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HomeMy WebLinkAboutResolution - 2821 - Lease Agreement Renewal-FSI Corporation-Office Space, Old Terminal Building LIA - 04/28/1988HW:da RESOLUTION Resolution #2821 April 28, 1988 Item 26 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Space Lease Agreement by and between the City of Lubbock and FSI, Inc., for office space and space for research and development in the Old Terminal Building at Lubbo6 International Airport, attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 28th day of April , 1988. 1V • C • ,00 c ht - r--� B.C. McMINN, MAYOR ATTEST: Ranftte Boyd, City Secretary APPROVED AS TO CONTENT: Marvin Coffee, DjOctor of Aviation APPROVED AS TO FORM: arold Willard, Assistant City Attorney t resolution #2821 HW: da SPACE LEASE - OLD TERMINAL BUILDING LUBBOCK INTERNATIONAL AIRPORT THE STATE OF TEXAS § COUNTY OF LUBBOCK § This Lease Agreement is entered into at Lubbock, Texas, by and between the City of Lubbock, Texas, hereinafter referred to as "Lessor," and FSI, Inc., hereinafter referred to as "Lessee." WITNESSETH: WHEREAS, the Lessor owns and operates a public airport designated as Lubbock International Airport, hereinafter called "Airport;" and WHEREAS, the Lessee desires to lease approximately 7,140 square feet of space in the Old Terminal Building of the Airport; and WHEREAS, the Airport Board of the City of Lubbock has approved a Space Lease in the Old Terminal Building of the Airport; and WHEREAS, the City Council of the City of Lubbock finds that execution of this Lease will properly serve the public interest of the citizens of the City of Lubbock; NOW THEREFORE, for and in consideration of the covenants and conditions herein contained and other valuable consideration, the Lessor authorizes the Lessee to exercise the rights, powers and privileges hereinafter set forth and does hereby lease to the Lessee certain exclusive premises, hereinafter described and called "Exclusive Leased Premises" or "Leased Premises." ARTICLE I LEASED PREMISES AND PRIVILEGES 1.01. EXCLUSIVE LEASED PREMISES. The Exclusive Leased Premises herein leased shall consist of an area of 7,140 square feet, more or less, in the Old Terminal Building of the Airport, located in Lubbock County, Texas, the location of which is designated on Exhibit "A" attached hereto and by this reference made a part hereof. 1.02. NONEXCLUSIVE PRIVILEGES. In addition to the Exclusive Leased Premises hereinabove described in Section 1.01, Lessee is hereby granted the nonexclusive use of such space and facilities in and adjacent to the Old Terminal Building as may be designated by Lessor and which shall be necessary to provide access to the Leased Premises. 1.03. EXCLUSIVE RIGHTS. It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308(a) of the Civil Aeronautics Act. 1.04. PURPOSE. Lessee's use of said leased facilities shall be for the sole purpose of providing office space and space for research and development. 1.05. SIGNS. Lessee shall have the right to place and replace existing signs identifying Lessee's business on and in the Old Terminal Building. However, said signs must be of a type, size and design approved in writing by the Director of Aviation of the City of Lubbock. Such installation must also comply with all applicable City Codes and must be without cost to Lessor. ARTICLE II TERM 2.01. The term of this Agreement shall be for a period of one (1) year commencing on May 1, 1988, and ending on April 30, 1989, and shall be automatically renewable for four (4) additional one (1) year periods beginning and ending on the same day and month of each subsequent year through April 30, 1993, unless the Lessee gives the City written notice within thirty (30) days of the expiration of any renewal date that Lessee no longer desires to renew said Agreement. - 2 - ARTICLE III RENTAL AND FEES 3.01. RENTAL. In consideration of the rights and privileges herein granted, Lessee shall pay to Lessor an annual rental of TWENTY-SIX THOUSAND THREE HUNDRED NINETY-SIX AND 04/100 DOLLARS ($26,396.04), payable in advance by the tenth (10th) day of each month during the term of the Lease in a sum equal to one -twelfth (1/12) of said annual amount. Said rental is computed as follows: (1) Space rental for 4,240 square feet at $3.4844433 per square foot per year or $14,774.04 per year, payable in monthly installments of $1,231.17 per month. (2) Space rental for 2,900 square feet at $4.0075862 per square foot per year or $11,622.00 per year, payable in monthly installments of $968.50 per month. 3.02. FEES. In addition to the above rental, Lessee shall also pay to Lessor a fee for gas and electric utilities of $3.40 per square foot per year for 5,470 square feet of leased space or $18,598.,00 per year, payable in monthly installments of $1,549.83 per month. 3.03. ADJUSTMENT OF RENTAL AND FEES. The aforesaid rental rates and fee shall be annually adjusted upward or downward in direct proportion to fluctuation in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Department of Labor. For the purpose of computing all adjustments, the Consumer Price Index as of January 1, 1988, shall be construed as the base and such adjustments shall be made on January 1 of each year thereafter during the term of this Agreement. 