HomeMy WebLinkAboutResolution - 2017-R0111 - N50SQ, LLC - 03/23/2017Resolution No.2017-R0111
Item No.6.7
March 23,2017
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for
and on behalf of the City of Lubbock, a Lease Agreement by and between the City of Lubbock
and N50SQ, LLC of Lubbock, Texas, and related documents. Said Lease Agreement is attached
hereto and incorporated in this resolution as if fully set forth herein and shall be included in the
minutes of the City Council.
Passed by the City Council on March 23, 2017 .
ATTEST:
>iW^
Rebecca Garza,City Secretar
APPROVED AS TO CONTENT:
Kelly Campbell,Director of;of Aviation
APPR
ccdocs/RES.Agrmt-N50SQ,LLC
3-6-17
DANIEL M.POPE,MAYOR
Resolution No. 2017-RO I I I
STATE OF TEXAS §
CITY OF LUBBOCK
LEASE AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
THIS LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered
into by the CITY OF LUBBOCK (referred to herein as "Lessor"), a Home Rule Municipality of
Lubbock County, Texas, and N50SQ, LLC (referred to herein as "Lessee").
WITNESSETH
WHEREAS, Lessor owns, controls and operates the Lubbock Preston Smith International
Airport (referred to herein as Airport), situated at Lubbock, Lubbock County, Texas, and has the
authority to grant certain rights and privileges with respect thereto, including those hereinafter set forth;
and
WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to lease
onto Lessee the ground area described herein, together with certain privileges, rights, uses and interests
therein, as hereinafter set forth; and
WHEREAS, Lessee intends to utilize the premises herein for the storage of personal aircraft; and
WHEREAS, Lessee has indicated a willingness and an ability to properly keep, maintain, and
improve said premises in accordance with standards established by Lessor, and
NOW THEREFORE, for and in consideration of the mutual promises, covenants, terms, and
conditions, both general and special, as hereinafter set forth, Lessor hereby grants to Lessee the rights
and privileges hereinafter described; Lessee agrees to accept the duties, responsibilities, and obligations
as hereinafter set forth; and the parties hereto, for themselves, their successors, and assigns, agree as
follows:
ARTICLE ONE
DEMISE OF LEASED PREMISES
1.01 LEASED PREMISES
For and in consideration of the terms, conditions and covenants of this Lease to be
performed by Lessee, all of which Lessee accepts, Lessor does hereby lease unto Lessee
certain property located on the west side of the Airport, more particularly described in
Exhibit "A" which is attached to this Lease, and is incorporated into and made a part of
.this Lease for all purposes (collectively referred to as "Premises" or "Leased Premises" in
this Agreement).
Description of Leased Premises: 47,950 square feet of land
1.02 PURPOSE AND PRIVILEGES
The Lessee is entitled to use the Leased Premises for the following activities:
A. Lessee may use the Leased Premises for storage of aircraft only.
B. Lessee, at its own expense, shall be responsible for securing all permits,
clearances, rights -of -way and other matters necessary to conduct business in a
lawful manner.
C. The Lessee may be entitled to use the Leased Premises for those activities set out
in Section 1, Fixed Base Operator, of the Minimum Standards for Aeronautical
Activities, 1991; as may be amended from time to time, with written approval of
the Executive Director of Aviation (referred to herein as Director).
1.03 USE OF AIRPORT
During the term of this Lease, Lessee shall have free use of, in common with others at the
Airport, all runways, taxiways, public ramps and public puking areas available at the
Airport, and the right of ingress to and egress from the above described Premises, which
right shall extend to Lessee's employees, guests, invitees, temints, and patrons.
If, during the term of this Agreement, the use of the Airport by Lessee is temporarily
suspended, restricted or interfered with for a period of thirty (30) consecutive days or
more for reasons beyond the practical control of the Lessor, in such manner so as to
substantially affect the use of the Leased Premises or operation of aircraft by Lessee or its
tenants, all fees during such period shall abate and the term of the Agreement shall, at the
election of Lessee, be extended for an equivalent period of time.
N50SQ,LLC Page 2
1.04 PUBLIC BENEFIT
If Lessee is authorized by this Lease to conduct business of my nature on the Airport,
Lessee agrees to operate the Leased Premises for the use and benefit of the public and
further agrees:
C. To use reasonable efforts to furnish good, prompt, and efficient services adequate
to meet all the demands for its services at the Airport;
D. To furnish said services on a reasonable, and not unjustly discriminatory, basis to
all users thereof, and
E. To charge reasonable, and not unjustly discriminatory prices for each unit or
service, provided that the Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar types of price reductions to
volume purchasers.
2.01 TERM
ARTICLE TWO
TERM
A. The initial term of this Agreement shall be for a period of five (5) years
commencing on April 1, 201 and ending on March 31, 2022 unless terminated sooner
as proved in this lease.
B. Lessee shall have the option to extend this Agreement for five (5) additional five
(5) year periods.
2.02 HOLDING OVER
In the event Lessee remains in possession of the Leased Premises after the expiration of
this Agreement, without any written renewal or extension of the Agreement, such holding
over shall not be deemed as a renewal of this Lease, except on a mouth-to-mouth basis at
110% of the amount of monthly rental most recently payable during the term of this
Lease.
N50SQ,LLC Page 3
ARTICLE THREE
RENTAL AND FEES
3.01 RENTALS
In consideration of the rights and privileges herein granted, Lessee shall pay to the Lessor
the following rentals and fees:
A. GROUND RENTAL
Land rental for 47,950 sq. ft. @ $0.1762 per sq. ft. per year is $8,448.79 annually;
$704.07 monthly.
B. CONSUMER PRICE INDEX
The parties hereto mutually agree that during the initial term of this Agreement,
and during my renewal period, except as otherwise might be set out in this
Agrcement� the rental rates will be adjusted upward or downward for each
ensuing calendar year beginning January 1, 2018, in direct proportion to the
fluctuation in the U.S. Department of Labor, Bureau of Labor Statistics Consumer
Price 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.
C. SECURITY BADGES:
In addition to the above rental and fees, Lessee shall pay the Lessor a processing
fee and a deposit for security badges for each of Lessee's employees on the
Leased Premises. Director shall determine the time of payment and the amount of
both the processing fee and deposit, each of which shall be reasonable and
uniform for all similarly situated tenants at the Airport. Said deposit shall be
refundable upon return of the badges.
3.02 PAYMENTS
All payments shall become due and payable on or before the 20" day of each month by
the Lessee under this Agreement and shall be made to the Lessor at Lubbock Preston
Smith International Airport, 5401 N. MLK Blvd. Unit 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 received by Lessor on or before the 20
day of the month.
N50SQ,LLC Page 4
3.03 DEFAULT FOR FAILURE TO PAY RENTALS OR FEES
If Lessee fails to pay my rent due and owing to Lessor hereunder within fifteen (15) days
of the due date, the Director shall provide written notice to the Lessee. Thereafter, if the
rent remains unpaid for more than fifteen (15) days after such notice is received, Lessor
may exercise its rights under Article Seven of this Agreement.
ARTICLE FOUR
RIGHTS RESERVED TO LESSOR
4.01 SAFETY
Lessor reserves the right to take any action it considers necessary to protect the aerial
approaches of the Airport against obstruction, together with the right to prevent Lessee
from constructing or permitting construction of my building or other structure on or off
the Airport which, in the reasonable 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 Director.
4.03 STANDARDS
Lessor reserves the right to establish reasonable staridards for the construction and
maintenance of and alterations, repairs, additions or improvements of Lessee's facilities.
'17bis includes structural design, color, materials used, landscaping and maintenance of
Lessee's facilities and Leased Premises. Once Lessee's construction plans are finally
approved by Lessor, Lessee shall not be required to alter or modify such improvements to
meet my future standards, unless mandated by federal, state, or local rules and
regulations.
4.04 TIME OF EMERGENCY
During time of war or national emergency, the Lessor shall have the right to lease the
landing area and any other portion of the Airport to the United States for governmental
N50SQ,LLC Page 5
use and, if any such lease is executed, the provisions of this instrument, insofar as they
are inconsistent with the provisions of the lease to the United States, shall be suspended.
4.05 DEVELOPMENT OF AIRPORT
Lessee agrees that Lessor has the right to further develop or improve the Airport as
Lessor sees fit, regardless of the desires or views of the Lessee, and without interference
or hindrance therefrom.
