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HomeMy WebLinkAboutResolution - 4007 - Lease Agreement - National Car Rental System Inc - Rental Services, LIA - 10_22_1992Resolution No. 4007 October 22, 1992 Item #35 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Lease Agreement with National Car Rental System, Inc., attached herewith, 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 deta Passed by the City Council thi ATTEST: Sally St' 1 Abbe , City Secretary APPROVED AS TO CONTENT: Bern Case, Director of Aviation APPROVED AS TO FORM: Ffarbld Willard, Assistant City Attorney HW:dw/Agenda-D2/Nationa1.Res October 12, 1992 Resolution No. 4007 October 22, 1992 Item #35 HW:dw THE STATE OF TEXAS § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LUBBOCK § LEASE AGREEMENT THIS AGREEMENT entered into by the City of Lubbock (referred to herein as CITY), a Home Rule Municipality of Lubbock County, Texas, and National Car Rental System, Inc. (referred to herein as LESSEE) of 7700 France Avenue S, Minneapolis, Minnesota 55435. WHEREAS, CITY owns, controls and operates the Lubbock International Airport (referred to herein as AIRPORT), situated at Route 3, Lubbock, Lubbock County, Texas, and has the authority to grant certain rights and privileges with respect thereto, including those hereinafter set forth; and WHEREAS, automobile rental services at the AIRPORT are an integral part of the necessary accommodations for ground trans- portation provided for passengers arriving at and departing from the AIRPORT in the promotion and development of air commerce and air transportation; and WHEREAS, LESSEE desires to make said automobile rental services available at the AIRPORT and is qualified and has the capacity to perform said services and to equip said facilities for use in connection therewith, and further desires to lease certain space and obtain certain rights and privileges with respect to the operation of a rent -a -car service at the AIRPORT upon the terms and conditions hereinafter set forth; NOW THEREFORE, for and in consideration of the mutual promises, covenants, terms and conditions, both general and special, as hereinafter set forth, CITY hereby grants to LESSEE the rights and privileges hereinafter described; LESSEE agrees to accept the duties, responsibilities and obligations as herein- after set forth; and the parties hereto, for themselves, their successors and assigns, agree as follows: ARTICLE ONE LEASE OF DESCRIBED PREMISES CITY, upon mutual execution of this agreement, does lease and demise to LESSEE, upon the terms and conditions contained herein, the following premises located at the AIRPORT: A. TERMINAL - A description of this location is shown on "Exhibit All, which Exhibit is attached to this agreement and incorporated herein. B. GROUND - A description of this location is shown on "Exhibit B", which Exhibit is attached to this agreement and incorporated herein. C. CLOSE -IN VEHICLE PARKING AREAS - A description of these locations are shown on "Exhibit C", which Exhibit is attached to this agreement and incorporated herein. - 2 - ARTICLE TWO TERM The initial term of this lease shall begin on the 1st day of May, 1992, and terminate on the 30th day of April, 1995. Upon written application of LESSEE, delivered to the office of the Director of Aviation of CITY prior to the expiration of the initial term of this lease, the Director of Aviation may extend this lease for a period of thirty (30) days upon the same terms and conditions contained herein. LESSEE may apply for as many thirty (30) day extensions of this lease as LESSEE deems necessary, which may or may not be granted by the Director of Aviation in his discretion. Any extension of this lease granted pursuant to this Article shall be in writing and signed by the LESSEE and the Director of Aviation. Notwithstanding any provision of this Article, this lease is subject to earlier termination as hereinafter provided under Article VII. ARTICLE THREE USE OF PREMISES The LESSEE is granted for the stated term and for no other purpose a non-exclusive privilege of conducting a transient automobile rental service from the leased premises. - 3 - ARTICLE FOUR RENTALS, RECORDS, AUDIT AND PLACE OF PAYMENT A. RENTAL 1. Terminal: The LESSEE shall pay to the CITY as rental the following: Ten percent (10%) of LESSEE's annual gross revenue for each year during the term of this agreement that LESSEE conducts business operations at the AIRPORT, but not more than ten percent (10%) of ninety percent (90%) of the preceding year's gross revenue, plus nine percent (9%) of the remaining ten percent (10%) of such preceding year's gross revenue, and eight percent (8%) of all gross revenue in excess of such preceding year's gross revenue. To illustrate, if LESSEE's gross revenue for the first year that this agreement is in effect is $600,000 and the preceding year's gross revenue was $500,000, rental would be calculated as follows: 10% of (90% of $500,000) _ $45,000 9% of (10% of $500,000) _ $ 4,500 8% of ($600,000 - $500,000) = 8,000 TOTAL = $57,500 Notwithstanding the above language, in no event will the annual rental for this lease be less than forty thousand ($40,000) dollars. The above rental is payable month by month at a rate of ten percent (10%) of the preceding month's gross revenue, or nine percent (9%) of the preceding month's gross revenue when LESSEE's gross revenue for the year has exceeded ninety percent (90%) of - 4 - the preceding year's gross revenue, or eight percent (8%) of the preceding month's gross revenue when LESSEE's gross revenue for the year has exceeded the preceding year's total gross revenue. Such rental payments are due on or before the 20th day of each month and are to be accompanied by a verified statement showing the preceding month's gross revenue. For determining the rental due the CITY, gross revenue shall include but not be limited to the following: (1) All revenues received as mileage charges for rental of automobiles, trucks, vans and other vehicles. (2) Charges for insurance policies sold customers, as well as any charges made to customers for insurance deductible waiver features. (3) Sales of fuel and oil. (4) All inter -city or drop fees. (5) All other revenues derived from business operations at the AIRPORT other than proceeds from the sale of cars used in such business operations and payments received from customers for damages to automobiles while rented or for emergency repairs made by the customers. 2. Ground lease (Service Facility): For each month that this lease is in effect, the LESSEE shall pay to the CITY rentals for a ground lease on an area to be used as a service facility and consisting of Z_,-� doo square feet of exclusive lease area, as shown on Exhibit "B", at the rate of $.0809 per sq. ft. per month. Payment must be received by the CITY on or before the loth day of each and every month during the term of this lease. - 5 - On January 1, 1993, and each year thereafter on the same month and day for the remainder of the term of this Agreement, the rental rate for the area to be used as a service facility shall be adjusted upward or downward in accordance with the 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 Government. 3. Close -in vehicle parking areas (Ready and Return Car Areas): For each month that this lease is in effect, the LESSEE shall pay to the CITY in advance the sum of SEVEN ($7.00) DOLLARS per space per month for LESSEE's allocated parking spaces, as shown on Exhibit "C". Payment for such allocated spaces must be received by the CITY on or before the 10th day of each and every month during the term of this lease. 4. Counter area: LESSEE shall be provided space for a counter area as shown on Exhibit "A". B. LESSEE'S ABATEMENT RIGHTS In the event that one or more of the following conditions arises during the term hereof, the minimum annual guaranteed rental hereinabove provided for shall be abated for the period of time the condition or conditions continue to exist: 1. If, for any reason, the number of passengers deplaning on scheduled airline flights at the AIRPORT during any period of thirty (30) or more consecutive days shall be lower than 85% of the number of such deplaning passengers for the same period of the immediately preceding contract year or of the year immediately preceding the first contract year. 2. If the operation of LESSEE'S car rental business at the AIRPORT, through no fault of LESSEE, is adversely affected by shortages or other disruptions in the supply of automobiles, gasoline or other goods necessary for the operation thereof, and there is a material diminution in LESSEE'S gross revenues hereunder for a period of thirty (30) or more consecutive days attributable to such shortages or other disruptions. During the period of the abatement, LESSEE will continue to pay to the CITY the monthly rentals which are based on gross revenues and the CITY will return to LESSEE a just proportion of any minimum annual guaranteed payment which may have been prepaid. In the event any of the above conditions continue for a period in excess of six (6) months, LESSEE shall have the right to terminate this agreement. C. MOST FAVORED NATIONS CLAUSE In the event that any contract granted by the CITY to any other automobile rental concessionaire shall contain any terms and conditions more favorable to such concessionaire than the terms and conditions herein described (other than the number of allocated parking spaces and the location of the counter area, service facility and vehicle parking areas), then, at the option of LESSEE, this agreement shall be amended to include such more favorable terms and any offsetting burdens that may be imposed on 7 - any such other concessionaire. The intent of this provision is to ensure that LESSEE will be able to compete on terms as equal as possible with all other automobile rental concessionaires and to ensure that no other concessionaire shall enjoy any rights or privileges more favorable to such concessionaire than those enjoyed by the LESSEE herein. D. RECORDS The LESSEE, following accepted accounting practices and procedures, will maintain true and accurate books, records and receipts which will show all of the gross revenue of all business transacted upon and within the AIRPORT. Within 30 days of the end of the initial term of this lease, and when otherwise necessary, LESSEE shall submit to the CITY a verified statement of its gross revenue for each year during the term of this lease in which Lessee conducted business operations at the AIRPORT. Such statement shall be certified by LESSEE's chief financial officer and shall be accompanied by LESSEE's payment of any remaining sums due the City for such business operations. In the event LESSEE's prior payments to the CITY exceed the amount required by this agreement, the CITY shall reimburse LESSEE with an amount equal to the difference