3.04. DEFAULT FOR FAILURE TO PAY RENTAL OR FEE. If Lessee fails to pay any portion of the above rental or fee when due, City may, at its option, upon ten (10) days written notice to Lessee (unless in such ten (10) day period Lessee shall have corrected such failure to pay), immediately or at any time thereafter, enter into and upon the Leased Premises, CMM or any part thereof in the name of the whole, and repossess said Leased Premises. 3.05. PAYMENTS. All payments that become due and payable by Lessee shall be made to the City of Lubbock at the office of the Director of Aviation, Lubbock International Airport, Lubbock, Texas, or as specified by the City Secretary. ARTICLE IV RIGHTS RESERVED TO LESSOR The following rights are reserved to Lessor, and Lessee agrees that all rights, powers and privileges granted in this Lease shall be subordinated to Lessor's rights as hereinafter stated. 4.01. AIRPORT HAZARDS. Lessor reserves the right to take any action Lessor considers necessary to protect the aerial approaches of the Airport against obstruction, and the right to prevent Lessee from erecting or permitting to be erected any building or other structure on the Airport which, in the opinion of Lessor, would limit the usefulness of the Airport or constitute a hazard to aircraft. 4.02. AGREEMENT WITH THE UNITED STATES. During time of war or national emergency, the Lessor shall have the right to enter into an agreement with the United States Government for military or naval use of pert or all of the landing area, the publicly owned air navigation facilities, and all other areas or facilities of the Airport. And if any such agreement is executed, the provisions of this instrument, insofar as they are inconsistent with the provisions of the agreement with the Government, shall be suspended. 4.03. SUBORDINATION OF LESSEE'S RIGHTS. This Agreement shall be subordinate to the provisions of any existing or future agreement between the Lessor and the United States pertaining to the operation or maintenance of the Airport, the execution of which has been or may be required as a condition - 4 - precedent to the expenditure of federal funds for the benefit or development of the Airport. 4.04. SUSPENSION OF LESSEE'S RIGHTS. All rights, privileges and interests acquired herein by Lessee may be suspended at the option of the Lessor, following written notice of thirty (30) days, if such suspension is found by the Lessor, acting in good faith, to be necessary to secure federal financial aid for the benefit or development of the Airport, or the benefit or development of aeronautical operations thereon. ARTICLE V GENERAL CONDITIONS This Lease is granted subject to the following provisions and conditions: 5.01. RULES AND REGULATIONS, In conducting its business hereunder, Lessee shall comply with all applicable laws of the United States of America and the State of Texas, the rules and regulations promulgated by their authority with reference to aviation and air navigation, and all reasonable and applicable rules, regulations and ordinances of the City now in force or hereafter prescribed or promulgated by authority or by law. 5.02. IMPROVEMENTS OR ALTERATIONS. The Lessee shall not make, permit or suffer any additions, improvements or alterations to the Leased Premises without prior written consent of the Director of Aviation. Any such additions, improvements or alterations made with the consent of the Director of Aviation shall be solely at the expense of the Lessee; and unless such consent provides specifically that title to the addition or improvement so made shall vest in the Lessee, title thereto shall at all times remain in the Lessor, and such additions or improvements shall be subject to all terms and conditions of this Lease. 5.03. REMOVAL AND DEMOLITION. Lessee shall not remove or demolish, in whole or in part, any improvements that already exist on the Leased Premises without prior written - 5 consent of the Director of Aviation, who may, at his discretion, condition such consent upon the obligation of Lessee to replace the same improvements specified in such consent upon termination of this Lease. The Director of Aviation shall not withhold consent unreasonably and shall not impose unreasonable conditions on his consent. 5.04. MECHANIC'S LIENS. The Lessee shall not bind or attempt to bind Lessor for payment of any money in connection with installations, alterations, additions or repairs to the Leased Premises or any of Lessee's equipment or facilities located on the Leased Premises, and shall not permit any mechanic's or other liens to arise against the Leased Premises or any improvements, equipment, machinery or fixtures thereon belonging to the Lessor, and Lessee expressly agrees that it will keep and save the Leased Premises and Lessor harmless from all costs and damages resulting from any lien or liens of any character created or that may be asserted as a result of any act or thing done by the Lessee. 