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HomeMy WebLinkAboutResolution - 2007-R0076 - Lease Agreement - Alamo Rental Inc. - LPSIA - 02_22_2007Resolution No. 2007-R0076 February 22, 2007 Item No. 5.17 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 Alamo Rental (US) Inc. at Lubbock International Airport. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 22nd ATTEST: Reb cca Garza, City Secretary VED AS TOCONTENT: Loomis, Assistant City Manager iortation and Public Works APPROVED AS TO FORM: Linda L. Chamales, Senior Attorney Office Practice Section day of February , 2007. DAVID A. MILLER, MAYOR Lc:cityatt/Linda/Resolutions and ccdocs: Res -Airport - Alamo Lease 07 February 8, 2007 THE STATE OF TEXAS Resolution No. 2007-R0076 February 22, 2007 Item No. 5.17 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 Rile Municipality of Lubbock County, Texas, and Alamo Rental (US) Inc. (referred to herein as "Lessee") WITNESSETH \N- HEREAS, City owns, controls and operates the Lubbock Preston Smith International Airport (referred to herein as "Airport"), situated at 5401 North Martin Luther King Boulevard, 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 transportation 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 automobilc 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 hereinafter 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 — Rental Car Counter locations are shown on "Exhibit A", which Exhibit is attached to this agreement and incorporated herein. B. GROUND — Rental Car Service Facilities are shown on "Exhibit B", which Exhibit is attached to this agreement and incorporated herein. C. READY AND RETURN PARKING — Rental car ready and return parking spaces are shown on "Exhibit C", which Exhibit is attached to this agreement and incorporated herein, ARTICLE TWO a The term of this lease shall be for four (4) years and seven (7) months and shall begin on MARCH 1, 2007 and terminate on SEPTEMBER 30, 2011. Upon written application of Lessee, delivered to the office of the Director of Aviation of City prior to the expiration of the term of this lease, the Director of Aviation may extend this lease for a period of one month upon the same terms and conditions contained herein. Lessee may apply for as many monthly 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 RENT CAR LEASE AGREEMENT PAGE 2 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 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. ARTICLE FOUR CONCESSIONS, RENTALS, RECORDS, AUDIT AND PLACE OF PAVN4VNT A. CONCESSION FEE 1. Terminal: The Lessee shall pay to the City 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. Notwithstanding the above language, in no event will the annual fee for this lease be less than $120,004.00 Dollars for Year One, S123,604.00 Dollars for Year Two, $127,313.00 Dollars for Year Three and $131,132.00 Dollars for Year Four. The seven months plus any monthly extension thereof, following Year Four will be prorated using the Minimum Annual Guarantee for Year Four submitted to the City by Lessee to obtain this lease. The above fee is payable month by month at a rate of ten percent (10%) of the preceding month's gross revenue. Such payments are to be accompanied by a verified statement containing an itemized summary of the preceding month's gross revenue. RENT CAR LEASE AGREEMENT PAGE 3 For determining the fee to the City, gross revenue shall include but not be limited to the following; (a) All revenues received from rental of automobiles, trucks, vans and other vehicles and revenues received as time and mileage charges. (b) Charges for insurance policies sold to customers. Insurance deductible waivers are not included. If and in the event Texas State Statutes are amended and no longer substantially require that the cost of the lost damage waiver bare a reasonable relationship to the company's expenses arising from the direct cost for replacement or repair of the vehicle, then the airport reserves the right to amend the definition of Gross Revenue. (c) Sales of fuel and oil. (d) All inter -city or drop fees. (e) Concession Fee Recovery for Rentals — Lessee shall list separately on any customer rental agreements, contracts or invoices, the concession rental payable by Lessee to the City for the privilege of doing business at the Airport under this agreement; provided, however, that any such amount shall be included in Gross Revenues, and provided that Lessee shall not in any way attribute such amounts or the charging of such amounts to the City. Lessee agrees that at no time will the concession fee listed on the customer rental agreement, contract or invoice, exceed eleven and eleven one -hundredths percent (11.11%). Lessee shall list such concession rental RENT CAR LEASE AGREEMENT PAGE 4 as a "Concession Fee Recovery" on all such customer rental agreements, contracts or invoices. (f) All other revenues derived from business operations at the Airport except 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 