between the sum required and the sum paid. E. AUDIT All books, records and receipts of all business transacted upon and within the AIRPORT will be kept or maintained at the AIRPORT or other place consented to in writing by the CITY's Auditor, and will be available for inspection and examination - 8 - during regular office hours by the CITY's Auditor or authorized representatives of the CITY. Such written consent may be revoked by the Auditor at any time. Any other books, records and receipts of LESSEE's business operations at locations other than the AIRPORT which the CITY's Auditor or authorized representatives of the CITY desire to inspect or examine shall also be made available for such purpose after reasonable notice to LESSEE. For the purposes of determining the accuracy of the required statements of gross revenue, the CITY's Auditor may authorize the making of a spot test audit and base the findings for an entire period upon such audit, provided that the audit shall include at least twenty-five percent (25%) of the total time of the period audited. LESSEE herein agrees to pay all reasonable expenses incurred by the CITY's Auditor and all other authorized representatives of the CITY when such person or persons inspect, examine or audit books, records or receipts of business transacted at the AIRPORT at any location other than the AIRPORT. In addition, the CITY's Auditor shall have the right at any time during the term of this lease to authorize an audit of LESSEE's records pertaining to its business operations at the AIRPORT. Any such audit shall be undertaken by a reputable firm of independent Certified Public Accountants satisfactory to the CITY. The cost of such audit shall be borne one-half by LESSEE and one-half by the CITY, unless results of the audit reveal a discrepancy of more than five percent (5%) between gross revenue reported in accordance with Section A of this Article and gross revenue as determined by the audit. In case of a discrepancy of more than five percent (5%) in favor of the LESSEE, the full cost of the audit shall be borne by the LESSEE. F. PAYMENT All payments that become due and payable by the LESSEE under this agreement shall be made to the CITY at the Office of the Director of Aviation, Lubbock International Airport, Lubbock, Texas. LESSEE shall pay CITY a late payment charge of five percent (5%) of the total amount of rentals payable if payment of such rentals is not made when due. G. DIVERTING REVENUE Any action taken by the LESSEE to divert rental car business from the AIRPORT to off -AIRPORT locations or to induce its patrons or patrons of other car rental concessionaires at the AIRPORT to rent or receive vehicles in any manner or at any location so as to diminish rentals payable to the CITY by LESSEE or other car rental concessionaires at the AIRPORT shall constitute a material breach hereof and a cause for the immediate termination of this agreement by the CITY. ARTICLE FIVE OBLIGATIONS OF THE CITY A. CLEAR TITLE The CITY covenants and agrees that upon execution of this lease CITY is well seized of the leased premises and has good title, free and clear of all liens and encumbrances having priority over this lease; and that the CITY has full right and authority to lease the premises described in this agreement. - 10 - B. MAINTENANCE OF AIRPORT The CITY covenants and agrees that it will during the term of this agreement operate and maintain the AIRPORT as a public facility consistent with and pursuant to the Assurances given by the CITY to the United States Government under federal law. C. CONDITIONS AND MAINTENANCE OF PREMISES The CITY shall assume no responsibility for the condition of the leased premises and shall not assume responsibility for maintenance, upkeep or repairs necessary to keep the premises in a safe and serviceable condition. The CITY shall maintain (but may relocate) roads on the AIRPORT which provide access to the leased premises in a good and adequate condition for use by cars, trucks and vans. ARTICLE SIX OBLIGATIONS OF LESSEE A. NET LEASE This lease shall be without cost to the CITY for the development, maintenance and improvement of the leased premises. It shall be the sole responsibility of the LESSEE to keep, maintain, repair and operate the entirety of the demised premises, and all improvements and facilities placed on the leased premises shall be at LESSEE's sole cost and expense. B. PRIVILEGES AND CONDITIONS The CITY grants to the LESSEE the following general privileges, uses and rights, all of which are subject to the terms, conditions and covenants herein set forth and all of which shall be non-exclusive on the AIRPORT: 1. The general use of all common terminal facilities and improvements which are now or may hereafter be connected with or appurtenant to the terminal building only in such a manner as may be necessary or convenient to the conduct of LESSEE's business. 2. The right of ingress to and egress from the leased premises over and across common or public roadways serving the AIRPORT for LESSEE, its agents, employees, patrons, invitees, suppliers of services and providers of materials, such right of ingress and egress being subject to such ordinances, rules and regulations now existing or subsequently promulgated. 