COMMISSIONERS' COURT AGENDA REQUEST PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT. MADE BY: William H. Williams OFFICE: Commissioner, Pct. 2 MEETING DATE: February 24, 2003 TIME PREFERRED: SUBJECT: (Please be specific) Consider, discuss and take appropriate action on recommendation of Kerrville-Kerr County Airport Advisory Board to approve revised Airport Lease Agreements with Kerrville Aviation, Inc. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON(S) ADDRESSING THE COURT: Commissioner Williams, and Paul Knippel, PE, City of Kerrville Director of Public Works. ESTIMATED LENGTH OF PRESENTATION: 15 Minutes IF PERSONNEL MATTER NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays: 5:00 P.M. previous Tuesday THIS REQUEST RECEIVED BY: THIS REQUEST RECEIVED ON: All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court meetings. Your cooperation is appreciated and contributes toward your request being addressed at the earliest opportunity. See Agenda Request Rule adopted by Commissioners Court. -=rage ' of '. Bill Williams From: "Paul Knippel" To: Sent: Saturday, February 15, 2003 9:28 PM Attach: revisions to lease req'd before approval (Attachment 4).doc Subject: Additional Airport Material Commissioner Williams: Attached hereto are revisions that are proposed to be made to the lease documents that were included in the Airport Board agenda packet last week. Please note that a final lease document incorporating these revisions will be complete by the time that the Court and Council meet on the 24th and 25th, respectively. As stated in the agenda bill for Council that I sent to you earlier, a final lease agreement will be on file in the clerk's office at the time of the Council meeting. This coming week I will complete the revenue analysis that we discussed on the phone Friday. l plan to have this available for presentation at the Court and Council. Please let me know if I can assist further... Paul «revisions to lease req'd before approval (Attachment 4).doc» 2/17/03 BUSINESS OF THE CITY COUNCIL CITY OF KERRVILLE, TEXAS SUBJECT: Airport Lease Agreements with Kerrville Aviation, Inc. FOR AGENDA OF: Feb. 25, 2003 SUBMITTED BY: Paul Rnippel, P.E. Public Works Director DATE SUBMITTED: Feb. 17, 2003 CLEARANCES: EXHIBITS: 1. Attachment 1 - Proposed new lease for lots 9 and 10 2. Attachment 2 - Proposed addendum to new lease for lots 9 and 10 3. Attachment 3 - Proposed addendum to RX Aviation lease 4. Attachment 4 - Proposed revisions to Attachments 1 and 2 following Airport Advisory Board Meeting AGENDA MAILED TO: APPROVED FOR SUBMITTAL BY CITY MANAGER: Expenditure Current Balance Amount Account Required In Account Budgeted Number: (not applicable) PAYMENT TO BE MADE TO: APPROVED FOR SUBMITTAL BY ASSISTANT CITY MANAGER: SUMMARY STATEMENT The purpose of this agenda bill is to gain Council authorization to execute a new lease for lots 9 and 10 and to gain Council authorization to execute a sixth addendum to the KX Aviation lease. This agenda bill describes the current and proposed leases and action taken by the Airport Advisory Board. The current lease for lots 9 and 10 is a ground lease only for both lots in their entirety. The lease was executed in 1985 for a 20 year period which means that it is due to expire in 2005, at which time the existing blue hangar located on lot 10 would become airport property and subject to rental fees that would be paid to the airport by a subsequent lessee of lot 10. The proposed new lease is a ground lease also for both lots in their entirety (initially) and is for a new 30 year period. The new lease has performance requirements of the lessee, mainly construction of a hangar on the southern end of lot 9. Upon completion of the new hangar, the remaining portion of lot 9 would be released to the airport. In addition, the new lease extends to 2015 the date at which the blue hangar becomes airport property and consequently i...... ...L...L L.~ ~..L ...~_..L L._ LL. 1 ....~ nfi. ....._ .7.. with what would have been a 30 year lease originally executed in 1985 for lots 9 and 10. The new lease also increases the frequency at which rental rate adjustments are permitted from a five year interval to a one year interval. The proposed new lease for lots 9 and 10 includes both of the documents identified as Attachment 1 and Attachment 2. These documents are exactly as presented to the Airport Advisory Board for consideration. The proposed sixth addendum to the existing IIX Aviation lease changes the language relating to fuel flowage fees to reference "other airports of similar size within the State of Texas...", and removes reference to specific airports including New Braunfels and San Marcus. The addendum also adds to the list of mandatory services to include airframe and power plant repair. These two issues (flowage fees and services) are all that are addressed in this addendum. Action on both the new and amended leases was requested by city staff of the Airport Advisory Board at their February 8, 2003 meeting. A motion was made that a recommendation for approval of both the new lease and the sixth amendment be made subject to essentially two stipulations. The first stipulation was that certain substantive changes be made to the lease documents. These changes are outlined in Attachment 4. The second stipulation for approval was that City Council and Commissioner's Court find it in the better interest of the Airport to not use a competitive, or open bidding process for lease agreements. This motion was seconded and carried with a unanimous vote. The outline in Attachment 4 includes changes identified in the motion, as well as other changes identified by staff. All of the changes in Attachment 4 will be incorporated into the documents included in this agenda package, and a final lease document will be on file in the City Clerk' s office at the time of the February 25 Council meeting. With regard to the second stipulation, it is recognized that certain portions of airport property are more desirable to prospective lessees than other portions of airport property. This is particularly true of apron frontage. It is further recognized that ground leases, in addition to fuel flowage fees (and possible future airport taxes), are the principle sources of revenue for the airport. Regardless of the proposed leases before Council in this agenda bill, staff recommends against establishment of a competitive bidding process for airport property, and supports a leasing process based on a rate formula approach with a first come, first serve policy of lease execution. AGENDAI l There are arguments for and against both processes for administering lease agreements. Discussion of the arguments is deferred until open session. These will be discussed during open session. It can be said now however, that there are no laws, or requirements via grant assurances, that either prohibit or require a competitive process. Also, based on conversation with airport administrators at several other Texas airports, there seems to be no industry practice of competitive process. Other airports apparently have leased on a negotiated