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HomeMy WebLinkAboutResolution - 3550 - Addendum #1 To Lease Agreement - American Airlines Inc - Space & Facilities, LIA - 02_28_1991f Resolution No. 3550.1 February 28, 1991 Item #18 HW:dw 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 an Agreement Modifying Certificated Passenger Airline Lease by and between the City of Lubbock, Texas, and American Airlines, 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 detail. Passed by the City Council this 28th day of February , 1991. e boyo, city Sezrem ary APPRO ED AS TO CONTENT: nCase, irec� for of Mation APPROVED AS TO FORM: AS Egrold Willard,Assistant City Attorney HW:da ADDENDUM NO. 1 TO AIRLINE LEASE AGREEMENT BY AND BETWEEN THE CITY OF LUBBOCK, TEXAS, AND AMERICAN AIRLINES, INC. WHEREAS, the City of Lubbock, Texas, hereinafter referred to as "City", and American Airlines, Inc., here- inafter referred to as "Lessee", executed an agreement on or about February 23, 1984, in which Lessee agreed to lease from City space and facilities in the terminal building at Lubbock International Airport sufficient to conduct its business of air transportation at said Airport; and WHEREAS, both City and Lessee, for good and valuable consideration, desire to amend the agreement which both such parties executed on or about February 23, 1984; NOW THEREFORE, the Certificated Passenger Airline Lease executed by City and Lessee on or about February 23, 1984, is hereby amended as follows: 1. Article I, Section 1.03, Paragraph (I) of said lease agreement is hereby amended to read as follows: (I) The right to provide food and beverages for consumption in flight by passengers and crews of Lessee or by passengers and crews of any other Certificated Passenger Air Transporta- tion Companies. Lessee shall also have the right to arrange for food and beverages to be provided to its passengers and crew members when said passengers or crew members are grounded at the Airport because of weather, mechanical conditions or other similar emer- gency conditions; provided, however, that if said passengers or crew members are to be given food and beverages at the Airport, Lessee shall arrange for this service from the person, firm or corporation holding concession rights from the City for food and beverage service at the Airport. In addi- tion, Lessee may furnish, free of cost, coffee and doughnuts to its passengers, provided such items are purchased through the person, firm or corporation holding conces- sion rights from the City for food and beverage service at the Airport. Lessee shall be relieved of its obligation under this subparagraph (I) to purchase food and beverages from the person, firm or corporation holding concession rights at the Airport if such concessionaire is unable or unwilling to provide the food and beverages requested in a timely manner. Except to the extent hereinabove specifically provided, nothing in this subparagraph (I) shall be deemed to give Lessee the right to maintain or operate at the Airport a cafeteria, restaurant, bar, cocktail lounge or vending machines or in any manner otherwise providing for the sale of food or beverages to the public. 2. Article V, Section 5.01 of said lease agreement is hereby amended to read as follows:, Section 5.01 - Term. A. The initial term of this Lease shall commence on the 1st day of June, 1983, and end on the 30th day of September, 1999, subject, however, to earlier termination as here- inafter provided under Article XI and to rene- gotiation of the Maintenance and Operation portion of the rentals and fees as hereinafter provided; the first such renegotiation shall commence upon written demand by either party at least ninety (90) days prior to April 1, 1985. Subsequent renegotiations shall commence upon written demand - 2 - by either party at least ninety (90) days prior to April 1, 1968; April 1, 1991; April 1, 1994 and April 1, 1997; such dates being the time of expiration of anniversary years of this Lease. In the event that no written demand for renegotiation is made by either party at least ninety (90) days prior to the expiration of such anniversary years, the rentals and fees then current shall apply for the succeeding three year period. B. Thirteen (13) months prior to the expiration of this Lease, City shall notify Lessee, in writing, that negotiations should commence to enter into a new lease agreement. Lessee shall upon receipt of such notification arrange for a meeting with City if Lessee desires to execute a new lease with City. The Lessee and City shall meet and commence said negotiations within thirty (30) days of the written notification hereinabove referred to and shall continue such negotiations with reasonable diligence so that a new lease shall be executed by the parties and be in effect upon the expiration of the term of this lease agreement. In the event the parties hereto have negotiated with diligence and are unable to conclude a new lease agreement before the expiration of the term of this lease agreement and it is evident that additional time is needed to conclude such new lease agreement, then in such event the Lessee may apply for an extension of time in which to operate at the Airport and conclude the negotiations, which extension may be granted by the Director of Aviation. Such extension shall be for no longer period of time than twelve (12) months from the date of termination of this Lease. Any extension of this Lease shall be in writing and signed by - 3 - Lessee and the Director of Aviation. During any extension, Lessee shall be subject to the rates, fees, rentals and other charges established by the Airport Board for Certificated Passenger Air Transportation Companies that are month -to -month tenants. Both City and Lessee herein agree, however, that all negotiations for any new lease shall be conducted in good faith. 