3. The privilege of constructing improvements upon the leased premises as follows: (1) Terminal: Concession counter (2) Grounds: Vehicle service building and vehicle storage area The LESSEE shall have the right to and shall provide for the location, construction, alteration, extension and erection of new or existing improvements, maintenance and removal of improve- ments, in any lawful manner, upon the leased premises, for the purpose of conducting an automobile rental service, provided that all plans and specifications for the construction, alteration, extension and erection of facilities and improvements, including landscaping, shall be in compliance with all laws, policies and ordinances of the CITY and shall require the written approval of the CITY's Director of Aviation before any construction or installation may be undertaken. - 12 - 4. The right to sell used rental vehicles on AIRPORT premises with the following restrictions: (1) Only those vehicles used at the AIRPORT may be sold there. All signs used in connection with the sale of such vehicles shall be approved by the CITY's Director of Aviation. (2) The sale of such vehicles on AIRPORT premises shall be restricted to LESSEE's vehicle service area, as shown in Exhibit "B". C. MAINTENANCE 1. The LESSEE shall, at its own expense, provide jani- torial and custodial services for all its leased premises. Said services may be provided by LESSEE alone or by LESSEE in conjunc- tion with other tenants who are now or who may hereafter be Lessees at the AIRPORT. 2. The LESSEE accepts the leased premises in their present condition and shall, at its sole cost and expense, maintain the leased premises, grounds, fences, buildings, improvements and appurtenances at all times in a clean and presentable condition, free of trash, debris and weeds and consistent with good business practice, and equal in appearance and character to similar improvements in the terminal building and parking and service area. The LESSEE shall repair all damage to the leased premises and CITY -owned property caused by its employees, patrons and its operations upon the AIRPORT. The CITY shall be the sole judge of the quality of maintenance, and upon written notice from the CITY's Director of Aviation, the LESSEE shall be required to - 13 - perform such maintenance as such individual deems necessary. Failure by LESSEE to comply within ten (10) days following receipt of such written notice from the Director of Aviation shall give the CITY the right to enter upon the leased premises and perform the necessary maintenance, the cost of which shall be borne by the LESSEE. D. PROPERTY PERMANENTLY AFFIXED TO PREMISES Any property belonging to LESSEE which becomes permanently attached to the leased premises shall become the property of the CITY upon termination of this agreement, whether upon expiration of the initial term, any extension thereof, or earlier under any provision of this lease, except the following named improvements shall be treated in the manner described: 1. Paving, fencing, fuel storage tanks and fuel lines shall be amortized over a period of ten (10) years. In the event that the LESSEE herein is succeeded by another operator at the end of the initial term of this lease, or any extension thereof, the new operator shall purchase the above -named improvements from the LESSEE by paying LESSEE the value of the remaining unamortized portion; otherwise, such improvements shall become the property of the CITY. 2. Service buildings constructed by LESSEE remain the property of LESSEE. However, in the event LESSEE is succeeded by another concessionaire at the end of the initial term of this lease, or any extension thereof, LESSEE shall promptly negotiate with the new concessionaire for the purchase of such service buildings. If the two parties are unable to agree on the - 14 - purchase price, each party shall immediately designate an appraiser who shall without undue delay appraise the buildings (along with a third appraiser) according to their fair market value. The third appraiser shall be designated by the CITY's Director of Aviation. However, the cost of all of the appraisals shall be divided equally between LESSEE and the new concessionaire. The average of the three appraisals shall be binding as the agreed price of the property. If for some reason the LESSEE terminates its operations, the CITY has the first right of refusal to purchase the service buildings at their fair market value. E. REMOVAL OF LESSEE'S PROPERTY The LESSEE shall have the right, within ten (10) days after the termination of this lease, whether such termination comes upon expiration of the initial term, any extension or otherwise under any provision of this lease, to remove from the leased premises all of LESSEE's furniture, fixtures, equipment and furnishings which have not become the property of the CITY, but LESSEE shall restore the premises to their original condition, normal wear and tear excepted. The CITY, however, shall have a lien on all of LESSEE's property to secure any unpaid rentals or other revenue due the CITY; and LESSEE's right to remove property from the leased premises is conditioned upon all amounts due the CITY from LESSEE having been paid in full. Unless a renewal agreement is executed, property left on the premises after ten (10) days from the date of termination of this agreement shall be deemed abandoned and will become the property of the CITY, and - 15 - may be disposed of as the CITY sees fit, without any liability to the LESSEE to account for the proceeds of any sale; and the CITY, at its option, may charge rent from the date of expiration