4.06 SPONSOR'S ASSURANCE SUBORDINATION
This Lease shall be subordinate to the provisions of my existing or future agreement
between the Lessor and the United States concerning the operation or maintenance of the
Airport, the execution of which has been or may be required as a condition precedent to
the expenditure of federal funds for the development of the Airport. Should the effect of
such agreement with the United States be to take my of the property under this Lease or
otherwise diminish the commercial value of this Lease, the Lessor shall not be held liable
therefor.
The Lessor covenants and agrees that it will during the term of this Agreement operate
and maintain the Airport as a public facility consistent with and pursuant to the
Assurances given by the Lessor to the United States Government under federal law.
ARTICLE FIVE
RIGHTS RESERVED TO LESSEE
5.01 WAGES
To the extent that it is applicable, Lessee shall comply with Ch. 2258, Tex. Govt. Code.
5.02 LESSEE'S DUTY TO REPAIR
Except as provided herein, my property of Lessor, or for which Lessor may be
responsible, which is damaged or destroyed incident to the exercise of the rights or
privileges herein granted, or which damage or destruction is occasioned by the
negligence of Lessee, its employees, agents, servants, patrons or invitees, shall be
properly repaired or replaced by Lessee to the reasonable satisfaction of the Director, or
in lieu of such repair or replacement, Lessee shall, if so required by the Director, pay
Lessor money in my mount reasonable to compensate the Lessor for the loss sustained
N50SQ,LLC Page 6
or expense incurred by Lessor as a result of the loss of, damage to, or destruction of such
property.
5.03 PARKING
Lessee shall at its sole cost and expense provide adequate and suitable parking areas for
use by its customers, employees, patrons, guests and invitees.
5.04 WARRANTY OF NO SOLICITATION
Lessee warrants that it has not employed my person employed by Lessor to solicit or
secure this Agreement upon any agreement for a commission, percentage, brokerage or
contingent fee.
ARTICLE SIX
GENERAL CONDITIONS
6.01 RULES AND REGULATIONS
Lessor reserves the right to issue through its Director such reasonable and non-
discriminatory 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 reasonable and non-
discriminatory rules and regulations which may be promulgated from time to time by the
Lessor or its authorized agents at the Airport, or by other lawful authority, to ensure the
safe and orderly conduct of operations and traffic on the Airport.
6.02 OPERATION OF AIRCRAFT, COMPLIANCE WITH RULES AND
REGULATIONS
Lessee agrees to operate and conduct its business, including but not limited to the
operation of aircraft and the occupancy of said Leased Premises, at all times in
compliance with applicable federal, state and local rules and regulations and in
compliance with all applicable statutes, ordinances, rules and regulations affecting the
use, occupancy or operation of the Leased Premises and Airport. Lessee further agrees
that in the event that a civil penalty or fine is levied against the Airport as a result of
Lessee's failure to comply or act in accordance with said regulations, statutes and/or
ordinances, Lessee shall within fifteen (15) days reimburse the Airport the full amount of
N50SQ,LLC Page 7
the penalty or fine and immediately correct the failure, act or omission leading to, causing
or contributing to the violation. Failure of the Lessee to comply with any requirement of
this paragraph shall be cause for immediate termination of this Lease Agreement by the
Director. Provided, however, that the duty of the Lessee to reimburse Lessor is subject to
Lessor providing written notice of any potential fine or penalty. Lessee shall be provided
notice to participate in the proceeding and defend itself, with counsel of its choice, at its
own cost.
6.03 IMPROVEMENTS OR ALTERATIONS
Lessee may not, absent the prior written consent of the Director, erect, maintain, alter,
remodel, reconstruct, rebuild, replace, and remove buildings and other improvements on
the premises, nor correct and change the contour of the premises.
Lessee agrees that any said improvements or alterations approved by Lessor, including
the building described in Exhibit "A," shall be subject and conform to the Minimum
Standards as set forth by the Director and any amendments thereto.
Ln the event Lessor shall consent in principle to the proposed activities of Lessee, such
activities of Lessee are subject to the following:
a. Lessee bears the cost of my such work.
b. The premises must at all times be kept free of mechanics' and
materialmen's Liens.
C. Secure my permits required by the City of Lubbock.
Lessor must be notified of the time for beginning and the general nature of any such
work, other than routine maintenance of existing buildings or improvements, at the time
the work begins.
6.04 ADVERTISING
The Lessee will erect no outdoor advertising or identification signs and will distribute no
advertising in the Airport or on Airport property without the prior written consent of the
Director. 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.
N50SQ,LLC Page 8
6.05 LIENS PROHIBITED
The Lessee shall not bind or attempt to bind the Lessor for payment of my money in
connection with the construction, repairing, alterations, additions or reconstitiction work
on the Leased Premises, and Lessee shall not permit my mechanic's, materialman's or
contractor's liens to arise against the Premises or improvements thereon, or any
equipment, machinery and fixtures thereon belonging to the Lessor, and Lessee expressly
agrees that it will keep and save the Premises and the Lessor limitless from all costs and
damages resulting from my liens of my character created or that may be asserted through
any act or thing done by the Lessee.
In the event that, as a result of Lessee's actions, my mechanic's lien or other lien or order
for payment shall be filed against the Leased Premises or improvements thereon, or
against Lessor -owned property located thereon during the initial term hereof, or during
any subsequent extension, Lessee shall defend on behalf of the Lessor, at Lessee's sole
cost and expense, any action, suit or proceeding which may be brought thereon or for the
enforcement of such lien or order. Failure of the Lessee to comply with any requirement
of this section after having received fifteen days written notice thereof shall be cause for
termination of this Agreement by the Lessor.
6.06 INSPECTION OF LEASED PREMISES
Lessee agrees that the Leased Premises will be kept reasonably clean and free of all
debris and other waste matter. Lessor reserves the right to conduct inspections of the
Leased Premises at reasonable times to ensure that fire, safety and sanitation regulations
and other provisions contained in this Lease are being adhered to by the Lessee.
6.07 MAINTENANCE
The Lessee shall, at its own cost and expense, maintain the Leased Premises in a
presentable condition, reasonable wear and tear excepted, reasonably free of trash, debris,
and weeds, and consistent with good business practices. Lessee shall repair all damages
to Leased Premises caused by its employees, patrons, or business operations thereon;
shall perform all maintenance and repair to the interior, including all HVAC and venting
systems; and shall repaint hangars and buildings as necessary to maintain a clean and
attractive appearance. Lessee shall also maintain my drainage structures or other
improvements installed for the benefit of Lessee, septic systems, ceilings, floor
NSOSQ,LLC Page 9
coverings, locks, doors, overhead doors, specialized ramp doors, window glass, parking
lots, and/or surfaces used for employee and/or customer parking.
Upon written notice by 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 paid by Lessee.
6.08 UTILITIES
The Lessee shall assume and pay for all costs or charges for metered utility services
provided to Lessee at the Premises during the term of this Agreement. Lessee shall have
the right, with written approval of Lessor (which if included in Exhibit "A" shall be
deemed approved upon execution of this Lease), to connect to my storm and sanitary
sewers and water and utility outlets, the cost of usage, extension, installation, and meters,
where required, to be paid by the Lessee.
6.09 TRASH, GARBAGE, REFUSE, ETC.
Lessee shall provide a complete and proper arrangement for the adequate sanitary
handling and disposal, away from the Airport, of all trash, garbage, and other refuse
produced as a result of Lessee's business operations on the Leased Premises.
6.10 PAYMENT OF TAXES, FEES, AND ASSESSMENTS
The Lessee agrees to pay promptly when due all federal, state, and local government
taxes, license fees, and occupation taxes levied on either the Leased Premises or on the
business conducted on the Leased Premises or on my of Lessee's property used in
connection therewith, except as provided herein.
Taxation may be subject to legal protest in accordance with the provisions of the taxing
authority whose levy is questioned. Any protest shall be at the sole expense of Lessee.
Delinquency in payment of such obligations after any protest has been settled shall, at the
option of the Lessor, be cause for immediate termination of this Lease.