basis such as the City and County have done historically. With the potential for conflict over preferred leasing space, staff believes that it would be beneficial to have Council indicate a preference for either a competitive bid process or rate formula approach for lease administration. Furthermore if so directed, staff could incorporate a written set of rules associated with the preferred lease administration approach into the Airport Rules, Regulations, and Minimum Standards. Since the issue of competitive vs. non-competitive lease administration is tied to the Airport Boards recommendation of approval of the lease agreements for Kerrville Aviation, Inc., staff will present a revenue analysis for different lease scenarios for lots 9 and 10 in the open meeting. Council is further advised that this matter will be brought before the Commissioner's Court for consideration and action on Monday, February 24, 2003. RECONIl~NDED ACTION Staff requests that Council establish support for a rate formula approach to lease administration and advise staff to not open leasing agreements to the competitive bid process. Staff also requests that Council authorize execution of the final lease agreement for lots 9 and 10 and authorize execution of the sixth amendment to the RX Aviation lease. ~ ,' ~ - - _ - `r ~ - - - - - .... - - Attachment 1 _ _ ...: _.. _ --- - COIVIlVIERCLAL LEASE AGREEb1E1VT - ~-~ ~ - - _ ,.,.. - - _ _ .. _..-. :,AMONG -_ - - -- _ - .. - - - ~, . : - ..- -THE CITY OF KERRVII..LE,-TEXAS, THE COUNTY OF KERB, TEXAS ~ ~_~` r _ AND - _ . .: _ ~~ JOSEPH L. KENNEDY ENTERPRISES, LTD., A TEXAS LINIITED PART~iERSHIP -_ '•r ~~%a~. U'_. ~ ~.. Rt~~^' _ _._ -.,:.. - , s h ~. ~~~ ~~~.+ ,y<. ~..3.e ~ ~2„+- i ~yY~~"`.~~~t~:p..^'~s~~ ~ ,es~ - ~ - _ -. ".° _ ~.~"' -, - ~~-:«'-. ,. _ .. _,~''F.+t. ••....fJ~~:~3. s,r ~,.. .'~- 'FS" ~'L...''.:-..-s; --..25r-..ate - ;;-~;~-~~€r~THIS LEASE AGREEMENT, made this ~=~'~-= day of Febma~i; 2003: by and among-the City of Kerrvt~e,--~-: .Texas, "a home ,rule municipal corporation, .,hereinafter 'called ~"Cit}~',' and the Coumy ,of ,Kerr, Texas, a political ~ -_ ,t~subdivision of the State of Texas, hereinafter called `~Count}~~ (City and County sometimes collectively being referred ~o -~--- 4~ ~ ~as~`Lessor"), and Joseph L Kennedy Enterprises, Ltd.; ~a Texas hmt~ted partaetship, vr+hose prmcrpal offices are located m _ _ ;~r~.a,;~'~Kemulle, Texas, hereinafter referred to as "Lessee" ~~z•,.~ "°, i ~A - -~ 'z . __ - __-- ~. ~ -x - ~: - - - - WHEREAS, the Lessor owns and operates the Kerrville-Kerr County Municipal Airport; located in the Ciry of - . -. - == -.-Kerrville, Texas, hereinafter referred to as "Airport", and, --~~ _ ~ -.-. .. _ ~._ ~ f, -_ ' ~ . , _ ~- _ ~ - _ __ . _. - - _ .. _ -_ - . - _. WI~REAS, Lessee desires to lease certain Lessor-owned land at the Airport to construct certain improvements ~'. _ Nand to engage in certain aeronautical-related services to be provided to the public as hereinafter pem>itted; and NOW, THEREFORE, for and in consideration of the covenants and conditions herein stated, Lessor and Lessee a~ee as follows: ARTICLE 1. GRANT OF LEASE 1.01 Leased Premises: Lessor agrees to lease to Lessee certain property o~~ved by Lessor located at the Airport and being more particularly descnbed as Lots 9 and 10, and a 100 foot wide portion of Lot 11, as shown on the map recorded in Volume 6, Page 331 of the Real Property Records of Ker, County and as sho~cn in the diagrarn at~chtd hereto, together with all improvements thereon and fixtures attached thereto, hereinafter being referred to as the "L~~d Premises." Lessee shall construct the improvements on the South portion of Lot 9 and within sixty days of the completion of the construction by Lessee of the hangar and related facilities on the Leased Premises, and issuance of a certificate of occupancy by the City, Lessee shall, at Lessee's sole cost and expense, have the Leased Premises sin-eeed ("Survey") and shall have this survey recorded among the official property records of Kerr County, Texas. within 30 days from the date of the completion of the survey, Lessee shall release the North portion of the Leased Premises not occupied by said hangar, related facilities and paving from this Lease. Based upon such survey, Lessor and Lessee shall enter into an amendment of this Lease specifying the legal description of the Leased Premises and the rent shall be adjusted based upon the Survey as provided for in Accrete 3. _ 1.02 Easements: This Agreement shall be subject to such easements, rights-of--way, drill sites, or other ruts or reservations affecting the Leased Premises which are of record or aze clearly visible as of the date of this Agreenxnt. ARTICLE 2. TERM OF AGREEMENT =~ t ;~ -~- ~ -- ~:~1 ~_T-~..~:~:..2.01 Lease Term: This Agreement shall commence at 12:01 ate. mt February ~ 2003, and tPrmina~ at _. _- a._. a..,:..: ,..,_~ -i - . ~. -_ midnight on the February ~ 2033, ("the Lease Term") unless temrinated earlier pursuant to~the provisiorLS of this ' _ '~ - Agreement..- _ _ - - __ `.- ~ r- ~'_ _ - -_. .i ~ 2.02 Optional Extension of Lease Term Deleted. ~ .-. _~ .. t :" - - ~ - - - - - _ ~. - - :-. ~ _ .. _ _ 2.03 Holdover of Lessee: Lf Lessee holds over or retrains in possession of the Leased Premises a$er the termination of this Agreement in the absence of a new lease agreement between the Lessor and Lessee, such continuation beyond the date of terminatioq or the collection or acceptance of rent, fees and/or other charges by the Lessor, shall not be construed as a renewal or extension of this Agreement, but shall be construed solely as creating a tenancy at will and not for any other term whatsoever. During the term of such tenancy at will, Lessee shall pay to Lessor the fees and charges herein reserved, and Lessee shall be bound by and cotrrQly with all the relevant provisions of this Agreement. The Lessor may terminate the tenancy at will by giving Lessee thirty (30) days written notice thereof. L ARTICLE 3. RENT .. 3,01 Amount of Base Rent; Lessee agzees to pay to Lessor rent for the Leased Premises $132.20 per age per month for the period commencing on the date hereof until and including June 30, 2005, at which time the base rent shall be recalculated and adjusted annually according to the Consumer Price Index as defined under Section 3.02 of this Lease, below. The total rent due by Lessee during this initial period will be modified as foIlows: within Winery (90) days after the issuance of the certificate of occupancy for the newly constructed improvements desrnbed iA Article S and Section 1.01 hereof, and recordation of the survey as required in those sections, the rent due will be adjusted to reflect the chance in acreage, if any, resulting from the survey and release of part of Lot 9. The total rent due shall also be adjusted on June 30, 2015, in that the base rent shall continue to be $132.20 per acre (as adjusted) per month but the total rent due shall be increased by the amount, if any, equal to the fair market rental value of the Leased Premises amtbutable to the irtrQrovements located on Lot ZO which improvements exist on the date hereof and which irr~rovements shall become the property of Lessor on said date, subject to this Lease. In the event of any dispute, disa~eemenr, controversy or c?aim arising out of, or related to, the determination of the fair market rental value of the Leased Premises attributable to .aid improvements on Lot 10, the pames a~*ee that such dispute, disagreement, controversy or claim shall be detertnired by binding arbitrarion, according to para~aph 12 of the Addendum to Commercial Lease Agreement Among Cit•: of Kerrville, Kerr County and Joseph L. Kennedy Enterprises, Ltd. 3.02 Adiustment of Rert During Lease Term: During the Lease Term, the rent ptic: per acre to be paid by Lessee shall be increased or decreased on each anniversary of the effective date of this A~?