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HomeMy WebLinkAboutResolution - 4835 - Agreement - Hallmark & Associates Inc - Non-Aeronotical Lease, LIA - 05/11/1995Resolution No. 4835 May 11, 1995 Item 434 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Non -Aeronautical Lease Agreement by and between the City of Lubbock and Hallmark & Associates, Inc., attached hereto, and which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. APPROVED AS TO CONTENT: MarEarle, Aviation anirger APPROVED AS TO FORM: DWald G. Vandiver; first` AssistAt Ci Attorney HW,js/L-HALMRK.RES adoesfrev. May 2, 1995 Resolution No. 4835 May 11, 1995 Item 434 LEASE AGREEMENT THE STATE OF TEXAS COUNTY OF LUBBOCK § This LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into at Lubbock, Texas, by and between the CITY OF LUBBOCK, TEXAS, hereinafter referred to as "Lessor," and HALLMARK & ASSOCIATES, INC., hereinafter referred to as "Lessee." ''V4'ITNESSETH. WHEREAS, Lessor owns and operates a public airport designated as Lubbock International Airport and hereinafter called "Airport;" and WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to lease unto Lessee a certain tract or parcel of land in the air cargo complex, together with certain privileges, rights, uses and interests therein, as hereinafter set forth; and WHEREAS, Lessee intends to construct buildings and other improvements on said tract or parcel of land and sublet the same to Federal Express Corporation (Sublessee) for use in its air cargo express operations; and WHEREAS, the Airport Board of the City of Lubbock has approved and recommends that Lessee be granted this Agreement for the term hereinafter designated; and WHEREAS, the City Council of the City of Lubbock accepts the recommendation of the Airport Board and finds that execution of this Lease will properly serve the public interest of the citizens of the City of Lubbock; ARTICLE I NOW THEREFORE, for and in consideration of the covenants and conditions herein contained and other valuable consideration, Lessor hereby authorizes Lessee to exercise the rights, powers and privileges hereinafter set forth and does hereby lease to the Lessee certain premises, hereinafter described and called "Leased Premises," which are designated on Exhibit A attached hereto and incorporated herein by reference as part of this Agreement. 1.01. LEASED PRFMISES The Leased Premises shall consist of approximately 115,500 square feet of land located in the air cargo complex at the Airport, as shown on Exhibit A. Lessor hereby represents and warrants unto Lessee that Lessor is the owner of good and marketable title to the Leased Premises. 1.02. NON-EXCLUSIVE It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308(a) of the Civil Aeronautics Act. 1.03. PURPOSE Subject to the approval of the Director of Aviation of the Lessor, Lessee may from time to time, at its own expense, construct buildings and other improvements on the Leased Premises (hereinafter called the "Improvements"), including but not limited to a facility to be built and leased to Sublessee, and which shall be used as an air and/or ground cargo and freight distribution facility. 1.04. SIGNS Lessee will erect no signs and will distribute no advertising at the Airport without the prior written consent of the Director of Aviation of Lessor. However, Lessee shall have the right to place signs identifying Lessee's or Sublessee's business at locations approved by the Director LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 2 of Aviation. Said signs shall be of a type, size and design approved in writing by the Director of Aviation. The installation of such signs must comply with all applicable City ordinances and shall be without cost to the Lessor. 1.05. PUBLIC BENEFIT Lessee agrees to conduct business on the Leased Premises for the use and benefit of the public and further agrees: 1. To furnish good, prompt and efficient services adequate to meet all the demands for its services at the Airport; 2. To furnish said services on a fair, equal and nondiscriminatory basis to all users thereof; and 3. To charge fair, reasonable nondiscriminatory prices for each unit of sale or service, provided that the Lessee may make reasonable nondiscriminatory discounts, rebates or other similar types of price reductions for volume purchases. 1.06. CONTINGENCIES Lessee has entered into this Lease with the expectation of obtaining all permits, licenses, permissions and/or other authorizations (hereinafter collectively called "Permits") necessary for the construction upon the Leased Premises of the Improvements, built according to Sublessee's plans and specifications (including, without limitation, septic tanks and/or sewer disposal systems, if necessary, buildings, parking areas, curb cuts, signs and any other improvements deemed necessary or desirable by Lessee), and for the operation of the Improvements upon the Leased Premises seven (7) days a week. This Lease shall be deemed null and void and of no further effect if Permits are not obtained within one hundred eighty (180) days of application therefor. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 3 This Lease is also contingent upon Lessee subletting the Leased Premises to Federal Express Corporation or another sublessee within one hundred eighty (180) days of execution of this Lease by both parties hereto. If such other agreement or sublease is not executed within one hundred eighty (180) days, this Lease shall be deemed null and void and of no further effect. ARTICLE II TERM The term of this Agreement shall be for a period of twenty (20) years commencing on the date of execution of this Agreement; subject, however, to earlier termination as hereinafter provided under Article VI. If this Agreement is not terminated pursuant to Article VI, Lessee may extend this Agreement for two (2) additional and consecutive periods of ten (10) years each by written notification to the Director of Aviation of the Lessor that an extension is desired at least thirty (30) days prior to expiration of the term of this Agreement or expiration of the first ten (10) year period, if in effect. ARTICLE III RENTALS AND FEES 3.01. RENTAL In consideration of the rights and privileges herein granted, Lessee shall pay to Lessor an annual rental for the 115,500 square feet of Leased Premises of ELEVEN THOUSAND SIX HUNDRED SEVEN AND 751100 DOLLARS ($11,607.75), which rental shall be due and payable, in advance, in twelve (12) equal monthly installments of NINE HUNDRED SIXTY- SEVEN AND 31/100 DOLLARS ($967.31), on or before the tenth (10th) day of each month following completion of the Airport's ramp and taxiway to the Leased Premises. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 4 The aforesaid rental rate shall be adjusted upward or downward on January 1 of each year this Agreement is in effect in direct proportion to the percentage increase or decrease for the preceding twelve (12) months in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Department of Labor. 3.02. DEPOSIT FOR SECURITY BADGES In addition to the above rental, Lessee shall pay the City a processing fee and a deposit for security badges for each of Lessee's employees on the Leased Premises if it is determined by the Director of Aviation that badges are necessary to continue operations. Lessor's Director of Aviation shall also determine 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 to the Director of Aviation. 3.03. DEFAULT FOR FAILURE TO PAY RENTALS OR FEES If Lessee fails to pay any rentals or fees payable to Lessor hereunder within fifteen (15) days of their due date, the Director of Aviation of Lessor may, at his option, upon ten (10) days written notice to Lessee (unless within such ten (10) day period Lessee shall have corrected its failure to pay) immediately or at any time thereafter, enter into and upon the Leased Premises, or any part thereof in the name of the whole, and repossess the same without being deemed guilty of trespass. 3.04. PAYMENTS All payments that become due and payable by Lessee shall be made to the City of Lubbock at the office of the Director of Aviation, Lubbock International Airport, Lubbock, Texas, 5401 N. Martin Luther King Blvd., Rt. 3 Box 389, Lubbock, Texas 79401. Lessee shall pay Lessor a late payment charge of five percent (5%) of the total amount of rent in arrears if payment is not made on or before the tenth (10th) day of each month. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 5 ARTICLE IV RIGHTS RESERVED TO LESSOR The following rights are reserved unto Lessor, and Lessee agrees that all rights, powers and privileges granted under this Lease shall be subordinated to Lessor's rights as hereinafter stated. 4.01. AIRPORT HAZARDS 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 erecting or permitting the erection of any building ar other structure on the Airport which, in the opinion of the Director of Aviation of Lessor, would limit the usefulness of the Airport or constitute a hazard to aircraft. 4.02. AGREEMENT WITH UNITED STATES During time of war or national emergency, the Lessor shall have the right to enter into an agreement with the United States Government for military or naval use of all or part of the landing area, the publicly -owned air navigation facilities, and any other area or facilities of the Airport. If any such agreement is executed, the provisions of this Lease, insofar as they are inconsistent with the provisions of the agreement with the Government, shall be suspended. 4.03. SUBORDINATION OF LESSEE'S RIGHTS This Agreement shall be subordinate to the provisions of any existing or future agreement between the Lessor and the United States pertaining to the operation and 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. 