or termination of this agreement through the day of final removal of the property, or of notification to the LESSEE of the abandonment of the property and taking by the CITY, as the case may be. F. PARKING If LESSEE had a lease with the CITY in effect on April 30, 1992, LESSEE may retain its allocated parking spaces in the Ready and Return Car Area of the AIRPORT during the term of this lease. Otherwise, the Director of Aviation shall allocate parking spaces in the Ready and Return Car Area of the AIRPORT to LESSEE. LESSEE agrees to confine its automobile parking to the parking spaces allocated to LESSEE. No additional parking area must be provided for LESSEE's vehicles, and LESSEE is prohibited from parking its vehicles on any of the curbs or entrance roads to the terminal area. LESSEE is also prohibited from allowing AIRPORT patrons to park their personal vehicles in any of LESSEE's allocated parking spaces. Vehicles parked in the AIRPORT's paid parking lot area shall accrue charges in accordance with current parking rates, and the CITY has no obligation to detect or report LESSEE's vehicles so parked. G. STANDARD OF SERVICE The LESSEE shall conduct a first class automobile rental service on the leased premises sufficient to meet the demands for such service at the AIRPORT. The LESSEE agrees to conduct its business in a proper and courteous manner and to furnish prompt - 16 - and efficient service, making available to the public clean, late -model, low -mileage automobiles in good mechanical condition. LESSEE agrees to charge fair, reasonable and non- discriminatory rates and charges for the rental of vehicles. However, LESSEE may make reasonable and non-discriminatory discounts, rebates or other similar types of price reductions to volume customers. H. BUSINESS SOLICITATIONS All of LESSEE's business operations and solicitations will be confined to the leased premises. LESSEE agrees to have its own employees present at its counter during all hours of scheduled airline operations. I. ADVERTISING The LESSEE will erect no signs and will distribute no advertising in the AIRPORT or on AIRPORT property without the prior written consent of the CITY's Director of Aviation. J. UTILITIES The LESSEE shall assume and pay for all costs or charges for metered utility services provided to LESSEE during the initial term hereof, and any subsequent extension. LESSEE shall have the right to connect to any storm and sanitary sewers and water and utility outlets, the cost of usage, extension, installation and meters, where required, to be borne by the LESSEE. - 17 - K. PAYMENT OF TAXES, FEES The LESSEE shall pay all federal, state and local government taxes, license fees and occupation taxes levied on either the leased premises or on the business conducted on the leased premises or on any of LESSEE's property used in connection therewith. The LESSEE shall render for taxation purposes all automobiles and other property used in connection with LESSEE's business operations at the AIRPORT, and all such property shall have its situs and domicile in Lubbock, Lubbock County, Texas. Taxation may be subject to legal protest in accordance with the provisions of the taxing authority whose levy is questioned. Any protest is at the sole expense of LESSEE. Delinquency in payment of such obligations after any protest has been settled shall, at the option of the CITY, be cause for immediate termination of this lease. L. REGULATIONS The LESSEE's officers, agents, employees and servants will obey all rules and regulations which may be promulgated by the CITY or its authorized agents at the AIRPORT, or by other lawful authority, to ensure the safe and orderly conduct of operations and traffic on the AIRPORT. M. PROHIBITION OF SUBLEASES AND ASSIGNMENTS The LESSEE will not directly or indirectly assign, sublet, sell, hypothecate or otherwise transfer this lease or any portion of the leased premises without the prior written consent of CITY's Director of Aviation. - 18 - N. REMOVAL OF TRASH LESSEE shall, at its sole expense, provide for the complete and adequate sanitary handling and disposal, away from the AIRPORT, of all trash, garbage and other refuse which results from LESSEE's business at the AIRPORT. 0. INDEMNIFICATION AND INSURANCE 1. The CITY, its officers, agents and employees shall stand indemnified by the LESSEE as provided by this agreement. The LESSEE shall be deemed to be an independent contractor and operator responsible to all parties for its respective acts and omissions, and the CITY shall in no way be responsible therefor. In the exercise of the obligations and in the enjoyment of the privileges granted by this agreement, the LESSEE shall indemnify and save harmless the CITY, its officers, agents and employees from any and all losses that result from any fault or negligence on the part of the LESSEE, its agents, employees or invitees, and shall indemnify the CITY, its officers, agents and employees against any and all claims, demands, suits, judgments and losses whatsoever. 