*eemenr in accordance with changes in the Consumer Price Index for Urban Wage Earners and Clerical ~t~or.L-er (CPI-W)(Dallas- on Worth) (the "Consume: Price Index") as promulgated by the Bureau of Labor Statistics of the United ~:_tes Department of Labor, ~chich Consumer Price Index for May, 2001, is (the "Bas: Index") using the ~:z~r 1984 as a base of 100. Tne Base Rent to be paid during the term of this Agreement shall bear the same ratio to the Consumer Price Index for the month of flay preceding the date of the rent adjustment, as S bears to the Base Index. In no event, however, shall the rent due be Less than Sli2.20 per acre per month. In the eve:a the Consumer Price Index ceases to incorporate a significant number of items, or if a substantial change is made in ire method of establishing such Consumer Price Index, then the Consumer Price Lsdex shall be adjusted to the ug~se that would have resulted had no change occurred in the manner of computing such Consumer Price Index. I~ the event such Consumer Price Index (or a successor or substitute index) is not available. a reliable governmen:_1 or other nonpartisan publication, evaluating the information thereto for use in determining the Consumer Price L^::ex. shall be used in lieu of such Consumer Price Index. 3.03 Deleted. 3.04 Deleted. 3.05 Deleted. 3.06 Delivery of Rent: All payments required of Lessee by this Agreement shall be delivered by marl or in persoq to the Office of the Director of Public Works, City of Kerrville, Texas, 800 Junction Highway, Kerrville, Tz:cas 78028, or to such other location as specified in writing by the Lessor from time to time, no Later than the first day of each calendar month of the Lease Term for which the payment is due, unless such due date fails on a Saturday, Sunday, or legal holiday, in which case such rent shall be due on the fast City business day fo12o~~-in~ the date such payment is duc. 3.07 DelincLuent Rent Pavments: In the event that payments to the Lessor for rent or other fees or charges are not received by the Lessor on or before the tenth day following the due date, Lessee shall pay a late rental charge of Two Percent (2.0%) of the rent amount due for that month. All rent and other payments which are past due more than thirty (30) days shall accrue simple interest at the rate of eighteen percent (18.0%) annually or (b) the maxirntrm percentage rate allowed by law, whichever is less. Nohvithstanding anything to the contrary in this Section 3.07, if at the time performance of the provisions set forth in this Section 3.07 becomes due the interest to be paid in accordance with this Section 3.07 exceeds the limits on the payment of interest established by law, then the amotmt of imerest to be paid shall be reduced to the maximum limit allowed by law; furthermore, if, from any circumstances, Lessor should ever receive as interest an amount that would exceed the highest lawful rate, the amount that would be excessive interest shall be applied to the payment of rent owing pursuant to the provisions of this Lease Agreement and not to the payment of interest 3.08 _Ayplication of Amounts Received: Payments received shall be applied in the following order. (1) interest accrued for late payments, (2) late rental charges, (3) past due rent, beginning with the aIdest amount due, (4) other past due amounts, (~) rent currently due, and (6) other amounts currently due. 3.09 Other Charges: Nothing herein shall be deemed io relieve Lessee and its tenants, sublessees, patrons, invitees and others from Airport use charges, including fuel flowage fees paid on fuel purchased by Lessee, as are levied generally by the Lessor directly upon the operation of aircraft, or from automobile parlana perrttit fees for parking areas that are not included within the Leased Premises, or from security fees. ARTICLE 4. LSE OF LEASED PR~IISES 4.01 Permitted Uses: Lessee shall be permitted to use the Leased Premises for the purpose of conducting for- profit commezcial aeronautical services or aca«ties consisting of any or all of the follo~tine onetaeorLS and no others: See Addendum artached hereto and ~.ade a part hereof for aII purposes. Such other uses as may be permitted in writing by the Lessor. X1.02 Prohibited Uses: Lessee 3~eeS at all times to cotrtQiy with the follo«ine: A. Lessee shall at no time use, or permit the use of, the Leased Premises in a manner chat is contrary to applicable federal, state, county or city laws, orders, ordinances. rules, or reQttlations. which shall include, but not be limited to, applicable Federal A~iaaon ?~dtninistration rules and regulations and applicable regulations for the use of the Aireon as riay from time to titres be promulgated by the Lessor: B. Lessee shall not hermit any permanent, unshielded ligh[ or illumination source to cause glare as viewed from any street, adjacent propemes or operating aircrafti: C. Lessee shall not cause or permit the burial or storage above mound on the Leased Premises of any hazardous waste or materials, as defined by federal or state Iaw, except in accordance with applicable federal, state, county or city laws, order, ordinances, regulations and rules, as maybe adopted or amended from time to time; D. Lessee shall not cause or permit any use or activity on the Leastd Premises that would create a hazardous condition for aircraft operating at the Airport; E. Lessee shall not allow the Leased Premises to be used for parking of motor vehicles, motorcycles, or motor driven equipment by anyone other than customers, employees, or contractors of Lessee except as tray be authorized by the Director of Public Works, with all such parking being limited to areas designated by Lessor for such parkine. Lessee shall not be in default for the improper parking of vehicles over which neither Lessee nor any of its subtenants, customers, employees, cr contractors have any control; F. Lessee shall not allow scheduled airline passenger operations to be conducted on the Leased Premises_ - G. Lessee shall not peimit aircraft to access the Leased Premised from outside the Airport - - • property such that such access would constitute'a "through the fence" operation prohibited by contracts between Lessor and the State of Texas or the United States ofAmerica. 