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 therefore. Lessee shall indemnify and hold harmless, to the fullest extent
N50SQ,LLC Page 10
permitted by law, Lessor, and Lessor's respective officers, employees, elected officials
and agents, from and against any and all losses, damages, claims or liabilities, of any kind
or nature, which arise directly or indirectly, or are related to, in any way, manner or form,
the activities of Lessee contemplated hereunder. Lessee further covenants and agrees to
defend any suits or administrative proceedings brought against the Lessor and/or Lessor's
respective officers, employees, elected officials and/or agents on account of my claim for
which it is obligated to indemnify Lessor, and to pay or discharge the full arrourn or
obligation of my such claim incurred by, seeming to, or imposed on Lessor, or Lessor's
respective officers, employees, elected officials and/or agents, as applicable, resulting
from the settlement or resolution of said suits, claims, and or administrative proceedings.
In addition, Lessee shall pay to Lessor, Lessor's respective officers, employees, elected
officials and/or agents, as applicable, all attorney fees incurred by such parties in
enforcing Lessee's indemnity in this section.
Indemnification — Environmental Harm. Without limiting any provisions of this
Agreement, Lessee shall also defend, indemnify and hold 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 my 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.
NSOSQ,LLC Page I I
6.12 INSURANCE
The Lessee shall carry and maintain insurance at all times that this Lease is in effect, at
Lessee's sole expense and with an underwriter authorized to do business in the State of
Texas and acceptable to the Lessor, against claims of general liability and workers'
compensation resulting from Lessee's business activities at the Airport.
General Liability Insuranc — Lessee will carry and maintain General Liability
Insurance for the protection of Lessor, and insuring against all claims, losses, costs and
expenses wising out of injuries to persons whether or not employed by the Lessee,
damage to property whether resulting from acts or omissions, negligence or othervvise of
the Lessee or any of its agents, employees patrons or other persons, and growing out of
the use of the said Leased Premises by Lessee, such policies to provide not less than
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) for Combined Single Limit
General Liability Insurance; the above insurance coverage shall also include
Hargarkeeper's Liability Coverage. To the extent permitted by law, the policy shall
include a waiver of subrogation and Lessor shall be named an additional insured on a
primary and non-contributory basis.
Automobile Liability Lessee will carry and maintain Automobile Liability Insurance
in the amount not less than ONE MILLION AND NO1100 DOLLARS ($1,000,000.00)
for Combined Single Limit Automobile Liability Insurance. To the extent permitted by
law, the policy shall include a waiver of subrogation and Lessor shall be named an
additional insured on a primary and non-contributory basis.
Workers' Compensation and Employer Liability — Lessee shall obtain workers'
compensation coverage to the extent legally required by Section 406.002 of the Texas
Labor Code. If legally required, Lessee shall maintain said coverage throughout the term
of this Agreement (or, if shorter, during the period such coverage is legally required) and
while such coverage is legally required to be in effect shall comply with all provisions of
Title 5 of the Texas Labor Code to ensure that the Lessee maintains said coverage. Any
termination of legally required of workers' compensation insurance coverage by Lessee
or my cancellation or nonrenewal of legally -required workers' compensation insurance
coverage for the Lessee shall be a material breach of this Agreement. To the extent
permitted by law, the policy shall include a waiver of subrogation.
N50SQ,LLC Page 12
Current Certificates of Insurance and Endorsements shall be provided to the Lessor, or
other satisfactory evidence of insurance shall be filed with the Director by the Lessee.
The Lessee or its insurer shall notify the Director of any alteration, renewal, or
cancellation of this coverage, which shall remain in full force and effect until at least ten
(10) days after such notice of alteration, renewal, or cancellation is received by the
Director.
Hazard and Extended Coverage — Lessee shall procure from a company authorized to
do business in the State of Texas and keep in force Hazard and Extended coverage
insurance on the Leased Premises to 80% of the full insurable value and shall furnish
Lessor with evidence that such coverage has been procured and is being maintained.
Lessor shall be named an additional insured on a primary and non-contributory basis.
6.13 NON-DISCRIMINATION PRACTICES
Lessee, its agents and employees will not discriminate against my person or class of
persons by reason of race, creed, color, national origin, age, Sex, or disability in providing
any services or in the use of my of its facilities provided for the public. Lessee further
agrees to comply with such enforcement procedures as the United States Government
might demand that the Lessor take in order to comply with the Sponsor's Assurances.
Lessee agrees not to illegally discriminate against any employee or applicant for
employment because of race, creed, color, national origin, age, sex, or disability.
6.14 BUSINESS SOLICITATIONS
All of Lessee's business operations and solicitations will be confined to the Leased
Premises.
6.15 PROHIBITION OF SUBLEASES AND ASSIGNMENTS
The Lessee will not directly or indirectly assign, sublet, sell, hypothecate, or otherwise
transfer this Lease or any portion of the Leased Premises without the prior written
consent of the Director which consent shall not be unreasonably withheld, conditioned or
delayed. This clause is riot intended to prohibit Lessee from leasing space to third parties
for aircraft storage. Such agreement with a third party shall be on the to= attached
hereto as Exhibit "B."
N50SQ,LLC Page 13
6.16 RIGHTS OF OTHERS
It is clearly understood by the Lessee that any person, firm, or corporation operating
aircraft at the Airport has the right or privilege to perform any services on its own aircraft
with its own regular employees (including, but not limited to, maintenance and repair).
The rights of said person, firm, or corporation are subject to the rights of Lessee as set
forth in 1.02.
6.17 SECURITY ACCESS
Lessee agrees to control all access to the Aircraft Operations Area (AOA) through the
Leased Premises and through gates assigned to or controlled by Lessee so as to prevent
unauthorized entry to the airfield by persons, animals, or vehicles. In the event that
unauthorized access to the AOA is gained through the Leased Premises or my area which
Lessee controls or is obligated to control, my fines or penalties assessed by the
Transportation Security Administration (or other authorized agency) shall be the
responsibility of the Lessee and Lessee hereby agrees to promptly pay all such fines or
penalties without delay and make my and all requested changes in operations or facilities
necessary to maintain Airport security and prevent reoccurrence of my unauthorized
entry. Lessee shall place appropriate signage on all doors with AOA access to prevent
unauthorized access. Failure to comply with this paragraph shall be cause for immediate
termination of this Agreement by Lessor.
6.18 SECURITY PLAN
Lessee shall submit a Security Plan acceptable to the Director and the Airport Operations
Supervisor. Failure to submit an acceptable Security Plan shall be grounds for immediate
termination of this Agreement.
6.19 VEHICULAR MOVEMENT
Except as specifically authorized by the Director, or designated other, Lessee will not
permit the driving of vehicles by employees, customers, guests or, invitees on the apron,
taxiways, or runways.
6.20 EXCLUSIVITY
It is understood and agreed that nothing herein contained shall be construed to grant or
authorize the granting of m exclusive right to conduct any aeronautical activities,
including, but not linrited to charter flights, pilot training, aircraft rental and sightsecing,
N50SQ,LLC Page 14
aerial photography, crop dusting, aerial advertising and surveying, air carrier operations,
aircraft sales and services, sale of aviation petroleum products whether or not conducted
in conjunction with other aeronautical activity, repair and maintenance of aircraft, sale of
aircraft parts, and any other activities which because of their direct relationship to the
operation of aircraft can be regarded as an aeronautical activity.
6.21 NO RESIDENTIAL USE
It is understood and agreed that Lessee shall not permit or enter into my arrangement that
results in permission for the leased premises to be used as a residence.
6.22 STORAGE USE
The Leased Premises shall be used solely for aviation-rclated purposes. Storage of non -
aviation related property inside hangars is strictly prohibited.
ARTICLE SEVEN
TERMINATION, CANCELLATION
7.01 TERMINATION
This Lease shall terminate at the end of the term and any extension thereof Lessee shall
have no further right or interest in my of the Premises or improvements hereby demised,
except as provided herein.
7.02 TERMINATION BY LESSEE
This Lease shall be subject to cancellation by Lessee upon the occurrence of my one or
more of the following events:
1. The permanent abandonment of the Airport by the Lessor as an air terminal.
2. The lawful assumption by the United States Government, or my authorized
agency thereof, of the operation, control or use of the Airport, or my substantial
part or parts thereof, in such a manner that substantially restricts Lessee for a
period of at least ninety (90) days from operating thereon.