4.04. SUSPENSION OF LESSEE'S RIGHTS All rights, privileges and interests acquired herein by Lessee, at the option of the Director of Aviation of Lessor, following thirty (30) days written notice to Lessee, may be suspended if LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 6 such suspension is found by the Director of Aviation, acting in good faith, to be necessary for the Lessor to secure federal financial aid for the development of the Airport, or further development of aeronautical operations thereon. 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, but Lessor herein agrees that it will endeavor to minimize any inconvenience to Lessee's use of the Leased Premises while undertaking such developments or improvements. 4.06. RIGHTS OF OTHERS It is clearly understood by the Lessee that no right or privilege has been granted which would operate to prevent any person, firm or corporation operating aircraft on the Airport from performing any services on its own aircraft with its own regular employees (including, but not limited to, maintenance and repair) that such person, firm or corporation may choose to perform. 4.07. 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, together with the right to direct and control all activities of Lessee in this regard. ARTICLE V opl-, 11ty-fleMIKII&I This Lease is granted subject to the following provisions and conditions: LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 7 5.01. RULES AND REGULATIONS In conducting its business on the Leased Premises, Lessee shall comply with all federal, state and local laws, ordinances, rules and regulations now in force or hereinafter prescribed or promulgated by authority or by law. Lessee further agrees that in the event a civil penalty or fine is levied against the Airport as a result of Lessee's failure to comply or act in accordance with said laws, ordinances, rules or regulations, Lessee shall immediately reimburse the Airport the full amount of the penalty or fine and 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 section shall be cause for immediate termination of this Lease by Lessor's Director of Aviation. 5.02. REMOVAL AND DEMOLITION Lessee shall not remove or demolish, in whole or in part, any improvements that already exist on the Leased Premises without prior written consent of the Director of Aviation of Lessor, who may, in his discretion, condition such consent upon the obligation of Lessee to replace the same improvements specified in such consent upon termination or expiration of this Lease. The Director of Aviation shall not withhold consent unreasonably and shall not impose unreasonable conditions on his consent. 5.03. LIENS Lessee shall not bind or attempt to bind Lessor for payment of any money in connection with installations, alterations, additions or repairs to the Leased Premises or to any of Lessee's equipment or facilities located on the Leased Premises and shall not permit any mechanic's, materialman's or contractor's liens to arise against the Leased Premises or any improvements, equipment, machinery or fixtures thereon belonging to Lessor, and Lessee expressly agrees that LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 8 it will keep and save Lessor harmless from all costs and damages resulting from any lien or liens of any character created or that may be asserted through any act or thing done by Lessee. 5.04. LESSEE'S DUTY TO DEFEND Lessee shall hold Lessor harmless from mechanic's and materialman's liens arising from the construction of any Improvements authorized by this Agreement. In the event any mechanic's or other liens or orders for payment shall be filed against the Leased Premises or improvements thereon, or the property of Lessor located thereon, during the initial term of this Agreement, or during any extension or renewal hereof, Lessee shall within ten (10) days cause the same to be canceled and discharged of record by bond or otherwise, at the election and expense of Lessee, and shall also defend on behalf of Lessor, at Lessee's sole cost and expense, any action, suit or proceeding which may be brought thereon or for the enforcement of such liens or orders. 5.05. INSPECTION OF LEASED PREMISES Lessor, acting by and through its Director of Aviation or his designated representatives, shall have the right to inspect the Leased Premises at all reasonable times during the initial term of this Lease and during any extension or renewal thereof. 5.06. JANITORIAL SERVICES Lessee shall, at its own expense, provide janitorial services for the Leased Premises. Said services may be provided by Lessee alone, or by Lessee in conjunction with other tenants who are now or may hereafter be Lessees at the Airport. 