay shut-in royalty of one dollar per acre these covered by this lease, such
payment to be made to Lessor or to Lesson's credit in the depository designated below, on or before the end of said 90 -day period and thereafter on or before each anniversary
of the end of said 90 -day period while the well or wells are shut in or production therefrom is not being sold by Lessee; provided that if this lease is otherwise being
maintained by operations, or if production is being sold by Lessee from another well or wells on the leased premises or lands pooled therewith, no shut-in royalty shall be due
until the and of the 90 -day period next following cessation of such operations or production. Lessee's failure to properly pay shut-in royalty shall render Lessee liable for the
amount due, but shall not operate to terminate this lease.
4. All strut -in royalty payments under this lease shall be paid or tendered direct to Lessor at above address. All payments may be made by check and such payments to Lessor
deposited in die U.S. Mails in a stamped envelope addressed to the Lessor at the last address known to Lessee shall constitute proper payment.
5. If Lessee drills a well which is incapable of producing in paying quantities (hereinafter called "dry hole") on the leased premises or lands pooled therewith, or if all
production (whether or not in paying quantities) permanently ceases from any cause, including a revision of unit boundaries pursuant to the provisions of Paragraph 6 or the
action of any governmental authority, then in the event this lease is not otherwise being maintained in force it shall nevertheless remain in force ifLessee commences
operations for reworking an existing well or for drilling an additional well or for otherwise obtaining or restoring production on the leased premises or lands pooled therewith
within 90 days afler completion of operations on such dry hole or within 90 days after such cessation of all production. If at the end of the primary term, or at any time
thereafter, this lease is not otherwise being maintained in force but Lessee is then engaged in drilling, reworking or any other operations reasonably calculated to obtain or
restore production therefrom, this lease shall remain in force so long as any one or more of such operations are prosecuted with no cessation of more than 90 consecutive days,
and if any such operations result in the production of oil or gas or other substances covered hereby, as long thereafter as there is production in paying quantities from the
leased premises or lands pooled therewith. After completion of a well capable of producing in paying quantities hereunder, Lessee shall drill such additional wells on the
leased premises or lands pooled therewith as a reasonably prudent operator would drill under the same or similar circumstances to (a) develop the leased premises as to
formations then capable of producing in paying quantities on the leased premises or lands pooled therewith, or (b) to protect the leased premises from uncompensated drainage
by any well or wells located on other lands not pooled therewith. There shall be no covenant to drill exploratory wells or any additional wells except as expressly provided
herein.
6. Lessee shall have the right but not the obligation to pool all or any part of the leased premises or interest therein with any other lands or interests, as to any or all depths or
zeroes, and as to any or all substances covered by this lease, either before or after the commencement of production, whenever Lessee deems it necessary or proper to do so in
order to prudently develop or operate the leased premises, whether or not similar pooling authority exists with respect to such other lands or interests. The unit formed by such
pooling for an oil well which is not a horizontal completion shall not exceed 80 acres plus a maximum acreage tolerance of 10%, and for a gas well or a horizontal oil
completion shall not exceed 640 acres plus a maximum acreage tolerance of 10%; provided that a larger unit may be formed for an oil well or gas well or horizontal
completion to conform to any well spacing or density pattern that may be prescribed or permitted by any governmental authority having jurisdiction to do so. For the purpose
of the foregoing, the terms "oil well" and "gas well" shall have the meanings prescribed by applicable law or the appropriate government authority, or, if no definition is so
prescribed, 'oil well' means a well with an initial gas -oil ratio of less than 100,000 cubic feet per barrel, and "gas well" means a well with an initial gas -oil ratio of 100,000
cubic feet or more per barrel, based on a 24-hour production test conducted under normal producing conditions using standard lease separator facilities or equivalent testing
equipment; and the tern "horizontal completion" means a well in which there is a horizontal component in the gross completion reservoir or interval after the vertical
component. In exercising its pooling rights hereunder, Lessee shall file of record a written declaration describing the unit and stating the effective date of pooling. Production,
drilling or reworking operations anywhere on a unit which includes all or any part of the leased premises shall be treated as if it were production, drilling or reworking
operations on the leased premises, except that the production of which Lessor's royalty is calculated shall be that proportion of the total unit production which the net acreage
covered by this lease and included in the unit bears to the total gross acreage in the unit, but only to the extent such proportion of unit production is sold by Lessee. Pooling in
one or more instances shall not exaust Lessee's pooling rights hereunder, and Lessee shall have the recurring right but not the obligation to revise any unit formed hereunder
by expansion or contraction or both, either before or after commencement of production, in order to conform to the well spacing or density pattern prescribed or permitted by
the governmental authority having jurisdiction, or to conform to any productive acreage determination made by such governmental authority. In making such a revision,
Lessee shall file of record a written declaration describing the revised unit and stating the effective date of revision. To the extent that any portion of the leased premises is
included in or excluded from the unit by virtue of such revision, the proportion of unit production on which royalties are payable hereunder shall thereafter beadjusted
accordingly. In the absence of production in paying quantities from a unit, or upon permanent cessation thereof, Lessee may terminale the unit by filing of record a written
declaration describing the unit and stating the date of termination. Pooling hereunder shall not constitute a cross -conveyance of interests.
7. if Lessor owns less than the full rnineml estate in all or any part of the leased premises, the royalties and shut-in royalties payable hereunder for any well on any part of the
leased premises or lands pooled therewith shall be reduced to the proportion that Lessor's interest in such part of the leased premises bears to die full mineral estate in such
part of the leased premises.
8. The interest of either Lessor or Lessee hereunder may be assigned, devised or otherwise transferred in whole or in part, by area and/or by depth or zone, and the tights and
obligations of the parties hereunder shall extend to their respective heirs, devisees, executors, administrators, successors and assigns. No change in Lessor's ownership shall
have the effect of reducing the rights or enlarging the obligations of Lessee hereunder, and no change in ownership shall be binding on Lessee until 60 days after Lessen has
been famished the original or certified or duly authenticated copies of the documents establishing such change of ownership to the satisfaction of Lessee or until Lessor has
satisfied the notification requirements contained in Lessee's usual fain of division order. In the event of the death of any person entitled to shut-in royalties hereunder, Lessee
may pay or lender such shut-in royalties to the credit of decedent or decedent's estate in the depository designated above. If at any time two or more persons are entitled to
shut-in royalties hereunder, Lessee may pay or tender such shut-in royalties to such persons or to their credit in the depository, either jointly or separately in proportion to the
interest which each owns. if Lessee transfers its interest hereunder in whole or in part Lessee shall be relieved of all obligations thereafter arising with respect to the
transferred interest, and failure of the transferee to satisfy such obligations with respect to the transferred interest shall not affect the rights of Lessee with respect to any
interest not so transferred. If Lessee transfers a full or undivided interest in all or any portion of die area covered by finis lease, the obligation to pay or tendershut-in royalties
hereunder shall be divided between Lessee and the transferee in proportion to the net acreage interest in this lease then held by each.
9. Lessee may, at any time and from time to time, deliver to Lessor or file of record a written release of this lease as to a full or undivided interest in all or any portion of the
area covered by this lease or any depths or zones thereunder, and shall thereupon be relieved of all obligations thereafter arising with respect to the interest so released. If
Lessee releases all or an undivided interest in less than all of the area covered hereby, Lessee's obligation to pay or tender shut-in royalties shall be proportionately reduced in
accordance with the net acreage interest retained hereunder.