4.03 Corrmliance with Minimum Standards: All activities conducted upon the Leased Preatises,.whether by - ~ Lessee or its officers,, employees, contractors, or agents, shall be in substantial conformatyce with Title 3, Chapter V, of the Code of Ordinances of the City of Kerrville, Texas, "Airport Rules, Regulations, and Minimum Standards", as such regulations exist or may be duly amended from time to time by the Lessor to the extent that such regulations apply to Lessee's operations. 4.04 Non-exclusive Uses: Lessee understands and acknowledges that, as to that part of the Airport not included within the Leased Premises, the allowable uses permitted herein are on a non-exchuive basis with respzct to other potential providers of aeronautical services at the Airport ARTICLE S. , OBLIGATIONS OF LESSEE WTI'H REGARD TO CONSTRUCTION OF IIyIPROVEMENTS ~.Ol Application for Building Permit: Upon execution hereof, Lessee shall make application for a btii~.ding permit ("Permit") with the appropriate governmental agency on or before 90 days from date hereof for the construction of the facilities necessary to carry out the purposes descnbed in Section 4.01 above, and shall pursue issuance of such Permit with reasonable diligence. Lessor agrees to cooperate with Lessee in obtaining such Permit ~A2 Approval of Construction Plans: Not later than 90 days after commencement of the Lease Term and prior to any constructioq alteratioq or changes to the Leased Premises, Lessee shall submit to the City's Airport Manager scaled plans and specifications of such constructioq and a site use pion with all drainage and utility services as esistin~ or proposed indicated thereon. Lessee is solely responsible for ascertaining the requirements of any and all, fedt•ai, state, or local goveznment agencies with regard to permit and application procedures necessary to obtain final approvals and building permits prior to beginning any construction on the Leased Premises. Lessee shall not commence anv construction until it has received prior whiten approval from the Airport Manager and until the Lessee or the Lessor or both have received the necessary approvals froth the Federal Aviation Administration, the City's Building Oral, and such other governmental authorities as are necessary for the type of construction contetitplated. In those instances in which the Lessor is required to make application for construction or alteration of the Airport due to the Lessor being the holder of the Airport Operating Certificate, the Lessor agrees to promptly and diligently make and prosecute such applications. Once necessary approvals and pemut(s) have been obtained, Lessee shall, not later than 180 days after issuance of approval and permit(s), solely and entirely at Lessee's cost, risk and expense, cotrunence to construct build and erect the Improvements in accordance with the final construction plans and specifications hereinabove mentioned_ x.03 Approval of Plans Not Assurance of Desieti Quality: The approval by the Director of Public tVorks or anyone eke acting on behalf of Lessor of any plans and specifications applies only to the conformity of such plans to the general azchitectural and operational plan for the Leased Premises and the Airport The approval of the Director of Public Works does not constitute approval of the quality of the azchitectural or ~*~ :..g work performed. Neither Lessor nor the Director of Public Works assumes any liability or responsibility for the architecttual or engineering design or for any defect in any building or improvement constructed from the plaffi or specifications. Construction of airy contemplated improvements shall be in accordance with the plans presented to and approved by the Director of Public Works. All construction work shall be subject to inspection by a representative employed by the Lessor or an inspector from the City's Planning and Development Services Department, or both, to determine that such work conforms to the plans and specifications approved by the Lessor. 5.04 Contractor's Insurance: Bonds: At any time construction activities are undr taken on the Leased Premises, Lessee shall require that its contractor or contractors keep in force insurance issued by a responstble insurance company or companies authorized to conduct business in the State of Texas insuring the improvements during construction under Completed Builder's All Risk Insurance, including fire, extended coverage, vandalism and malicious mischief, in an amount equal to the full insurable value of such construction as the same progresses in order to insure continuity of construction and ultimate completion despite damage or destruction suffered during the cotuse thereof: Furthermore, Lessee shall require all contractors performing construction work on the Leased Premises to provide payment and performance bonds issued by a responsible bonding company or companies authorized to conduct business in the State of Texas for the full amount of the cost of the conshuction to be performed on forms which aze in compliance with Chapter 2253 of the Texas Government Code, as amended The foregoing shall be made a part of nay contract between Lessee and its contractor or contractors. In the event Lessee does any constntction work itself; it shaIl comply with the all-risk insurance provisions hereof. 5.05 Compliance With Burldins Codes and Federal Standards: All improvements made to the Leased Premises by Lessee shall comply with all applicable City Building Codes and Federal standards for construction of airport improvements in effect at the time construction commences as well as all other applicable federal aviation regulations, if any. 5.06 Encumbrance of Leasehold Estate: Lessee may enctmtber its leasehold interest in the Leased Premises by deed of trust, mortgage, security agreement or other security interest without the prior written consent of the Lessor as set forth in the Addendum attached hereto. 5.07 Ownership of BuiIdin~s. Irrrorovements and Fixtures: Any and alI buildings, improvements {inchrdin~, but not limited to all aarons, ta,~ciivavs and road~vavs), additions, alterationu, and fixtures existing on the Cotnmencemeat Dale or constructed or placed on any part of the Leased Premises during the Lease Term by Lessor or Lessee, shall be considered part of the real property of the Leased Premises, shall remain on the Leased Prernses, and shall not be removed by Lessee or nay sublessee without the «~ritten consent of Lessor. Except as othernise provided in this L~.se or an Addendum hereto, improvements, additions, alterations, and fixtures on the Leased Premises shall become the sole property of Lessor upon termination of this Agreement without compensation to Lessee, it being understood and armed by Lessee that the transfer of title to the Lessor of the buiidin~s and improvements located on the Leased Premises at the end of the Lease Tenn is additional consideration for this Agreement. \Tonvithstanding the abo~-e. Lessee shall ha~-e the right at any time during Lessee's occupancy of the Leased Premises, or within a reasonable time thereafter, to remove any and all furniture, machinery, equipment, or other trade fixtures, owned or placed by Lessee, in, under, or on the Leased Premises; provided, however, prior to the termination of the Lease Tenn, Lessee shall repair any damage to any buildings or improvements on the Leased Prz.