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HomeMy WebLinkAboutResolution - 2000-R0069 - Agreement - Lubbock Regional Arts Center Corporation - Fire Admin Facility Dev. - 02/24/2000Resolution No. 2000-R February 24, 2000 Item No. 49 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 between the City of Lubbock and Lubbock Regional Arts Center Corporation, for the purposes of developing the Fire Administration facility as a cultural and arts center, and all related documents. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council Passed by the City Council this 24th day of February , 2000. Max Ince, Mayor Pro Tem ATTEST: APPROVED AS TO CONTENT: Tommy WAzalez Managing Director of Civic Center APPROVED AS TO FORM: Assistant Attorney JMK:cp Ccdocs/LubbockRegiona]ArtsCenterCorp.Res February 17, 2000 i a 11 1 . 01 , Resolution No. 2000—R 0069 February 24, 2000 Item No. 49 LEASE AND MANAGEMENT AGREEMENT This Lease and Management Agreement (the "Agreement") is made and entered into as of the 24th day of February , 2000 , IM by and between the City of Lubbock, Texas (the "City"), a home -rule city of the State of Texas duly organized and existing pursuant to its charter and the laws of the State of Texas, and Lubbock Regional Arts Center, Inc. (the "Manager"), a non-profit corporation organized under the laws of the State of Texas and qualified as a tax exempt organization under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3) of the Internal Revenue Code; for the following purposes and considerations, to -wit: RECITALS OF THE PARTIES: WHEREAS, the City, for economic development purposes and for the benefit of all the citizens of the City, desires to provide, pursuant to statutory authority in Tex. Rev. Civ. Stat. Ann., art. 1269]-4.1, V.A.C.S. and Chapter 380, Local Government Code, a multi-purpose regional arts center for cultural and educational programs and to contract with the Manager in the leasing of certain land and facilities and the management of a multi-purpose arts center, and WHEREAS, the City and the Manager desire to enter into this Agreement for the purpose of evidencing their respective agreements and intentions concerning such project: NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein set forth, the parties hereto agree as follows: ARTICLE ONE DEFINITIONS AND GENERAL PROVISIONS Section 1.1. Definitions: In this Agreement the following terms have the following respective meanings unless the context hereof clearly requires otherwise: "Account" means any of the accounts referred to herein or created or affirmed by an ordinance. "Act" means Tex. Rev. Civ. Stat. Ann. art 1269j-4.1, V.A.C.S. and Chapters 380, Local Government Code as now in effect or as hereafter amended. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or the power to appoint and remove its directors, by contract, or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agreement" means this Lease and Management Agreement as originally executed or as amended from time to time by the parties. "Budget" means the annual budget for the operation and maintenance of the multi-purpose regional art center. "Business Day" means any day other than (1) a Saturday or a Sunday, (2) a legal holiday or the equivalent on which banking institutions generally are authorized or requested to close in the City, or (3) a day of which the New York Stock Exchange is closed. "City" means the City of Lubbock, Texas. "Code" means the Internal Revenue Code of 1986, as amended and in force and effect during the term of this Agreement. "Counsel" means an attorney or attorneys selected by the Person such Counsel represents and qualified to perform the services required of such Counsel under this Agreement. "Effective Date" means the date specified in Section 1.13. "Event of Default" means the occurrence of any event specified as an Event of Default in Section 6.1. "Exempt Person" means any organization described in Section 501(c)(3) of the Code and exempt from tax under Section 501(a) of the Code, the District of Columbia, any state of the United States, any possession of the United States, and any political subdivision of any such State or possession if such political subdivision has more than an insubstantial amount of any of the power to tax, the power of eminent domain, or the police power. "Lubbock Regional Arts Center" means the public building of the City located on the Site, and the construction and/or improvement of which is financed by Manager. "Fiscal Year" means the twelve-month accounting period of the Person with respect to which such term is used. "Fund" means any of the funds referred to in this Agreement or created or affirmed. by an ordinance. "Gross Revenues" means all receipts, revenues, and moneys of every kind paid or payable to the City or Manager as a result or consequence of owning or leasing the Site, Lubbock Regional Arts Center, or an interest in the Equipment (other than restricted grants or gifts). "Improvements" means the modifications, additiohs and alterations to the current building located on the Site which are necessary for Manager to operate and maintain the Site as a regional center to promote the performing and visual arts and to be known as the Lubbock Regional Arts Center. "Maintenance and Operating Expenses" means the expenses of operation and maintenance of the Site, the Lubbock Regional Arts Center, and the Equipment, including, without limitation, all salaries, management fees, labor, materials, interest, repairs and additions necessary to render efficient service. "Manager" means Lubbock Regional Arts Center, Inc. "Net Revenues" means Gross Revenues less Maintenance and Operating Expenses. "Opening" means the date upon which the Lubbock Regional Arts Center is ready for use as certified in writing by the Manager to the City. "Opinion of Counsel" means a written opinion of Counsel. "Ordinance" means the written document or documents in the form finally approved and adopted by the City Council of the City authorizing the Agreement. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof. "Primary Goal" has the meaning given in Section 5.1. 2 "Regulations" means the applicable proposed, temporary, or final Income Tax Regulations promulgated under the Code, as such regulations may be amended or supplemented from time to time. "Site" has the meaning given in Section 4.1. "Term" has the meaning given in Section 1.14. "Written Policies and Procedures" means written directions, orders, or guidelines of the City relating to the operation and management of the Lubbock Regional Arts Center in effect from time to time and delivered to the Manager. Section 1.2. Definitions of General Terms. Unless the context shall clearly indicate otherwise, or may otherwise require, in this Agreement the terms "herein", "hereunder", "hereby", "hereto", "hereof' and any similar terms refer to this Agreement as a whole and not to any particular article, section or subdivision hereof. Unless the context shall clearly indicate otherwise, or may otherwise require, in this Agreement: (i) references to articles, sections and other subdivisions, whether by number or letter or otherwise, are to the respective or corresponding articles, sections or subdivisions of this Agreement as such articles, sections or subdivisions may be amended from time to time; (ii) references to articles, chapters, subchapters and sections of the Statutes, or to any public law or other statute of the United States or any section thereof, are to the respective or corresponding articles, chapters, subchapters, sections and statutes as they may be amended from time to time; (iii) the word "heretofore" means before the date of execution of this Agreement, the word "now" means at the date of execution of this Agreement, and the word "hereafter" means after the date of execution of this Agreement. Section 1.4. Certificates and Opinions. Any certificate or opinion of an officer of the City may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, Counsel, unless such officer knows, or in the exercise of ordinary care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the City stating that the information with respect to such factual matters is in the possession of the City, unless such Counsel knows, or in the exercise of ordinary care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, or opinions under this Agreement, they may, but need not, be consolidated and form one document. Section 1.5. Exhibits. Attached to and by reference made a part of this Agreement are the following exhibits: Exhibit A: Legal Description of the Site. 3 Section 1.6. Benefits of Agreement. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person other than the City, and the Manager, any right, remedy, or claim, legal or equitable, under or by reason of this Agreement or any provision hereof, this Agreement and all its provisions being intended to be and being for the sole and exclusive benefit of the City and the Manager. Section 1.7. Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in direct conflict or inconsistent with any provision of this Agreement are hereby repealed to the extent of such conflict and the provisions of this Agreement shall be and remain controlling as to the matters contained herein; provided, however, that to the extent of any conflict between the provisions of this Agreement and the Ordinances, the provisions of the Ordinances shall control. The parties agree that no provision of the Ordinances shall ever be construed as impairing the obligation of this contract it being expressly agreed that the provisions of this Agreement shall be subject and subordinate in all respects to the provisions of the Ordinances and the Instruments. Section 1.8. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 1.9. Incorporation of Recitals of the Parties. The recitals of the parties contained in the preamble hereof are hereby incorporated by reference and made a part of this Agreement for all purposes as if the same were restated in full in this Section. Section 1.10. Notices -Waiver. Wherever this Agreement provides for notice of any event, such notice shall be shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of the party to receive such notice specified below at the close of business on the Business Day next preceding the mailing of such notice. If to the City at: City of Lubbock, Texas Municipal Building 1625 13th Street Lubbock, Texas 79401 Attention: City Manager If to the Manager at: Lubbock Regional Arts Center, Inc. P.O. Box 