5.07. MAINTENANCE Lessor assumes no responsibility for the condition of the Leased Premises and shall not assume any responsibility for maintenance, upkeep or repairs necessary to keep the Leased Premises in a safe and serviceable condition. Lessee shall, at its sole cost and expense, maintain LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 9 the Leased Premises in a presentable condition consistent with good business practice. Lessee shall repair all damages to said Leased Premises caused by its employees, patrons and its business operations thereon, and shall also maintain and repair all improvements, facilities and equipment thereon, including any drainage installations, paving, curbs, buildings and other improvements. All such maintenance and repairs shall be performed with quality materials and in a workmanlike manner. All paint colors and schemes shall harmonize and shall be subject to prior approval of the Director of Aviation for the Lessor. The Director of Aviation of Lessor shall be the sole judge of the quality of maintenance, and upon written notice from Director of Aviation, Lessee shall be required to perform whatever maintenance such Lessor's agent deems necessary. If said maintenance is not undertaken by Lessee within twenty (20) days after receipt of written notice, the Director of Aviation shall have the right to enter upon the Leased Premises and perform the necessary maintenance, the cost of which shall be borne by Lessee. 5.08. LESSEE'S DUTY TO REPAIR Except as provided herein, any property of Lessor, or for which Lessor may be responsible, which is damaged or destroyed incident to the exercise of the rights 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 satisfaction of the Director of Aviation of Lessor, or in lieu of such repair or replacement, Lessee shall, if so required by the Director of Aviation, pay Lessor money in any amount deemed sufficient by him to compensate the Lessor for the loss sustained or expense incurred by Lessor as a result of the loss of, damage to, or destruction of such property. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. -- PAGE 10 5.09. 'TRASH DISPOSAL Lessee shall, at its sole expense, provide a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse resulting from its business operations authorized by this Agreement. 5.10. UTILITIES Lessee agrees to pay for all utility charges and fees resulting from or connected with Lessee's use of the Leased Premises. 5.11. TAXES, ASSESSMENTS AND LICENSES During the term of this Lease, and during any extension or renewal thereof, Lessee shall promptly pay all taxes and assessments of whatever character that may be lawfully levied or charged upon the leasehold improvements and upon Lessee's use of the Leased Premises. Lessee shall obtain and pay for all licenses and permits necessary or required by law for the construction of any additional improvements, the installation of equipment and furnishings, and any other licenses necessary for the conduct of its business. 5.12. HOLD HARMLESS Lessee agrees to indemnify, defend and forever save Lessor, its authorized agents, representatives and employees, harmless from and against any and all penalties, liability, annoyances or losses resulting from claims or court actions of any nature arising directly or indirectly out of any acts or omissions of Lessee, its agents, servants, guests, employees or business visitors under this Agreement. 5.13. PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE Lessee shall maintain at all times during the initial term of this Lease, and during any extension or renewal thereof, at its sole expense, adequate insurance with an insurance underwriter acceptable to the Director of Aviation of Lessor and authorized to do business in the LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE l 1 State of Texas, against claims of public liability and property damage resulting from Lessee's activities at the Airport. The amount of insurance coverage shall not be less the than ONE HUNDRED THOUSAND DOLLARS ($100,000) for property damages as a result of any one event, or less than THREE HUNDRED THOUSAND DOLLARS ($300,000) for personal injury or death of any one person in any one event, or less than FIVE HUNDRED THOUSAND DOLLARS ($500,000) for personal injury or death of two or more persons in any one event. All policies shall contain an agreement on the part of the respective insurers waiving the right of such insurers to subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be filed with the Director of Aviation contemporaneously with the commencement of the initial term of this Lease. Each policy shall name the City of Lubbock as an additional insured as its interest may appear, require the insurer to notify the Director of Aviation of the City of Lubbock, Texas, of any alteration, nonrenewal or cancellation, and remain in full force and effect until at least ten (10) clays after such notice of alteration, nonrenewal or cancellation is received by the Director of Aviation.. 