10. In exploring for, developing, producing and marketing oil, gas and other substances covered hereby on the leased premises or lands pooled or unitized therewith, in
primary and/or enhanced recovery, Lessee shall have the right of ingress and egress along with the right to conduct such operations on the leased premises as may be
reasonably necessary for such purposes, including but not limited to geophysical operations, the drilling of wells, and the construction and use of roads, canals, pipelines,
tanks, water wells, disposal wells, injection wells, pits, electric and telephone lines, power stations, and other facilities deemed necessary by Lessee to discover, produce, store,
treat and/or transport production. Lessee may use in such operations, free of cost, any oil, gas, water and/or other substances produced on the leased premises, except water
from Lessor's wells or ponds without Lessor's consent, which cannot be unreasonably withheld. In exploring, developing, producing or marketing from the leased premises or
lands pooled therewith, the ancillary rights granted herein shall apply (a) to the entire leased premises described in Paragraph 1 above, notwithstanding any partial release or
other partial termination of this lease, and (b) to any other lands in which Lessor now or hereafter has authority to grant such rights in the vicinity of the leased premises or
lands pooled therewith. When requested by Lessor in writing, Lessee shall bury its pipelines below ordinary plow depth on cultivated lands. No well shall be located less
than 200 feet from any house or barn now on the leased premises or other lands used by Lessee hereunder, without Lessors consent, and Lessee shall pay for damage caused
by its operations to buildings and other improvements now on the leased premises or such other lands, and to commercial timber and growing crops thereon. Lessee shall have
the right at any time to remove its fixtures, equipment and materials, including well casing, from the leased premises or such other lands during the term of this lease or within
a reasonable time thereafter. G
11. Lessees obligations under this lease, whether express or implied, shall be subject to all applicable laws, rules, regulations and orders of any governmental authority
having jurisdiction including restrictions on the drilling and production of wells, When drilling, reworking, �/"
production or other operations are prevented or delayed by such laws, rules, regulations or orders,
or by fire, flood, adverse weather conditions, war, sabotage, rebellion, insurrection, riot, strike or labor disputes, Q;A jwinebi{i!�►to-+
obtain a
this lease shall not terminate because of such prevention or delay, and at Lessees option, the period of such prevention or delay shall be added to the term hereof.
Lessee shall not be liable for breach of any express or implied covenants of this lease when drilling, production or other operations are so prevented, delayed or interrupted.
12. No litigation shall be initiated by Lessor with respect to any breach or default by Lessee hereunder, for a period of at least 90 days after Lessor has given Lessee written
notice fully describing the breach or default, and then only if Lessee fails to remedy the breach or default, within such period. In the event the matter is litigated and there is a
final judicial determination that a breach or default has occurred, this lease shall not be forfeited or cancelled in whole or in part unless Lessee is given a reasonable time after
said judicial determination to remedy the breach or default and Lessee fails to do so.
13. Lessor hereby warrants and agrees to defend title conveyed to Lessee hereunder, and agrees that Lessee at Lessee's option may pay and discharge any taxes, mortgages or
liens existing, levied or assessed on or against the leased premises. If Lesec exercises such option, Lessee shall be subrogated to the rights of the party to whom payment is
made and, in addition to its other rights, may reimburse itself out of any royalties or shut-in royalties otherwise payable to Lessor hereunder. In the event Lessee is made
aware of any claim inconsistent with Lessor's title, Lessee may suspend the payment of royalties and shut-in royalties hereunder, without interest, until Lessee has been
famished satisfactory evidence that such claim has been resolved.
SEE ADDENDUM ATTACHED HERETO AND MADE A PART HEREOF FOR ADDITIONAL TERMS AND PROVISIONS
IN WITNESS WHEREOF, this lease is executed to be effective as of the date first written above, but upon execution shall be binding on the signatory and the signatory's
heirs, devisees, executors, administrators, successors and assigns, whether or not this lease has been executed by all parties heremabove named as Lessor.
Lessor: The City of Lubbock Texas. a Municipal Corporation
By: �
TOM MARTIN
Tide: Mayor
CORPORATE ACKNOWLEDGMENT
STATE OF TEXAS
)SS
COUNTY OF LUBBOCK
The foregoing instrument was acknowledged before me this a day of Rarer , 2012, by
T� M i`C ar r' , Or (Office) of The City of Lubbock, Texas, a Municipal
Corporation, on behalf of the corporation.
bam-0 &Jm�
EUSASANCHEZ Notary Public, State of Texas 87
SWtes
aiToy
CW jr;w r, Expires 11-0 15
7.20
Resolution No. 2012-RO103
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON YOU MAY
REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS
INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR
SOCIAL SECURITY NUMBER OR YOUR DRIVERS LICENSE NUMBER.
MEMORANDUM OF OIL AND GAS LEASE
THE STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LUBBOCK §
That the undersigned, The City of Lubbock, Texas, a Municipal Corporation,
whose address is PO Box 15100, Lubbock, TX 79350, (herein collectively called "Lessor",
whether one or more) has executed and delivered to Four Sevens Exploration Co. , Ltd.,
herein called "Lessee", whose address is 777 Taylor St. , Suite 1090, Fort Worth,
Texas, 76102, an Oil and Gas Lease dated March 6, 2012 , and covering minerals
in 2,085.47 gross acres of land, whether more or less (+-) as situated in Lubbock County, Texas,
and being more described in the following:
640 acres, more or less, being all of Section No.2 , Block D-3 , Abstract No. 654, G.C.& S.F. Ry. Co. Survey and
Certificate No. 3/368, Lubbock County, Texas, and being described in that certain Warranty Deed dated May 22,
1942 from Allie Ebba Cockrell, individually and as Executrix of the Will and Estate of Florence Jones, Deceased,
joined by my husband Fred Cockrell to The City of Lubbock Texas, a municipal corporation, recorded in Volume
267, Page 206, of the records of Lubbock County, Texas.
640 acres, more or less, in Section 28, Block A, Abstract No. 685, Lubbock County, Texas.
433.25 acres, more or less, being part of Section 32, Block A, Abstract No. 684,
Lubbock County, Texas, described by metes and bounds in Warranty Deed dated May
27, 1942 from Allie E. Cockrell, et al, to The City of Lubbock recorded in Volume
267, Page 206, and Deed dated January 4, 1949 from U.S.A. to The City of Lubbock
recorded in Volume 383, Page 144, and Petition for Condemnation dated October 31,
1957 from the Lubbock District Court to The City of Lubbock recorded in Volume 673,
Page 495, and Warranty Deed dated May 31, 1973, from Grace Jones, et al, to The City
of Lubbock recorded in Volume 1350, Page 747, in the Deed Records, Lubbock County,
Texas.
19.72 acres, more or less, being part of the N/2 of Section 36, Block A, in the G.C. & S.F. Railway Co. Survey,
Abstract No.683, Certificate No. 2/253 and being described by metes and bounds description in that Deed dated
February 14, 1962, from the Board of Directors of The Texas A&M University Systems to City of Lubbock and
recorded in Volume 1366, Page 485, in the records of Lubbock County, Texas.
151.276 acres, more or less, being part of the SW/4 of Section 36, Block A, in the G.C. & S.F. Railway Co. Survey,
Abstract No.683, Certificate No. 2/253 and being described by metes and bounds description in two (2) Warranty
Deeds (1) dated March 26 1973, from Cleo Thiel and her husband Robert W. Thiel to City of Lubbock, a Home
Rule Municipal Corp. and recorded in Volume 1338, Page 223, (2) Warranty Deed dated March 26 1973, from
Cleobob, Incorporated, to City of Lubbock, a Home Rule Municipal Corp. and recorded in Volume 1338, Page 225,
of the records of Lubbock County, Texas.