3. Article V of said lease agreement is hereby amended by adding Section 5.08 thereto, which shall read as follows: Section 5.08 - Duty to Prevent Unauthorized Access to the Premises. Lessee shall prohibit and prevent access or entry into the Exclusive Leased Premises and any sterile area by any person or property whose access or entry is not authorized and Lessee agrees that in the event that a civil penalty or fine is levied against the Airport or City as a result of Lessee's failure to comply or act in accordance with this provision, or any other applicable federal, state or local statutes, ordinances, rules and regulations affecting the use, occupancy or operation of any of said premises, Lessee shall immediately reimburse the Airport or City the full amount of the penalty or fine and correct the act or omission leading to, causing or contributing to the violation. The term "sterile area" as herein used shall mean any area at the Airport which Lessee possesses or controls either singularly or in conjunction with other air carriers and to which access is controlled by the inspection of persons and property in accordance with any security program mandated by the Federal Aviation Administration. 4. Article VI, Sections 6.01, 6.02 and 6.03 of said lease agreement are hereby amended to read as follows: - 4 - Section 6.01 - Rental for Exclusive Terminal Building Space. Rental for the 3,882 square feet of exclusive leased space within the terminal building of the Airport, as described in Section 1.01, shall include a fixed fee of $5.63 per sq. ft. per year (to cover debt service) or $21,855.66 per year. In addition to the fixed fee above set forth, a variable sum shall be charged to Lessee for Maintenance and Operation (M & O) costs as follows: (a) The charge for M & 0 prior to April 1, 1988, shall be assessed at the rate of $2.62 per sq. ft. per year; and (b) Effective April 1, 1986, the charge for M & 0 shall be increased to $2.87 per sq. ft. per year; and (c) Effective October 1, 1988, the charge for M & O shall be increased to $3.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (d) Effective October 1, 1969, the charge for M & O shall be increased to $4.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (e) Effective October 1, 1990, the charge for M & O shall be increased to $5.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth. Notwithstanding any of the rates set forth in subsections (c) through (e) of this section and further notwithstanding any provision to the contrary in this Lease, effective October 1, 1988, and each year thereafter on the same month and day - 5 - for the remainder of the term of this Lease, the M & O portion of the rental for exclusive leased space due under this section shall be adjusted upward or downward in accordance with the increase or decrease for the same period of time in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Government, hereinabove and hereinafter called "CPI". It is the intention of the parties hereto that the charges set forth in subsections (c) through (e) of this section shall vary upward or downward in accordance with the CPI. Section 6.02 - Landing Fee. The fee for the use of the landing area and facilities necessary therefor as granted hereunder, except those for which rentals are specifically provided elsewhere herein, shall be as follows: 32.50 effective October 1, 1981 350 effective October 1, 1983 400 effective October 1, 1986 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, 1988, the fee for the use of the landing area and facilities necessary therefor as granted hereunder, except those for which rentals are specifically provided elsewhere herein, shall be .45 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, 1991, the fee for the use of such landing area and facilities shall be .50 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, 1994, the fee for the use of such landing area and facilities shall be 55 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, - 6 - 1997, the fee for the use of such landing area and facilities shall be .60 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Not later than the fifth day of each month, Lessee shall file with the Director of Aviation a report of Lessee's actual landings at the Airport for the preceding month, which report shall include the number and type of aircraft making such landings. The term "approved maximum gross landing weight" for any aircraft, as used herein, shall be the maximum landing weight approved by the Federal Aviation Administration for landing such aircraft at the Airport. Lessee shall provide the City with a summary of the "approved maximum gross landing weights" for each type of aircraft it operates at the Airport. Five hundred (500) pounds or any larger part of one thousand (1,000) pounds shall be counted as if a whole one thousand (1,000) pounds and any smaller part shall be disregarded. Section 6.03 - Rental for Common Use Area. A. Common Bag Claim Area Rental for the 16.939 sq. ft. common bag claim area shall be charged jointly to Lessee and all other Certificated Passenger Air Transporta- tion Companies which now or may hereafter have valid leases at the Airport according to the common bag claim area formula, as hereinafter defined, and Lessee herein agrees to pay its pro rata portion of such rental, which shall include a fixed fee of $5.63 per sq. ft. per year (to cover debt service) or $95,366.57 per year. - 7 - In addition to the fixed fee above set forth, a variable sum shall be charged jointly to Lessee and all such Air Transportation Companies for Maintenance and Operation (M & 0) costs as follows: (a) The charge for M & O prior to April 1, 1988, shall be assessed jointly at the rate of $2.62 per sq. ft. per year; and (b) Effective April 1, 1988, the charge for M & O shall be increased to $2.87 per sq. ft. per year; and (c) Effective October 1, 1988, the charge for M & O shall be increased to $3.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (d) Effective October 1, 1989, the charge for M & O shall be increased to $4.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (e) Effective October 1, 1990, the charge for M & O shall be increased to $5.