5.14. FIRE AND HAZARD INSURANCE Lessee shall insure for fire and extended coverage risks all of the Improvements on the Leased Premises and shall keep such insurance in full force and effect during the entire term of this Lease, and during any extension or renewal thereof. Such insurance shall be in an amount not less than eighty percent ($0%) of the full insurable replacement value of such improvements. All fire insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder, and an agreement on the part of the insurers waiving the right of such insurers to subrogation. Lessee shall furnish evidence of certificates of insurance to the Director of Aviation prior to Sublessee taking possession of the Leased Premises. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 12 5.15. INDEMNITY Lessee agrees to hold the Lessor free and harmless from loss from each and every claim and demand of whatsoever nature made on behalf of or by any person or persons and resulting from Lessee's activities on and/or use of the Leased Premises and common areas owned by the Lessor and used by the Lessee, its agents, servants or employees, and from all loss and damages by reason of negligence of the Lessee, its agents, servants or employees. 5.16. LESSEE On or before the date of expiration of this Agreement, Lessee shall, as required by the Director of Aviation of Lessor, vacate said Leased Premises, remove all property of Lessee, and restore the Leased Premises and any improvements, facilities and equipment remaining thereon to the same or better condition on such date of expiration as when received, ordinary wear and tear excepted. If, however, this Lease is terminated pursuant to Article VI, Lessee shall vacate the Leased Premises, remove said property, and restore the Leased Premises, and any improvements, facilities and equipment thereon as aforesaid within ten (10) days following the date of such termination; provided, however, that Lessee's right to remove its property is subject to the condition that Lessee has paid in full all amounts due and owed to Lessor under this Agreement. If Lessee shall fail or neglect to remove said property and so restore the Leased Premises and all improvements, facilities and equipment thereon on or before said expiration or within ten (10) days of such termination, then said property shall become the property of Lessor without compensation therefor. 5.17. NONDISCRIMINATION Lessee, its agents and employees will not discriminate against any person or class of persons by reason of race, color, sex, religion or national origin in providing any services or in the use of any of its facilities provided for the public; nor shall Lessee discriminate against any LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 13 person or class of persons on the basis of age in a manner that violates any prohibition against such discrimination under the Age Discrimination Act of 1975, 42 U.S.C. §§ 621 et. seq. Lessee further agrees to comply with such enforcement procedures as the United States might demand that Lessor take in order to comply with the Sponsor's Assurances. Lessee agrees to not discriminate against any employees or applicants for employment because of race, color, age, sex, religion or national origin. Lessee also agrees to take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, age, sex, religion or national origin. Such action shall include, but not be limited to, employment, upgrading, demotion or transfer, recruitment, layoff, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Lessee will also conduct its activities in accordance with the requirements of Section 504 of the Rehabilitation Act of 1973, and will assure that no qualified handicapped person shall, solely by reason of his or her handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination, including discrimination in employment, under any program or activity of Lessee. Lessee also agrees that in the event facilities are constructed, maintained or otherwise operated on the Leased Premises for a purpose for which a Department of Transportation program or activity is extended, or for another purpose involving the provision of similar services or benefits, Lessee shall maintain and operate such facilities and services in compliance with all requirements imposed pursuant to 49 CFR Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said Regulations may be amended. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 14 5.18. WARRANTY OF NO SOLICITATION Lessee warrants that it has not employed any person employed by Lessor to solicit or secure this Agreement upon any agreement for a commission, percentage, brokerage or contingent fee. 5.19. ASSIGNMENTS AND SUBLEASES Lessee may sublet any part of the Leased Premises and assign, transfer, pledge or alienate this Agreement or any interest herein so long as the Leased Premises and Improvements continue to be used for the purpose expressed in this Agreement and any such sublessee or assignee agrees in writing that it will observe and abide by all of the terms, covenants and conditions herein which are applicable to Lessee. No assignment or sublease shall affect Lessee's obligations to make all required rental and fee payments hereunder upon default of any assignee or sublessee. 5.20. 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 future performance shall continue to be in full force and effect. Furthermore, the acceptance of rentals or fees by Lessor after Lessee's failure to perform, keep or observe any of the terms, covenants or conditions of this Lease shall not be deemed a waiver by Lessor to cancel this Agreement for such failure. 5.21. DUTY TO PRE'V'ENT UNAUTHORIZED ACCESS Lessee shall prohibit unauthorized persons, vehicles and animals from obtaining access or entry into the air operations area and any other sterile area at the Airport through those Airport premises which Lessee either controls or has possession of under this Agreement; and Lessee agrees that in the event that a civil penalty or fine is levied against the Airport or Lessor as a LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 15 result of Lessee's failure to comply or act in accordance with this provision, or any other applicable federal, state or local statutes, ordinances, rules and regulations affecting the use, occupancy or operation of any of said premises, Lessee shall immediately reimburse the Lessor the full amount of the penalty or fine and correct the act or omission leading to, causing or contributing to the violation. 5.22. SECURITY PLAN Within thirty (30) days of execution of this Agreement, Lessee shall submit a Security Plan to the Director of Aviation, the Airport Security Coordinator and the Federal Aviation Administration. Failure to submit an acceptable Security Plan in a timely manner shall be grounds for immediate termination of this Agreement. 5.23. STANDARDS Prior to construction of the Improvements contemplated by this Lease, Lessor reserves the right to establish standards for the construction and maintenance of and alterations, repairs, additions or improvements to Lessee's facilities. This includes structural design, color, materials used, landscaping and maintenance of Lessee's facilities and the Leased Premises. Lessor also reserves the right to issue through its Director of Aviation such 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. 5.24. 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. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 16 5.25. 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 same shall remain the sole property of Lessor. 5.26. CONSTRUCTION PERIOD Upon execution of this Agreement, Lessee shall be granted immediate access to the Leased Premises. No rentals shall accrue prior to the completion by the Lessor of a ramp and taxiway to the Leased Premises. 5.27. LANDLORD'S LIEN Lessee hereby gives Lessor a contractual lien upon all of Lessee's property, now or at any time hereafter placed in or upon the Leased Premises, to secure the prompt payment of the rentals and charges herein required, and Lessee hereby waives all exemptions for such property, and any portion thereof, insofar as permitted by law. ARTICLE VI TERMINATION This Agreement is subject to termination for the reasons set forth below, provided that ten (10) days written notice is given to the nonterminating party. 6.01. LESSEE'S RIGHT TO TERMINATE Lessee may terminate upon the happening of any of the following: A. The permanent abandonment of the Airport as an air terminal by Lessor. B. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Leased Premises. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 17 C. The breach by Lessor of any of the terms, covenants or conditions of this Agreement to be kept, performed and observed by Lessor, and the failure of Lessor to remedy such breach for a period of thirty (30) days after written notice from Lessee of the existence of such breach. D. The assumption by the United States Government, or any authorized agency of same, of the operation, control or use of the Airport and its facilities in such a manner as to substantially restrict Lessee from conducting its business under this Agreement. 