160.00 acres more or less, being the SW/4 of Section 6, Block D-3, A-1299 and A-1300, D & W RR Co. Survey,
Lubbock County, Texas.
41.224 acres more or less, being part of Section 43, Block A, A-56, HE & WT RR Co. Survey, Lubbock County,
Texas, and being further described in Judgment dated November 29, 1971, between City of Lubbock vs. Arthur L.
Cone, et al, and being recorded in Volume 1288, Page 397, Deed Records, Lubbock County, Texas.
Whereas said Oil and Gas Lease provided for a "'Primary Term" of 3 years effective on the date
first written above. Duplicate copies of said lease are in the possession of Lessor's and Lessee where the
same may be examined by any person having a lawful right or legitimate interest therein.
Now therefore, for the consideration set forth in said lease, Lessor does hereby grant, lease and let
unto Lessee all of the rights as specified therein, to the above described properties.
This "Memorandum of Lease" shall be binding on all parties, their heirs, successors and Assigns.
LESSOR: The City of Lubbock, Texas, a Municipal Corporation
By:
TOM MARTIN
Title: Mayor
CORPORATE ACKNOWLEDGMENT
STATE OF TEXAS
)SS
COUNTY OF LUBBOCK
The foregoing instrument was acknowledged before me this �S-- day of iTurS� 2011, by
W)OYAin -"- (Office) of The City of Lubbock, Texas, a
Municipal Corporation, on behalf of the torporation.
Seal: Notary Public, State ofTexas
° ELISA SANCHEZ
No" Pu*, State of Texas
MyCorrs►>assian Expires 1"07.2015
Resolution No. 2012-R0103
Exhibit A
ADDENDUM
ATTACHED TO AND MADE A PART OF THAT CERTAIN OIL AND GAS LEASE
DATED March 6, 2012.
1. Minerals Covered. Oil and Gas Only: This lease covers only "oil and gas"
which term, as used herein means "only oil, gas and other related hydrocarbons, including sulfur
produced as a by-product of oil and or gas" and does not cover or include any other minerals,
including but not limited to coal, lignite or uranium. All other said minerals are excluded and are
reserved to Lessor.
2. Royalty. The royalty share for all oil and gas under this Lease shall be 25%.
Lessor's royalty shall never bear or be chargeable with, either directly or indirectly, any part of
the costs or expenses of production, gathering, dehydration, compression, transportation,
manufacturing, processing, treating, marketing, or depreciation of any plant or other facility or
facilities or equipment for processing or treating of the oil or gas produced from the Leased
Premises or any other costs of a similar nature. Gas shall be priced at the point of sale to a third
party and not at the well unless an arms length sale to a third party occurs at that point.
Upon written request and reasonable notice by Lessor, Lessee shall make available to Lessor or
Lessor's authorized representative for inspection and examination the books and accounts,
receipts, well records, and all contracts and other records pertaining to the production,
transportation, sale and marketing of the oil and gas produced on the Leased Premises which
relate to or have bearing on, in any manner, the royalty to be received by Lessor hereunder. Any
inspection or examination shall be done at Lessee's principal place of business during normal
working hours.
Any use of oil or gas produced from operations on or under the Leased Premises shall be
included in calculating revenue and payment of royalties from the well production.
Notwithstanding any other provision in this section, Lessee may reduce Lessor's royalty to
not less than 22.5% upon providing Lessor satisfactory evidence that, in order to secure an off
premise well site from which to produce oil or gas from the Leased Premises, Lessee was
obligated to grant an overriding royalty interest in oil or gas produced from the Leased Premises
to the surface owner at said off premise well site. In that event, and only in that event, Lessor's
royalty may be reduced by the amount of said overriding royalty interest, but in no event shall
such reduction exceed a 2.5% royalty interest. Lessor and Lessee acknowledge that "pad
sites" using current technology often host more than one well head. Therefore, Lessee agrees to
make best efforts to secure an off premise well site without the grant of an overriding royalty
interest. In the event such efforts are not successful, and only in that event, Lessee may reduce
the Lessor's royalty from the well in question to not less than 22.5% utilizing the calculation set
out in this paragraph.
Page 1
3. Primary Term Extension. Notwithstanding any provision herein to the contrary,
in order the Primary Term to be extended by Lessee, Lessee shall pay Lessor the amount of $350
per acre per year for such an extension. Lessee may opt to extend the Primary Term for two (2)
one-year periods.
4. Shut-in Royalty. While there is a gas well on this Lease or on lands pooled with
the Land capable of producing in paying quantities, but gas is not being sold, at the end of the
Primary Term or any time thereafter, Lessee shall pay or tender in advance an annual shut-in
royalty of $20,000 for each well from which gas is not being sold. Payment with respect to a
well will be due within 60 days after the well is shut-in and shall be proportionately reduced to
Lessor's percentage of acreage in the pooled unit. While shut-in royalty payments are timely and
properly paid, this Lease will be held as a producing lease.
5. Continuous Development.
(a) If, at the expiration of the Primary Term, oil or gas is not being produced from the Leased
Premises, but Lessee has commenced the drilling of a well on the Leased Premises, the Lease
will not terminate but will remain in effect for so long thereafter as operation are carried out with
due diligence with no cessation of more than 60 days, and if the operations result in the
production of oil or gas, the Lease shall remain in force as otherwise provided herein. For the
purposes of this Lease, the term "operations" means operations for any of the following:
drilling, testing, completing, reworking, recompleting, deepening, plugging back, or repairing of
a well in search for production of oil or gas.
(b) If this Lease is maintained beyond the expiration of the Primary Term by production or
otherwise, it will remain in force as to all acreage and depths as long as there is no lapse of more
than 150 days between the completion of one well and the commencement of the actual drilling
of another well. The commencement of actual drilling means the penetration of the surface with
a drilling rig capable of drilling to the anticipated total depth of the well. After a well is
commenced, drilling operations must continue in a good and workmanlike manner in a good
faith effort to reach the anticipated total depth with no cessation of operations for more than 60
consecutive days. A well will be deemed to have been completed on the date of the release of
the drilling rig from the drill site and any completion operations cease. The permitted time
between wells shall be cumulative so that if a well is commenced prior to the date it is required
to be commenced, the number of days prior to the date on which the well should have been
commenced shall be added to the time permitted for the next well.
(c) If at any time the maximum time for the commencement of the actual drilling of a well
expires without the commencement of the well, or upon the expiration of the Primary Term if the
Lease is not maintained by continuous drilling or any other provision contained herein, this
Lease will terminate except as to the Retained Tract (defined below) surrounding any well that is
then producing in paying quantities or deemed to be producing in paying quantities by virtue of
payment of shut-in royalties, and as to each Retained Tract, the Lease will then terminate as to
all depths 100 feet below the stratigraphic equivalent of the base of the deepest producing
formation on the Retained Tract. The Lease will be treated as a separate lease with respect to
each Retained Tract and will continue so long as production in paying quantities continued from
Page 2
the Retained Tract or the Lease is otherwise maintained. If production from a Retained Tract
ceases from any cause, this Lease will terminate as to that tract unless Lessee commences
operations for drilling or reworking on the tract within 60 days after the cessation of production
or this Lease is maintained by other provisions, in which case the Lease as to that Retained Tract
will continue in force as long as the operations are prosecuted with no cessation of more than 60
consecutive days, and if they result in production, so long thereafter as there is production from
the Retained Tract.