5.05. LESSEE'S DUTY TO DEFEND. In the event any mechanic's or other liens or orders for payment shall be filed against the Leased Premises or improvements thereon, or the property of Lessor located thereon, during the term of this Agreement, 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 Lessor, at Lessee's sole cost and expense, any action, suit or proceeding which may be brought thereon or for the enforcement of such liens or orders. 5.06. LESSOR'S RIGHT TO INSPECT. The Lessor, acting by and through the Director of Aviation or his designated representative, shall have the right to inspect the Leased Premises at all reasonable times during the term of this Lease. 5.07. JANITORIAL SERVICES. Lessee shall, at its own expense, provide janitorial services for the Leased Premises. :WIM Said services may provided by Lessee alone or by Lessee in conjunction with other tenants who are now or may hereafter be Lessees at the Airport. 5.08. MAINTENANCE BY LESSOR. Lessor shall be responsible for and shall perform exterior building maintenance, structural maintenance and maintenance of heating and air conditioning units. 5.09. MAINTENANCE BY LESSEE. Lessee agrees that it will at all times during the term of this Lease maintain, without cost to Lessor, the Leased Premises and all facilities and equipment thereon, including but not limited to installed equipment owned by Lessee,in a good and serviceable condition, ordinary wear and tear excepted. In addition, Lessee shall relamp light fixtures as necessary and shall repaint the interior of the Leased Premises as necessary. All such maintenance, repairs and replacement shall utilize materials and workmanship of a quality equal to or better than the original condition. All paint colors or schemes shall harmonize with the decor of the Old Terminal Building and be subject to the prior approval of the Director of Aviation. 5.10. LESSEE'S DUTY TO REPAIR. Except as provided herein, any property of the Lessor, or for which Lessor may be responsible, which is damaged or destroyed incident to the exercise of the privileges herein granted or which damage or destruction is occasioned by the negligence of Lessee, its employees, agents, servants, patrons or invitees, shall be properly repaired or replaced by the Lessee to the satisfaction of the Lessor and its authorized representatives; or in lieu of such repair or replacement, the Lessee shall, at the option of the Lessor, pay to the Lessor money in an amount deemed sufficient by the Lessor to compensate for the loss sustained or expense incurred by the Lessor by reason of the loss of, damage to or destruction of such property. 5.11. TRASH DISPOSAL. Lessee shall provide at its own expense a complete and proper arrangement for the adequate - 7 - sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse directly or indirectly resulting from Lessee's use of the Leased Premises. 5.12. TAXES AND LICENSES. Lessee shall pay all taxes of whatever character that may be lawfully levied or charged upon Lessee's leasehold improvements and upon Lessee's rights to use the Leased Premises. Lessee shall obtain and pay for all licenses or permits necessary or required by law for the construction of any additional improvements, the installation of equipment and furnishings, and any other licenses necessary for the conduct of its business. 5.13. HOLD HARMLESS. The Lessee agrees to indemnify, defend and forever save the Lessor, its authorized agents, representatives and employees harmless from and against any and all penalties, liability, annoyances or losses resulting from claims or court action of any nature arising directly or indirectly out of any acts or omissions of the Lessee, its agents, servants, guests, employees or business visitors occurring as a consequence of this Agreement. 5.14. PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE. The Lessee shall maintain at all times during the term of this Lease, at its sole expense and with an insurance underwriter authorized to do business in the State of Texas and acceptable to the Lessor, insurance against claims of public liability and property damage resulting from Lessee's business activities at the Airport. The amount of insurance coverage shall not be less than ONE HUNDRED THOUSAND DOLLARS ($100,000) for property damages as a result of any one event; or less than THREE HUNDRED THOUSAND DOLLARS ($300,000) for personal injury or death of any one person in any one event; or less than FIVE HUNDRED THOUSANL DOLLARS ($500,000) for personal injury or death of two or more persons in any one event. All policies shall contain a clause or agreement waiving the right of the insurers to subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be filed with - 8 - the City Secretary and the Director of Aviation prior to the commencement of the term of this Lease. Each policy and certificate shall name the City of Lubbock, Texas, as an additional insured as its interest may appear. Each policy shall also contain a provision requiring the insurer to give the City written notice of cancellation or of any material change in said policy or certificate at least thirty (30) days in advance of the effective date of such cancellation or material change. 