3. The issuance by any court of competent jurisdiction of an injunction in any way
preventing or restraining the use and operation of the Airport for a period of at
least ninety (90) days.
4. The default of the Lessor in the performance of any covenant or agreement herein
required to be performed by the Lessor and the failure of the Lessor to remedy
N50SQ,LLC Page 15
such default for a period of sixty (60) days after receipt from Lessee of written
notice to remedy the same.
If any one or mom of the foregoing events occurs and is not cured within the applicable
cure period provided above, Lessee may exercise such right of termination by giving
written notice to the Lessor and this Lease shall terminate as of the last day of the
calendar month in which such termination notice is given. Rental due hereunder shall be
payable only to the effective date of said termination.
7.03 TERMINATION BY LESSOR
This Lease shall be subject to cancellation by Lessor after the happening of one or more
of the following events:
I The taking by a court of competent jurisdiction of Lessee and its assets pursuant
to proceedings brought under the provisions of any federal reorganization act,
unless my such proceedings am dismissed within ninety (90) days after its filing.
2. The appointment of a receiver for Lessee's assets.
3. The divestiture of Lessee's assets by other operation of law.
4. The abandonment by Lessee of the Premises at the Airport for a period of thirty
(30) days or more.
5. The failure by Lessee to pay any rentals or other charges hereunder after notice as
specified above.
6. The default by Lessee in the performance of my covenant or agreement herein
required to be performed by Lessee and the failure of Lessee to commence to
remedy such default for a period of sixty (60) days after receipt ftom the Director
of written notice to remedy the same. If the nature of the default is such that it
reasonably cannot be cured within sixty (60) days, this Lease will not be subject
to cancellation by Lessor if Lessee commences to core its default as soon as
reasonably possible after receipt of Lessor's notice and prosecutes such cure to
completion in a diligent and good faith manner. In cases related to safety and/or
security at the airport, Lessee &ball commence and remedy such default
immediately.
7. The lawful assumption by the United States Government, or my authorized
agency thereof, of the operation, control or use of the Airport, or my substantial
N50SQ,LLC Page16
part or parts thereof, in such a manner as to substantially restrict Lessee for a
period of at least ninety (90) days from operating thereon.
Lessor may exercise such right of termination by giving written notice to the Lessee to
correct or cue such default, failure to perform or breach. If within thirty (30) days from
the date of such notice, the default, failure to perform or breach complained of shall not
have been corrected in a manner satisfactory to the Lessor, then in such event, Lessor
shall have the right, at once and without further notice to Lessee, to declare this
Agreement terminated.
Once Agreement is terminated, Lessor's agents may enter upon the Leased Premises and
take immediate possession of the same and remove Lessee's effects. Any rental due
hereunder shall be payable to said date of termination.
It is agreed that failure to declare this Lease terminated upon the default of Lessee for any
of the reasons set forth above shall not be construed as a waiver of my of the Lessor's
rights hereunder or otherwise bar or preclude Lessor from declaring this Agreement
cancelled as a result of my subsequent violation of my of the terms or conditions of this
Agreement.
7.04 CONFLICT OF INTEREST
The Lessee acknowledges that it is informed that Texas law prohibits contracts between
the City of Lubbock and its "officers" and "employees," and that the prohibition extends
to officers and employees of the City of Lubbock agencies, such as Lessor -owned
utilities, and certain City of Lubbock boards and commissions, and to contract with my
partnership, corporation or other organization in which the officers or employees have a
substantial interest. Lessee certifies (and this Agreement is made in reliance thereon) that
neither the Lessee nor any person having an interest in this Agreement is currently an
officer or employee of the City of Lubbock or any of its agencies, boards or
commissions.
7.05 OWNERSMP
Within ninety (90) days after expiration of this Agreement as herein provided, the Lessee
shall have the option to remove all improvements, constructed or placed thereon, except
for any pavement area constructed by Lessee and return land to a clean and level
condition. Lessee shall give Lessor thirty (30) days written notice prior to expiration of
N50SQ,LLC Page 17
the Agreement of Lessee's intent to exercise such option. In the event Lessee chooses
not to exercise its option to remove from the Premises such improvements, Lessee may
choose to surrender title to such improvements to Lessor, subject to the approval of
Lessor. If Lessor does not accept Lessee's surrender of title to such improvements,
Lessee shall remove such improvements from the Premises within ninety (90) days after
expiration of this Agreement.
In the event Lessor terminates this Agreement for cause as contained in 7.03 above, the
Lessor retains ownership to Lessee's improvements to the "tent of the rentals due for the
then remaining term.
7.06 REMOVAL OF LESSEE'S PROPERTY
The Lessee shall have the right, within thirty (30) days after the termination of this Lease,
whether such termination comes upon expiration of the initial term, any extension or
otherwise under my provision of this Lease, to remove from the Leased Premises all of
Lessee's property which has not become the property of the Lessor, but Lessee shall
restore the Premises to the original condition, normal wear and tear excepted. The
Lessor, however, shall have a lien on all of Lessee's property to secure my unpaid rentals
or other revenue due the Lessor; and Lessee's right to remove property from the Leased
Premises is conditioned upon all amounts due the Lessor from Lessee having been paid in
full. Unless a renewal agreement is executed, property left on the Premises after thirty
(30) days from the date of termination of this Agreement shall be deemed abandoned and
will become the property of the Lessor, and may be disposed of as the Lessor sees fit,
without any liability to the Lessee to account for the proceeds of any sale; and the Lessor,
at its option, may require Lessee to remove the abandoned property and may charge tent
from the date of expiration or termination of this Agreement through the day of final
removal of the property, or of notification to the Lessee of the abandonment of the
property and taking by the Lessor, as the case may be. Provided however, that Lessee
shall have ninety (90) days to remove my buildings or fuel storage tanks or dispensing
equipment. Lessee shall comply with all state and federal requirements for removal of
fuel storage tanks and dispensing equipment and shall obtain written certification from
the appropriate governmental agency that said tanks and equipment have been removed
properly.
N50SQ,LLC Page 18
7.07 TERMINATION OF LEASE AND 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
condition, reasonable wear and tear expected, and the Lessor shall have the right to take
possession of the Leased Premises and the improvements, subject to the limitations
expressed in Article Seven, of this Lease, with or without process of law.
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
8.01 NOTICES
Notices to the Lessor required or appropriate under this Agreement shall be deemed
sufficient if in writing and hand delivered or mailed, registered or certified mail, postage
prepaid, addressed to Lubbock Preston Smith International Airport, Ann: Director, 5401
N. MLK Blvd., Unit 389, Lubbock, Texas 79403. Notices to the Lessee shall be deemed
sufficient if in writing and hand delivered or mailed, registered or certified mail, postage
prepaid, addressed to N50SQ LLC, Attn: Gary Andrews, 5307 W. Loop 289, Suite 302,
Lubbock, Texas 79414.
8.02 NON -ARBITRATION
Each party reserves the right to exercise any right or remedy available to it by law,
contract, equity, or otherwise, including without limitation, the fight to seek any and all
forms of relief in a court of competent jurisdiction. Further, neither party shall be subject
to any arbitration process prior to exercising its unrestricted right to seek judicial remedy.
The remedies set forth herein are cumulative and not exclusive, and may be exercised
concurrently. To the extent of my conflict between this provision and mother provision
in, or related to, this document, this provision shall control.
8.03 ATTORNEY'S FEES
Both Lessee and Lessor covenants and agrees to pay all reasonable costs, attorney's fees
and expenses that shall be incurred by the other party in enforcing the covenants and
conditions of this Agreement.
N50SQ,LLC Page 19
8.04 ENTIRE AGREEMENT
This Lease constitutes the entire Agreement for the construction of a hangar between the
Lessor and Lessee, and my other written or parole agreement with the Lessor is expressly
waived by Lessee.
EXECUTED this 23rd day of Much ,2017.