(d) As used in the Lease, the term "horizontal well" means a well that meets the definition of
a "horizontal drain hole well" under Statewide Rule 86 of the Railroad Commission of Texas,
and a "vertical well" is a well that is not a horizontal well. The land assigned to a well for the
purposes of this section is referred to as a "Retained Tract." Once Lessee concludes its
continuous drilling operations hereunder, each Retained Tract must include sufficient wells
drilled to hold the Retained Tract and the parties agree that the acreage earned by drilling a well
may not exceed the minimum size required to obtain a drilling permit under the well density
rules adopted by the Railroad Commission of Texas for the field, or if there are no field rules that
apply, the Retained Tract shall be limited to the smallest size required to obtain a drilling permit
under the statewide well density rules of the Railroad Commission of Texas. A Retained Tract
for a vertical well may not exceed 40 acres. If field rules are established later that permit
obtaining a drilling permit with less acreage, a Retained Tract for a vertical well may not exceed
the minimum size permitted. A Retained Tract for a horizontal well may include the minimum
acreage specified above for a vertical well plus the additional acreage listed in the tables in Rule
86 and must comply with the requirements of Rule 86 for a minimum permitted well density.
Each Retained Tract shall be designated in a shape that maximizes the number of possible
Retained Tracts on the Leased Premises.
(e) Within 60 days after the last to occur of the expiration of the Primary Term or the
continuous drilling program, Lessee must file in the county records and furnish to Lessor a
document designating each Retained Tract by metes and bounds description prepared by a
professional surveyor, specifying the retained depths thereunder, and releasing all other depths
and acreage. A gas well that becomes an oil well will hold only the acreage permitted for an oil
well, and Lessee must file a redesignation of the Retained Tract (containing metes and bounds
description prepared by a professional surveyor and specifying the retained depths thereunder) in
the Real Property Records of the county were the Land is located. If Lessee fails to file timely a
document required by this paragraph after Lessor has provided thirty (30) days prior written
notices, then Lessor may do so, and the filing will bind Lessee.
(f) Lessee shall drill as many horizontal wells from each drill site as is reasonably
practicable in accordance with good oilfield practices and taking into account all geological and
geophysical information know to Lessee. Each drill site should each be located in such a manner
as to facilitate the drilling of as many wells a possible from such drill site in order to minimize
the number of drill sites on lands pooled herewith.
6. Vertical Pugh Clause. Sixty (60) days after completion of a well, this lease
shall expire to all depths below the stratigraphic equivalent of 100 feet below the base of the
deepest producing formation, provided however, if Lessee is then engaged in drilling
Page 3
operations on the Leased Premises or on acreage pooled therewith, this lease shall remain in
full force and effect as to all depths so long as no more than one hundred fifty (150) days elapse
between the completion or abandonment of one well and the commencement of operations for
the drilling of another well.
7. Horizontal Pugh Clause. Notwithstanding any provision herein to the contrary,
upon the expiration of the primary term of this lease or upon the expiration of sixty (60) days
following the completion of the last well drilled on the leased premises or acreage pooled
therewith (whether completed as a well capable of production in paying quantities or as a dry
hole), whichever is the later date, this lease shall terminate as to any land not included in a
pooled unit, proration unit or other unit from which any well, located thereon at pooled
therewith, is producing or may be capable of producing in paying quantities, or upon which
drilling, reworking or other operations calculated to restore production are being pursued as
herein provided. After the expiration of the primary term of this lease, if production on any
pooled, proration or other unit permanently ceases from any cause either voluntary or
involuntary (and if this lease is not otherwise being maintained), this lease shall terminate as to
such unit unless Lessee within (60) days thereafter commences reworking operations or the
actual drilling of a new well thereon. In such event, this lease will continue in effect as to such
unit so long as such drilling or reworking is prosecuted with no cessation of such operations for
more than (60) consecutive days until production is restored.
8. Any lights used by the Lessee on airport property will be subject to the review
and approval of airport management prior to activation. All operations on airport property or
directly adjacent to airport property will first be coordinated with airport operations to assure
compliance with Federal Aviation Administration rules and regulations. Compliance with FAA
rules and regulations will be the sole responsibility of Lessee.
9. This Lease Agreement is entered into subject to that certain agricultural lease
agreement between the City of Lubbock and K. F. Thiel & Sons dated 9 June 2004 and any and
all extensions thereto. The Thiel Lease Agreement is attached hereto as Exhibit `B".
10. No Surface Drilling Use Clause. It is hereby agreed and understood that there
shall be no drilling activities on the surface of the Leased Premises without the prior written
permission from the surface owner of the applicable portion of the Leased Premises.
Notwithstanding the foregoing, this waiver of surface shall not be construed as a waiver of the
rights of Lessee to utilize the subsurface of the Leased Premises under this Lease, and Lessee
shall have the right to exploit, explore for, develop and produce oil, gas and other covered
minerals under this Lease from wells from surface locations off the Leased Premises, including
but not limited to, directional or horizontal drilling activity which comes under the surface of the
Leased Premises. This drilling surface waiver does not apply to any surface rights associated
with instruments other than this Lease.
11. No Warranty of Title. This Lease is made and entered into without any express
or implied warranty of title by, or recourse upon, Lessor(s) whatsoever, not even for the return of
the consideration paid heretofore or hereunder.
Page 4
12. Addendum Prevails. It is understood and agreed by all parties hereto that the
provisions of this Addendum supersede any provisions to the contrary in the printed lease hereof.
13. Offset Wells. For purposes of this Lease, an "offsetting well" is a well that is
producing oil or gas from adjacent or nearby land and is in reasonable probability draining the
Leased Premises. If an offsetting well is completed, Lessee must, within 120 days after the date
of first sales from the offsetting well, commence operations for the drilling of an offset well on
the Lease Premises and must diligently pursue those operations to the horizon in which the
offsetting well is producing, or at the option of Lessee: (i) execute and deliver to Lessor a release
in recordable form of the acreage nearest to the offsetting well; or (ii) pay Lessor a monthly
royalty equal to the royalty that would be payable under this Lease if the production from the
offsetting well had come from the Leased Premises. In the event acreage is released pursuant to
(i) above, the release will cover a tract of a size and shape that will permit the drilling of a well to
the producing formation and the creation of a proration unit surrounding the well in compliance
with the field rules for the field in which the offsetting well is located, but if there are no fields
rules, in compliance with the statewide rules of the Railroad Commission of Texas. A well
producing with perforations within 330 feet of the Leased Premises will be conclusively
presumed to be draining the Land.
14. No Warranties. Lessor makes no warranty of any kind with respect to, and has
no obligation to defend, title to the Land. If Lessor owns an interest in the Land less than the
entire fee simple estate, then the royalties payable hereunder will be reduced proportionately.
15. Attorney's Fees. In the event that Lessor is required to employ legal counsel for
the enforcement of any provision of this Lease and prevails, Lessor will be entitled to recover
from Lessee reasonable attorney's fees and expenses, including but not limited to expect witness
fees, incurred by Lessor.
16. Insurance. At all times while this Lease is in force, Lessee shall acquire and
maintain insurance covering all of its activities and operations hereunder, including any work
performed on its behalf by contractors, subcontractors, and others, naming Lessor as an
additional insured. The policies shall include coverage for comprehensive general liability, for
bodily injury and property damage, blowout and loss of well coverage, and coverage for any
damage to the environment, including coverage for the cost of clean up and surface remediation.
The coverage shall be in the minimum amount of $3,000,000. Lessee shall furnish a certificate
from the issuing insurance company or companies evidencing the coverage.