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth. Notwithstanding any of the rates set forth in subsections (c) through (e) of this section and further notwithstanding any provision to the contrary in this Lease, effective October 1, 1988, and each year thereafter on the same month and day for the remainder of the term of this Lease, the M & O portion of the rental for common bag claim area due under this section shall be adjusted upward or downward in accordance with the increase or decrease for the same period of time in the Consumer Price Index published by the Bureau of - 8 - Labor Statistics of the United States Government, hereinabove and hereinafter called "CPI." It is the intention of the parties hereto that the charges set forth in subsections (c) through (e) of this section shall vary upward or downward in accordance with the CPI. The total common bag claim area charges shall be prorated among all Certificated Passenger Air Transportation Companies at the Airport based on the following formula: 20% of the total charges shall be divided equally among all Certificated Passenger Air Transportation Companies and the remaining 80% prorated based on each such carrier's percentage of enplanements in the preceding month. Not later than the fifth day of each month, the Lessee shall file with the Direc- tor of Aviation a summary of the actual number of passenger enplanements on Lessee's aircraft and the actual number of departures of Lessee's aircraft from the Airport for the preceding month. Lessee agrees to pay its calculated pro rat& amount of common bag claim area rental monthly in accordance with the above common bag claim area formula. B. Common Boarding Lounge Area Approximately 51,685 square feet of space and nine (9) loading gates are available for use as common boarding lounge area. Both City and Lessee agree that for purposes of this Lease the common boarding lounge area shall consist of those six (6) gates that formed the common boarding lounge area before the Airport was expanded and remodeled to provide additional space for airline ticketing and operations facilities, but such common area shall be enlarged to include an addi- tional gate for each Certificated Passenger Air - 9 - Transportation Company that either begins or has already begun providing Air Transportation services at the Airport after January 1, 1987. Initially, the base rental rate for the common boarding lounge area shall be $2.62 per sq. ft. per year. Effective April 1, 1988, the base rental rate for the common boarding lounge area shall be $2.87 per sq. ft. per year. Effective October 1, 1988, and each year thereafter on the same month and day for the remainder of this Lease, the base rental rate for the common board- ing lounge area shall be adjusted upward or down- ward in accordance with the increase or decrease for the same period of time in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Government, hereinafter called "CPI." In addition to any increase or decrease in the base rental rate resulting from changes in the CPI, $1.00 per sq. ft. will auto- matically be added to the base rental rate effec- tive October 1, 1988, and a like sum shall auto- matically be added to such base rental rate on the same month and day of each of the next two succeeding years so that the base rental rate, subject to adjustment for changes in the CPI, shall be as follows: (a) April 1, 1988, to October 1, 1988 -- $2.87 per sq. ft. per year x 51,685 square feet = $148,335.95 (yearly rental); (b) October 1, 1988, to September 30, 1989 - - $3.87 per sq. ft. per year x 51,685 square feet = $200,020.95 (yearly rental); - 10 - (c) October 1, 1989, to September 30, 1990 - - $4.S7 per sq. ft. per year x 51,685 square feet = $251,705.95 (yearly rental); (d) October 1, 1990, to September 30, 1991 - - $5.67 per sq. ft. per year x 51,685 square feet = $303,390.95 (yearly rental). Rental of the common boarding lounge area shall be charged jointly to all Certificated Passenger Air Transportation Companies which now or may hereafter have leases at the Airport according to the common boarding lounge area formula, as herein defined, and in accordance with the following calculation, and Lessee herein agrees to pay its pro rata portion of such rental: (6/9 X base rental rate X 51,685 square feet = annual rental) However, the fraction in the above calculation shall be enlarged by one -ninth each time that a Certificated Passenger Air Transportation Company either has begun or does begin providing Air Transportation services at the Airport after January 1, 1987. In like manner, the fraction shall be reduced by one -ninth whenever any Certificated Passenger Air Transportation Company ceases providing Air Transportation services at the Airport after January 1, 1987. Except, however, such fraction shall not be reduced if any Certificated Passenger Air Transportation Company with an unexpired lease takes bankruptcy and refuses to surrender its lease or allow the City to reclaim the space so occupied by such Air Transportation Company for any reason whatsoever. City and Lessee hereby agree that two (2) new Certificated Passenger Air Transportation Compa- nies have commenced providing Air Transportation services at Lubbock International Airport after January 1, 1987, and that the fraction in the formula as above set forth shall be adjusted in accordance with the above described procedure from the date such new Air Transportation Companies commenced services, which dates were November 12, 1987, and January 31, 1989, respectively. City and Lessee also hereby agree that the Certificated Passenger Air Transportation Company which began providing Air Transportation services at the Airport on January 31, 1989, ceased providing such services and discontinued operations at the Airport on July 31, 1989. The total common boarding lounge area charges shall be prorated among all Certificated Passenger Air Transportation Companies at the Airport based on the following formula: 20% of the total charges shall be divided among all Certificated Passenger Air Transportation Companies based on the percent- age of departures in the previous month, and So% shall be prorated based on each such carrier's percentage of enplanements in the previous month. Lessee agrees to pay its calculated pro rata amount of common boarding lounge area rental monthly in accordance with the above common board- ing lounge area formula. Loading gates which have not been designated as common boarding lounge area shall not be considered as such unless added to the common area in accordance with this Section 6.03. However, Lessee may at no additional charge utilize the loading gates not included in the common area for diversion or off -schedule operations. Lessee may similarly use these loading gates for charter flights after negotiating a use fee with the Airport Board of City. City herein agrees to - 12 - train Lessee's personnel to operate such loading gates for these purposes. 