HomeMy WebLinkAboutResolution - 2012-R0292 - Lease Agreement - EAN Holdings LLC/ National Car Rental - 07/26/2012Resolution No. 2012-RO292
.July 26, 2012
Item No. 5.3.D.
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to
execute for and on behalf of the City of Lubbock, a Lease Agreement by and between the
City of Lubbock and EAN Holdings, LLC d/b/a National Car Rental, and related
documents. Said Lease Agreement is attached hereto and incorporated in this resolution
as if fully set forth herein and shall be included in the minutes of the City Council.
Passed by the City Council on July 26, 2012
CLEW, ROBERTSON, MAYOR
ATTEST:
Rebec Garza, City Secret ry
APP V ED AS TO CONTENT:
`' +�.z...
omis, Director of Aviation
APPROVED AS TO FORM:
Chad Weaver, Assistant City Attorney
vw: ccdocs/ RES. Lease Agrmt-National Car Rental
July 10, 2012
Contract 10577-5
THE STATE OF TEXAS §
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LUBBOCK §
LEASE AGREEMENT
This Agreement entered into by the City of Lubbock (referred to herein as "City"), a
Home Rule Municipality of Lubbock County, Texas, and EAN Holdings, LLC d/b/a National
Car Rental (referred to herein as "Lessee").
WITNESSETH
WHEREAS, 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 automobile rental services available at the
Airport and is qualified and has the capacity to perform said services and to equip said facilities
for use in connection therewith, and further desires to lease certain space and obtain certain
rights and privileges with respect to the operation of a rental 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 COUNTER — Rental Car Counter locations are shown on
"Exhibit A", which Exhibit is attached to this agreement and incorporated
herein.
B. GROUND FOR SERVICE FACILITY — 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
TERM
The term of this lease shall be for five (5) years and shall begin on SEPTEMBER 1,
2012 and terminate on AUGUST 31, 2417.
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, for a
period not to exceed twelve (12) months. 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 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
P A VIULF NT
A. CONCESSION FEE
RENTAL CAR LEASE AGREEMENT
PAGE 2
I . 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:
$143,000.00 Dollars for Year One,
$143,000.00 Dollars for Year Two,
$144,625.00 Dollars for Year Three,
$145,147.00 Dollars for Year Four and,
$146,482.00 Dollars for Year Five.
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.
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 Ionger 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
RENTAL CAR LEASE AGREEMENT
PAGE 3
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
as a "Concession Fee Recovery" on all such customer rental agreements,
contracts or invoices.
{t) 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, Customer Facility Charge (CFC), parking tickets, tolls, towing,
impound fees, traffic tickets, carbon offsets, or for emergency repairs
made by the customers.
2. Ground Lease (Service FaciIity): 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 _NIA_ square feet of exclusive lease area, as shown on Exhibit "B", at the
rate of $0.1647 per sq. ft. per year. On January 1, 2013, 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 FIFTEEN AND NO/100 DOLLARS ($15.00) per
space per month for Lessee's allocated parking spaces, as shown on Exhibit "C". The space fee
will increase $0.50 per space at the beginning of each contract year two through five. 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 be allocated
based on the percentage of the aggregate minimum annual guarantee for the first year of the
agreement. Upon request, the number of spaces can be reviewed annually on the anniversary
date of the agreement by determining the percentage of market share for the preceding year.
4. Terminal Counter: For each month that this lease is in effect, the Lessee shall pay
to the City rentals for counter space 376 square feet of exclusive lease area, as shown on Exhibit
"A", at the rate of $27.23 per sq. ft. per year. On January 1, 2013, and each year thereafter on
RENTAL CAR LEASE AGREEMENT
PAGE 4
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.
5. Customer Facility Charge:
(a) Beginning on September 1, 2012 (the charge effective date) and during the term
of this Agreement, City shall impose, and the Lessee will collect and remit to
City, a Customer Facility Charge (CFC) in the amount of $3.50 for any of
Lessee's automobiles contracted for or picked up at the Airport pursuant to a
Customer Contract. Lessee shall include the CFC in all forms of reservations not later
than thirty (30) days prior to the CFC charge effective date. CFC shall only apply to
rental agreements that begin on or after September 1, 2012 and shall not apply in whole
or in part to any rental agreements commencing prior but ending after the CFC charge
effective date or for rental agreements entered into as a result of a reservation made
prior to a revised charge effective date. The amount of each CFC shall be payable
directly by each of the customers of the Lessee, as a separately identified charge
for each day or portion thereof that a Customer Contract is in force with a
maximum cap of three (3) days. The level of the CFC, in the sole discretion of the
City, may be adjusted from time to time by the City to meet the needs of
construction of rental car related facilities, parking and roadways which may be
necessary for the non-exclusive use of Lessee. The CFC shall remain in effect
until tenninated by City in its sole discretion. The level of the CFC may be
adjusted by the City at any time that City reasonably determines that the
amount of the CFC estimated to be remitted will be insufficient to meet the capital
and operational costs of funded facilities.