17. Indemnity. LESSEE, ITS SUCCESSORS AND ASSIGNS WILL
PROTECT, DEFEND, INDEMNIFY, REIMBURSE, AND HOLD HARMLESS, THE
LESSOR, ITS EMPLOYEES, SURFACE TENANTS, AGENTS, SUCCESSORS,
ASSIGNS, HEIRS, DEVISEES, AND PERSONAL REPRESENTATIVES
(COLLECTIVELY "LESSOR INDEMNITEES") FROM AND AGAINST ALL
ATTORNEYS' FEES, CAUSES OF ACTION, CLAIMS, COSTS, COURT COSTS,
DAMAGES, DEMANDS, EXPENSES, EXPERT FEES, JUDGMENTS, PENALTIES,
AND SUITS OF EVERY KIND OR CHARACTER (COLLECTIVELY "CLAIMS"), AND
WHETHER IN CONTRACT, IN TORT OR EXISTING AT COMMON LAW, OR BY
Page 5
VIRTUE OF ANY STATUTE, REGULATION OR ORDINANCE, ARISING OUT OF
ANY ACT WHICH MAY HEREINAFTER TRANSPIRE FROM ANY ACTIVITY
EXPRESSLY OR IMPLIEDLY AUTHORIZED OR REQUIRED BY THIS
AGREEMENT WHETHER PERFORMED BY THE LESSEE OR THOSE HAVING A
CONTRACTUAL RELATIONSHIP WITH LESSEE EXCEPT TO THE EXTENT THAT
SUCH CLAIMS RESULT FROM LESSOR INDEMNITEES' NEGLIGENCE, GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. FOR PURPOSES OF THE
INDEMNITY PROVISIONS HEREOF, ANY ACTS OR OMISSIONS OF LESSEE, OR
BY EMPLOYEES, AGENTS, ASSIGNEES, SUCCESSORS, GUESTS, INVITEES,
CONTRACTORS, OR SUBCONTRACTORS OF LESSEE OR ACTIONS OF ANY
OTHER PERSONS FOR OR ON BEHALF OF LESSEE (WHETHER OR NOT THEY
ARE NEGLIGENT, INTENTIONAL, WILLFUL, OR UNLAWFUL), SHALL BE
STRICTLY ATTRIBUTABLE TO LESSEE AND AS SUCH SHALL FALL WITHIN
THE SCOPE OF LESSEES OBLIGATION IN THIS SUBPARAGRAPH TO
INDEMNIFY LESSOR. THE INDEMNITY OBLIGATIONS OF THIS PARAGRAPH
SHALL APPLY TO ANY ATTORNEYS' FEES, COURT COSTS OR OTHER
EXPENSES LESSOR INCURS IN THE SUCESSFUL DEFENSE OF ANY ACTION OR
CLAIM BROUGHT AGAINST LESSOR WHICH ARISES FROM OR RELATES TO
THE ACTIVITY OF LESSEE EXPRESSLY OR IMPLIEDLY AUTHORIZED OR
REQUIRED BY THIS AGREEMENT.
18. Compliance with Environmental Laws and Regulations. Lessee, its
successors and assigns, by its acceptance of this Lease, hereby agrees to comply with all
applicable laws, rules and regulations and hereby assumes full responsibility for, and agrees to
indemnify, defend and hold harmless, Lessor from and against any loss, liability, claim, fine,
expense cost (including attorneys fees and expenses) and cause of action caused by or arising out
of the violation (or defense of the alleged violation) of any federal, state or local laws, rules or
regulations applicable to any waste material, drilling matter fluid or any hazardous substances
released or caused to be released by Lessee or Lessee's agents, or independent contractors, or
any other operations on the Leased Premises hereunder into the atmosphere or into or upon the
land or any water course or body of water, including ground water, or subsurface water. Further,
Lessee covenants and agrees to accept total and sole responsibility for the preservation of all
animal and plant life existing under the protection of the Endangered Species Act; and to comply
with all governmental laws and edicts relating to any other and all environmental cares and
concerns. Lessee further acknowledges and agrees that, as between Lessor and Lessee, it is also
solely liable for violations of environmental laws, rulings and edicts by contractors, crews,
service companies, transportation companies, and any other company or individual who travels
or works on, over or across the Leased Premises while engaged in pursuits that are, in any way,
connected with the Lessee's exploration for oil and gas. Additionally, upon receiving any notice
regarding any environmental, pollution or contamination problem or violation of any law, rule or
regulation, Lessee will forward a copy to Lessor by certified mail within thirty (30) days. This
provision and its indemnities shall survive the termination of this Lease, and shall enure to the
successors, heirs and assigns of Lessor and Lessee.
Lessee agrees to pay the cost of water quality testing, as follows: (1) an initial baseline water
quality test to be conducted no more than 60 days before Lessee commences actual drilling and
Page 6
(2) re -testing 1 year following completion of the first well, and (3) repeat testing every three
years thereafter, as long as this lease remains in effect. Said testing shall be conducted at each
mutually agreeable water wells on, the Leased Premises. The testing shall be done by a qualified
professional water testing firm selected jointly by the Lessee and Lessor. Testing will include,
but not be limited to, testing for gas, minerals, metals, volatile organic compounds (VOC's), and
semi -volatile organic compounds (SVOC's).
19. Miscellaneous Provisions.
(a) In the event this Lease terminates for any reason as to all or any part of the Land, Lessee
shall, within 60 days thereafter, deliver to Lessor a recordable release covering all of the Land or
that portion of the Land as to which this Lease terminated.
(b) Nothing in this Lease negates any implied covenants imposed upon Lessee under
applicable law.
(c) Lessee will conduct all operations hereunder in compliance with the rules of the Railroad
Commission of Texas and federal and state environmental laws and regulations and municipal
ordinances. Upon written request of Lessor, Lessee shall furnish to Lessor copies of applications
to drill, daily drilling reports, well tests, completion reports, plugging records, and production
reports. Lessee will divulge to Lessor's Representative correct information as requested in
writing by Lessor as to each well, the production therefrom, and such non-proprietary technical
information as Lessee may acquire; however, Lessor and Lessor's Representative must keep all
such information confidential and may not divulge same to any third party. Lessor's
Representative has the right to be present when wells or tanks are gauged and production
metered and upon written request has the right to examine all run tickets and to have full
information as to production and runs and to received copies of all run tickets.
(d) The term "production" means production in paying quantities. Lessee's obligations to
pay money under this Lease are to be performed in Lubbock County, Texas. Paragraph headings
are used in this Lease for convenience only and are not to be considered in the interpretation or
construction of this Lease. The execution or ratification by Lessor of any division order, gas
contract, or any other documents will not alter any provision of this Lease unless the intent to do
so is expressly stated in the document. Under no circumstances may Lessee, its agents,
employees, or contractors bring firearms or dogs or other animals on the Leased Premises or hunt
or fish on the Leased Premises. Upon Lessor's written request, Lessee agrees to furnish to
Lessor a copy of each title opinion or report obtained by Lessee that covers all or any part of the
Leased Premises together with a copy of each title curative document obtained by Lessee.
(e) Any compressors used in connection with this Lease or the Leased Premises herewith
shall be equipped with the latest technology in noise suppression and muffling devices. Every
five years if requested by Lessor, Lessee shall be required to install quieter compressors if such
are available for sale and distribution.
(f) Upon Lessor's written request and reasonable notice, Lessor shall have the right to
inspect, during normal business hours, all records of Lessee relating to this Lease, operations
Page 7
conducted on the Leased Premises, the sale and marketing of production from the Leased
Premises, and the payment of royalties, including the right to audit Lessee's books insofar as
they relate to the foregoing. All such information is confidential and shall not be further
disclosed by Lessor or Lessor's Representative without Lessee's prior written consent.