THE CITY OF LUBBOCK, LESSOR
BY:
DANIEL M. POPE, MAYOR
ATTEST:
kebe Garza� City SecretU
APPROVED AS TO CONTENT:
Gat" 0"(ka-
Kelly Caffipbell, Ekecutive Director of Aviation
Loll/ I
ell vz
hw 14— '0'
-11A -
M'Ir� - -
N50SQ,LLC,LESSEE
GARY/A DRF*�
Title: LO—A
Date:
N50SQ.LLC Page 20
PARKHILLSMITH&COOPER 4222 951h S�
Lubbob� Tem 79423
806,473.2200
EXHIBIT "A"
A 1.1008-ACRE TRACT OF LAND 14
SECTION 28, BLOCK A, ABSTRACT NO. 686,
LUBBOCK-PRESTON SMITH INTERNATIONAL AIRPORT,
LUBBOCK COUNTY, TEXAS
A 1.1008-acre (47,950-square foot) tract of land in Section 28, Block A Abstract No. 685, Lubbock
County, Texas, being a portion of the Lubbock -Preston Smith International Airport, said 1. 1 008-acre tract
being further described by metes and bounds as follows,
BEGINNING at a 1/2-Inch iron rod with a cap marked "PSC RPLS 6453" set for the southwest corner of
this tract, said southwest corner having coordinates of NORTHING: 7,299,544.82 and EASTING:
954,555.65, Texas Coordinate System, North Central Zone 4202, North American Datum of 1983,
whence the southwest corner of said Section 28 bears South 01 degrees 34 minutes 38 seconds West
a distance of 51.08 feet and North 88 degrees 25 minutes 22 seconds Westa distance of 1132AO feet,
per calls in previous descriptions;
(1) THENCE North 01 degrees 29 minutes 44 seconds Easta distance of 162.11 feet to a 112-Inch iron
rod with a cap marked "PSC RPLS 6453" set for the northwest corner of this tract;
(2) THENCE South 88 degrees 32 minutes 25 seconds East at a distance of 35.13 feet pass a 112-inch
iron rod with a cap marked "STEVENS RPLS 4339" found at the southwest corner of a 47,740-square
foot tract of land surveyed by Norris Stevens on October 12, 2012, continuing for a total distance of
295.90 feet to a WAG" nail found at the southeast corner of said 47,740-square-foot tract, for the
northeast corner of this tract, said northeast comer having coordinates of NORTHING: 7,299,699.30 and
EASTING: 954,855.62, Texas Coordinate System, North Central Zone 4202, North American Datum of
1983;
(3) THENCE South 01 degrees 41 minutes 26 seconds West a distance of 162.29 feet to a WAG" nail
with washer stamped "PSC RPLS 6453" set for the southeast corner of this tract;
(4) THENCE North 88 degrees 30 minute 16 seconds Waste distance of 295.35 feet to the POINT OF
BEGINNING. Bearings and coordinates called in this description are based on the Texas Coordinate
System, North Central Zone 4202, North American Datum of 1983. Distances called in this description
are at surface. Areas reported heron am based on calculations made from surface distances.
Note: A sketch of this easement is included on Page 2 of this document.
— fh. --� KA—k Al 1A1 7
stered Surveying Firm # 10194091
Page I o F2
EXHIBIT "A"
A 1.1008-ACRE TRACT OF LAND IN
SECTION 28, BLOCK A, ABST. NO. 685,
LUBBOCK-PRESTON SMITH INTERNATIONAL AIRPORT,
LUBBOCK COUNTY, TEXAS
MSVNG 47.740-SOMRr FOOT
�sr
NORWNC� 7.299,599.M
fAsuRv. 954,asa,v
NOM PROPOSED ARD EX)SRW
ARE SHOW FOR REFFREWE
OMLY WS DOES NOT CO�RR,Tt A
OPOCRARRIC suw,,rY or MIS FwaFEN
doom
020M
am=
47,950 SQUARE FEET
1. 1008 ACRES
I-.-z momm. �
WE SDUR"ESr COMU5R OF S&7TVN 28
BEARS S0f'J4J8V. JI.M' Mo
N.8875'22'W. I IJ2.,40' FROM � FORT
(RER CAUS IN P�S DE5CRPF0NS)
LEGOMD
N-88*J0'f6"W. 295.35'
SCALE, I' - 50.
0 = SET 112' RON ROD VTH � IPSC RALS 6453-
x - SET UG' WE � �ER �c Ans �-
S = FOUND 112- MON ROD IffTH CAR ST�NS RPLS 4=-
x - FOUND 'Mc* MIL
�15 FILAT 4US PREPARED R
AND ME INFORWTON HERE
SURAY TO THE BEST OF W
SUR�o. MRCH 01. 2017
SURIADURS REFORT r 01-4817
� SURME' IS 1MSED � ME 7TOS COORDINATE SMEV OF 19M
W,83).
�RGENCE - -01-48'47' TO MUE NORTH BEARINGS.
COMBINED SC4U5 FACTOR - 0999"2388
DISIANCES REPORTED HERERI ME AT SURFACE
AR&4S REFFRTEV H&?FOM ME WED ON MCUATIONS MDE AT
SURFACE DISIMCES.
THIS SURI,EY IS SU� TO MY FACTS WICH MY BE DISCLOSED BY
A FUU AND ACCURATE IRLE S&RCH RECORD DOCUMENTS OMER
ThAN WSE �WN MY A� THIS �CT
MONUMENTS INDICATED AS FOUND BY THIS SURVEY ME NOT -F�IW
MONUMENTS 0I` RECORD DUNRY' UNLESS W NOTED
FOUW MONUMENTS ME ACCEP70 BY Me SURIeEYDR AS
CONTROUJNG MDENCE DUE TO SUBS?MTAL AGREE� � RECOAD
DDCUM�
MIS �T IS 1� UNLESS IT SEARS THE SU�R'S CAGINAL
DEAL AND wcMTUw
A �S AND 80RVVS DESCN� OF M� RVICT Z IWLUXV ON
PAGE I OP MIS DOCUASVT
PACE 2 OF 2
'4AIT
.:ftN"'E'LVg. :! PARKHILL SMITH & COOPER
6463..- TBFD FIRM REGISTIUkTIO4 MO� 101�
&
0, 10 12U TH STFSET
'E. 0,
.1 CUBBMK� .23
ci 7
si GAn 2M
MUa WATT
I., � AIA , �, I
EXHIBIT "B"
SUBLEASE OF SPACE IN HANGAR
FACILITY AT LUBBOCK INTERNATIONAL AIRPORT
This SUBLEASE (this "Sublease") is entered into as of this — day of
between
(7enant"), and N50SQ, LLC, a Texas limited liability company ("Landlord").
Landlord and Tenant agree as follows:
1. BASIC INFORMATION. The following terms used in this Sublease
have the following meanings:
(a) HANGAR FACILITY: The executive jet aircraft hangar facility
constructed at Lubbock International Airport in Lubbock County, Texas,
including a hangar building, a garage area, an office area and other
improvements more fully described in the diagrarn of the hangar facility
attached as Exhibit A (the "Hangar Facility").
(b) PERMITTED USE: The Hangar Space shall be used only for the
maintenance and storage of a registration number
_(the "Aircraff"). The Garage Space shall be used
only to park automobiles. The Office Space shall be used only for general
office purposes in connection with the foregoing. Landlord agrees that
consent will not be unreasonably withheld, should Tenant request that the
Aircraft be replaced in the future by a substantially similar aircraft of similar
size owned by Tenant and to be wed for the same purposes; and upon any
such replacement, the term "Aircrall" herein shall thereafter be deemed to
refer to the replacement aircraft in all respects.
(c) GROUND LEASE: The Lease dated as it has
been or may be mended from time to time, hetwecn N50SQ, LLC as
Lessee and the City of Lubbock (the "Authority") as Lessor.
(d) SECURITY INSTRUMENTS: The mortgages, deeds of trust and
other security instruments recorded against the Hangar Facility as each may
be mended from time to time, and having priority over the interest of
Landlord now or in the future.
(e) NONDISTURBANCE AGREEMENTS: The nondisturbance and
other agreements executed by the Authority, or the Landlord, as each may be
mended from time to time.
(f) PREMISES. The Premises being subleased to Tenant pursuant to this
Sublease.
EXHIBIT "B"
2. GRANT.
(a) Landlord hereby subleases the following to Tenant:
square feet in the Hangar Facility for Tenant to use
solely for the purpose of storing, serving and maintaining the
Aircraft;
(b) The exact location of such space within the Hangar Facility shall
be as determined by Landlord in its sole discretion from time-tc-
time.