~nises resulting from their removal. Apr such personal property ite:.^~ or trade fixtures which are not removed within sicty (60) days after the termination date of this Agreement shall become the property of Lessor as of that date. x.03 Failure to Construct Irrmrovements: Lessor shall have the right, eszrcisable at its sole option, to terminate this Lease Agreement if: A. Lessee fails to commence construction of tbe improvements required to conduct Lessee`s operations on the Leased Premises on or before the 180th day after commencement of the Lease Term; or B. after construction of the required improvements has commenced, Lessee fails to complete construction of the improvements on or before the second anniversary of commencerneat of construction. 5.09 Availability of Sanitary Sewer. Lessee understands and aclmowledges that the Leased Premises is not served with sanitary sewer service as of the commencement of the Lease Term. Lessee shall be solely responstble for installing and maintaining at Lessee's cost an on-site sewage facility that complies with all applicable state and local regulations with sufftcient capacity to provide sanitary sewer disposal for Lessee. If City extends a sanitary sewer ;~ - - . collection main adjacent to the Leased Premises, Lessee agrees it will construct a sanitary sewer service line to connect to the sanitary sewer collection main not later than 180 days after receiving written notification from Lessor that the sanitary sewer collection main is complete and ready to receive waste. ff Lessee has constructed its facilities and is operational at the time of the extension of sanitary sewer service to the Leased Premises, Lessee shall not be required to pay a capital recovery fee to the City as otherwise required by ordinance upon connection to City's sanitary sewer system 5.10 Discharee to Sanitary Sewer. Pre-treatment: Lessee shall at no limo discharge or allow the discharge of any substance into City's sanitary sewer system that is otherwise prohibited by federal, state, or local law, ordinance, or regulation_ In the event that pre-treatment of waste is required prior to the discharge into the City's sanitary sewer system of waste generated from the Leased Premises, Lessee must construct such pre-treatment facility at its sole expense in compliance with applicable federal, state, and local laws and regulations. ARTICLE 6. REPAIRS. MAIN'I'ENAt`1CE A`1D RESTORATION 6.01 Maintenance by Lessor: Lessor shall, at Lessor's sole expense, keep in good repair, condition and appearance the taxiways and roadtivays which have been or may be constructed by Lessor. Lessor shall commence required repairs as soon as reasonably practicable after receiving written notice from Lessee chereo£ 6.02 Maintenance by Lessee: Lessee shall, at Lessee's sole expense, keep the Leased Premises and alt improvements of any '.,rind, which may be existing at the commencement of the Lease Term or erected, installed, or made thereon by Lessee after commencement of the Lease Term, not required herein to be maintained by Lessor in good repair, condition and appearance. Lessor shall be the sole judge of the quality of Lessee's maintenance; provided, however, Lessor shall not unreasonably withhold acceptance of said repairs or maintenance. Upon Rnrea notice by Lessor to Lessee, Lessee shall be required to perform such reasonable maintenance under this Section 6.02 as Lessor considers necessar,•. If Lessee does not undertake such maintenance ltiithin tea i 10) days after receipt of written nonce, Lessor wall ha~-e the right to enter on the Leased Premises and perform the aecessary maintenance. the cost of which shah be borne by Lessee. Subject to the provisions of Section x.07, on dte last day of the Lase Term, or on any sooner termination, Lessee shall surrender the Leased Premises to Lessor in the same condition as received and clean and free of debris. except for fire and casualty damages or ordirary.t-ear end tear. 6.03 Trash and «aste Removal: Lessee agrees to cause to be removed from the Leased Premises, at its ona expense, all waste, garbage and rubbish. and a~•ees not to deposit same on the Leased Premises elcept tempor..rily in waste or garbage containers provided by Lessee at Lessee's e.Ypense. Lessee further agree; that Lessee will store aiI parts, supplies, and other s~aterials on the interior of buildings locared on the Leased Premises. prodded, However. rat any parts or supplies which must be keot outside because of volatility of the supply item or toe size of the part trill be kept out of view of the public traveling on public rights of way or other surrounding teaanu b~• installation of feacinQ ar other means of screening approved by the Airport ~lanaoer. ARTICLE 7. ACCESS TO AND USE OF AIRPORT 7.OI Access to Airport: Lessor shall maintain all roads on the Airport giving access to the Leased Premises in good and adequate condition for use by cars and trucks and shall maintain free and ttninterrunted access to the Leased Premises over said roads at all times; provided, however, Lessor shall not be in default of this Agreement if access is interrupted for any of the reasons set forth in Section 16.03, below. 7.02 Rieht to Use Airport. Lessee and Lessee's officers, employees, agents, contractors, invitees, and guests shall have the right to use that part of the Airport and its facilities not included within the Leased Premises in common with others authorized to do so. Such use shall be subject to any and all applicable federal, state or local laws, ordinances, statutes, rules, regulations, or orders of any governmental authority, lawfully exercising jurisdiction over the Airport or the activities and business operations of Lessee, including any Limitations, restrictions or prohibitions affecting the aviation activities or operations of Lessee. '1.03 Vehicular Operations on the Airfield: No vehicles of Lessee, its officers, tmpIoyees, agents, contractors, invitees, and guesu will be operated on, or cross, the runways of the Airport except pursuant to the Airport Rules and Regulations. 7.04 Air ort Certification Rules and Regulations: Lessee shall comply with such Hiles that pertain to its operation on the Airport under the Airport Certifications Rules of Federal Aviation Regulations Part 139, as amended [ 14 CFR Part 139, as amended], to the extent such regulations are applicable to the operation of tbe Airport. r 7.05 Airnort Security Rules and Regulations: Lessee, its officers, employees, agents, contractors, invitees, and guests shaII comply with all federal and local Airport Security Regulations adopted by the Lessor as such rules and regulations e,Yist or may hereafrer be amended. LESSEE AGREES TO INDEMNIFY AND HOLD HARMLESS THE LESSOR ITS OFFICERS ARID EiviPLOYEES from any charges, fines or penalties that tnay be assessed or levied by the FAA or the Texas Department of Transportation by reason of the NEGLIGENT OR 1N'I'ENITONAL FAILURE OF LESSEE TTS OFFICERS. E~LOYEES. AGENTS, CONTRACTORS, II~iVITEES. A~~ GI.tESTS to comply with such Airport Security Regulations. 