(g) Lessor may not own all of the minerals underlying the Land. Lessee agrees that it will
not drill, conduct operations or participate in drilling or operations on the Land or Leased
Premises which are not in compliance with the terms and requirements of this Lease by claiming
authority under the lease or leases covering the outstanding interest.
(h) Choice of Law. This agreement will be construed under the laws of the State of Texas,
without regard to choice -of -law rules of any jurisdiction. Venue is in Lubbock County, Texas.
(i) Lessee, for itself and its successors and assigns, hereby waives any right of eminent
domain possessed by Lessee or any Affiliate of Lessee to acquire any right of way or easement
for the transportation of gas, oil or any other substance.
0) Groundwater Protection. Any oil or gas wells drilled by Lessee shall be drilled in
compliance with the surface casing requirements imposed by the State of Texas for
groundwater protection and Lessee shall install such surface casing in the required manner in
order to insure the protection of all water bearing formations in and under the Land. Further,
Lessee agrees to conduct water quality testing on any water wells available on lands pooled
with the Land, as follows: (1) an initial baseline water quality test to be conducted no more than
60 days before Lessee commences actual drilling for the first well from Lessee's drillsite
located on lands to be pooled with the Land, and (2) re -testing 1 year following completion
of the first well, and (3) repeat testing every three years thereafter, as long as this Lease
remains in effect. The testing shall be done by a qualified professional water testing firm and
will include, but not be limited to, testing for gas, minerals, metals, volatile organic
compounds (VOC's), and semi- volatile organic compounds (SVOCs).
(k) Visual Appearance. Lessee shall maintain any drillsites within 1,000 feet of the
Land in a neat and orderly fashion. For safety and appearance, Lessee shall construct and
install fencing around each drillsite and related facilities in a visually appealing manner, in an
effort to maintain the continuity of the surrounding area, and shall maintain the fences in a
good state of repair. Upon conclusion of Lessee's drilling and completion operations, Lessee
shall restore that portion of the drillsite not being utilized by Lessee for producing operations as
nearly as is reasonably practicable to its original state. In addition, Lessee shall maintain the
drillsite in a manner whereby it shall be free of noxious vegetation and debris resulting from
Lessee's operations. Upon lease expiration, Lessee shall remove all of Lessee's equipment and
restore the surface of the ground on the drillsite as nearly as is reasonably practicable to its
original state.
(1) Mud Pits. Lessee shall locate no mud pits on the Land.
(m) Remedial Action. Any remedial action or activities required of Lessee under this
Lease shall be addressed and the remedial work commenced within the earlier of twenty (20)
Page 8
days or a reasonable amount of time under the circumstances, dependent on the nature of the
remedial work, and must be diligently pursued until fully performed.
(n) Environmental Safeguards. Lessee shall employ such measures as will reduce the impact
of its operations upon improvements, vegetation and habitat on the Leased Premises. Lessee
shall use reasonable care and safeguards in conducting its operations to prevent contamination or
pollution from any waste, pollutant, or contaminant to any environmental medium, including
soil, surface waters, groundwater, sediments, surface or subsurface strata, ambient air, or any
other environmental medium in, on, or under the Leased Premises. Lessee shall promptly
remediate any condition which is hazardous to humans or wildlife resulting from Lessee's
operations.
(o) Visual Appearance. Lessee shall not permit the disposal of trash, storage of used
equipment or other such materials on the well site and shall maintain the well site in a neat and
orderly fashion. Lessee shall construct or improve necessary lease roads as all weather roads and
shall maintain such roads in a good state of condition and repair in order to prevent excess dust
and erosion and maintain the continuity of the surrounding environment. For safety and
appearance, Lessee shall install appropriate fences around each well and related facilities in a
visually appealing manner in an effort to maintain the continuity of the surrounding area, and
shall maintain the fences in a good state of repair. Upon conclusion of Lessee's drilling and
completion operations, Lessee shall restore that portion of the well site not being utilized by
Lessee for producing operations as nearly as is reasonably practicable to its original state. In
addition, Lessee shall maintain the well site in a manner whereby it shall be free of noxious
vegetation and debris resulting from Lessee's operations. Upon lease expiration, Lessee shall
remove all of Lessee's equipment and restore the surface of the ground as nearly as is reasonably
practicable to its original state.
(p) Noise Abatement and Safety. Lessee shall utilize modern equipment with appropriate
safeguards in its drilling, completion and producing operations. Whenever possible, Lessee shall
install sound barriers and utilize hospital grade mufflers on compressors to reduce noise levels
and emissions while conducting its operations.
(q) Seismic Operations. Lessee shall pay for all damages incurred to the Land which result
from its seismic operations. Other than seismic operations as provided herein, by execution and
delivery of this Lease, Lessee does not otherwise obtain the right to conduct exploration,
excavation or drilling operations from or upon the surface of any portion of the Land.
(r) Local Ordinances. In conducting its operations hereunder, Lessee shall comply with all
present and future ordinances, rule or regulations imposed by the City of Lubbock or other
governmental agency. For purposes of this Lease, the Leased Premises shall be deemed to be
wholly inside the corporate boundaries of the City of Lubbock, and Lessee agrees to comply with
City of Lubbock Ordinances Article 8.07 for the entirety of the Leased Premises.
(s) This Lease does not carry with it the right for Lessee to use ground water, fresh, brackish
or otherwise, or surface water, from the Leased Premises. The parties are in discussions
regarding the sale by Lessor to Lessee of certain municipal water treatment plant discharge water
Page 9
for use Lessee's operations. Regardless of the outcome of those negotiations, this Lease carries
with it no express or implied right to utilize surface water or ground water from the Leased
Premises and any indication to the contrary is hereby expressly revoked.
(t) Counterpart Language. This Lease may be executed in counterparts.
Executed on the date first written above.
Lessor:
THE CITY OF LUBBOCK, TEXAS,
A MUNICIPAL CORPORATION
Tom Martin, Mayor
ATTEST:
Web ca Garza, City Secreta
APPROVED AS TO CONTENT:
'PROVED AS TO FORM:
Page 10
No Text
Lessee:
Four SEVENS EXPLORATION Co., LTD.
y: Brad Ingham
Title: Partner
STATE OF TEXAS §
COUNTY OF LUBBOCK §
This instrument was acknowledged before me on the (P day of March ,
2012, by Tom Martin, Mayor, The City of Lubbock, Texas, a Municipal Corporation.
ELISA SANCHEZ
Notary Public, State of Texas
OF My Cm*sion Expires 147.2015
STATE OF TEXAS §
.1 §
COUNTY OF §
Notary Public, State of Texas
This instrument was acknowledged before me on the 3 day of /"�4 P-(-1 ,
2012, by Brad Cunningham, Partner, Four Sevens Exploration Co., Ltd.
E
dacobe
. dc, f31 o anstasNo Public, State f exas
runlaasan Expires�'�of� 2015
Page 11
Resolution No. 2012-RO103
Nov -20-2011 �11:44am From- T-088 P.001 F-334
Vr
��.�•�'�-./ •.�; Resolution No. 2004—BD263
J=e 9, 2004
soItem leo . 29
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL, OF TIM 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 an Agricultural Lease
Agreement with K. F. Thiel & Sons at Lubbock International Airport, and all related
documents, Said Agreement is attached hereto and incorporated in this Resolution as if
frilly set forth herein and shall be included in the minutes of the Council.
Passed by the City Council this 9th day of
ATTEST:
Reb6cca Garza, City Secretary
AS TO CONTENT:
of Aviation
APPROVED AS TO FORM:
Linda L. Chamales, Supervising Attorney
Office Practice Section
-WC4alta&d3&=d0U1R92-A9 Lem-lbW
May 13, 2004
EXHIBIT
i
Nov -29-2011 11:44am From -
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
T-099 P.002 F-334
KNOW ALL MEN BY THESE PRESENTS;
AIRPORT AGRICULTURE LEASE AGREEAfENT
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 IC F. THIEL a SONS, (referred to herein as Lessee).