25,000 square feet of exclusive lease area, as shown on Exhibit "B", at the rate of $0.1472 per sq. ft. per year. On January 1, 2008, 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. Ready and Return Car Areas: For each month that this lease is in effect. the Lessee shall pay to the City the sum of TWELVE AND NO/100 DOLLARS ($12.00) per space per month for Lessee's allocated parking spaces, as shown on Exhibit "C". The location within the parking lot will be determined in descending order of the highest aggregate minimum annual guarantee. The number of Ready and Return Car Spaces will allocated based on the percentage of the aggregate minimum annual guarantee for the first year of the agreement. The spaces can be reviewed annually on the anniversary date of the agreement upon request by determining the percentage of market share for the preceding year. RENT CAR LEASE AGREEMENT PAGE 5 4. Counter area: For each month that this lease is in effect, the Lessee shall pay to the City rentals for counter space 370.54 square feet of exclusive lease area, as shown on Exhibit "A", at the rate of $16.05 per sq. ft. per year. On January 1, 2008, and each year thereafter on the same month and day for the remainder of the term of this Agreement, the rental rate for the counter area 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. Lessee of the sixth service facility site will begin paying the above -mentioned ground lease once construction has been completed and have obtained a beneficial occupancy. 5, Employee Parking_ Airport agrees to provide employee parking for Lessee's employees at the same charge and same location as provided other airport tenant employees. 6. Postal Boxes: Airport agrees to provide a postal box for Lessee at the same charge and same location as provided other airport tenants. 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 monthly period shall be lower than 85% of the number of such deplaning passengers for the same month of the immediately preceding contract year, or of the year immediately preceding the first contract year. RENT CAR LEASE AGREEMENT PAGE 6 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 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. EXCLUSIVITY RENT CAR LEASE AGREEMENT PAGE 7 City agrees that during the term of this lease there shall be no more than six (6) automobile rental concessionaires permitted to conduct business operations in the terminal building of the Airport at the same time. E. 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 sixty (60) days of the end of each contract year, Lessee shall submit to the City a verified statement of its gross revenue 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. F. 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 Internal Auditor, and will be available for inspection and examination 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 Lubbock area 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 RENT CAR LEASE AGREEMENT PAGE 8 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 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. G. PAYMENTS DUE All payments must be received by the City on or before the 20th day of each and every month during the term of this agreement. All payments due and payable by the Lessee under this agreement shall be made to the City at the Office of the Director of Aviation, Lubbock Preston Smith International Airport, 5401 N. Martin Luther King Boulevard, Lubbock, Texas 79403. 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 received by City on or before the 20th day of the month. H. DIVERTING REVENUE RENT CAR LEASE AGREEMENT PAGE 9 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. 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 RENT CAR LEASE AGREEMENT PAGE 10 OBLIGATION 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 teens, 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. I The privilege of constructing improvements upon the leased premises as follows: (a) Terminal: Concession counter RENT CAR LEASE AGREEMENT PAGE 11 (b) 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 improvements, 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. 4. The right to sell used rental vehicles on Airport premises with the following restrictions: (a) 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. (b) The sale of such vehicles on Airport premises shall be restricted to Lessee's vehicle service area, as shown in Exhibit "B". C. MAINTENANCE The Lessee shall, at its own expense, provide janitorial and custodial services for all its leased premises. Said services may be provided by Lessee alone or by Lessee in conjunction with other tenants who are now or who may hereafter be Lessees at the Airport. 