(b) Collection of the CFC revenue shall be placed in a separate account until
sufficient funds are available to initiate construction projects or reimburse the
City for any amounts it has pre -funded for the construction and operation of
facilities. The City will provide, upon request, an annual statement of CFC funds.
The following element shall be considered when developing CFC requirements:
The amount of the Annual CFC Requirement shall be determined by City
RENTAL CAR LEASE AGREEMENT
PAGE 5
for each Fiscal Year for which the calculation is being made, as long as
the total CFC requirement calculated in this way does not exceed what the
City deems a reasonable CFC requirement.
(c) Lessee shall separately state the amount of the CFC in all of its Customer
Contracts and collect the CFC from its customers on behalf of City,
Lessee agrees that the CFC is not income, revenue or any other asset to
Lessee; that Lessee has no ownership or property interest in such CFCs;
and that Lessee hereby waives any claim to a possessory or ownership
interest in the CFCs. Lessee agrees that it holds such CFCs in trust for the
benefit of the City, and that the City (or a trustee on its behalf) has
complete possessory and ownership rights to such CFCs.
(d) Lessee shall report to City by the twentieth (20th) day of
each month the total number of transaction days during the preceding
month, and at such time remit to City all amounts it has collected as CFCs
from its customers during the preceding month without deduction or set-
off. Lessee shall be responsible for the amounts of any CFCs that it does
not collect from its customers. Any such amounts not remitted by the
twcntieth (20th) day of the month shall be assessed as a fee payable by
Lessee equal to five (5%) of such amount per month until paid. City shall
have the right to audit the records of Lessee, pursuant to Article Four, F.
of this Agreement, to assure compliance with this provision. Further, if
City determines that Lessee has failed for any reason to collect and remit
the proper amount of CFCs for any fiscal year, such Lessee will be
required to pay to City an amount equal to the amount of any such
deficiency applicable to its Customer Contracts for the fiscal year in
question plus the amount of any fees and penalties owed pursuant to the
terms of this Agreement.
City will apply and use the amounts of CFCs remitted to it as follows:
First: to the payment of debt service on debt obligations incurred by City
in connection with the Rental Car Capital Projects;
RENTAL CAR LEASE AGREEMENT"
PAGE 6
Second: to repay City for the annual amortization of any amounts of City
funds expended on or invested in capital rental car facilities;
Third: to fund a reserve against any future shortfalls in CFC revenues;
Fourth: to fund operations and maintenance on the shared rental car
facility;
Fifth: to make up any deficiencies in the amount of CFCs collected in
prior years or to defray all or part of a future fiscal year's Annual CFC
Requirement;
Sixth: to defease or prepay the amounts of any indebtedness that City has
incurred in connection with the Rental Car Capital Projects; and
Seventh: to be held in reserve to pay the cost of future improvements to
rental car facilities.
6. 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.
7. 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.
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 (34) or more consecutive days attributable to such shortages or other
disruptions.
RENTAL CAR LEASE AGREEMENT
PAGE 7
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
City agrees that during the term of this lease there shall be no more than six (6)
automobile rental concessionaires perrnitted 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 or other authorized representative of Lessee 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
RENTAL CAR LEASE AGREEMENT
PAGE 8
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 Director of
Aviation, and will be available for inspection and examination during regular office hours by the
Director of Aviation or authorized representatives of the City. Such written consent may be
revoked by the Director of Aviation at any time. Any other books, records and receipts of
Lessee's business operations at Lubbock area locations other than the Airport which the Director
of Aviation 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
detennining the accuracy of the required statements of gross revenue, the Director of Aviation
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 Director
of Aviation 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 Director of Aviation 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 20`h 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, Unit 389, Lubbock, Texas
RENTAL CAR LEASE AGREEMENT
PAGE 9
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 20'h day of the
month.