7.06 14 C-F.R. Part 77 Requirements: Lessee agrees to comply with the notifirstion and review requirements set forth in Part 77 of the Federal Aviation Regulations [14 CFR Part 77~ in the event any future structure, antenna or building is planned for the Leased Premises, or in the event of any planned rnodification of any present or future building, antenna or structure located on the Leased Premises. 7.07 Control of Strucntres: Lessee wall not erect nor permit the erection of any structure or object nor permit the growth of any tree on the Leased Premises which highest point is above a mean sea level elevation established by the F.~-~ and Lessor as a heisht lirutation on such structures or objects. Lessor reserves the right to enter upon the Leased Premises and to remove the otTending structure or object and cut the offending tree at Lessee's expense. 7.03 Aerial Anoroaches: Lessor resen•es the right to twice any action it considea necessary to protect the ae~ai approaches of the Airport against obsmrcaon together with the right to prevent Lessee from erecting or perrnittins to ~e erected any building or other stntcture on or adiacent to the Airport which, in the opinion of the Lessor, would limit tre usefulness of the Airport or constitute a hazard to aircraft. - 7.09 Right of Overflight: There is hereby reserved to the Lessor, for the use and benefit of the public, a right of flight for the passage of aircraft above the sarface of the Leased Premises, together ~~ith the right to cause in said airspace such noise as may be inherent in the operation of aircraft, now latown or hereafter used for navigation of or ,light in the air, using said airspace for landing at taking off from or operating on the Air-pon. ARTICLE 8. Iii ST >R~NCE 8.01 Lessee's Minimum Insurance Arrtounts: Lessee shall obtain and maintain continuously in effect at ail times during the Lease Term, at Lessee's sole expense, at least the following minimum iratr-vra~e with a carrier or carriers licensed to do business in the State of Texas and satisfactory to the Lessor: A. Commercial General Liability Insu-ance against claims for bodily injury, death. or property damage occurrin; on, in or about the Leased Premises, or am other portion of the Airport, in at '_east the amount of $1,000,000.00 per individual, S2,OOO,Q00.00 per occurrence and $1,000,000.00 with respect to property damage. In the event that the Texas Torts Claims Act, as amended (Tex. Civ. Prat. & Rem. Code §I01.001, et seq.) or its successor statute, is amended to increase the amount of liability of municipalities for acts descn'bed in said Act above the levels set forth in this Section 8.O1..A, Lessee agrees to increase the amotmt of insurance coverage required by this Section 8.O1.A. to an amount sufficient to provide coverage to the level of potential liability per occurrence under said Act; and B. Automobile Liability Coverage on all motor vehicles owned and/or operated by Lessee or its employees on the Leased Premises or other Airport property in amounts of not less that $500,000.00 combined single limit or equivalent; provided, however. separate automobile coverage shall not be required if such coverage is provided under Lessee's comprehensive eeneral liability policy. ` C. Property and Casualty Insurance on improvements constructed on the property, whether owned by Lessee or Lessor, insuring against loss or damage to improvements due to fire, lightning and all other perils included in standard extended coverage policies, and vandalism and malicious mischief, all in amounts of not Iess than ninety percent (90%) of replacement value; D. If required pursuant to Article 3-V-10{a.)(2) of the Code of Ordinances of the Ciry of Kerrville or its successor ordinance, Hangarkeeper's Liability coverage in the minurnmt amount of 51,000,000.00 per occurrence unless simt7ar coverage exists under the required general liability policy; E. Environmental Liability Coverage in the amount of not less than 51,000,000.00 per occurrence. 8.02 Lessee's Coverage Primary: All insurance herein required shall apply as primary and not in excess of or contnbuting with other insurance which the Lessee may carry. Insurance provided pursuant to Section B.OI shall name the Lessor as an additional insured or loss payee as the case may be. The comprehensive general Iiabtlity policy zs provided in paragraph 8.01?.. shall provide contractual liability coverage sufficiently broad so ~; to include the liability assumed by Lessee in the indemnity and hold harmless provisions included in Article 9 of this A~eement. 3.03 Contents of General Liabilin• Policy: Lessee's Comprehensive General Liabiiir: policy shall protect tl:° Lessor and Lessee against any and all liabili~r to any person or persons w'nose prapem datnsge or personal irju^; arse; out of or is in connection «~th the occupation, use, or condition of the Leased Prernisa or resuitiag from any init.^: er damage occurring on or about the roads. dr~~e~vays or other public areas of the Leased Pre.^..i)zs used by L:ss;e. its otI`icers, etrpIoyees, agents, contractors, ins;tea, and guests at the Airport. whether or not such aamage or injur. is the result of re2iigence of the Lessee or iu orzcers. emploti~ees, agents, conttactors. invitees. and ~.:ests. 3.04 Cancellarion: Cemncates of T~tsurance: Lessee's insurance as required by this Agreement shall not be subject to cancellation or tnaterial alteration until at least thirty (30) days written notice has beta provided to the Laser. Lessee shall furnish to the Lessor, annually. Certificates of Insurance showing Lessor as an additions! insured and e«dencing that all of the herein stated recuL:menes have been met. 8.0~ Lessor's Risht to Purchase Insurance: In the event such insurance as required'oy Section B.OI. abe.e, shall lapse, the Lessor reser~~es the nght to ootatn such ursttrance at Lessee's expert: z. I:pon demand from Lesser. Lessee shall reimburse Lessor for the full amount of the premium paid on Lessee's behalf. ARTICLE 5 INDEtifVTIY 9.01 Generally: LESSEE AGREES TO INDEMNIFY. DEFEND. A:~ID HOLD HARMLESS THE CITE' COUNTY.:~r~ID THEIR RESPECTIVE OFFICERS. E~II'LOYEES AW AGENTS from and against any and all loss, damage, liability, claims, demands, costs, charges, expenses and causes of action including all costs of defense thereof (and including reasonable attorney fees) of whatsoever character which the Lessor may incur, sustain, or be sub}ected to on account of loss, damage to property and loss thereof and for bodily injury to or death of any persons (including but not limited to the property, errrployees, customers, contractors, agents, invitees and licensees of each parry hereto) ARISNG OUT OF THE CONDUCT OR_ OPERATIONS, _NEGLIGENI' OR OTHERRZSE OF LESSEE ITS DIRECTORS, OFFICERS, EVIPLOYEES_SUBLESSEES, CONTRACTORS. SLBCO\TR~CTORS OR AGE~iTS on the Leased Premises. The Lessor will give Lessee protnpt notice of any claim made or suit iastituted which in any ~vay affects or might affect the Lessor. Similarly, Lessee will accord the Lessor the same notice and rights. 