2. The LESSEE shall maintain insurance at all times that this lease is in effect, at LESSEE's sole expense and with an underwriter authorized to do business in the State of Texas and acceptable to the City, against claims of general liability, automobile liability and property damage resulting from LESSEE's business activities at the AIRPORT. The amount of insurance coverage shall be not less than FIFTY THOUSAND ($50,000.00) DOLLARS for property damage as a result of any one event; or less - 19 - than ONE HUNDRED THOUSAND ($100,000.00) DOLLARS for personal injury or death of any one person in any one event; or less than THREE HUNDRED THOUSAND ($300,000.00) DOLLARS for personal injury or death of two or more persons in any one event. Certificates of insurance or other satisfactory evidence of insurance shall be filed with the CITY's Director of Aviation prior to entry upon the premises by the LESSEE. Each policy shall name the CITY as an additional insured, require the insurer to notify the Director of Aviation of any alteration, renewal or cancellation, and remain in full force and effect until at least ten (10) days after such notice of alteration, renewal or cancellation is received by the Director of Aviation. P. WAGES The LESSEE shall pay, or require the payment of, the prevailing wage rate for each craftsman or workman employed by LESSEE, or by persons or firms engaged by LESSEE, for any alteration of the leased premises or installation, maintenance or repair of vehicles, fixtures, equipment and furnishings used in LESSEE's operations, as required by ordinances enacted pursuant to Article 5159a, V.A.C.S., as amended. The ordinances and statute and amendments thereto are incorporated herein by reference for all purposes. Q. CONDUCT AND APPEARANCE OF EMPLOYEES Any employee of LESSEE who is reasonably deemed to be discourteous or objectionable shall be removed from the leased premises by LESSEE on demand from the CITY's Director of Aviation, who may also cause any objectionable person or persons, - 20 - including LESSEE's employees, to be removed from said premises; and LESSEE hereby waives any right and all claims for damages against CITY or any of its officers, agents or employees which might occur as a result of the exercise of such authority. R. LIENS PROHIBITED The LESSEE shall not bind or attempt to bind the CITY for payment of any money in connection with construction, repairing, alterations, additions or reconstruction work on the leased premises, and LESSEE shall not permit any mechanic's, materialman's or contractor's liens to arise against the premises or improvements thereon, or any equipment, machinery and fixtures thereon belonging to the CITY, and LESSEE expressly agrees that it will keep and save the premises and the CITY harmless from all costs and damages resulting from any liens of any character created or that may be asserted through any act or thing done by the LESSEE. In the event any mechanic's lien or other lien or order for payment shall be filed against the leased premises or improvements thereon, or against CITY -owned property located thereon during the initial term hereof, or during any subsequent extension, LESSEE shall within ten (10) days cause the same to be cancelled and discharged of record by bond or otherwise, at the election and expense of LESSEE, and shall also defend on behalf of the CITY, at LESSEE's sole cost and expense, any action, suit or proceeding which may be brought thereon or for the enforcement of such lien or order. Failure of the LESSEE to comply with any - 21 - requirement of this section shall be cause for immediate termination of this agreement by the CITY. S. NON-DISCRIMINATION PRACTICES LESSEE, its agents and employees will not discriminate against any person or class of persons by reason of age, sex, race, religion or national origin in providing any services or in the use of any of its facilities provided for the public. LESSEE further agrees to comply with such enforcement procedures as the United States Government might demand that the CITY take in order to comply with the Sponsor's Assurances. LESSEE agrees not to discriminate against any employee or applicant for employment because of age, sex, race, religion or national origin. LESSEE agrees to take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their age, sex, race, religion or national origin. Such action shall include, but not be limited to employment, upgrading, demotion, transfer, recruitment, layoff, rates of pay or other forms of compensation, and selection for training, including apprenticeship. LESSEE shall also comply with the Americans with Disabilities Act, if applicable, at all times that this lease is in effect. T. SINGULAR AGREEMENT LESSEE shall not operate more than one rent -a -car service at the AIRPORT nor occupy space provided for more than one passenger car rental concessionaire at the AIRPORT at any time during the initial term of this agreement, or any subsequent extension. - 22 - However, LESSEE herein agrees to pay all outstanding rentals, fees and other charges incurred under any prior lease with the CITY within twenty (20) days of the date of execution of this lease. ARTICLE SEVEN TERMINATION, CANCELLATION A. TERMINATION This lease shall terminate at the end of the full term hereof and LESSEE shall have no further right or interest in any of the premises or improvements hereby demised, except as provided in Article Six. B. CANCELLATION BY LESSEE This lease shall be subject to cancellation by LESSEE after the happening of one or more of the following events: 1. The permanent abandonment of the AIRPORT by the CITY as an air terminal. 2. The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the AIRPORT, or any substantial part or parts thereof, in such a manner that substantially restricts LESSEE for a period of at least ninety (90) days from operating thereon. 3. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use and operation of the AIRPORT for a period of at least ninety (90) days. - 23 - 4. The default of the CITY in the performance of any covenant or agreement herein required to be performed by the CITY and the failure of the CITY to remedy such default for a period of thirty (30) days after receipt from LESSEE of written notice to remedy the same. LESSEE may exercise such right of termination by giving thirty (30) days advance written notice to the CITY at any time after the lapse of the applicable periods of time and this lease shall terminate as of the thirtieth (30th) day. Rental due hereunder shall be payable only to the effective date of said termination. C. CANCELLATION BY CITY This lease shall be subject to cancellation by CITY after the happening of one or more of the following events: 1. The taking by a court of competent jurisdiction of LESSEE and its assets pursuant to proceedings brought under the provisions of any federal reorganization act. 2. The appointment of a receiver for LESSEE's assets. 3. The divestiture of LESSEE's assets by other operation of law. 4. The abandonment by LESSEE of its rent -a -car service at the AIRPORT for a period of ten (10) days or more. 5. The failure by LESSEE to pay any rentals or other charges hereunder when due. - 24 - 6. The default by LESSEE in the performance of any covenant or agreement herein required to be performed by LESSEE and the failure of LESSEE to remedy such default for a period of ten (10) days after receipt from the CITY's Director of Aviation of written notice to remedy the same. 7. The LESSEE's breach of any provision contained in Article Four, Section G of this lease. 8. The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the AIRPORT, or any substantial part or parts thereof, in such a manner as to substantially restrict LESSEE for a period of at least ninety (90) days from operating thereon. If any of the aforesaid events occur, CITY's agents may enter upon the leased premises and take immediate possession of the same and remove LESSEE'S effects. Upon said entry this lease shall terminate, and any rental due hereunder shall be payable to said date of termination. It is agreed that failure to declare this lease terminated upon the default of LESSEE for any of the reasons set forth above shall not be construed as a waiver of any of the CITY's rights hereunder or otherwise bar or preclude CITY from declaring this lease cancelled as a result of any subsequent violation of any of the terms or conditions of this lease. - 25 - 0 ARTICLE EIGHT GENERAL A. TIME OF EMERGENCY During time of war or national emergency, the CITY shall have the right to lease the landing area and any other portion of the AIRPORT to the United States for governmental use and, if any such lease is executed, the provisions of this instrument, insofar as they are inconsistent with the provisions of the lease to the United States, shall be suspended. B. SPONSOR'S ASSURANCE SUBORDINATION This lease shall be subordinate to the provisions of any existing or future agreement between the CITY and the United States concerning the operation or maintenance of the AIRPORT, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development of the AIRPORT. Should the effect of such agreement with the United States be to take any of the property under this lease or otherwise diminish the commercial value of this lease, the CITY shall not be held liable therefor. C. REPLACEMENT AFTER DAMAGE It is agreed between the parties hereto that in the event the leased premises are damaged by fire or other accidental cause during the initial term of this lease so as to become totally or partially untenantable, the CITY shall have the option to restore the premises to their former condition. If the CITY elects to exercise the option, the CITY shall give LESSEE notice in writing of its election within thirty (30) days of the occurrence of such - 26 - damage. If the CITY elects to restore the premises, the CITY shall proceed with due diligence and there shall be an abatement of the rent until repairs have been made for the time and to the extent for which the premises, or part thereof, have been untenantable. Should the CITY not exercise the option to restore the premises, the lease of such untenantable portion of the premises shall cease and terminate effective on the date of damage by fire or other accidental cause. D. CONFLICT OF INTEREST The LESSEE acknowledges that it is informed that Texas law prohibits contracts between the CITY and its "officers" and "employees," and that the prohibition extends to officers and employees of CITY agencies, such as CITY -owned utilities, and certain CITY boards and commissions, and to contracts with any partnership, corporation or other organization in which the officers or employees have a substantial interest. LESSEE certifies (and this agreement is made in reliance thereon) that neither the LESSEE nor any person having an interest in this agreement is an officer or employee of the CITY or any of its agencies, boards or commissions. E. BOND LESSEE must provide the CITY with a performance bond in the amount of FORTY THOUSAND DOLLARS ($40,000), to be reviewed annually, to secure the prompt payment of the minimum annual guaranteed rental and all other charges herein stipulated to be paid for the use of the leased premises. - 27 - In lieu of a performance bond, LESSEE