5. Article VI, Section 6.06 of said lease agreement is hereby amended by adding a paragraph at the end of such section which shall read as follows: Lessee shall pay City a late payment charge of five percent (5%) of the total amount of rentals, fees and other charges payable if payment is not made when due. 6. Article VI of said lease agreement is hereby amended by adding Section 6.08 thereto, which shall read as follows: Section 6.08 - Security Charges. Notwith- standing anything to the contrary contained in this lease agreement, a charge of twenty-five cents (250) shall be assessed to Lessee for each of Lessee's enplaned passengers at the Airport for backup security reimbursement. An enplaned passenger is any person that initially boards an airplane at the Airport or any person that leaves an airplane and reboards an airplane at the Airport. 7. Article VIII, Section 8.02, Paragraph (A) of said lease agreement is hereby amended to read as follows: (A) The right to further develop or improve the landing area and other portions of the Airport as City deems necessary. City agrees to advise Lessee of any proposed capital expenditure in excess of $100,000 and to consult with Lessee prior to undertaking such capital expenditure. However, nothing in this Section 9.02 or elsewhere in this Lease shall be construed as a delegation of the City's authority to determine when such capital expenditures are deemed necessary. If feasible, such improvements shall be made in a manner which will cause Lessee as little - 13 - inconvenience as possible. Lessee shall not be assessed any rentals, fees or other charges for such improvements unless Lessee occupies or utilizes such improvements either exclusively or in conjunction with other air carriers, or the improvements are required by the Federal Aviation Administration or for the safe operation of the Airport. S. Article XIII of said lease agreement is hereby amended by adding Section 13.20 thereto, which shall read as follows: Section 13.20 - Understanding of the Parties. City herein agrees not to assess Lessee any rates for rentals, fees and other charges less favorable than those rates for rentals, fees and other charges assessed to standard short- term tenants and month -to -month tenants for comparable space or facilities. However, City reserves the right to assess higher rates for rentals, fees and charges to short-term and month -to -month tenants in the future. A short-term tenant is herein defined to mean a Certificated Passenger Air Transportation Company other than a tenant at will or hold over tenant which has a lease agreement with the City with an initial term of less than three (3) years. A month -to - month tenant or tenant at will is herein defined to mean a Certificated Passenger Air Transportation Company which is neither a long-term tenant nor a short-term tenant at the Airport and whose business relationship with the City is on a month -to -month basis. A long-term tenant is herein defined to mean a Certificated Passenger Air Transportation Company which has a lease agreement with the City with an initial term of three (3) or more years. 9. Notwithstanding the date on which this ADDENDUM is executed, Lessee herein agrees to pay City rentals for exclusive leased space and common areas retroactively in accordance with amended sections 6.01 and 6.03 as though this ADDENDUM had been executed and became effective on - 14 - April 1, 1988. However, in calculating such rentals, Lessee shall be given credit for those rentals already paid to City since April 1, 1988. Any rentals due City after such calcu- lations are made shall be immediately due and payable upon execution of this ADDENDUM. If such calculations indicate that rentals have been overpaid, Lessee shall receive a credit for such overpayments. 10. Notwithstanding the date on which this ADDENDUM is executed, Lessee herein agrees to pay City landing fees retroactively in accordance with amended Section 6.02 as though this ADDENDUM had been executed and became effective on October 1, 1988. However, in calculating such landing fees, Lessee shall be given credit for those landing fees already paid to City since October 1, 1988. Any landing fees due after such calculations are made shall be immedi- ately due and payable upon execution of this ADDENDUM. If such calculations indicate that landing fees have been over- paid, Lessee shall receive a credit for such overpayments. 11. The rentals and fees set forth in amended Sections 6.01, 6.02 and 6.03, as modified by this ADDENDUM, shall remain in force and effect according to the terms set forth in the above mentioned sections unless such rentals and fees set forth in said amended sections, above named, are renego- tiated. 12. In the event of any conflict between the provi- sions of this ADDENDUM and the provisions of the said lease agreement which this ADDENDUM amends and modifies, the provisions of this ADDENDUM shall be controlling and shall define and govern the business relationship between the City and Lessee. 13. The location of the Exclusive Leased Premises and the Non -Exclusive Use Premises herein leased to Lessee are each designated and set forth on Exhibit B attached hereto and by this reference made a part of this ADDENDUM for all purposes. - 15 - 14. Nothing in this ADDENDUM shall ever be construed or understood as a delegation or surrender of the City of Lubbock's governmental authority. Executed this •2 1- — day of 5ZNV0.rH__ 19 . CITY OF LUBBOCK AMERICAN AIRLINES, INC. BY:BY: B�MI N, MAYOR ATTEST: Ranette Bcb d, City Secrdtary APPROVED AS TO CONTENT: &BernD rector of Aviation APPROVED AS TO FORM: ,04 //� rid Willard, Assistant City Attorney ATTEST: Charles D. MarLett Corporzte Secretary - 16 - Resolution No. 3550 February 28, 1991 Item #18 HW:dw it RESOLUTION !