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 RENT CAR LEASE AGREEMENT PAGE 12 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 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. New paving and fencing 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 the 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 RENT CAR LEASE AGREEMENT PAGE 13 shall negotiate with the new concessionaire for the purchase of such service buildings. Negotiations shall be completed within thirty (30) days. If the two parties are unable to agree on the purchase price, each party shall immediately designate an appraiser who shall 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 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 the original condition, normal wear and tear excepted. The City, however, shall have a lien on all of Lessee's property (excluding vehicles) 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 may be disposed of as the City sees fit, without any liability to the RENT CAR LEASE AGREEMENT PAGE 14 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. Lessee shall within thirty (30) days of expiration or termination of this lease, remove any fuel tanks from the premises. Said tank removal and any associated cleanup shall be at the Lessee's cost and expense and shall be undertaken and completed in full compliance with all federal, state, and local laws and regulations. F. PARKING The Director of Aviation shall allocate parking spaces in the Ready and Return Car Area of the Airport to Lessee and may reallocate such spaces according to Article 4, A, 3. 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 GP SERVICE The Lessee shall conduct a first class automobile rental service on the Ieased premises sufficient to meet reasonable demands for such service at the Airport. The Lessee agrees to conduct its business in a proper and courteous manner and to furnish prompt and efficient service, making available to the public clean, late -model, low -mileage automobiles in good RENT CAR LEASE AGREEMENT PAGE 15 mechanical condition. As used herein, the term "late -model" shall mean no more than two (2) model years old (including the current model year). 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. 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. RENT CAR LEASE AGREEMENT PAGE 16 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. N. INDEMNIFICATION AND INSURANCE 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, judgements and losses in connection therewith, except for losses resulting from the City's negligence and willful misconduct. RENT CAR LEASE AGREEMENT PAGE 17 The Lessee shall maintain insurance at all times that this lease is in effect, at Lessee's sole expense and with an underwriter, with an A or Best Rating, authorized to do business in the State of Texas and acceptable to the City, against claims of general liability, automobile liability and worker's compensation resulting from Lessee's business activities at the Airport. General Liability and Auto Liability Insurance - The amount of insurance coverage shall not be less than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS (S500,000.00) for Combined Single Limit General Liability Insurance; or less than THREE HUNDRED THOUSAND AND NO/100 (S300,000.00) for Combined Single Limit Auto Liability Insurance. Worker's Compensation and Employers Liability Insurance — The Lessee shall elect to obtain workers' compensation coverage pursuant to Section 406.002 of the Texas Labor Code. Further, Lessee shall maintain said coverage throughout the term of the agreement and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure that the Lessee maintains said coverage. Any termination of worker's compensation insurance coverage by contractor or any cancellation or nonrenewal of workers' compensation insurance coverage for the Lessee shall be a material breach of this Agreement. The above mentioned policies shall all include a waiver of subrogation. 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. The Auto Liability 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. O. WAGES RENT CAR LEASE AGREEMENT PAGE 18 The Lessee shall pay, or require the payment of, the prevailing wage rate for each craftsman or worlunan 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 the reference for all purposes. P. CONDUCT AND APPEARANCE OF EMPLOYEES Any employees 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, 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. Q. LIENS PROHIBITED The Lessee shall not bind or attempt to bind the City for payment of any money in connection with the 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 RENT CAR LEASE AGREEMENT PAGE 19 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 requirement of this section shall be cause for immediate termination of this agreement by the City. R. DISADVANTAGED BUSINESS ENTERPRISE This agreement is subject to the requirements of the U. S. Department of Transportation's regulations, 49 CFR Part 23. The Lessee agrees that it will not discriminate against any business owner because of the owner's race, color, national origin, or sex in connection with the award or performance of any concession agreement, management contract, or subcontract, purchase or lease agreement, or other agreement covered by 49 CFR Part 23. The Lessee agrees to include the above statements in any subsequent concession agreement or contract covered by 49 CFR Part 23, that it enters and cause those businesses to similarly include the statements in further agreements. The Lessee agrees to provide requested information to City regarding Lessee's DBE program within thirty (30) days of request. 