may give the CITY: (1) an irrevocable letter of credit from a bank or other financial institution approved by the City Attorney of the CITY and which assures the CITY of payment of the minimum annual guaranteed rental; or (2) a secured interest with priority over the secured interests and liens of all other creditors of LESSEE in all vehicles, equipment, furniture, fixtures and furnishings used in LESSEE's car rental operation at the AIRPORT, including all vehicles, equipment, furniture, fixtures and furnishings hereafter acquired and so used. To ensure the priority of a secured interest granted to the CITY, LESSEE shall file with the Director of Aviation of CITY subordination agreements executed by and between the CITY and any and all persons or firms who are secured parties with secured interests that would have priority over the secured interest granted to the CITY, subordinating such other secured interests to the secured interest held by the CITY. In addition, LESSEE shall secure subordination agreements between the CITY and any person or firm who takes a purchase money secured interest in LESSEE's vehicles, equipment, furniture, fixtures and furnishings during the initial term of this lease agreement (or any extension thereof), subordinating such purchase money secured interest to the secured interest held by the CITY. LESSEE shall further secure and file with the CITY's Director of Aviation subordination agreements executed by and between the City of Lubbock and any person or firm holding a lien against any structures or other improvements used or installed by LESSEE upon the leased premises, subordinating such lien to the CITY's lien - 28 - against such structures or improvements to secure payment of all amounts due under this agreement. LESSEE shall execute security agreements and sign financing statements to be filed with the County Clerk of Lubbock County and the Secretary of State of Texas; and such security agreements shall give the City of Lubbock a secured interest in all vehicles, equipment, furniture, fixtures and furnishings used in LESSEE's car rental operation on the AIRPORT, including all such items hereafter acquired for such use, and a lien upon all structures and improvements presently existing or to be installed or constructed upon the leased premises during the initial term of this agreement, or any extension thereof. In addition to executing said security agreements, LESSEE will file with the Director of Aviation a schedule showing the motor vehicle identification and registration numbers of each vehicle used in its car rental operation on the Airport and such supplementary schedules as are necessary to keep the CITY informed as to the number and identity of such vehicles. F. RIGHT OF INSPECTION The CITY reserves the right to conduct inspections of the leased premises at reasonable times to ensure that fire, safety and sanitation regulations and other provisions contained in this lease are being adhered to by the LESSEE. - 29 - G. TERMINATION OF LEASE, SURRENDER OF LEASED PREMISES AND OWNERSHIP OF IMPROVEMENTS The LESSEE covenants and agrees that at the expiration of the initial term of this lease, or any extension which has been granted, or upon earlier termination as provided elsewhere in this agreement, LESSEE will quit and surrender the leased premises and the improvements in good state and condition, reasonable wear and tear excepted, and the CITY shall have the right to take possession of the leased premises and the improvements, subject to the limitations expressed in Article Six, Section D of this lease, with or without process of law. H. HEADINGS The paragraph headings contained herein are for convenience in reference and are not intended to define, extend or limit the scope of any provisions in this agreement. I. NOTICES Notices to the CITY required or appropriate under this agreement shall be deemed sufficient if in writing and mailed, registered or certified mail, postage prepaid, addressed to the Director of Aviation, Lubbock International Airport, Route 3, Box 389, Lubbock, Texas 79401. Notices to the LESSEE shall be deemed sufficient if in writing and mailed, registered or certified mail, postage prepaid, addressed to the LESSEE at the address on file with the CITY's Director of Aviation. - 30 - J. EXCLUSIVITY Nothing in this agreement shall be construed as prohibiting the CITY from executing the same or similar agreement as this lease with any other person or company who desires to provide automobile rental services at the AIRPORT. K. ENTIRE AGREEMENT This lease constitutes the entire agreement between the CITY and LESSEE, and any other written or parole agreement with the CITY is expressly waived by LESSEE. EXECUTED this 22nd daj% of \ Ogtob�� , 1992 . LESSEE \ ITY O LU C3 4 , NATIONAL CAR RENTAL SYSTEM, INC. BY: L mil lend Carroll Title Vi resident and Assistant General Counsel Date HW:dw cont-agr/D#4/A-Natn1.doc R.-Langston / MAYOR ATTEST: Ste' C,e- lh� City Secretary (Acting) Sally Still Abbe APPROVED AS TO CONTENT: ern E. Case Director of Aviation APPROVED AS TO FORM: arold Willard Assistant City Attorney - 31 - `------------------ ._J BAGGAGE CLAIM CONCESSIONS /'`-.-.'� .- T I C K E i ING (EXIST ING) RENTALS B-Avis / C-National / = D-Hertz - � TIc.:_nwc ( Future ) " A = c•-AI"' PASSENGER TERMINAL MAIN LEVEL • LUBBOCK INTERNATIONAL AIRPORT LUBBOCK-TEXAS EXHIBIT "A" INTERNATIONAL AIRPORT SERVICE AREA LANU LEASE EXHIBIT "B"