2218 Lubbock, Texas 79408 Attention: Neal Hanslik, President 4 Where this Agreement provides for notice in any manner, such notice may be waived in writing by the party entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Section 1.11. Construction of Terms. If appropriate in the context of this Agreement, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto. Section 1.12. Public Meeting. It is officially found, determined, and declared by the City that the meeting at which this Agreement is approved by the City was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Agreement, was given, all as required by Chapter 551, Government Code, as amended. Section 1.13. Effective Date. This Agreement shall take effect and be in full force upon its execution and delivery by the parties hereto. Section 1.14. Term of Agreement. The term of this Agreement shall be the period of time from the latest date shown as the date either the City or the Manager executed this Agreement until the date which is the date the final payment from the Manager to the City is due pursuant to this Agreement, unless sooner terminated as provided in this Agreement. This Agreement shall terminate automatically, and without the requirement of any action by the parties, upon notification by the Internal Revenue Service to the Manager that it is no longer an organization described in Section 501(c)(3) of the Code. Section 1.15. Waivers and Amendments. Except with respect to waivers referred to in Article Four which may occur as provided in Article Four, any provision of this Agreement may be waived if, but only if, such waiver is in writing and signed by the City and the Manager. Any provision of this Agreement may be amended and otherwise if, but only if, such amendment is in writing and is signed by the City and the Manager. Section 1.16. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. The Manager agrees that it will not assign this Agreement or take or permit the taking of any action which would result in a successor to the Manager without the prior written consent of the City, which consent may be withheld in the City's sole and absolute discretion. 5 Section 1. 17. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 1.18. Table of Contents: Article Titles: Captions. The Table of Contents, Article Titles, and Section Captions in this Agreement are inserted for convenience of reference only and in no way define, describe, limit, or expand the scope or intent of this Agreement or any of the provisions hereof. Section 1.19. Entire Agreement. This Agreement contains the entire agreement between the parties relating to the transactions contemplated hereby on its Effective Date. All prior or contemporaneous agreements, understandings, representations or statements, oral or written, are superseded hereby. It is expressly provided that amendments to this Agreement may be made by the Ordinances. Section 1.20. Partial Invalidity. Any provision of this Agreement which is unenforceable or invalid or the inclusion of which would affect the validity, legality, or enforcement of this Agreement shall be of no effect, but all the remaining provisions of this Agreement shall remain in full force and effect. Section 1.21. Further Assurances. Both the City and the Manager agree that it will without further consideration execute and deliver such other documents and take such other action as may be reasonably requested by the other party to consummate more effectively the transactions contemplated hereby. ARTICLE TWO CONSTRUCTION OF IMPROVEMENTS Section 2.1. Management Obligations. Subject to the conditions set forth in this Article Two, the Manager agrees to expend not less than the sum of $1,000,000 to renovate and construct the Improvements on the Site and agrees to seek to obtain adequate parking by lease agreement or otherwise for use as a Lubbock Regional Arts Center. All obligations of the City pursuant to this Agreement are conditioned upon, and are in all respects subject to the Manager fulfilling its obligations pursuant to the Ordinances and this Agreement. Section 2.2. Authority Retained in City. In the event the Manager fails for any reason, whether within its control or not, to initiate construction of the improvements prior to December 31, 2002, the City shall be deemed to have terminated this Agreement for cause and neither the City nor the Manager shall have any claim, cause of action, or recourse against the other as a result of such termination by virtue of the approval, execution, or delivery of this Agreement. 