6.02. LESSOR'S RIGHT TO TERMINATE Lessor may terminate upon the happening of any of the following: A. If the Lessee makes an assignment for the benefit of creditors; or files a voluntary petition of bankruptcy; or if proceedings in bankruptcy are instituted against Lessee and Lessee is thereafter adjudicated as bankrupt pursuant to such proceedings; or if a receiver for Lessee's assets is appointed; or if Lessee petitions or applies to any tribunal for the appointment of a trustee or receiver for Lessee under any bankruptcy, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect. B. If Lessee shall abandon and discontinue operations under this Agreement, except that Lessor may not terminate if only a sublessee abandons and discontinues operations. C. If Lessee shall default in or fail to make any rental or fee payments at the time and in the amounts required under this Agreement. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 18 D. If Lessee shall fail to perform, keep and observe all of the covenants and conditions contained in this Agreement to be performed, kept and observed by Lessee. E. If Lessee shall fail to abide by all applicable laws, ordinances, rules and regulations of the United States, State of Texas, City of Lubbock and Director of Aviation of the City of Lubbock. Except where this Lease provides for immediate termination, Lessor shall give written notice to Lessee to correct or cure any such default, failure to perform or breach and if, within ten (10) 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 Director of Aviation of Lessor, then and in such event the Director of Aviation shall have the right, at once and without further notice to Lessee, to declare this Agreement terminated and to enter upon and take full possession of the Leased Premises and, provided further, that upon the happening of any of the contingencies enumerated in Article VI, Section 5.02, numbered Paragraph A hereof, this Agree- ment shall be deemed to be breached by Lessee and thereupon "ipso facto," and without entry or any other action by Lessor, shall automatically terminate and be reinstated only if such involuntary bankruptcy or insolvency proceedings, trusteeship, receivership or other legal act divesting Lessee of its rights under this Agreement shall be denied, set aside, vacated or terminated in Lessee's favor within thirty (30) days from the happening of the contingency. Upon the happening of any of said latter events, this Agreement shall be reinstated as if there had been no breach occasioned by the happening of the contingency, provided that Lessee shall, within ten (10) days after the final denial, vacating or setting aside of such petition, or the vacating, terminating or setting aside of such appointment, pay or discharge any and all sums of money which may have become due under this Agreement in the interim and remain unpaid, and LEASE AGREEMENT HALLMARK &c ASSOCIATES, INC. ---- PAGE 19 shall likewise fully perform and discharge all other obligations which may have accrued and become payable in the interim. 6.03. OWNERSHIP OF IMPROVEMENTS Lessee may at its own expense remove any of the Improvements any time during the term of this Lease, or during any extension of the term, provided no rental payments are in arrears. If Lessee has not removed all of the Improvements from the Leased Premises upon expiration of the term or an extension, if applicable, those Improvements which remain shall be deemed abandoned and shall become part of the real estate, with title thereto vesting in the Lessor, and the Lessor shall thereafter own the remaining Improvements free and clear of any rights, titles and interests of Lessee and free and clear of all liens and encumbrances. In the event Lessee elects to remove any of the Improvements from the Leased Premises, Lessee shall restore such premises to the condition in which they existed prior to construction of the Improvements. In the event Lessor terminates this Agreement for cause, as contained herein, or if Lessee discontinues its business on the Leased Premises at any time prior to expiration of the term, or the expiration of any subsequent extension, Lessor shall retain ownership of the Improvements to the extent of the rentals due for the remainder of the term or extension. ARTICLE VII MISCELLANEOUS PROVISIONS 7.01. NOTICES Notices to the Lessor provided for herein shall be sufficient if sent by certified mail, postage prepaid, addressed to the Director of Aviation, Route 3, Box 389, Lubbock, Texas 79041, and notices to Lessee, if sent by certified mail, postage prepaid, to the address for Lessee on file with the Director of Aviation for Lessor. LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 20 7.02. 