�I BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: !I 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 an Agreement Modifying Certificated Passenger Airline Lease by and between the City of Lubbock, Texas, and American Airlines, 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 detail. I� Passed by the City Council this 28th day of February 1991. a B. C. MCMINN, MAYOR Wanelte Boyd, city Sectary APP OVED AS TO CONTENT: ��enL. Case, Director oationAPPROVED AS TO FORM:, Harold Willard, Assistant City Attorney HW:da ADDENDUM NO. 1 TO AIRLINE LEASE AGREEMENT BY AND BETWEEN THE CITY OF LUBBOCK, TEXAS, AND AMERICAN AIRLINES, INC. 93s5a WHEREAS, the City of Lubbock, Texas, hereinafter referred to as "City", and American Airlines, Inc., here- inafter referred to as "Lessee", executed an agreement on or about February 23, 1984, in which Lessee agreed to lease from City space and facilities in the terminal building at Lubbock International Airport sufficient to conduct its business of air transportation at said Airport; and WHEREAS, both City and Lessee, for good and valuable consideration, desire to amend the agreement which both such parties executed on or about February 23, 1984, NOW THEREFORE, the Certificated Passenger Airline Lease executed by City and Lessee on or about February 23, 1984, is hereby amended as follows: 1. Article I, Section 1.03, Paragraph (I) of said lease agreement is hereby amended to read as follows: (I) The right to provide food and beverages for consumption in flight by passengers and crews of Lessee or by passengers and crews of any other Certificated Passenger Air Transporta- tion Companies. Lessee shall also have the right to arrange for food and beverages to be provided to its passengers and crew members when said passengers or crew members are grounded at the Airport because of weather, mechanical conditions or other similar emer- gency conditions; provided, however, that if said passengers or crew members are to be given food and beverages at the Airport, Lessee shall arrange for this service from the person, firm or corporation holding concession rights from the City for food and beverage service at the Airport. In addi- tion, Lessee may furnish, free of cost, coffee and doughnuts to its passengers, provided such items are purchased through the person, firm or corporation holding conces- sion rights from the City for food and beverage service at the Airport. Lessee shall be relieved of its obligation under this subparagraph (I) to purchase food and beverages from the person, firm or corporation holding concession rights at the Airport if such concessionaire is unable or unwilling to provide the food and beverages requested in a timely manner. Except to the extent hereinabove specifically provided, nothing in this subparagraph (I) shall be deemed to give Lessee the right to maintain or operate at the Airport a cafeteria, restaurant, bar, cocktail lounge or vending machines or in any manner otherwise providing for the sale of food or beverages to the public. 2. Article V, Section 5.01 of said lease agreement is hereby amended to read as follows: Section 5.01 - Term. A. The initial term of this Lease shall commence on the 1st day of June, 1983, and end on the 30th day of September, 1999, subject, however, to earlier termination as here- inafter provided under Article XI and to rene- gotiation of the Maintenance and Operation portion of the rentals and fees as hereinafter provided; the first such renegotiation shall commence upon written demand by either party at least ninety (90) days prior to April 1, 1985. Subsequent renegotiations shall commence upon written demand - 2 - by either party at least ninety (90) days prior to April 1, 1988; April 1, 1991; April 1, 1994 and April 1, 1997; such dates being the time of expiration of anniversary years of this Lease. In the event that no written demand for renegotiation is made by either party at least ninety (90) days prior to the expiration of such anniversary years, the rentals and fees then current shall apply for the succeeding three year period. B. Thirteen (13) months prior to the expiration of this Lease, City shall notify Lessee, in writing, that negotiations should commence to enter into a new lease agreement. Lessee shall upon receipt of such notification arrange for a meeting with City if Lessee desires to execute a new lease with City. The Lessee and City shall meet and commence said negotiations within thirty (30) days of the written notification hereinabove referred to and shall continue such negotiations with reasonable diligence so that a new lease shall be executed by the parties and be in effect upon the expiration of the term of this lease agreement. In the event the parties hereto have negotiated with diligence and are unable to conclude a new lease agreement before the expiration of the term of this lease agreement and it is evident that additional time is needed to conclude such new lease agreement, then in such event the Lessee may apply for an extension of time in which to operate at the Airport and conclude the negotiations, which extension may be granted by the Director of Aviation. Such extension shall be for no longer period of time than twelve (12) months from the date of termination of this Lease. Any extension of this Lease shall be in writing and signed by - 3 - Lessee and the Director of Aviation. During any extension, Lessee shall be subject to the rates, fees, rentals and other charges established by the Airport Board for Certificated Passenger Air Transportation Companies that are month -to -month tenants. Both City and Lessee herein agree, however, that all negotiations for any new lease shall be conducted in good faith. 