(c) This Sublease is conditioned on satisfaction of the requirements for
approval by any landlord under the Ground Lease. If such requirements
are not satisfied, Landlord, may, in its sole discretion, immediately
cancel and terminate this Sublease.
(d) Tenant acknowledges that Tenant accepts the premises "AS -IS."
(e) Landlord may sublease any other parts of the Hangar Facilities to other
parties on my terms Landlord deems appropriate, and those other parties
will have access to their respective premises through the Hangar Facility.
(f) To accommodate the arrival and departure of aircraft housed in the
Hangar Facility by one or more other tenants (collectively, "Other
Tenants"), Tenarit's aircraft will need to be moved from time to time,
Landlord and Other Tenants shall have the right to move Tenam's
aircraft as may be necessary or appropriate to accommodate the use of
the hangar floor by Landlord or Other Tenants. Tenant acknowledges
that Tenant has agreed to enter into an Agreement Regarding the
Movement of Aircraft, among Landlord and other existing tenants of the
Hangar Facility, and Tenant agrees to cooperate in amending such
agreement to add as a party thereto any future teriant of the Hangar
Facility and to remove any current or future tenam that ceases to be a
tenant.
3. TERM. Subject to my other previsions of this Sublease allowing for
early termination, the term of this Sublease (the "Term") shall begin on _
(the "Commencement Date"), and if not previously terminated
or extended by mutual agreement, shall automatically expire at midnight on
(the "Expiration Date").
4. RENT. Initial Rent trader this Sublease is_ per month,
payable on or before the first of each month. If this Sublease has not been earlier
terminated, the amount of monthly Rent shall increase by 2.5% on each anniversary of
EXHIBIT "B"
the Commencement Date during the term of this Sublease. There is no security deposit.
5. FUELING. INTENTIOANLLY OMITTED.
6. USE.
(a) Tenant will use the Premises only for the Permitted Use. Tenant will
comply fully with the Ground Lease, the Security Instruments and my law or
governmental regulation now or later in force pertaining to the use of the Premises.
Tenant shall not (i) permit anything to be done in or about the Premises which will in any
way obstruct or interfere with the rights of Landlord or my other occupant of the Hangar
Facility, or injure or unreasonably annoy them; (ii) use or allow the Premises to be used
for my improper, unlawful or objectionable purpose; or (iii) cause, maintain or permit
my nuisance in, on or about the Premises or commit or allow to be committed my waste
in, on or about the Premises. Tenant acknowledges that this Sublease is subject in all
respects to the terms of the Ground Lease (the "Master Lease"). Tenant acknowledges
that it has reviewed the terms of the Master Lease, acknowledges that commencement of
this Sublease is subject to receipt of the consents described in the Master Lease, and
acknowledges that this Sublease may be subject to termination pursuant to the terms of
the Master Lease. Tenant further acknowledges that, under such circumstances, this
Sublease shall also terminate without any liability to Tenant by Landlord for or in
connection with such termination, in which case Tenant shall promptly remove the
Aircraft from the Premises. Tenant further acknowledges that Tenant shall have no right
to participate in my condemnation award in the event of condemnation of all or any part
of the Premises or the Hangar Facility or my right to participate in any insurance
proceeds relating to a casualty affecting all or my portion of the Hangar Facility or the
Premises (or the value of Tenant's interest under this Sublease), excluding any proceeds
of insurance specifically carried by Tenant.
(b) Tenant assurnes the risk and will bear all responsibility and costs
necessary to ensure that Tenant's use of the Premises and its manner of operation am in
compliance with all applicable laws, including, without limitation, the Americans with
Disabilities Act of 1990 and all zoning laws regulating the use and enjoyment of the
Premises. Tenant shall do all acts required to comply with all applicable laws,
ordinances, regulations and rules of my public authority to the extent relating strictly to
Tenant's particular use of the Premises, and not generally applicable to airport hangar
properties.
(c) Without limiting the generality of Section 6(a) of this Sublease,
Tenant will not do anything throughout the Term that will violate the provisions in the
Ground Lease regarding Hazardous Materials (as defined below) or otherwise violate
any Environmental Laws (as defined below). Tenant will indemnify and defimd
Landlord, the Authority and their respective directors, shareholders, partners,
employees, agents and assignees or successors to their respective interest in the
Premises, from and against my and all loss, claims, damages, liability or expense
3
EXHIBIT "B"
arising directly or indirectly out of the use, generation, storage, release or threatened
release or disposal of Hazardous Materials by Tenam, its agents, contractors or invitees,
including, without limitation, (i) all out-of-pocket litigation costs and attorneys'fices,
(ii) all damages (including consequential damages), and (iii) the cost of and the
obligation to perform my required or necessary repair, clem-up, investigation, removal,
remediation or abatement, and the preparation of my closure or other required plans to
the full extent that such action is attributable, directly or indirectly, to: (x) the use,
generation, storage, release or threatened release or disposal of Hazardous Materials by
Tenant, its employees, agents, contractors, licensees or invitees; (y) or the violation of
any Environmental Law (as defined below) arising from Tenant's use and occupancy of
the Premises or operation of its business.
For purposes of this Sublease, "Hazardous Materials" will include but not be
limited to substances defined as "hazardous substances ... .. hazardous materials," or "toxic
substances" in any of the Ground Lease or Security Instruments; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 960 1, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq.*, the common law; and any and all state, local or federal laws, rules,
regulations and orders pertaining to enviromnental, public health or welfare matters, as
now or later in effect (collectively, the "Environmental Laws"). Any terms mentioned
in this Sublease defined in any applicable Environmental Laws will have the meanings as
in such laws.
This Section 6(c) will survive my termination of this Sublease,
(d) Tenant will comply with my security and access requirements for the
Hangar Facility as Landlord may reasonably require in Landlord's sole
discretion.
7. UTILITIES.
(a) If Tenant's utility or service requirements increase over its
requirements as of the Commencement Date, Tenant will be required to pay the
increased cost of utilities or services. Landlord will not be required to pay, or provide
for or allow any new or additional utility installations.
(b) Landlord may temporarily discontinue such utilities and services, or
my of them, at such times as may be necessary by reason of accident, repairs, alterations
or improvements, strikes, lockouts, riots, acts of God, actual or threats of terrorism,
governmental preemption in connection with a national or local emergency, my law,
rule, order or regulation of any goverramental agency, conditions of supply and demand
which make any product =available, Landlord's compliance with my mandatory
governmental energy conservation or environmental protection program, with my
requirements of the Ground Lease, or with any voluntary governmental energy
conservation program at the request of or with consent or acquiescence of Tenant, or my
EXHIBIT "B"
other event. A discontinuance in utility service to the Premises for my reason other than
Landlord's failure to make payments to utility providers will not be construed as an
eviction of Tenant, or operate to release Tenant from my of Tenams obligations under
this Sublease, or cause an abatement of Rent.
8. LANDLORD'S REPAIR AND MAINTENANCE. If Landlord
determines that Tenant, its agents, independent contractors, employees, licensees or
invitees have caused my damage to Hangar Facilities, then Landlord may either repair
such damages, in which case Tenant shall reimburse all costs incurred by Landlord in
connection with such repair, or demand that Tenant repair such damages, in which case
Tenant shall begin the repair at its own expense within five days after receiving notice
from Landlord and shall diligently continue such repair to completion. Landlord shall
not repair my damages pursuant to the preceding sentence without giving Tenant at least
five days' notice, unless Landlord reasonably believes that waiting for
such period could cause safety concerns or could result in further damage to the Hangar
Facility.
9. TENANT'S CARE OF THE PREMISES AND PERSONAL
PROPERTY.
(a) Tenant, at its sole cost and expense, will maintain and repair its
portion of the Premises (including, without limitation, Tenant's equipment, personal
property and trade fixtures located in the Premises, and all glass surfaces within the
Premises), in good working order and in good, nmt and clean condition, reasonable wear
miltearexcepted. In making my repairs, replacements and renewals, Tenant will use
materials and equipment which are at least equal in quality to those in the Hangar
Facility on the Commencement Date. Tenant will immediately advise Landlord of my
damage to the Premises. After (a) written notice from Landlord to Tenant of the need for
Tenant to repair the Premises, and (b) the expiration of a 14 day ewe period for Tenant to
take such action, then at Landlord's option, Landlord may (without obligation) repair all
damage or injury to the Premises or Landlord's fixtures, appurtenances and equipment in
the Premises caused by Tenant, its agents, independent contractors, employees, licensees
or invitees, at the expense of Tenant, and Landlord may collect the expense of such
repairs, including an amount sufficient to reimburse Landlord for overhead and related
expenses, as rent payable by Tenant within 20 business days after delivery of a statement
to Tenant. Notwithstanding the foregoing, if Landlord reasonably believes that waiting
for such period
could cause safety concerns or could result in fiarther damage to the Harigar Facility,
Landlord shall not be required to provide Tenant with notice and an opportunity to cure
before Landlord may, but need not, repair any damage.