6 Section 2.3. Conditions to Agreement.. Unless and until each of the following conditions have been satisfied, or waived by the City at its sole discretion, the City shall have no obligation under this Agreement. A. No suit, action, investigation or legal or administrative proceeding shall be seriously threatened or pending before any court or governmental agency which is likely to result in the restraint, prohibition or the obtaining of damages or other relief in connection with this transaction or the consummation of the transactions contemplated hereby, or which, in the opinion of the City, would have a materially adverse effect on the transactions contemplated hereby. B. All steps to be taken and all other documents to be executed, and all other legal matters in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in legal form and effect to Counsel for the City. C. At or prior to the initiation of construction of the Improvements, the City shall have received two executed copies of each of the following documents: (1) a certificate of the Manager, signed on its behalf by the President of its Board of Trustees, in form satisfactory to the City, to the effect that the representations and warranties of the Manager herein, including the amount of funds on hand dedicated to this project are sufficient to finance the construction of the Improvements, and all agreements or conditions to be performed or complied with by the Manager hereunder on or prior to the initiation of construction of the Improvements have been performed or complied with; (2) a copy of the resolutions or other proceedings of the Manager authorizing the execution and delivery of this Agreement and the transactions contemplated hereby, in each case certified by the Secretary of the Board of Trustees of the Manager as having been duly adopted and being in full force and effect and as being true, accurate and complete copies thereof, (3) a certificate executed by the President of the Board of Directors of the Manager, to the effect that except to the extent heretofore disclosed to the City, no litigation is pending or, to the knowledge of such Person, threatened, in any court to restrain or enjoin the operations or activities of the Manager, or in any way contesting or affecting the creation, organization, or tax-exempt status of the Manager or the validity of this Agreement, or contesting the powers of the Manager to execute, deliver, and perform this Agreement; and (4) such additional legal opinions, certificates, proceedings, and other documents such as parking lot lease agreements, etc. as may reasonably be requested to evidence compliance by the Manager with legal requirements, the truth and accuracy of the representations and warranties of the Manager contained herein and the due performance or satisfaction by the Manager at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Manager. All such opinions, certificates, letters, agreements and documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to the City and its counsel. The City shall be entitled to receive such conformed copies or photocopies of such opinions, certificates, letters, agreements and documents as the City may reasonably request. 7 ARTICLE THREE INTENDED RENOVATIONS Section 3.1 Renovations. Manager, prior to the initiation of any construction related to the intended renovations, will conduct a Phase I environmental study of the leased premises and will take any corrective action indicated by such study, including removal of asbestos materials if required. Both parties agree that in the event that the cost of abatement makes renovation of the facility financially impractical the parties will renegotiate the lease provisions, or in the discretion of the Manager may abandon the premises. The Manager shall be obligated to renovate the facilities so that the facilities will have an auditorium containing not less than150 seats with a proscenium stage, back stage dressing areas and support rooms, a 600 square foot visual arts gallery, a second multi-purpose visual arts and working gallery classroom, together with a lobby gallery and support offices. These renovations will be done with input from City Of Lubbock as to the most appropriate method of accomplishing the renovations. Said renovation shall be accomplished within one (1) year of notice to proceed by the City. Section 3.2 Cost of Renovations. It is anticipated that the cost of renovations will be not less than $1,000,000. The funds for such renovation are to come from the Manager. Issues should increase the cost of this project by more than 25 percent as determined by bids or estimates, the parties hereto may abandon the project without liability on the part of either party. The City shall have the right to withhold its consent to initiate the construction of the Improvements until such time as the Manager has raised a minimum of $1,000,000 for this project and provided certification of such funds on hand to the City. ARTICLE FOUR CONVEYANCE OF PROPERTY Section 4.1. Agreement to Lease and Accelt. In consideration of their covenants set forth in this Agreement, the Manager agrees to lease from the City, and the City agrees to lease to the Manager, the following described property on the terms and conditions set forth in this Article Four: A. All of the land (the "Site") situated in the City of Lubbock, the County of Lubbock and the State of Texas, described on Exhibit A attached hereto and made a part hereof. B. All structures, buildings, improvements and fixtures, if any, located on the Site on the date the Lease begins. C. All personal property, if any, owned by the City located on or in the Site or Improvements and used in connection with the operation and maintenance of the Site or Improvements ("Personal Property"). D. City further agrees to also allow Manager the use of any adjacent City parking facilities at such times as those facilities are not being used by the City. 8 The Site, Improvements, Personal