9.02 Environmental Matters: LESSEE AGREES TO INDEMi1IFY. DEFEND AND HOLD HARMLESS CITY COUNTY AND THEIR RESPECTIVE OFFICERS EMPLOYEES AND AGEYTS from and against any loss, costs, damages, claims, assessments, fines, and/or penalties (including reasonable attorney's fees) (together referred io as "Losses") which tray be incurred by or Ievied against A~IY OF THOSE HEREIN INDEMNIFIED BY ANY THIRD PARTY INCLUDING BUT NOT LIl~tTTED TO THE U.S. ENVIRONMENTAL PROTECTION AGENCY OR THE TEXAS NATiIRAL RESOURCES CONSERVATION COMMISSION OR THEIR SUCCESSOR AGENCIES as the result of Lessee's construction, operatioq or tttaintenance of any aircraft painting and refinishing facility on the Leased Premises. As used in this Section 9.02, the term Losses shall intrude, but not be limited to, any losses, costs, damages, claims, assessments, Ernes or penalties, including but not limited to cost of remediation, resulting from the contamination of any soil, water, or air by hazardous tnaterials discharged by Lessee, or by Lessee's officers, employees, agents, sublessees, invitees, licensees, guests, trespassers, or conhactors, either intentionally or negligently, into the soil, water, or air. ARTICLE 10. UTILITIES Lessee shall be solely responstble for the payment of aIl electric, telephone, water, refuse, natural gas and other puhlic utility services used on the Leased Premises_ ARTICLE I I_ SIGNS 11.01 Consent Required: Except with the prior written consent of the Airport Manager, which shall not be unreasonably withheld, Lessee shall not erect maintain or display any sighs or any advertising at or on, the exerior nzz of structures on the Leased Premises, or inside any buildings located on the Leased Pretnises so as to be visiole theca=a the window or exterior doors thereof. 11.02 Removal on Termination: L;pon the tezmination of this Agreement Lessee shall remove, oblite ate or paint out, as the Lessor may direct, any and all signs and advertising on the Leased Premises or elsewhere at the Ai.~or,. and in connection therewith shall restore the Lensed Premises to the same condition as prior to the placement of any st:ch signs or advertising. In the event that there is a failure by Lessee to so remove, obliterate or paint out each and evert: sign or advertising and so to restore the Leased Premises, the Lessor may, at its option, perform the necessary ~vorit at ti:e expense of Lessee, and the charge therefor shall be paid by Lessee to the Lessor on demand. In certain circttrrstanc~s. the Lessor may elect to allow specific signs to remain at the termination of this Agreement Such signs shall be identifed and aereed ucon mutually, in ti~ntins. by Lessee and Lessor. ARTICLE 12. ASSIGwIE~I`I' A:~'D SLBLEASItiG 12.01 Assi~ttment by Lessee: At no time shall Lessee sublease any potrion of the Leased Pretenses or assi~*t its interests or obligations in this Lease A~eement without the wrtitten consent of Lessor. Any such assizatnent or attempted assignment without Lessor's consent to same shall be void. 12.02 Assisrtment by Lessor: Lessor may transfer and assign this Agreement to any successor in interest of Lessor to whom the Airport may be sold or assigned; provided that the successor in interest shalt execute and deliver to Lessor, with copy to Lessee, an instrument assuming the lawful obligations of Lessor under this Agreement ARTICLE I3. TAX LIENS Lessee shall be solely responsible for the collection and payment of all applicable federal, state, and local taxes, including, but not limited to, sales, use, fuel, amusement, or excise tax required to be collected and paid over by Lessee to the appropriate taxing authority. Furthermore, Lessee sltali be responsible for the payment of any applicable ad valorem taxes and any taxes on Lessee's personal propery located on the Leased Premises. Lessee shall at no time permit the foreclosure of any tax liens to Lessee's leasehold interest in the Leased Premises or the buildings, fixtures, or other improvements located on the Leased Premises. The Lessor shall have the right to pay such taxes due after Lessee's refusal to pay such taxes, and upon demand Lessee shall reimburse the Lessor for the amount of taxes paid phu any penalties, interests, and attorney's fees incurred, subject to Lessee's right to challenge the validity of such taxes in whole or in part In the event that Lessee is successful in any challenge regarding the payment of any tax, the Lessor shall be subrogated to any recovery obtained by Lessee to the extent of the amount of taxes, interests, penalties, and attorneys fees previously paid by the Lessor and not already reimbursed by Lessee. ARTICLE 14. DEFAULT AND RE1tifEDIES 14.01 Default by Lessee: The following shaIl be deemed to be events of default by Lessee tinder this Agreement: A. Lessee shall fail to pay when due any installment of rent or any other payment required pursuant to this Agreement; B. Lessee shall abandon any substantial portion of the Leased Premises; C. Lessee or any guarantor of Lessee's obligations hereunder shall file a petition or be adjudged banlmtpt or insolvent under any applicable federal or state battlsuptcy or insolvency law or admit that it cannot meet its financial obligations as they became due, or a receiver or trustee shall be appointed for al] or substantially all of the assets of Lessee or any warantor of Lessee's obligations hereunder: D. Lessee or tiny Quarartor of Lessee's obligations hereunder shall make a transf r i:. ~~d of creditors or shall make an assignment for the benefit of creditors; E. Lessee shall do or permit to be done any act that results in a lien being filed against the Leased Premises: V F. The liquidation, termination, dissolution of Lessee or any guarantor of Lessee's obligations hereunder; or G. Lessee shall be in noncompliance with any ocher term. pro~-ision or covenant of ~`~s Agreement, other than those specified in subparts A. through F. above. 14.02 Termination Loon Lessee's Default: Except for an event of default resulting from the filing of a cetition in bankruptcy, if an event of default by Lessee shall continue for tea (IO} days after service of notice of such eves of default by Lessor to Lessee, Lessor may give nonce of its election to te-urinate this A~•eenxac and thirty (;0} dais aver service of such notice of election to terminate, this Agreement shall cease and terminate as if the day of Lessor's e'.ecaon were the day originally fixed for termination of this Agreement Such election to terminate by Lessor shall not be construed as a waiver of any claim it may have against the Lessee consistent with such termination. If, however, the event of default is of such nature that it cannot reasonably be remedied within ten (10) days after receipt of notice by Lessee, and if the Lessee shall have commenced curing such event of default within ten (IO) days after receipt of such notice, and shall continuously and diligently proceed in good faith to cure such event of default, then the period for curing the event of default shall be extended for such length of time as is reasonably necessary to cure the event of default. Furthermore, if the event of default is the result of Lessee filing a petition in banla:trptcy, then termination shall not occur unless the trustee in bankruptcy has failed to ratify this lease within sixty (60) days following the date of filing of the perition in bankruptcy. 