(b) Tenant will keep its planes, trade fixtures, equipment and all
other property belonging to Tenant on the Premises (collectively, "Tenant's
Property") at Tenant's own risk. Tenant will pay, before delinquency, all taxes
assessed against and levied upon Tenam's Property. Tenant will cause Tenant's
Property to be assessed and billed separately from the property of Landlord.
5
EXHIBIT "B"
10. ALTERATIONS; ADDITIONS. Other than purely cosmetic alterations
or improvements that: (i) do not affect the hangar floor or building structure or systems
and (ii) total less than $ 1,000 in the aggregate, Tenant will not make or anow to be made
my alterations, additions or improvements to my part or the Premises without first
obtaining the written consent of Landlord, which Landlord may grant or withhold in its
sole discretion. Except with respect to items that Landlord requires Tenant to remove
from the Premises, my alterations, additions or improvements made by Tenant to the
Premises, excluding movable furniture, equipment and
trade fixtures placed in the Premises by Tenant, will at once become a part of die
Premises and Landlord's property, which Tenant will surrender with the Premises.
Tenant shall not be permitted to install or erect my signs in, on or about the Premises
or the Hangar Facility.
11. LIENS. Tenant will keep the Premises free from any liens arising out of
any work performed, materials furnished or obligations incurred by or on behalf of
Tenant. If, because of any act or omission of Tenant, my mechanic's lien or other lien,
charge or order for the payment of money (collectively, a "Lien") shall be filed against
Landlord, the Authority or my portion of the Premises, Tenant shall, at its own cost and
expense, cause the same to be discharged of record or fully bonded against within 10
business days after Landlord, or Authority notifies Tenant of the Lien. Tenant shall
indemnify and save harmless Landlord, and Authority against my loss, claim, damage,
liability or expense resulting from the Lien.
12. END OF TERM. At the end of the Term, Tenant will promptly quit and
surrender the Premises broorn-clean, in good order and repair, ordinary wear and tear
excepted. Tenant will fully repair my damage (including without limitation structural
damage) occasioned by the removal of any of Tenant's property from the Premises. All
trade fixtures, equipment, furniture, inventory, effects, alterations, additions and
improvements remaining on the Premises after the end of the Term will be deemed
conclusively to have been abandoned, and Landlord may appropriate, sell, store, destroy
or otherwise dispose of those items without notice to Tenant or my other person and
without obligation to account for them. Tenant will reimburse Landlord for all expenses
incurred in connection with such property, including without limitation the cost of
repairing my damage to the Premises caused by the removal of such property. Tenant's
obligation under this Article 12 will survive the termination of this Sublease.
13. ASSIGNMENT AND SUBLETTING. Tenant will not, either
voluntarily or by operation of law, assign, transfer, mortgage, pledge, hypothecate or
encumber this Sublease or my interest in it, and will not sublet the Premises, or allow any
other party to occupy or use all or any part of the Premises, without first obtaining the
written consent of Landlord, which consent Landlord may withhold in its sole discretion.
14. 14OLD HARMLESS; NON -LIABILITY OF LANDLORD.
(a) Tenant will indemnify, and hold Landlord and Authority hamiless against and
from my and all loss, claim, damage, liability or expense (including attorneys' fees and
6
EXHIBIT "B"
other expenses of litigation) directly or indirectly attributable to (i) the injury, death,
disability or illness of any person, or damage to my property occurring in, on or about
the Premises or arising from Tenant's use of the Premises, from the conduct of its
business or fmni my activity, work or other things done or permitted by Tenant in or
about the Premises (except to the extent caused by Landlord's willful misconduct); or (ii)
my breach of any of Tenant's obligations under this Sublease; or (iii) my act, omission,
or negligence of Tenant or its officers, servants, employees, agents, independent
contractors, licensees or invitees. In my such action or proceeding against Landlord or
Authority covered by the indemnity by Tenant above, if the indemnified party elects,
upon notice from such party Tenant will defend the same at Tenant's expense by counsel
mutually satisfactory to the parties. Landlord or its agents will not be liable for any loss
or damage to persons or property in the Premises resulting from fire, windstorm,
explosion, falling plaster, stem, gas, electricity, water or min which may leak from my
part of the Premises or the building of which the Premises we a part or from the pipes,
appliances or plumbing works in that building or from the roof, street or subsurface or
from my other place resulting from dampness, or my such injury or damage fmin my
other cause whatsoever, beyond what is covered under the Landlord's property and
liability insurance policies. Landlord will however move as expeditiously as possible to
remedy damages on the Premises.
(b) Tenant, as a material part of the consideration to Landlord, assumes all risk of
damage to property or injury to persons in, upon or about the Premises, firma my cause
other than Landlord's willful misconduct. Tenant waives and releases all claims in
respect of such events against Landlord. Landlord shall not supervise Tenant's property
and Tenant waives my and all claims against Landlord for damage to its property.
Tenant will give prompt notice to Landlord
in case of casualty or accidents in the Premises. Landlord and its agents and employees
will not be liable for any Intent defect in the Promises. Landlord will have no obligation
to provide security guards, patrols, devices or systems for the Premises, and will not be
liable for my failure to provide such security services.
15. WAIVER OF SUBROGATION. Notwithstanding anything in this
Sublease to the contrary, Tenant waives, and shall cause its insurance carriers to waive
my and all rights (by way of subrogation or otherwise) of recovery, claim, action or
causes of action against Landlord and its respective trustees, principals, beneficiaries,
members, officers, directors, agents and employees, for any loss or damage that may
occur to Tenant or my party claiming by, through or under Tenant, as the case may be,
with respect to Tenant's property, the Hangar Facility, the Premises, my additions or
improvements to the Hangar Facility or Premises, or my contents thereof, INCLUDING
ALL RIGHTS (BY WAY OF SUBROGATION OR OTHERWISE) OF RECOVERY,
CLAWS, ACTIONS OR CAUSES OF ACTION ARIS ING OUT OF THE
NEGLIGENCE OF LANDLORD which loss or damage is (or would have been, had the
insurance required by this Sublease been carried) covered by insurance.
16. TENANT'S INSURANCE OBLIGATIONS.
(a) Tenant will carry and maintain, at its own cost and expense, the
EXHIBIT "B"
following types, amounts and forms of insurance
(i) Liability Insurance. Aviation liability insurance and liability
insurance for the Premises with a combined single limit of not less than $25,000,000,
insuring against my liability wising out of the ownership, use, occupancy or maintenance
of Tenant's aircraft and the Premises and including contractual liability coverage for the
performance of Tenant's indemnity obligations under this Sublease.
(ii) Casualty Insuranc . A policy or policies of insurance in the
time of Tenant insuring all merchandise, equipment, trade fixtures, appliances,
furnishings and personal property in the Premises in providing protection against all
perils included within the "all risk of physical damage" classification, including, without
limitation, fire, extended coverage, vandalism, theft, "hangar rash," tug accidents,
malicious mischief, special extended peril (all risk), mechanical equipment, glass
breakage and sprinkler and fire suppression system leakage in the amount of 100% of all
replacement costs; with the understanding that Tenant will use all policy proceeds for the
repair or replacement of the property damaged or destroyed.
(iii) Other Insurance. Worker's compensation insurance as
required by law and such other insurance as maybe required under the Ground Lease.