Property, and Intangible Property are sometimes collectively referred to in this Article Four as "Premises". Section 4.2. Term. The term of this Lease shall begin on the first day of the September 2000 or as soon thereafter as the City has removed its personnel from the Site which is now being utilized as the Fire Administration Building, and the City agrees to notify Manager of the projected date of the availability of the Site thirty (30) days prior to the date that the City believes that it shall discontinue use of the Site as offices for Fire Administration staff. The initial term of the Lease shall be for a period of twenty (20) years beginning as set forth above and ending on the last day of August, 2020. It is agreed that the annual rental on the property shall be the sum of $10.00 and other good and valuable consideration per year paid on the last day of the year of each and every year of the term. Section 4.3 Right of First Refusal. City agrees that should it decide to sell the property during the primary term or any extensions that Manager shall have the right of first refusal to purchase the Premises consistent with all state laws and regulations governing the sale of municipally -owned real property. Section 4.4. Option to Extend Lease. Manager shall have the option to extend this Lease for an additional ten (10) year period at the end of the primary term. This option will automatically become effective unless the Manager notifies the City in writing on or before ninety (90) days before the end of the primary term that it does not wish to exercise the option. Section 4.5. Representations and Warranties. The City represents and warrants that as of the date of its execution of this Agreement: A. The City has received no notice from any governmental authority of any pending or threatened (i) zoning, binding, fire, or health code violations or violations of other governmental requirements or regulations with respect to the Premises that have not previously been corrected, or (ii) of any proposed condemnation of the Premises. The City further warrants and represents that in the event it receives any such notice prior to the beginning of the Lease, it will provide to the Manager copies of any such notice. The City agrees to correct any matters disclosed in such notice. B. That as of the date hereof, there are no leases or other agreements for occupancy in effect with respect to the Premises. C. That the City has received no notices from insurers of defects in the Improvements which have not been corrected. D. That there are no legal actions pending or threatened against the Premises nor are there any violations of any building codes or other statutes affecting the use, occupancy and enjoyment of the Premises. E. That the representations and warranties contained in this section shall survive the beginning of this Lease. 9 Section 4.6. The Manager's Covenants. Upon notice to proceed upon verification to the City that adequate funds and all other requirements have been met as necessary to proceed with construction, the Manager shall: A. Renovate the Leased Premises for the purpose of utilizing the Leased Premises as a Lubbock Regional Arts Center within one (1) year or such additional time as may mutually agreed upon between the parties. B. Pay to the City the sum of $10.00 plus other good and valuable consideration on the last day of each succeeding twelve (12) month period during the term of this Lease. ARTICLE FIVE MANAGEMENT AGREEMENT Section 5.1. Retention of Services. The primary goal of this Article is to secure cultural and economic development for the City and the expertise and services necessary to operate the Lubbock Regional Arts Center at a level consistent with the community in which the Lubbock Regional Arts Center is to be located and with economic efficiency consistent with such level (the "Primary Goal"). The City hereby retains the Manager to manage and supervise construction of the Lubbock Regional Arts Center and to supervise, operate and manage the Lubbock Regional Arts Center in the name, for the account, and on behalf of the City, pursuant and subject to the terms and conditions set forth in this Article, and the Manager hereby accepts such retention and agrees to render such services as are hereinafter set forth. Subject to the foregoing, the City agrees that Manager shall retain all Gross Revenues from the Leased Premises. Section 5.2. Manager's Authority. Subject to the City's authority set forth in Section 5.3 of this Article, the Manager shall have the full responsibility to supervise, operate and manage the day-to-day operations of the Lubbock Regional Arts Center in accordance with the Budget and Written Policies and Procedures of the Lubbock Regional Arts Center as established from time to time by its Board of Directors with the advice and consent of the City and to perform the specific functions set out in this Article without the prior consultation or approval of the City, except, that prior specific authorization of the City must be obtained for any action by the Manager on the following: A. Commitment of the City for capital expenditures not included in the Budget of the Lubbock Regional Arts Center; B. Execution of or otherwise binding of the City to any contract or lease; C. Disposition of any asset of the City; and D. Execution of any contract or agreement with any third party with respect to the Premises or the Lubbock Regional Arts Center except that it is specifically understood and agreed that the Manager may sublease the Premises for office space and will in the regular course of its operations rent various portions of the Premises for art displays, performances, rehearsals, private parties, wedding receptions, banquets and such other purposes as are consistent with the basic purpose and reason for the creation of the Lubbock Regional Arts Center. 