H. DIVERTING REVENUE
Any action taken by the Lessee to divert rental car business from the Airport to off -
Airport locations or to induce its patrons or patrons of other car rental concessionaires at the
Airport to rent or receive vehicles in any manner or at any location so as to diminish rentals
payable to the City by Lessee or other car rental concessionaires at the Airport shall constitute a
material breach hereof and a cause for the immediate termination of this agreement by the City.
ARTICLE FIVE
OBLIGATIONS OF THE CITY
A. CLEAR TITLE
The City covenants and agrees that upon execution of this lease City is well seized of the
leased premises and has good title, free and clear of all liens and encumbrances having priority
over this lease; and that the City has full right and authority to lease the premises described in
this agreement.
E. 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 the ready and return lot and airport roads to provide access to the
leased premises in a good and adequate condition.
A. NET LEASE
ARTICLE SIX
OBLIGATION OF LESSEE
RENTAL CAR LEASE AGREEMENT
PAGE 10
This lease shall be without cost to the City for the development, maintenance and
improvement of the leased premises. It shall be the sole responsibility of the Lessee to keep,
maintain, repair and operate the entirety of the demised premises, and all improvements and
facilities placed on the leased premises shall be at Lessee's sole cost and expense.
B. PRIVILEGES AND CONDITIONS
The City grants to the Lessee the following general privileges, uses, and rights, all of
which are subject to the terms, conditions and covenants herein set forth and all of which shall be
non-exclusive on the Airport:
I. The general use of all common terminal facilities and improvements which are
now or may hereafter be connected with or appurtenant to the terminal building
only in such a manner as may be necessary or convenient to the conduct of
Lessee's business.
2 The right of ingress to and egress from the leased premises over and across
common or public roadways serving the Airport for Lessee, its agents, employees,
patrons, invitees, suppliers of services and providers of materials, such right of
ingress and egress being subject to such ordinances, rules and regulations now
existing or subsequently promulgated.
3. The privilege of constructing improvements upon the leased premises as follows:
(a) Tenninal: Concession counter
(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:
RENTAL CAR LEASE AGREEMENT
PAGE i I
(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
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. The City shall maintain the ready and return lot striping
and asphalt.
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 the period of the contract. 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
RENTAL CAR LEASE AGREEMENT
PAGE 12
the remaining unamortized portion, otherwise, such improvements shall become
the property of the City.
2. Service buildings, paving, and fencing constructed by the Lessee remain the
property of Lessee and shall be removed from the premises within sixty (60) days
after the end of the term of the agreement. However, in the event Lessee is
succeeded by another concessionaire at the end of the initial term of this lease, or
any extension thereof, Lessee shall 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 any reason the Lessee terminates its operations,
service buildings, paving and fencing that is not removed within 60 days or
purchased by a new concessionaire, will become the property of the City.
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, non -nal wear and tear accepted. 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 rencwal 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 ft, without any liability to the
Lessee to account for the proceeds of any sale; and the City, at its option, may charge rent from
the date of expiration or termination of this agreement through the day of final removal of the
RENTAL CAR LEASE AGREEMENT
PAGE 13
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. However, in the event Lessee is succeeded by
another concessionaire at the end of the initial term of this lease, or any extension thereof, Lessee
shall negotiate with the new concessionaire for the purchase of such fuel tank. Negotiations shall
be completed within thirty (30) days. If the two parties are unable to agree on the purchase of
the said tank, Lessee shall remove the fuel tank from the premises.
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 or grass areas on airport property. Lessee is also
prohibited from allowing Airport patrons to park their personal vehicles in any of Lessee's
allocated parking spaces. Vehicles parked in the Airport's paid parking lot area shall accrue
charges in accordance with current parking rates, and the City has no obligation to detect or
report Lessee's vehicles so parked.
G. STANDARD OF SERVICE
The Lessee shall conduct a first class automobile rental service on the leased premises
sufficient to meet 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
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
RENTAL CAR LEASE AGREEMENT
PAGE 14
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.
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
RENTAL CAR LEASE AGREEMENT
PAGE 15
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.
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 ONE MILLION AND NO1100 DOLLARS ($1,000,000.00) for Combined
Single Limit General Liability Insurance; or less than ONE MILLION AND NO1100
($1,000,000.00) 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 4016.002 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. Lessee shall carry and maintain Employer Liability coverage in an
amount no less than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
(5500,000.00). 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 a primary additional insured, require the insurer to notify the Director of Aviation of
RENTAL CAR LEASE AGREEMENT
PAGE 16
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.