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 this Agreement, such holding over shall not be deemed as a renewal or extension of this Lease, and may be terminated at any time by the Director of Aviation of Lessor. Executed this 11th day of May , 1995. LESSOR: LESSEE: CIT BOC , TS HALLMARK & ASSOCIATES, INC. BY: BY:. D R. LANG N, MA R Name: ATTEST: Betty M. fohnsoity gecretary APPROVED AS TO CONTENT: malkEarle, Aviation Director APPROVED AS TO FORINT: o ald G. Vandiver, First Assistant City Attorney HW;js/L-HALMRK.DOC CityAtt/rev. April 24, 1495 Title: ATTEST: LEASE AGREEMENT HALLMARK & ASSOCIATES, INC. ---- PAGE 21 CITY OF LUBBOCK TO: Betty M. Johnson, City Secretary FROM: Harold Willard, Assistant City Attorney SUBJECT: Council agenda item DATE: May 17, 1995 As per our discussion in your office yesterday, the Airport staff and I have concluded some additional research concerning the Lease Agreement with Hallmark & Associates, Inc. as requested by Councilman Randy Neugebauer. Please submit the Agreement to the Mayor for his signature as authorized by the City Council at its meeting on May 11, 1995. Thanks. Harold Willard xc: Mark N. Earle 4L'&W4(Z,4 &-- t-/J(N v ccat4e&, t.�. P.O. Box 53516 • Lubbock, Texas 79453 • (806) 797-2190 RECEIVEL) JUN 2 3 1995 CITY SECRETAP LUBBOCK. TEXAS Thursday, June 22, 1995 Ms. Betty M. Johnson City of Lubbock P.O. Box 2000 Lubbock, Tx 79457 Re: Ground lease at airport between City of Lubbock & Hallmark & Associates, Inc. for Federal Express Facility. Dear Betty: One of the requirements for my construction loan on the Federal Express project being built at the airport is to have the City sign the attached consent to assignment of the ground lease. This would enable my lender, Norwest, to step into my place and complete the Federal Express project in the event there were a default on my part relating to the construction loan. If you would, please have the enclosed document executed and notarized and return it to me in the enclosed post paid envelope by no later than July 1, 1995. Thank you for your assistance. Sincerely, W. Wesley Hallmark Commercial -deaf '-Estate AFTER RECORDING REMRN To: Wart W. Human CAFA7SHAw, DUPRFZ t M7LUM, L.L.P. P, o. &= u9v Lubbock, Tam iMM V 0 D CONSENT TO ASSIGNMENT AND ATTORNMENT BY CITY OF LUBBOCK Lessee: HALLMARK & ASSOCIATES, INC., a Texas Corporation Lessee's Mailing Address: P.O. Box 53516, Lubbock, Lubbock County, Texas 79453 Lessor. CITY OF LUBBOCK, TEXAS Lessor's Mailing Address: P.O. Box 2000, Lubbock, Texas 79457 Lender. NORWEST BANK TEXAS, N.A. Leader's Mailing Address: P.,(-). Box 12� 1, 1-u—b0bo .11, 'A exa.s 794000 Loan Documents: Real Estate Lien Note in the original principal sum of $1,364,000.00, all Deeds of 'frust, Assignments of Leases and Rents, Loan Agreements, Guaranty Agreements, Security Agreements, Assignment of Construction Contracts, Assignment of Architectual Contract and Plans, and all other instruments and documents, whether now or hereafter existing, executed by owner further securing the above- described Real Estate Lien Note. Property: All of Grantor's leasehold interest in a tract of land out of Section 32, Block A, Abstract 684, H.B. Reed Original Grantee, Lubbock County, Texas, and being more particularly described as follows: BEGINNING at a 1/2" iron rod, set for the Northeast and beginning comer of this tract, whence the Northeast corner of said Section 32 bears North, 2020.34 feet and East 4486.05 feet; THENCE South 00006'45" West, 550.00 feet to a 1/2" iron rod, set for the Southeast comer of this tract; THENCE North 89053'15" West, 210.00 feet to a 1/2" iron rod, set for the Southwest comer of this tract; THENCE North 00006'45" East, 550.00 feet to a 1/2" iron rod, set for the Northwest corner of this tract; THENCE South 89'53'15" East, 210.00 feet to the POINT OF BEGINNING. Lessor acknowledges the Assignment of Lease Agreement (the "Assignment"), entered into by and between Lessee and Lender dated June 22 , 1995, and hereby consents to the Assignment and states that the Assignment is accepted by Lessor. Lessor further acknowledges and agrees that upon receipt from Lender of written notice to the effect that. a default exists in one or more of the loan documents, Lesser shall make full and complete attornment to Lender as Lessee under the Lease Agreement and observe and perform the Lease Agreement as though Lender were the Lessee named in the Lease Agreement and to continue to do so until otherwise notified by Lender, so as to establish direct privity of contract between Lender and Lessor, with the same force and effect as though the Lease Agreement was originally made directly between Lender and Lessor. EXECUTED on the day of VOID THE STATE OF TEXAS § COUNTY OF LUBBOCK § 1995. ATTEST: &4,-, )j C�� Betty . Johnso City Secretary This instrument was acknowledged before me on the L l � l day of June, 1995, by David R. Langston, as Mayor of the CITY OF LUBBOCK, TEXAS, on behalf of the CITY OF LUBBOCK, TEXAS. �e-z otary Public, State of T as Place Seal, Printed Name & Commission Expiration Date Here: "°•f,� BEAIMZ M. WINGUE Nor Pdk so d Tam CONSENT TO ASSIGNMENT AND ATTORNMENT BY CITY OF LUBBOCK PAGE 2