3. Article V of said lease agreement is hereby amended by adding Section 5.08 thereto, which shall read as follows: Section 5.08 - Duty to Prevent Unauthorized Access to the Premises. Lessee shall prohibit and prevent access or entry into the Exclusive Leased Premises and any sterile area by any person or property whose access or entry is not authorized and Lessee agrees that in the event that a civil penalty or fine is levied against the Airport or City as a result of Lessee's failure to comply or act in accordance with this provision, or any other applicable federal, state or local statutes, ordinances, rules and regulations affecting the use, occupancy or operation of any of said premises, Lessee shall immediately reimburse the Airport or City the full amount of the penalty or fine and correct the act or omission leading to, causing or contributing to the violation. The term "sterile area" as herein used shall mean any area at the Airport which Lessee possesses or controls either singularly or in conjunction with other air carriers and to which access is controlled by the inspection of persons and property in accordance with any security program mandated by the Federal Aviation Administration. 4. Article VI, Sections 6.01, 6.02 and 6.03 of said lease agreement are hereby amended to read as follows: - 4 - Section 6.01 - Rental for Exclusive Terminal Building Space. Rental for the 3.882 square feet of exclusive leased space within the terminal building of the Airport, as described in Section 1.01, shall include a fixed fee of $5.63 per sq. ft. per year (to cover debt service) or $21,855.66 per year. In addition to the fixed fee above set forth, a variable sum shall be charged to Lessee for Maintenance and Operation (M & O) costs as follows: (a) The charge for M & O prior to April 1, 1988, shall be assessed at the rate of $2.62 per sq. ft. per year; and (b) Effective April 1, 1988, the charge for M & O shall be increased to $2.87 per sq. ft. per year; and (c) Effective October 1, 1988, the charge for M & 0 shall be increased to $3.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (d) Effective October 1, 1989, the charge for M & O shall be increased to $4.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (e) Effective October 1, 1990, the charge for M & 0 shall be increased to $5.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth. Notwithstanding any of the rates set forth in subsections (c) through (e) of this section and further notwithstanding any provision to the contrary in this Lease, effective October 1, 1988, and each year thereafter on the same month and day - 5 - for the remainder of the term of this Lease, the M & O portion of the rental for exclusive leased space due under this section shall be adjusted upward or downward in accordance with the increase or decrease for the same period of time in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Government, hereinabove and hereinafter called "CPI". It is the intention of the parties hereto that the charges set forth in subsections (c) through (e), of this section shall vary upward or downward in accordance with the CPI. Section 6.02 - Landing Fee. The fee for the use of the landing area and facilities necessary therefor as granted hereunder, except those for which rentals are specifically provided elsewhere herein, shall be as follows: 32.50 effective October 1, 1981 350 effective October 1, 1983 400 effective October 1, 1966 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, 1968, the fee for the use of the landing area and facilities necessary therefor as granted hereunder, except those for which rentals are specifically provided elsewhere herein, shall be .45 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, 1991, the fee for the use of such landing area and facilities shall be .50 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, 1994, the fee for the use of such landing area and facilities shall be $.55 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Effective October 1, - 6 - 1997, the fee for the use of such landing area and facilities shall be .60 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Not later than the fifth day of each month, Lessee shall file with the Director of Aviation a report of Lessee's actual landings at the Airport for the preceding month, which report shall include the number and type of aircraft making such landings. The term "approved maximum gross landing weight" for any aircraft, as used herein, shall be the maximum landing weight approved by the Federal Aviation Administration for landing such aircraft at the Airport. Lessee shall provide the City with a summary of the "approved maximum gross landing weights" for each type of aircraft it operates at the Airport. Five hundred (500) pounds or any larger part of one thousand (1,000) pounds shall be counted as if a whole one thousand (1,000) pounds and any smaller part shall be disregarded. Section 6.03 - Rental for Common Use Area. A. Common Bag Claim Area Rental for the 16.939 sq. ft. common bag claim area shall be charged jointly to Lessee and all other Certificated Passenger Air Transporta- tion Companies which now or may hereafter have valid leases at the Airport according to the common bag claim area formula, as hereinafter defined, and Lessee herein agrees to pay its pro rata portion of such rental, which shall include a fixed fee of $5.63 per sq. ft. per year (to cover debt service) or $95,366.57 per year. - 7 - In addition to the fixed fee above set forth, a variable sum shall be charged jointly to Lessee and all such Air Transportation Companies for Maintenance and Operation (M & O) costs as follows: (a) The charge for M & O prior to April 1, 1988, shall be assessed jointly at the rate of $2.62 per sq. ft. per year; and (b) Effective April 1, 1988, the charge for M & 0 shall be increased to $2.87 per sq. ft. per year; and (c) Effective October 1, 1988, the charge for M & 0 shall be increased to $3.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (d) Effective October 1, 1969, the charge for M & 0 shall be increased to $4.