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. RENT CAR LEASE AGREEMENT PAGE 20 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 acknowledges and agrees that it will only operate under one brand name during the term of this agreement. That under no circumstances shall any "dual branding" or combined operations of Lessee be represented to the public in signage or other manner which would represent to the public that two companies were jointly operating one concession operation at the Airport. U. OUTSTANDING CHARGES 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. RENT CAR LEASE AGREEMENT PAGE 21 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. 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 (30t') 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: RENT CAR LEASE AGREEMENT PAGE 22 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 due after given ten (10) days written notice to cure. 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 thirty (30) 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. RENT CAR LEASE AGREEMENT PAGE 23 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. 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 arc 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 RENT CAR LEASE AGREEMENT PAGE 24 its election within thirty (30) days of the occurrence of such damage. If the City elects to restore the premises, the City shall proceed with due diligence and there shall be an abatement of the associated rent or concessions 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 contract 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 full amount of the highest minimum annual guaranteed year that was bid under this agreement to secure the prompt payment of such amount for the use of the leased premises. Such bond shall be effective through the term of the Agreement. In Lieu of a performance bond, Lessee may give the City; (1) an irrevocable fetter 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 guaranteed bid; or (2) a secured interest with priority over the secured interests and liens of all other creditors of Lessee in all equipment, RENT CAR LEASE AGREEMENT PAGE 25 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 ftimishings 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 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 RENT CAR LEASE AGREEMENT PAGE 26 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. 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 expected, subject to Article Six, Section E of this lease, 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 Preston Smith International Airport, 5401 N. MLK Blvd., Unit 389, Lubbock, Texas 79403. Notices to the Lessee shall be deemed sufficient if in writing and RENT CAR LEASE AGREEMENT PAGE 27 mailed, registered or certified mail, postage prepaid, addressed to the Lessee at the address on file with the City's Director of Aviation. J. 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 day of February 2007. THE CITY OF LUBBOCK: ALAMO RENTAL (US) INC.: k "ter BY: DAVID A. MILLER, MAYOR BSc E c� f—X'f11�t Title: 5��� L��' l-%`� `�' JL--7/` Date: 7 � ATTEST: Re ecca Garza, City Secretary APP VED AS TO CONT V�` Ja es W. Loomis, Transportation and Public Works sistant City Manager APPROVED AS TO FORM: Linda L. Chamales, Assistant City Attorney RENT CAR LEASE AGREEMENT PAGE 28 Resolution No. 2007-R0076 EXHIBIT A LUBBOCK PRESTON SMITH INTERNATIONAL AIRPORT RENT CAR COUNTERS 1: 340.47 sq. ft, . 2: 370.54 sq. ft. 5 • 3: 368.28 sq. ft. ` 4: 376.20 sq. ft. 5: 366.52 sq. ft. 6: 353.43 sq. ft. e i RENT CAR LEASE AGREEMENT PAGE 29 I i L-J AVIS WHIET ENTERPRISE i El l 1 1 EXHIBIT B RENT CAR SERVICE FACILITIES ALAmq HERTZ' ADANTASE 0o Q RENT CAR READY/RETURN LQT RENT CAR LEASE AGREEMENT PAGE 30 Resolution No. 2007-R0076 EXHIBIT C LUBBOCK PRESTON SMITH INTERNATIONAL AIRPORT READY AND RETURN PARKING LOT Entrance Exit u North THE STATE OF TEXAS VajA&, MC-P&ru.ewd COUNTY OF LUBBOCK Before nne Alan C. Weems a Notary PL day personally appeared Arista Ramirez Corporation, publishers of the Lubbock Avalanche -Journal - Moi did dispose and say that said newspaper has run continuously insertion of this Legal Notice No. printed copy of the Legal Notice is a true cop' Avalanche-Joumal on the following dates: Inside Sales Manager LUBBOCK AVALANCHI_-JOURNAL Morris Communication Corporation Subscribed and sworn to before me this NOTARY PUBLIC in and for the State of Texas my commission Expires 51712011 ft!�� day of 4 ALAN C WEEMS FORM 58-90 ` NOWY Pubft, Stott of Tom My commis" E 01roo }+'Cgi0 ,V May 07, 2011