WIMSSTH:
WlHMAS, 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 owns the following described tracts of land comprising a
part of the Lubbock International Airport property, and has determined that said land
should be put to a productive use; and
WHEREAS, 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 the Lessee herein and all other persons from erecting, or permitting to be erected,
any building or other structure on Airport property which, in the opinion of the Lessor,
would limit the usefiilness of the Airport or constitute a hazard to aircraft, 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
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:
Nov -20-2011 11:45am From- T-096 P.003/018 F-334
ARTICLE ONE
DEAUSE OF LEASED )PREIV>CXSES
)LEASED PREMSES. Lessor does hereby lease unto Lessee the premises described
and being:
Farm #4187 — 756.9 acres
The acreage and location of land covered by this Lease can be changed as needed due to
future land acquisition and development by an amendment including the changes signed
by the Director of Aviation and the Lessee. Such amendments shall be kept on file at the
office of the Director of Aviation.
PURPOSE AND PRY'VI)<.EGES. Lessee shall use the leased premises solely for the
purpose of planting, cultivating and harvesting crops of such diversification and acreage
as may be agreed upon by the Director of Aviation and the Lessee prior to each planting
season, or at such times during the year as may be necessary to determine what crops
shall be planted. Such agreement shall be obtained before cultivation is commenced.
Nothing in this Agreement shall be consuued as granting to Lessee any right to operate
any other business or concession on the Airport premises except as enumerated herein.
ARTICLE TWO
TER
'T'ERM. The term of this Agreement shall be for a one (1) year period, commencing on
the 1" day of June, 2004, and ending on the last day of May, 2005.
This Lease shall automatically be extended for nine (9) additional one (1) year terms
unless terminated by Lessee or Lessor with sixty (60) days written notice.
K. F. Thiel & Sons
2
Nov -20-2011 11:45am From -
ARTICLE THREE
RENTALS AND FEES
T-080 P-004/016 F-334
RENTAL. In consideration of the rights and privileges herein granted, Lessee shall pay
to the Lessor in accordance with the following schedule:
A. One-third (1/3) of all grain produced.
B. One-fourth (1/4) of all cotton produced.
C. One-third (1/3) of all Government payments for grain acreage diverted in
accordance with Government conservation programs or other Government
Programs.
D. One-fourth (1/4) of all Government payments for cotton acreage diverted
in accordance with Government conservation programs or other
Government Programs,
E. Cash rent on other crops as may be negotiated from time to time with the
Director of Aviation, conunitted to writing and signed by both Lessee and
the Director of Aviation.
Lessee shall deliver to the Lessor at the cotton grin, free of any charges, one-fourth
(1/4) of all lint cotton in the bale, together with the seed therefrom, and shall deliver to
the said Lessor at the Lessor -designated elevator one-third (1/3) of all grain, feed -stuff or
other crop grown on said land; provided, however, that if cotton is sold as ginned,
settlement for cotton and cotton seed shall be promptly made at the Airport on the same
day as the same is sold, or as soon as practicable thereafter.
CROP FERTILIZATION COSTS. The parties hereto mutually agree that fertilization
of farm land is and will be mutually beneficial and should be undertaken as warranted.
The Lessor agrees to pay one-fourth (1/4) of any agreed fertilizing program costs on
cotton crops and one-third (1/3) of any agreed fertilizing program costs on all other crops.
The patties agree that a letter agreement outlining the fertilizing program and its
maximum monetary limitations shall be executed annually by Lessee and the Director of
Aviation prior to commencing any fertilizing operations. The parties further agree that
the Lessor's share of agreed fertilization program costs shall be deducted from rentals
owed by Lessee to the Lessor in each and every year throughout the term of this Lease.
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ARTICLE FOYER
RIGHTS RESERVED TO LESSOR
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.
TEVIE 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.
DEVELOPMENT QF AIRPORT. All rights, privileges or interests acquired herein by
the Lessee or other persons, at the option of the Lessor, following written notice of thirty
(30) days, may be suspended or terminated, if such suspension or termination is found by
the Lessor, acting in good faith, to be necessary for the development of the Airport, or for
the development or promotion of aeronautical operations.
LESSOR'S RIGHT TO PREMISES. Lessor reserves the right to go upon said
premises at any time and to survey, lay off contour lines, build terraces and drill wells,
construct and maintain water and other utility lines, and to make any improvements it
chooses, and should Lessee fail or refuse to properly tend, cultivate and harvest the crops
on said land, Lessor shall have the right to enter upon said land and hire sufficient labor
for that purpose, the cost of which shall be repaid to Lessor out of the portion of the crops
belonging to Lessee.
It is understood that this Lease is made subject to all existing easements and all
rights under mineral deeds and leases heretofore granted or assigned and recorded in the
Real Property Records of Lubbock County, Texas, and subject to the right of Lessor to
develop and explore for oil and gas and other minerals on said land; and such rights and
the right of ingress and egress over and upon said lands are herein expressly reserved to
Lessor, its agents, successors and assigns.
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ARTICLE FIVE
BIGHTS & LBUTATIONS OF LESSEE
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.
LAND WORK. Lessee agrees to faithfully and promptly in a prudent farmer -like
manner, at the seasonable time therefore, break, prepare and plant the cultivated land
upon such premises and shall, during the growing season, cultivate and work the crops so
planted at all times when necessary, hiring all necessary labor and supplying all necessary
materials to keep all the growing crops free from damage from weeds and grass, and to
chop all cotton planted on said land, and shall gather, harvest and market said crops.
Lessee agrees to provide and pay all costs of insecticides, desiccants and defoliation.
Lessee agrees that none of the tillable land will be allowed to lie out or be taken
out of production without the written consent bf the Director of Aviation.
Lessee agrees that if he, for any reason, Mils to plant any crop or crops, in due
time and season, or if planted or replanted and the crop be destroyed by the elements, or
he otherwise fails to develop a stand which could be reasonable expected to mature into a
profitable crop, such acreage shall revert to Lessor absolutely, unless Lessee notifies the
Director of Aviation in writing as soon as such condition reasonable and be determined,
and obtains his written consent to plant such acreage in such crops as may be mutually
agreed upon.
Lessee agrees that during the time this Agreement is in force, they will at all times
and in all seasons so cultivate all of said land, whether planted or not, so as to minimize
the blowing of top soil, sand and dust from said lands on to the landing strip areas and
taxiways of the Airport
WATER WELLS. Lessee shall have and is hereby given the right to use the seven (7)
existing Lessor -owned irrigation water wells on the premises, but Lessee shall provide
the pumps and motors for the operation of said wells. Lessee may drill additional water
wells on the land for the limited purpose of irrigating crops grown thereon, and it is
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strictly understood that said wells shall be drilled at locations designated by the Director
of Aviation and without cost to the Lessor, and that all wells drilled on said land shall be
the property of the Lessor. All motors and pumps owned by Lessee may be removed by
Lessee at the expiration of the agreement. Lessee shall cap the wells if the motors and
pumps are removed. if the motors and pumps are left on the premises thirty (30) days
from the date of termination of this agreement, they shall be deemed abandoned and will
become the property of the Lessor.
WEEDS AND GRASS. Lessee agrees to keep down all noxious weeds and grasses and
prevent their seeding and spreading with the same precaution that any prudent farmer
would exercise in the care of his own field, and to allow no volunteer crop of any kind to
mature on said land.