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth; and (e) Effective October 1, 1990, the charge for M & O shall be increased to $5.87 per sq. ft. per year, subject to CPI adjustments as hereinafter set forth. Notwithstanding any of the rates set forth in subsections (c) through (e) of this section and further notwithstanding any provision to the contrary in this Lease, effective October 1, 1988, and each year thereafter on the same month and day for the remainder of the term of this Lease, the M & O portion of the rental for common bag claim area due under this section shall be adjusted upward or downward in accordance with the increase or decrease for the same period of time in the Consumer Price Index published by the Bureau of - 8 - Labor Statistics of the United States Government, hereinabove and hereinafter called "CPI." It is the intention of the parties hereto that the charges set forth in subsections (c) through (e) of this section shall vary upward or downward in accordance with the CPI. The total common bag claim area charges shall be prorated among all Certificated Passenger Air Transportation Companies at the Airport based on the following formula: 20% of the total charges shall be divided equally among all Certificated Passenger Air Transportation Companies and the remaining 80% prorated based on each such carrier's percentage of enplanements in the preceding month. Not later than the fifth day of each month, the Lessee shall file with the Direc- tor of Aviation a summary of the actual number of passenger enplanements on Lessee's aircraft and the actual number of departures of Lessee's aircraft from the Airport for the preceding month. Lessee agrees to pay its calculated pro rata amount of common bag claim area rental monthly in accordance with the above common bag claim area formula. B. Common Boarding Lounge Area Approximately 51,685 square feet of space and nine (9) loading gates are available for use as common boarding lounge area. Both City and Lessee agree that for purposes of this Lease the common boarding lounge area shall consist of those six (6) gates that formed the common boarding lounge area before the Airport was expanded and remodeled to provide additional space for airline ticketing and operations facilities, but such common area shall be enlarged to include an addi- tional gate for each Certificated Passenger Air - 9 - Transportation Company that either begins or has already begun providing Air Transportation services at the Airport after January 1, 1987. Initially, the base rental rate for the common boarding lounge area shall be $2.62 per sq. ft. per year. Effective April 1, 1988, the base rental rate for the common boarding lounge area shall be $2.87 per sq. ft. per year. Effective October 1, 1988, and each year thereafter on the same month and day for the remainder of this Lease, the base rental rate for the common board- ing lounge area shall be adjusted upward or down- ward in accordance with the increase or decrease for the same period of time in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Government, hereinafter called "CPI." In addition to any increase or decrease in the base rental rate resulting from changes in the CPI, $1.00 per sq. ft. will auto- matically be added to the base rental rate effec- tive October 1, 1988, and a like sum shall auto- matically be added to such base rental rate on the same month and day of each of the next two succeeding years so that the base rental rate, subject to adjustment for changes in the CPI, shall be as follows: (a) April 1, 1988, to October 1, 1988 -- $2.87 per sq. ft. per year x 51,685 square feet = $148,335.95 (yearly rental); (b) October 1, 1988, to September 30, 1989 - - $3.87 per sq. ft. per year x 51,685 square feet = $200,020.95 (yearly rental); - 10 - (c) October 1, 1989, to September 30, 1990 - - $4.87 per sq. ft. per year x 51,685 square feet = $251,705.95 (yearly rental); (d) October 1, 1990, to September 30, 1991 - - $5.87 per sq. ft. per year x 51,685 square feet = $303,390.95 (yearly rental). Rental of the common boarding lounge area shall be charged jointly to all Certificated Passenger Air Transportation Companies which now or may hereafter have leases at the Airport according to the common boarding lounge area formula, as herein defined, and in accordance with the following calculation, and Lessee herein agrees to pay its pro rata portion of such rental: (6/9 X base rental rate X 51,685 square feet = annual rental) However, the fraction in the above calculation shall be enlarged by one -ninth each time that a Certificated Passenger Air Transportation Company either has begun or does begin providing Air Transportation services at the Airport after January 1, 1987. In like manner, the fraction shall be reduced by one -ninth whenever any Certificated Passenger Air Transportation Company ceases providing Air Transportation services at the Airport after January 1, 1987. Except, however, such fraction shall not be reduced if any Certificated Passenger Air Transportation Company with an unexpired lease takes bankruptcy and refuses to surrender its lease or allow the City to reclaim the space so occupied by such Air Transportation Company for any reason whatsoever. City and Lessee hereby agree that two (2) new Certificated Passenger Air Transportation Compa- nies have commenced providing Air Transportation services at Lubbock International Airport after January 1, 1987, and that the fraction in the formula as above set forth shall be adjusted in accordance with the above described procedure from the date such new Air Transportation Companies commenced services, which dates were November 12, 1987, and January 31, 1989, respectively. City and Lessee also hereby agree that the Certificated Passenger Air Transportation Company which began providing Air Transportation services at the Airport on January 31, 1989, ceased providing such services and discontinued operations at the Airport on July 31, 1989. The total common boarding lounge area charges shall be prorated among all Certificated Passenger Air Transportation Companies at the Airport based on the following formula: 20% of the total charges shall be divided among all Certificated Passenger Air Transportation Companies based on the percent- age of departures in the previous month, and 80% shall be prorated based on each such carrier's percentage of enplanements in the previous month. Lessee agrees to pay its calculated pro rate amount of common boarding lounge area rental monthly in accordance with the above common board- ing lounge area formula. Loading gates which have not been designated as common boarding lounge area shall not be considered as such unless added to the common area in accordance with this Section 6.03. However, Lessee may at no additional charge utilize the loading gates not included in the common area for diversion or off -schedule operations. Lessee may similarly use these loading gates for charter flights after negotiating a use fee with the Airport Board of City. City herein agrees to - 12 - train Lessee's personnel to operate such loading gates for these purposes. 