The Lessee will provide copies of the policies without expense, to the City and all
endorsements thereto and may make any reasonable request for deletion, revision, or
modification of particular policy terms, conditions, limitations, or exclusions (except where
policy provisions are established by law or regulation binding upon either of the parties hereto or
the underwriter of any of such policies). Upon such request by the City, Lessee shall exercise
reasonable efforts to accomplish such changes in policy coverages, and shall pay the cost thereof.
Any costs will be paid by the Lessee.
Q. WAGES
The Lessee shall pay, or require the payment of, the prevailing wage rate for each
craftsman or workman employed by Lessee, or by persons or firms engaged by Lessee, for any
alteration of the leased premises or installation, maintenance or repair of vehicles, fixtures,
equipment and furnishings used in Lessee's operations, as required by ordinances enacted
pursuant to Texas Government Code Chapter 2258, 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
RENTAL CAR LEASE AGREEMENT
PAGE 17
and the City harmless from all costs and damages resulting from any liens of any character
created or that may be asserted through any act or thing done by the Lessee.
In the event any mechanic's lien or other lien or order for payment shall be filed against
the leased premises or improvements thereon, or against City -owned property located thereon
during the initial terra 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. AIRPORT CONCESSION DISADVANTAGED BUSINESS ENTERPRISE
1. The City will give consideration to Lessee submitting a Proposal as an Airport
Concession Disadvantage Business Enterprise (ACDBE). If you are submitting
your Proposal as an ACDBE you must also complete the ACDBE Proposal Form.
2. The City is committed to a policy and program for the participation of ACDBEs
in concession -related contracting opportunities in accordance with U.S.
Department of Transportation's (DOT) 49 Code of Federal Regulations (CFR)
Part 23 as may be amended. In advancing City's policy, the selected Lessee
agrees to ensure that ACDBEs, as defined in 49 CFR Part 23 and City's ACDBE
Program, have the maximum opportunity to participate in the performance of the
Agreement. The selected Lessee will take all necessary and reasonable steps in
accordance therewith to ensure that ACDBEs are encouraged to compete for and
perform subcontracts under the Agreement.
3. Non -Discrimination
a. The selected Lessee and any subcontractor of the selected Lessee will not
discriminate on the basis of race, color, national origin, or sex in the
performance of the Agreement. The selected Lessee will carry out
applicable requirements of 49 CFR Part 23 in the award and
administration of agreements. Failure by the selected Lessee to carry out
these requirements is a material breach of the Agreement, which may
RENTAL CAR LEASE AGREEMENT
PAGE 18
result in the termination of the Agreement or such other remedy as the
City deems appropriate.
b. The Agreement is subject to the requirements of the U.S. Department of
Transportation's regulations 49 CFR Part 23. The selected Lessee agrees
that it will not discriminate against any business owner because of owner's
race, color, natural origin, or sex in connection with the award or
performance of any concession agreement, management contract, or
subcontract, purchase of lease agreement, or other agreement covered by
49 CFR Part 23.
C. The selected Lessee will agree to include the statements in paragraphs (1)
and (2) above 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.
4. ACDBE Participation and Compliance
a. ACDBE Goal: The selected Lessee agrees that it will pursue subcontracting
opportunities with ACDBE firms, certified with the State of Texas Uniform
Certification Program, to provide goods and services to be purchased under
the Agreement for each year of the term, or clearly demonstrate in a manner
acceptable to City its good faith efforts to do so.
b. ACDBE Termination and Substitution: The selected Lessee will not terminate
an ACDBE for convenience without the City's prior written consent. If an
ACDBE is terminated by the selected Lessee with the City's consent or
because of the ACDBE's default, then the selected Lessee must make a good
faith effort, in accordance with the requirements of 49 GFR Part 23.25 to find
another ACDBE to substitute for the original ACDBE to provide the same
amount of ACDBE participation.
c. Reporting Requirements: The selected Lessee agrees that within twenty (20)
days after the expiration of each calendar quarter during the term of the
Agreement, it will provide an ACDBE Utilization Activity Report to the City,
in a form acceptable to the City, the total actual payments received by each of
its ACDBE subcontractors and vendors for such fiscal year, calculated in
RENTAL CAR LEASE AGREEMENT
PAGE 19
accordance with the requirements of 49 CFR Part 23. If the ACDBE
participation required is not met, the selected Lessee will explain in its report
the reason for its failure to meet the prescribed goal and the corrective
action(s) the selected Lessee proposes to take in the next fiscal year(s) to meet
said goal.