(b) The policies of insurance required to be carried by Tenant
purmant to Section 16(a) will be with insurance companies authorized to transact
business in the State of Texas and reasonably acceptable to Landlord. All such policies
will name Landlord and Authority as additional insureds (and, if requested by Landlord,
such policies will also time as additional insureds my other person or entities as
Landlord may designate). Each such policy will obligate the issuer to notify Landlord
and Authority in writing not less than 30 days before my expiration date, cancellation or
modification affecting the additional insured of such policy, All such policies will be
written as primary policies not contributing with, and not in excess of, coverage which
Landlord or my other person may carry and will provide that Landlord's coverage or
interest will not be affected by my act or omission of Tenant. There shall be no right of
subrogation of the insurance carrier against my of the insured parties. Tenant will
furnish to Landlord and Authority on or before the date of this Sublease and from time to
time upon request by Landlord, a binder or certificate of insurance which will set forth
the particulars of coverage in sufficient detail to assure Landlord that Tenant has satisfied
the insurance requirements set forth above.
(c) If Tenant fails to provide and maintain the insurance required
under this Sublease, Landlord, at Landlord's sole option (and without waiving any rights
against Tenant for breaching the provisions set forth above), may obtain such insurance
or any portion of it and pay the premiums in question and within five business days after
written demand given by Landlord to Tenant, Tenant will reimburse Landlord for such
premiums. Notwithstanding the foregoing, Tenam is solely responsible for any damage
that occurs to its property and that Landlord will not carry "hangar -keepers" insurance-
17. RULES AND REGULATIONS. Tenant will faithfully observe and
EXHIBIT "B"
comply with the rules and regulations that Landlord or my landlord trader the Ground
Lease may issue or modify from time to time relating to the Hangar Facility.
18. ENTRY BY LANDLORD. Landlord reserves the right to enter the
Premises to inspect them, to show them to prospective tenants, to post notices of non -
responsibility, to permit the Authority to exercise the entry rights, if any, reserved under
the Ground Lease, and to make repairs as Landlord may deem necessary or desirable, all
without abatement of Rent. Landlord will have the right to use anymearis which
Landlord may deem proper to open any doors in an emergency to obtain entry to the
Premises, without liability to Tenant. Any entry to the Premises obtained by Landlord in
accordance with this Article 18 will not be construed under my circumstances as a
forcible or unlawful entry into, or a detainer of, the Premises, or as an eviction of Tenant
from the Premises.
19. DEFAULT AND REMEDIES.
(a) If Tenant violates any provision of this Sublease, if anyone seeks to attach
Tenant's interest in this Sublease or if Tenant becomes party to any bankruiptcy
insolvency or similar action or proceeding, then Landlord, in its sole discretion, may
cum such default (in which case Tenant shall promptly upon demand repay Landlord
the full cost of such cure, including overhead) or immediately terminate this Sublease
and recover damages.
(b) If Landlord terminates this Sublease under Section 19(a), Landlord may
reenter and take possession of all or any part of the Premises, without demand or notice,
and repossess the same and expel Tenant and my party claiming by, through or under
Tenant, and remove the effects of both, with or without process of law, and using such
force for such purposes as may be necessary, without being liable for prosecution on
account of that action or being deemed guilty of any manner of trespass, and without
prejudice to any remedies for arrears of rent or right to bring my proceeding for breach
of covenants or conditions. No such reentry or taking
possession of the Premises by Landlord will be construed as an election by Landlord to
terminate this Sublease unless Landlord gives Tenant a written notice of such intention.
No notice from Landlord under this Sublease or under a forcible entry and detainer statute
or similar law will constitute an election by Landlord to terminate this Sublease unless
such notice specifically so states. Landlord reserves the right, following any reentry or
reletting, to exercise its right to terminate this Sublease by giving Tenant such written
notice, in which event this Sublease will terminate as specified in such notice.
(c) Nothing contained in this Sublease will limit or prejudice the right of
Landlord to prove and obtain as liquidated damages in any bankruptcy, insolvency,
receivership, reorganization or dissolution proceeding, an mount equal to the
maximum allowable by any statute or role of law governing such proceeding in effect
at the time when such damages are to be proved, whether or not such amount is greater
than, equal to, or less than the mounts recoverable, either as damages or rent, under
this Sublease.
EXHIBIT "B"
(d) Exercise of any of the remedies of Landlord under this Sublease will not
prevent the concurrent or subsequent exercise of my other remedy provided for in this
Sublease or otherwise available to Landlord at law or in equity.
20. DEFAULT BY LANDLORD. In case of a breach of this Sublease by
Landlord, Landlord will not be liable for my consequential or punitive or damages for
lost profits or business interruption or my damages similar to my of the foregoing. In
no event will Landlord be liable to Tenant for any damages, costs or expenses in excess
of Landlord's interest in the Premises.
21. GENERAL.
(a) Landlord's waiver of any provision of this Sublease will not be
effective unless in writing and signed by Landlord, and my such waiver will not be
deemed a waiver of any other provision or of die same provision on my other occasion.
The subsequent acceptance of rent by Landlord will not be deemed a waiver of any
preceding default by Tenant.
(b) Subject to Section 13, this Sublease will more to the benefit of
and bind the heirs, successors, executors, administrators and permitted assigns of the
parties.
(c) Tenant shall not record this Sublease or any memorandum of it.
(d) Tenant may be charged, at Landlord's sole discretion, a late charge
of 10% for any payment not made when due under this Sublease. This will not affect my
of Landlord's other rights or remedies for such breach.
(e) This Sublease is the entire agreement of the parties regarding its
subject matter. This Sublease may not be amended except by an agreement in writing
signed by the parties.
(f) Tbe invalidity or unenforceability of my part of this
Sublease in my application will not affect the validity of my other part or of the
same pan in my other application.
(g) This Sublease will be governed by and construed in accordance
with the laws of the State of Texas.
(b) If either party brings an action or proceeding against the other
under this Sublease, the prevailing party will be entitled to recover its court costs and
reasonable attorneys' fees in such action or proceeding, including costs of appeal, if my,
plus other expenses of litigation or arbitration.
(i) All controversies and disputes between Landlord and Tenant
arising out of or related to this Sublease shall be submitted to and settled by conclusive
binding arbitration under the Commercial Rules of the American Arbitration Association.
hi my such arbitration proceeding: (a) all statutes of limitation which would otherwise be
10
EXH I BIT "B"
applicable shall apply; (b) the arbitration must be conducted by a single, neutral arbitrator
that is a practicing lawyer licensed in Texas and who has not less than five years'
experience in the arbitration of leasing disputes; (c) all hearings shall be held at a location
or locations in Texas designated by the arbitrator;
(d) the fees and expenses of the arbitrator shall be home equally by the parties, or as
ordered by the arbitrator; and (g) the arbitrator shall have the power to award attorneys'
fees pursuant to Section 2 1 (h) above and may require the party that is required to pay an
award of attorneys' fees to also pay the fees and expenses of the arbitrator and the fees
and expenses of my qualified person or persons hired by the arbitrator. The results of
the arbitration shall be final and binding upon all parties to the arbitration, and judgment
maybe entered upon such results in accordance with applicable law in my court of
competent jurisdiction. This arbitration provision shall not limit the right of Landlord to
use rights and/or remedies, judicial or otherwise, for the purposes of preserving or
protecting the Premises or obtaining possession of the Premises, including without
limitation proceeding under forcible entry and detainer laws for possession of the
Premises as well as the remedies of specific performance and injunctive relief The
decision of the arbitrator may not be appealed.
0) All notices under this Sublease shall be in writing and shall be sent
by first class certified mail (in which case it shall be deemed given two business days
after being mailed), by telecopy (in which case it shall be deemed given when the sending
machine confirms that it was successfidly sent) or bypersonal delivery (in which case it
will be deemed given when delivered or when delivery is refused) as follows:
If to Landlord:
N50SQ,LLC
Attn: G. Randall Andrews
5307 W Loop 289, Ste 302
Lubbock, TX 79414
Email: grandallApracorealestate.com
Facsimile: 806-748-1757
If to Tenant:
Attn:
Email:
Facsimd�—.
(k) Each party represents to the other that it has not used a broker or
become: obligated to pay any commission or similar fee in connection with this Sublease.
Each party will indemnify the other for my such claim based on acts or omissions by the
indemnifying party.
I I
EXHIBIT "B"
(1) Any payment or indemnification obligation of Tenant shall
survive any tennination of this Sublease.
LANDLORD:
N50SQ, LLC, a Texas Limited Liability Company
By:
G. Randall Andrews, Member
TENANT:
M.
12