14.03 Abandonment of Business by Lessee: Lessee further agrees that the abandaament for a period of thirty (30} days by Lessee of the conduct of its business acrivities at the Airport shall terminate Lessee's rights tinder this 10 Agreement. By so terminating this Agreement, Lessor does not waive any other claim or riolrts against Lessee. For the -' purposes of this paragaph, the term "abandonment" shall mean the failure of Lessee to be open for business on the Leased Premises except iu the case of war, strike, catastrophe or causes beyond Lessee's control 14.04 No Remedy Exclusive: No remedy herein conferred upon or reserved to the Lessor or Lessee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or hereafter existing under Iaw or in equity. No delay or omission to exercise any right or power accreting upon airy default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as ofren as tray be deemed expedient. In order to entitle the Lessor and Lessee to exercise any remedy reserved to it in this sectioq ii shall not be necessary to give any notice, other than such notice as tnay be herein expressly required. 14.05 No Waiver of Breach: Lessor's failure or delay in declaring the existence of an event of default by Lessee shall not be construed as a waiver thereof, nor shall it be construed so as to waive or to lessen the right of the Lessor to insist upon the performance by Lessee of any term, covenant or condition hereof, or to exercise any rights given it on account of any such event of default. A waiver of any particular event of default shall not be deemed to be a waiver of the same, similar of any other subsequent event of default 14.06 Expeditious Action. \otwithstanding any provision as to notice in this Ageement herein contained, if in Lessor's reasonable judgment the continuance of any event of default by Lessee for the full period of the notice to cure the event of default will jeopardize the operation of the Airport or the rights of the Lessor of the other Airport tenanu, Lessor rrtay, without notice, elect to perform those acts in respect to which Lessee is in default. Lessee shall reimoune Lessor for any reasonable and necessary costs incurred by the Lessor ptnsttant to this Section 14.06. 14.07 Default in Rent Pa~7rtent: \ ornithstanding an!nhina to the contrary above, if there should be any default in the payment by Lessee of any ren~s. fees or charges due to Lessor as provided herein. the Lessor may ; ve Lessee a ten (10) day written nonce to pay all sums then due or cease operations, and ifsuch pa~Trteat is not made within such :ea (10) day period or such longer time as Lessor may set forth, Lessee's rights under the Agreement shall terminate. B•: so terminating this Agreement, the Lessor toes not waive any other claim or rights a~airut Lessee. However, if such monetary default consisU only of underpa~Trtent of a disputed and unliquidated sum under SI,OOOAO, the te.*rnirtarion of this Agreement maybe forestalled by reader of the liquidated sum and deposit of the amount in controvezsy in escrow. ARTICLE 1 ~. TERVINATION BY LESSEE E:ccept for the payment by Lessee to Lessor of rents or other amounts past due or accrued but not ~e: cue. Lessee shall have the right to terminate this Agreement in its entirety, and all rioters and obligations et>strino there from immediately upon the occurrence of the following: A. The issuance of any order, rule or regulation of the Federal Aviarion Administration, or its suecasor Federal Agency, or other competent government authority, Federal or State, or the issuance and execution of any judicial process by any count of competent jurisdiction, materially restricting for a period of at lest sixty (60) days, the use of the airport for aeronautical purposes; provided that none of the fore_4oias is due to any fault of Lessee; or B. The material restriction of the Lessor's operation of the Airport by action of the Federal Government, or any department or agency thereof, under its wartime or emergency powers, and the continuance thereof far a period of not less than sixty (60) days; provided however, that without prejudice to the rights of Lessee to terminate as above provided, the Lessor and Lessee may mutually ogee to adjust fees and charges; or C. Material restriction of the operation of the Airport arising from Lessor's failure to maintain and keep in repair the landing area of the Airport. 11 If Lessee terminates this Lease for any of the reasons set forth in this Article 15, Lessor shall promptly repay Lessee any rent previously paid by Lessee attributable to the period following the date of sucFr terrnmation. ARTICLE 16. MISCELLANEOUS PROVISIONS 16.01 Damages: LESSEE HEREBY RELEASES CITY COUNTY. ~,\~ THEIR RESPECTIVE OFFICERS EMPLOYEES AGENTS AND CONIRACTORS FROM LIABILITY TO LESSEE FOR ANY DAMAGE TO THE PERSONAL PROPERTY OF LESSEE including its airczafl; caused by the act of negligence of any of those hereby released or any other user of the Airport, the bursting, leaking or ntnning of any cistern, water closet, waste pipe, tank, water, gas, steam or sewer pipe, or oil and/or gas pipelines m, above, upon or about the Leased Premises, the Airport, or any part thereof, any heating, gas or electrical device, or vehicle, or any IIooding or other weather related casualty. 16.02 Ouiet Enjoyment: Upon the performance of the covenants and agreetnencs on the part of the Lessee to be performed hereunder, the Lessee shall peaceably have and enjoy the Leased Premises, appurtenances, factlities, licenses and privileges granted in this Agreement. 16.03 Force Maieure: Neither the Lessor nor Lessee shall be deemed in ~iolatioa of this Agreement if it is prevented from performing any of its obligations hereunder except the obligation to pay rent by reason of stnlces, boycotts, labor disputes, embargoes, shortages of materials, act of God, acts of the public enerrty, act of supe.~or governmental authority, weather conditions, floods, riots, rebellions, acts of sabotao: or any other circtrnLStances for «-hich it is not resuorsible or which are not in its control. 16.04 ~o Parmersl-.io- .~Qencv. Joint Venture: It is mutually understood end weed :hat nothing in this Agreement is intended or shall be cons~tred as in any way creating or establishing any p_r-.L:rsiun. joint vennrre, ag°^cv, or any other relationship bettiveen the Lessor and Lessee other than landlord and tetrant.:es":ti~-ely. 16.05 Inst;ection by Lessor. Lessor may enter upon the Leased Premise: at any reasonable time for any purpose necessary, incidental to or connected with the performance of Lessor's obligarons herz.rnder, or in the exe:cse of its goverrunental funcrions, for fire protection or security purposes, or for inspe:tin~ or maintaining the Lz3