d. Monitoring: City will monitor the compliance and good faith efforts of the
selected Lessee in meeting the requirements of this Section. City will have
access to the necessary records to examine such information as may be
appropriate for the purpose of investigating and determining compliance with
this Section, including, but not limited to, records, records of expenditures,
contracts between the selected Lessee and the ACDBE participant, and other
records pertaining to the ACDBE participation plan, with the selected.
e. Prompt Payment: The selected Lessee agrees to pay each subcontractor under
the Agreement for satisfactory performance of its contract no later than ten
(10) calendar days from the receipt of each payment the selected Lessee
receives from the Commission. The selected Lessee agrees further to release
retainage payments to each subcontractor within ten (10) calendar days after
the subcontractor's work is satisfactorily completed. Any delay or
postponement of payment from the above referenced time frame may occur
only for good cause following written approval of the Commission. This
clause applies to both ACDBE and non-ACDBE subcontractors.
f. Sanctions for Non -Compliance: Commission may, in addition to pursuing
any other available legal remedy for the selected Lessee's failure to comply
with this Section, terminate, suspend or cancel the Agreement in whole or in
part; and/or suspend the selected proposer from future Agreements with the
Commission.
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
RENTAL CAR LEASE AGREEMENT
PAGE 24
enforcement procedures as the United States Government might demand that the City take in
order to comply with the Sponsor's Assurances.
Lessee agrees not to discriminate against any employee or applicant for employment
because of age, sex, race, religion or national origin. Lessee agrees to take affirmative action to
ensure that applicants are employed and that employees are treated during employment without
regard to their age, sex, race, religion or national origin. Such action shall include, but not be
limited to employment, upgrading, demotion, transfer, recruitment, layoff, rates of pay or other
forms of compensation, and selection for training, including apprenticeship.
Lessee shall also comply with the Americans with Disabilities Act, if applicable, at all
times that this lease is in effect.
T. SINGULAR AGREEMENT
Lessee acknowledges and agrees that it will only operate under one brand name during
the tenn 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 or extension hereof and Lessee shall
have no further right or interest in any of the premises or improvements hereby demised, except
as provided in Article Six.
B. CANCELLATION BY LESSEE
This lease shall be subject to cancellation by Lessee after the happening of one or more of
the following events:
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
RENTAL. CAR LEASE AGREEMENT
PAGE 21
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 (3oth) day. Concessions and rentals due hereunder as set forth in
Article Four shall be payable only to the effective date of said termination.
C. CANCELLATION BY CITY
This lease shall be subject to cancellation by City after the happening of one or more of
the following events:
1. The taking by a court of competent jurisdiction of Lessee and its assets pursuant
to proceedings brought under the provisions of any federal reorganization act.
2. The appointment of a receiver for Lessee's assets.
3. The divestiture of Lessee's assets by other operation of law.
4. The abandonment by Lessee of its rental 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.
RENTAL CAR LEASE AGREEMENT
PAGE 22
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 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 concessions or rentals due hereunder as set forth in Article Four shall be
payable to said date of termination.
It is agreed that failure to declare this lease terminated upon the default of Lessee for any
of the reasons set forth above shall not be construed as a waiver of any of the City's rights
hereunder or otherwise bar or preclude City from declaring this lease cancelled as a result of any
subsequent violation of any of the terms or conditions of this lease.
ARTICLE EIGHT
GENERAL
A. TIME OF EMERGENCY
During time of war or national emergency, the City shall have the right to lease the
landing area and any other portion of the Airport to the United States for governmental use and,
if any such lease is executed, the provisions of this instrument, insofar as they are inconsistent
with the provisions of the lease to the United 'States, shall be suspended.
B. SPONSOR'S ASSURANCE SUBORDINATION
This lease shall be subordinate to the provisions of any existing or future agreement
between the City and the United States concerning the operation or maintenance of the Airport,
the execution of which has been or may be required as a condition precedent to the expenditure
of federal funds for the development of the Airport. Should the effect of such agreement with
the United States be to take any of the property under this lease or otherwise diminish the
commercial value of this lease, the City shall not be held liable therefor.