LIVESTOCK. Lessee agrees that no livestock will be on the leased premises.
LAST YEAR OF LEASE. Lessee agrees that as the crops are gathered from any of said
land during the last year of this Lease, Lessee will surrender possession of such portions
thereof; so that Lessor or any future tenant may enter upon said land and prepare it for
cultivation for the following year; and that no crops wluch would not ordinarily be
harvested before the termination of the last year of this Lease shall be planted without the
written consent of the Director of Aviation, and any crops growing on said premises in
violation of this provision shall revert to Lessor as its absolute property, together with
any plowing or work done by Lessee without such written consent.
fWROVEMEEN'x'S ON PRENHSES. Lessee'agrees to keep all fences, buildings and
other improvements in as good condition as they are in at the time of entry onto the
leased premises, the usual wear and tear and injury or damage by fire not the result of the
negligence of Lessee or agents and the elements or acts of God excepted. If the buildings
or other improvements on the land and premises herein leased are destroyed or so
damaged that they cannot be repaired except by substantially rebuilding them, Lessor
shall be under no obligation to rebuild or repair said buildings or improvements. No
alterations in the buildings or improvements shall be made and no substantial
improvements shall be plated on the premises by Lessee without the written consent of
the Director of Aviation, and both parties herein agree that any improvements placed
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thereon contrary hereto shall become the property of the Lessor and shall not be removed
by Lessee, in whole or in part.
RECORDS. Lessee agrees to keep adequate records and books of account, to be open at
all reasonable times for inspection by the Director of Aviation and all other duly
authorized agents of the Lessor, and to annually render to the Lessor a satisfactory
written account showing the total number of bales of cotton produced from said land
and/or the total number of applicable units of other crops produced therefrom, and the
sales price thereof.
ARTICLE SIX
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
automobile liability resulting from Lessee's business activities at the Airport. Lessor
may review and adjust the insurance limits in order to reflect reasonable coverage as
necessary.
Farm Gencral Liability Insurance — Lessee shall have Farm General Liability
Insurance with limits of $300,000 combined single limit iu the aggregate and per
occurrence,
Comprehensive Automobfde Liability Insurance — The Lessee shall have
Comprehensive Automobile Liability Insurance, with limits of not less than
bodily injury/property damage $300,000 combined single limit, to include all
owned and nonowned vehicles, including employer's nonownership liability hired
and noaowned vehicles.
The above-mentioned liability policies shall all include a waiver of subrogation and name
Lessor as an additional insured. 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 insurer shall notify the Director of Aviation of any
alteration, renewal or cancellation, and remain in full force and effect until at least thirty
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(30) days after such notice of alteration, renewal or cancellation is received by the
Director of Aviation.
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 therefore. Lessee shall indemnify and hold
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. 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
Indemnification — Environmental Harm. V46out limiting any provisions of this
Agreement, Lessee shall also defend, indemnify and hold Lessor and its respective
officers, employees, elected officials and agents harmless from and against all suits,
actions, claims, demands penalties, fines liabilities, settlements, damages, costs and
expenses (including but not limited to reasonable attorney's and consultant's fees, court
costs and litigation expenses) of whatever kind or nature, known or unknown, contingent
or otherwise, brought against Lessor arising out of or in any way related to:
1. Any actual, threatened or alleged contamination by hazardous substances of the
Premises or contamination by hazardous substances of the Airport by Lessee or its
agents;
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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.
ARTICLE SEVEN
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 small be cause for immediate
termination of this Agreement by Lessor.
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.
The taxiways, runways and adjacent -safety areas of the Airport shall not be used
by the Lessee or any agent, servant or employee of the Lessee as a passage or roadway
for any tractor, plow, implement or other vehicle of any character, and Lessee shall not
otherwise enter in or upon these areas or park any equipment or vehicle upon said areas.
No irrigation ditch shall be placed in such close proximity to a taxiway, runway or
safety area on the Airport so that the foundations thereof or surface may be flooded or
weakened by water seepage, and no irrigation ditch shall be constructed at any location
unless expressly approved by the Director of Aviation.
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NON -DIS ON 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.
FEES, TAXES, AND PERMITS. Lessee shall pay for all licenses, permits, clearances,
rights-of-way and other matters necessary to conduct business. Lessee shall pay
promptly when due all fees, taxes and charge's' assessed under State, local or Federal
j statutes or ordinances insofar as they are applicable. 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.
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 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
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 remains 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
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,
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provided however, that any trade fixtures installed by Lessee may be removed by Lessee
at its expense.
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.
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.
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 Director of Aviation. No such assignment
or subletting shall affect Lessee's obligations to make all required rental payments
hereunder.
ABANDONMENT. Should Lessee abandon said premises, or sell or attempt to sell any
part of the crops before they are matured or harvested, all of Lessee's interest in all said
crops shall be immediately forfeited to Lessor, and Lessor shall have the right to enter
upon and take possession of said premises.
EXCLUSIVITY. Lessee's right to conduct business at the Airport shall be
nonexclusive.
WAIVER. The failure of Lessor to insist in any one or more instance upon performance
of any of the terms, covenants or conditions of this Lease shall not be construed as a
waiver or relinquishment of the future performance of any such terms, covenants or
conditions, and Lessee's obligation with respect to such flmrre 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.
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
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leased shall remain the sole property of Lessor. Lessor grants Lessee a leasehold interest
by and through this Agreement.
STORED CONTENTS. Lessee agrees to limit the outside storage of any and all
materials, components, assemblies and repaired and manufactured products to the area on
the leased premises and to control the growth of vegetation and weeds on the leased
premises.
ARTICLE EIGHT
TERNMATION
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 or give Lessee any rights under this
Agreement in or to the premises.
Lessee agrees to give peaceful possession of said property at the termination of
this Lease in as good condition as reasonable use and wear will permit, it being the
absolute intention of the parties hereto that this Lease shall expire upon the date above
determined.
This Agreement is subject to termination for the reason set forth below, provided
that thirty (30) days written notice is given to the Lessee. In the event Lessee fails or
refuses to keep and perform any covenant or condition of this Lease in the time and
manner herein stated, the Director of Aviation shall have the right, to declare this
Agreement null and void and enter and take pgssession of said premises without being
deemed guilty of trespass and without prejudice to any other remedy the Lessor may have
for the collection of rents or the enforcement of this Lease.
In case of Lessor's sale of said premises during the tenancy by Lessee thereof to a
purchaser who desires possession, Lessee agrees to surrender the same at once upon
receipt by him of the actual present value of the growing crops, and the refund of the pro-
rate part of the cash payment for grass land, if any, according to the calendar year that has
passed, such value to be determined by Lessee and the Director of Aviation, if they
cannot agree, by three disinterested parties, one to be selected by the Director of
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Aviation, one by Lessee and the two to choose a third, and their decision as to value shall
be binding.
ARTICLE NINE
MISCELLANEOUS PROVISIONS
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 K.F. Thiel 8a
Sons, Route 3, Box 214, Lubbock, Texas 79403.
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.
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 He exclusively in Lubbock County, Texas.
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
PRIOR AGREEMENTS. Both parties hereby agree that this instrument constitutes the
final Agreement to 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.
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.
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EXECUTED this 9th day of Jame . 2004.
LESSOR:
CTI
M
AT___--
Rebecca Garza, City Secretary
AP VED AS TO,C TENT:
J es W. Loomis, Director of Aviation
APPROVED AS TO FORM:
LESSEE:
K. F. THIEL & SONS
BY��
Linda Chamales, Supervising Attorney -Office Practice
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No Text