5. Article VI, Section 6.06 of said lease agreement is hereby amended by adding a paragraph at the end of such section which shall read as follows: Lessee shall pay City a late payment charge of five percent (5%) of the total amount of rentals, fees and other charges payable if payment is not made when due. 6. Article VI of said lease agreement is hereby amended by adding Section 6.08 thereto, which shall read as follows: Section 6.08 - Security Charges. Notwith- standing anything to the contrary contained in this lease agreement, a charge of twenty-five cents (250) shall be assessed to Lessee for each of Lessee's enplaned passengers at the Airport for backup security reimbursement. An enplaned passenger is any person that initially boards an airplane at the Airport or any person that leaves an airplane and reboards an airplane at the Airport. 7. Article VIII, Section 8.02, Paragraph (A) of said lease agreement is hereby amended to read as follows: (A) The right to further develop or improve the landing area and other portions of the Airport as City deems necessary. City agrees to advise Lessee of any proposed capital expenditure in excess of $100,000 and to consult with Lessee prior to undertaking such capital expenditure. However, nothing in this Section 9.02 or elsewhere in this Lease shall be construed as a delegation of the City's authority to determine when such capital expenditures are deemed necessary. If feasible, such improvements shall be made in a manner which will cause Lessee as little - 13 - inconvenience as possible. Lessee shall not be assessed any rentals, fees or other charges for such improvements unless Lessee occupies or utilizes such improvements either exclusively or in conjunction with other air carriers, or the improvements are required by the Federal Aviation Administration or for the safe operation of the Airport. 8. Article XIII of said lease agreement is hereby amended by adding Section 13.20 thereto, which shall read as follows: Section 13.20 - Understandincr of the Parties. City herein agrees not to assess Lessee any rates for rentals, fees and other charges less favorable than those rates for rentals, fees and other charges assessed to standard short- term tenants and month -to -month tenants for comparable space or facilities. However, City reserves the right to assess higher rates for rentals, fees and charges to short-term and month -to -month tenants in the future. A short-term tenant is herein defined to mean a Certificated Passenger Air Transportation Company other than a tenant at will or hold over tenant which has a lease agreement with the City with an initial term of less than three (3) years. A month -to - month tenant or tenant at will is herein defined to mean a Certificated Passenger Air Transportation Company which is neither a long-term tenant nor a short-term tenant at the Airport and whose business relationship with the City is on a month -to -month basis. A long-term tenant is herein defined to mean a Certificated Passenger Air Transportation Company which has a lease agreement with the City with an initial term of three (3) or more years. 9. Notwithstanding the date on which this ADDENDUM is executed, Lessee herein agrees to pay City rentals for exclusive leased space and common areas retroactively in accordance with amended Sections 6.01 and 6.03 as though this ADDENDUM had been executed and became effective on - 14 - April 1, 1988. However, in calculating such rentals, Lessee shall be given credit for those rentals already paid to City since April 1, 1988. Any rentals due City after such calcu- lations are made shall be immediately due and payable upon execution of this ADDENDUM. If such calculations indicate that rentals have been overpaid, Lessee shall receive a credit for such overpayments. 10. Notwithstanding the date on which this ADDENDUM is executed, Lessee herein agrees to pay City landing fees retroactively in accordance with amended Section 6.02 as though this ADDENDUM had been executed and became effective on October 1, 1988. However, in calculating such landing fees, Lessee shall be given credit for those landing fees already paid to City since October 1, 1988. Any landing fees due after such calculations are made shall be immedi- ately due and payable upon execution of this ADDENDUM. If such calculations indicate that landing fees have been over- paid, Lessee shall receive a credit for such overpayments. 11. The rentals and fees set forth in amended Sections 6.01, 6.02 and 6.03, as modified by this ADDENDUM, shall remain in force and effect according to the terms set forth in the above mentioned sections unless such rentals and fees set forth in said amended sections, above named, are renego- tiated. 12. In the event of any conflict between the provi- sions of this ADDENDUM and the provisions of the said lease agreement which this ADDENDUM amends and modifies, the provisions of this ADDENDUM shall be controlling and shall define and govern the business relationship between the City and Lessee. 13. The location of the Exclusive Leased Premises and the Non -Exclusive Use Premises herein leased to Lessee are each designated and set forth on Exhibit B attached hereto and by this reference made a part of this ADDENDUM for all purposes. - 15 - 14. Nothing in this ADDENDUM shall ever be construed or understood as a delegation or surrender of the City of Lubbock's governmental authority. Executed this 2-2-'A day of �wr� onv, 19 CITY OF LUBBOCK A14ERICAN AIRLINES, INC. B.C. McMINN, MAYOR ATTEST: Ranette Boyd, City Secreyary APPROVED AS TO CONTENT: Sern' Case_ -, Director of Aviation APPROVED AS TO FORM: 4= S� � 4 V-c " � Harold Willard, Assis ant City Attorney ATTEST: Cherler, D. tgarLett Corporate SccretPstjF - 16 -