C. REPLACEMENT AFTER DAMAGE
It is agreed between the parties hereto that in the event the leased premises are damaged
by fire or other accidental cause during the initial term of this lease so as to become totally or
partially untenantable, the City shall have the option to restore the premises to their former
condition. If the City elects to exercise the option, the City shall give Lessee notice in writing of
RENTAL CAR LEASE AGREEMENT
PAGE 23
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 shall cease and tenninate 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 letter of
credit from a bank or other financial institution approved by the City Attorney of the City and
which assures the City of payment of the minimum guaranteed bid; or (2) a secured interest with
priority over the secured interests and liens of all other creditors of Lessee in all equipment,
furniture, fixtures and furnishings used in Lessee's car rental operation at the Airport, including
all vehicles, equipment, furniture, fixtures and furnishings hereafter acquired and so used. To
ensure the priority of a secured interest granted to the City, Lessee shall file with the Director of
Aviation of City subordination agreements executed by and between the City and any and all
persons or firms who are secured parties with secured interests that would have priority over the
secured interest granted to the City, subordinating such other secured interests to the secured
interest held by the City. In addition, Lessee shall secure subordination agreements between the
City and any person or firm who takes a purchase money secured interest in Lessee's vehicles,
RENTAL CAR LEASE AGREEMENT
PAGE 24
equipment, furniture, fixtures and furnishings during the initial term of this lease agreement (or
any extension thereof), subordinating such purchase money secured interest to the secured
interest held by the City. Lessee shall further secure and file with the City's Director of Aviation
subordination agreements executed by and between the City of Lubbock and any person or firm
holding a lien against any structures or other improvements used or installed by Lessee upon the
leased premises, subordinating such lien to the City's lien against such structures or
improvements to secure payment of all amounts due under this agreement. Lessee shall execute
security agreements and sign financing statements to be filed with the County Clerk of Lubbock
County and the Secretary of State of Texas; and such security agreements shall give the City of
Lubbock a secured interest in all vehicles, equipment, furniture, fixtures and furnishings used in
Lessee's car rental operation on the Airport, including all such items hereafter acquired for such
use, and a lien upon all structures and improvements presently existing or to be installed or
constructed upon the leased premises during the initial term of this agreement, or any extension
thereof. In addition to executing said security agreements, Lessee will file with the Director of
Aviation a schedule showing the motor vehicle identification and registration numbers of each
vehicle used in its car rental operation on the Airport and such supplementary schedules as are
necessary to keep the City informed as to the number and identity of such vehicles.
F. RIGHT OF INSPECTION
The City reserves the right to conduct inspections of the leased premises at reasonable
times to ensure that fire, safety and sanitation regulations and other provisions contained in this
lease are being adhered to by the Lessee.
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 accepted, 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
RENTAL CAR LEASE AGREEMENT
PAGE 25
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.
L 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
mailed, registered or certified mail, postage prepaid, addressed to:
EAN Holdings, LLC
d/b/a National Car Rental
4210 South Congress Avenue
Austin, TX 78745
J. NON -ARBITRATION
The City reserves the right to exercise any right or remedy available to it by law, contract,
equity, or otherwise, including without limitation, the right to seek any and all forms of relief in a
court of competent jurisdiction. Further, the City shall not be subject to any arbitration process
prior to exercising its unrestricted right to seek judicial remedy. The remedies set forth herein
are cumulative and not exclusive, and may be exercised concurrently. To the extent of any
conflict between this provision and another provision in, or related to, this document, this
provision shall control.
K. ENTIRE, AGREEMENT
This lease constitutes the entire agreement between the City and Lessee, and any other
written or parole agreement with the City is expressly waived by Lessee.
RENTAL CAR LEASE AGREEMENT
PAGE 26
EXECUTED this 25 day of
THE CITY OF LUBBOCK
pjpgppp-
ATTEST:
Reber a Garza, City Secretary
APYROVED AS TO CONTENT:
Jarn s W. Loomis, Director of Aviation
A2PP2
A TO FORM:
yZ'11
Chad Weaver, Assistant City Attorney
July . 2012.
EAN Holdings, LLC
d/b/a National Car Rental
BY: 64'-1
AI%W' ZAP►#'
Title: V1Ot Ve4je dal ff,4
Date: 7 -)2
RENTAL CAR LEASE AGREEMENT
PAGE 27
LUBBOCK PRESTON SMITH INTERNATIONAL AIRPORT
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LUBBOCK PRESTON SMITH
INTERNATIONAL AIRPORT
READY AND RETURN PARKING LOT
Entrance Exit
North