10 Section 5.3. Control Retained in the City. The governing body of the City shall retain all authority placed in it by law which is non -delegable and shall retain such other authority as shall not have been specifically delegated by it to the Manager pursuant to the terms of the Article or otherwise. No provision of this Article or this Agreement is intended to delegate, or shall be construed as delegating, any non -delegable right or power of the City. To the extent of any conflict or inconsistency between the provisions of any other Section of this Agreement and this Section 5.3., the provisions of the Section 5.3 shall control and the provisions in conflict with or inconsistent with this Section 5.3 shall be of no force or effect. Section 5.4. Relationship of the Parties. The Manager's appointment and actions hereunder are in the status of an independent contractor to the City. In furtherance thereof, the City and the Manager acknowledge and agree that one is neither the employee, employer, principal, nor agent of the other. Nothing contained in this Agreement shall constitute or be construed to be or to create a partnership or joint venture between the City and the Manager with respect to the Lubbock Regional Arts Center or any equity interest in the Lubbock Regional Arts Center on the part of the Manager. The Manager and its Affiliate shall have the right to render similar services for other Persons, whether or not engaged in the same business, and may enter into such other business activities as the Manager and its Affiliate, in their sole discretion, may determine, including, but not limited to, other transactions with the City that are beyond the scope of this Agreement. Section 5.5. Management of the Lubbock Regional Arts Center. Consistent with all materially applicable federal, state and local laws, the Manager shall perform those functions reasonably required to manage the operations of the Lubbock Regional Arts Center in. accordance with accepted management techniques and the reasonable exercise of its judgment. Without limiting the generality of the foregoing the Manager shall be responsible for the performance of the following duties during the Term of this Agreement: A. Subject to the approval of the City, engagement of an architect and arranging for architectural and engineering services for the renovation of the Lubbock Regional Arts Center; B. Entering into all appropriate lease and service agreements with such other provider of equipment for the operation of the Lubbock Regional Arts Center as may be selected by the Manager; C. Subject to the approval of the City, selection, supervision, and payment of all contractors engaged to provide labor, materials, and equipment in connection with the renovation of the Lubbock Regional Arts Center; D. Provision of all personnel reasonably necessary to supervise and direct the completion of the renovation of the Lubbock Regional Arts Center; E. Entering into all necessary agreements for exhibitions to be displayed within the Lubbock Regional Arts Center; F. Operation and management of the Lubbock Regional Arts Center following its renovation and provision of all personnel, labor, and material reasonably necessary to properly 11 operate the Lubbock Regional Arts Center; G. The Manager shall timely pay all Maintenance and Operating Expenses and Taxes; and H. The Manager shall have the right to make application for and obtain a license to allow for sales and consumption of alcoholic beverages on the Premises. Manager shall be responsible for the payment of any and all taxes associated with the sale of alcoholic beverages. Section 5.6. Employees. The Manager shall be responsible for hiring, promotion, discharge and supervision of all employees performing services in and about the Lubbock Regional Arts Center. Such employees shall be in the employ of the Manager and, as such, the Manager shall be solely liable to such employees for their wages, compensation, and "employee benefits," if any ("employee benefits" being defined as an employer's contribution to F.I.C.A., unemployment compensation, and other employment taxes, pension plan contribution, worker's compensation, group life and accident and health insurance premiums, retirement, disability and other similar benefits applicable to such employees), all of which shall be set and determined solely by the Manager. Section 5.7. Administrator. The Manager shall provide a full-time administrator of the Lubbock Regional Arts Center to oversee the day-to-day management thereof. The administrator shall be the employee of the Manager, but shall at all times be acceptable to the City. Section 5.8. Inside Consultants. The Manager shall provide such consultants who are employees of the Manager as it deems necessary to achieve the Primary Goal, except for consultation services in connection with extraordinary matters which are not covered by this Agreement. (Such "extraordinary matters" being defined as any matter deemed by the Manager, in its sole discretion, to involve such extraordinary time and expense as to warrant prior approval thereof by the City before undertaking to provide any services in connection therewith.) Section 5.9. Outside Consultants. The Manager shall use its best efforts to engage such consultants who are not employees of the Manager as it deems necessary to achieve the Primary Goal. Section 5.10. Recommendations Concerning Operations. At least annually, the Manager shall consult with and make recommendations to the City concerning the operations of the Lubbock Regional Arts Center. Section 5.11. Legal Compliance. The Manager shall comply with all applicable federal, state and local rules, regulations, statutes, laws and ordinances governing the operations of the Lubbock Regional Arts Center. 12 Section 5.12. Insurance. The Manager shall be responsible for providing the following insurance coverage: A. General Liability Coverage of $2,000,000.00 minimum, combined single limit, to cover all properties defined in this agreement. B. Automobile Insurance of $500,000.00 minimum, combined single limit, to cover all autos owned or leased by the manager or staff. C. Workers' Compensation Insurance with statutory limits and employer liability in the amount of $500,000. D. Property and Casualty Insurance shall be purchased from the City of Lubbock at the amount of the cost of the rider to insure the identified building in this agreement. This amount shall be paid to the City of Lubbock in the month following payment of the insurance premium. Manager shall also provide insurance coverages for the contents of the identified building and special coverage for all arts exhibits, permanent items of art on display and equipment used in identified building. All coverages and proof of coverages shall be provided to the City of Lubbock annually, immediately following new effective dates of coverage. The City of Lubbock shall be named as an additional insured on the general liability and auto liability coverages. The City of Lubbock shall also require a waiver of subrogation on all coverages where applicable. Any physical modifications or contract work to the building must include provisions for insurance in order to indemnify the City of Lubbock. All insurance requirements must be approved by the City of Lubbock prior to the inception of the project. Section 5.13. Rate and Fee Schedule. The Manager shall determine the fee schedules for all services and rates charged by the Lubbock Regional Arts Center; shall be consistent with the financial viability of the Lubbock Regional Arts Center and shall be consistent with fees and rates prevailing from time to time in the community. Section 5.14. Preparation and Adoption of Construction Budget and Annual Budget. The Manager shall prepare a detailed construction budget with respect to the renovation of the Lubbock Regional Arts Center and shall cause such construction budget to be presented to the City prior to awarding any contract for the renovation of the Lubbock Regional Arts Center. The construction budget shall be based upon bids received by the Manager. Upon adoption of the construction budget by the City, the Manager shall be authorized to commence, or cause to be commenced, renovation of the Lubbock Regional Arts Center for the City. Manager shall from time to time and at the request of the City make a presentation to it concerning its annual budget discussing its operating objectives, anticipated revenues, expenses, cash flow and capital expenditures. Such presentation shall also include its plan for programs and projects. 13 Section 5.15. Ownership in City. The City shall own all additions and accessions to such property during the term of this Agreement. To the extent property and leasehold rights are acquired by the Manager in connection with the Lubbock Regional Arts Center in its name, such property and leasehold rights shall be held by it as trustee for the benefit of the City, subject to the provisions of this Agreement. Specifically excluded, however, are all art collections or objects which may or may not be permanently affixed to the Premises which Manager has acquired with its own funds. It is further understood that the Manager shall purchase and install various items of personal property and equipment on and in the Premises which is generally associated with an arts center, and such items which are not permanently affixed to the Premises shall remain the property of the Manager and may be removed by the Manager at the end of the term of the Lease. ARTICLE SIX DEFAULTS AND REMEDIES Section 6.1. Events of Default. If any of the following events occur, it is hereby defined as and declared to be and to constitute an Event of Default, whatever the reason therefore and whether voluntary or involuntary or effected by operation of law: A. Default in the performance of any of the Manager's obligations with respect to the transmittal of moneys to be credited to the Lubbock Regional Arts Center under the provisions hereof and such default shall have continued for a period of thirty (30) days after appropriate notice thereof has been given to Manager; or B. Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the Manager contained in this Agreement, and such default shall have continued for a period of ninety (90) days after written notice thereof, specifying such default, shall have been given by the City to the Manager; or C. If the Manager shall (1) admit in writing its inability to pay its debts generally as they become due; or (2) consent to the appointment of a custodian (as that term is defined in the federal Bankruptcy Code) for or assignment to a custodian of the whole or any substantial part of the Manager's property, or fail to stay, set aside or vacate within ninety (90) days from the date of entry thereof any order or decree entered by a court of competent jurisdiction ordering such appointment or assignment; or (3) commence any proceeding or file a petition under the provisions of the federal Bankruptcy Code for liquidation, reorganization or adjustment of debts, or under any insolvency law or other statute or law providing for the modification or adjustment of the rights of creditors or fail to stay, set aside or vacate within ninety (90) days from the date of entry thereof any order or decree entered by a court of competent jurisdiction pursuant to an involuntary proceeding, whether under federal or state law, providing for liquidation or reorganization of the Manager or modification or adjustment of the rights of creditors. 14 Section 6.2. Remedies. If an Event of Default has occurred and is continuing, the City may pursue any available remedy by suit at law or in equity to enforce the covenants of the Manager herein, including, without limitation, any remedy of a secured party under the Texas Uniform Commercial Code, foreclosure and mandamus, and may pursue such appropriate judicial proceedings as the City shall deem most effective to protect and enforce, or aid in the protection and enforcement of, the covenants and agreements herein. If an Event of Default has occurred and is continuing, the City may by notice in writing to the Manager, declare this Agreement terminated, and in such event, the Manager shall be considered to be a Tenant -at -Will, and in addition to all other rights and remedies available to the City under applicable law, the City shall have all rights and remedies of a landlord under the law of the State of Texas. The City shall be entitled to immediate possession of the Exhibition Hall,/Auditorium, and it may remove the Manager and its employees and property, if any, therefrom without being deemed guilty of any manner of trespass. No remedy by the terms of this Agreement conferred upon or reserved to the City is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the City hereunder or now or hereafter existing at law or in equity or by statute. The assertion or employment of any right or remedy hereunder shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient by the City. No waiver of any default or Event of Default hereunder shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Section 6.3. Waiver of Stay or Extension Laws. To the extent that such rights may lawfully be waived, neither the Manager nor anyone claiming through it or under it shall or will set up, claim, or seek to take advantage of any stay or extension laws now or hereafter in force, which may affect the covenants or agreements contained in this Agreement and the Manager, for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of all such laws. Section 6.4. Undertaking for Costs. The Manager and the City agree that any court may in its discretion, in any suit by or on behalf of the City for the enforcement of any right or remedy under this Agreement, assess reasonable costs, including reasonable attorneys fees, against the Manager in such suit, having due regard to the merits and good faith of the claims or defenses made by the Manager. Section 6.5. Termination of Proceedings. In case the City shall have proceeded to enforce any right under this Agreement and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the City, then and in every such case the Manager and the City shall, subject to any determination in such proceedings, be restored to their 15 former positions and rights hereunder with respect to this Agreement, and all rights, remedies and powers of the City shall continue as if no such proceedings had been taken. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the dates indicated below. EXECUTED by the City this 24th day of February , 2000. CITY OF LUBBOCK Max Ince, Mayor Pro Tem EST --- ayt Darnell, CAit-"'Amtkr' APPROVED AS TO CONTENT: -C s6 rl& &Owt,db4-'- Tommy Gorttalez Managing Director of Civic Services APPROVED A TO FORM: tT andFver 1 St Assistant City Attorney w/ EXECUTED by the Manager this J.3 r day of fe j rli ory , 2000. LUBBOCK REGIONAL ARTS CENTER, INC. By: Ne Hansli President, Lubbock Regional Arts Center 16 Resolution No. 2000-R February 24, 2000 Item No. 49 Exhibit A: Legal Description Lots 1 - 10, Block 22, Original Town of Lubbock Addition to the City of Lubbock, Lubbock County, Texas. 17