5.15. FIRE INSURANCE. _ Lessee shall insure for fire and extended coverage risks all of Lessee's improvements on the Leased Premises and shall keep such insurance in full force and effect during the entire term of this Lease. Such insurance shall be in an amount equal to the full insurable replacement value of such improvements. All fire insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder, along with a clause or an agreement waiving the right of the insurers to subrogation. Lessee shall furnish three (3) copies of certificates of insurance or other satisfactory evidence of compliance with this provision to the City Secretary prior to the commencement of the term of this Lease. 5.16. WORKERS' COMPENSATION. Lessee shall furnish to the Lessor satisfactory evidence that Lessee carries Workers' Compensation Insurance in accordance with the laws of the State of Texas. 5.17. LESSEE SHALL VACATE. On or before the expiration date of this Agreement, the Lessee shall, as required by the Lessor, vacate the Leased Premises, remove all property of the Lessee, and restore said Leased Premises, improvements, facilities and equipment thereon to as good condition on such expiration date as when received, ordinary wear and tear excepted. If, however, this Lease is terminated in accordance with Article VI of this Agreement, the Lessee shall vacate the - 9 - Leased Premises, remove said property and restore the Leased Premises, improvements, facilities and equipment included thereon as aforesaid within thirty (30) days following the date of such termination; provided, however, that Lessee's right to remove its property is subject to the condition that Lessee has paid in full all amounts due and owed to Lessor under this Agreement. If the Lessee shall fail or neglect to remove said property and so restore the Leased Premises, improvements, facilities and equipment thereon on or before said expiration date or within thirty (30) days of said termination date in accordance with Article VI, then said property shall, at the option of the Lessor, either become the property of the Lessor without compensation therefor, or the Lessor may cause the property to be removed, and restore the Leased Premises, improvements, facilities and equipment thereon at the expense of the Lessee; and no claim for damages against the Lessor or its officers, agents or employees shall be created or made on account of such removal and restoration. 5.18. NONDISCRIMINATION. Neither the Lessee, its agents nor employees shall discriminate against any person or class of persons because of age, sex, race, color, religion or national origin in providing any services or in the use of any of Lessee's facilities provided for the public. The Lessee further agrees to comply with such enforcement procedures as the United States might demand that the Lessor take in order to comply with the Sponsor's Assurances. Lessee shall not discriminate against any of Lessee's employees or applicants for employment because of age, sex, race, color, religion or national origin. Lessee agrees to take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their age, sex, race, color, religion or national origin. Such action shall include, but not be limited to, employment, upgrading, demotion, transfer, recruitment, layoff - 10 - rates of pay and other forms of compensation, and selection for training, including apprenticeship. Lessee shall also conduct its activities and operate its facilities in accordance with the requirements of Section 504 of the Rehabilitation Act of 1973, and will ensure that no qualified handicapped person shall, solely by reason of his or her handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination, including discrimination in employment, under any program or activity of the Lessee. 5.19. WARRANTY OF NO SOLICITATION. The Lessee warrants that it has not employed any person employed by the Lessor to solicit or secure this Lease for a commission, percentage, brokerage or contingent fee. 5.20. NO ASSIGNMENT OR SUBLETTING. Lessee shall not sublet any part of the Leased Premises or assign the Lease or any of Lessee's rights hereunder without the prior written consent of the Director of Aviation. No such assignment or subletting made with Lessor's consent shall affect Lessee's obligations to make all required rental and fee payments hereunder upon default of its assignee or subtenant. 5.21. WAIVER. The failure of the Lessor to at any time insist upon performance or fulfillment of any of the terms or conditions of this Lease shall not be construed as a waiver or relinquishment of the future performance of any such term or condition, and the Lessee's obligation with respect to such future performance shall remain in full force and effect. 5.22. LESSOR'S RIGHT TO EXECUTE OTHER LEASES. Lessee agrees that Lessor has the right to lease remaining portions of the Terminal Building to any such other tenants as Lessor desires. 5.23. SECURITY - DUTY TO PREVENT UNAUTHORIZED ACCESS TO AIRPORT PREMISES. Lessee agrees to control all access to the air operations area (AOA) through its leased area and through gates assigned to or controlled by Lessee so as to prevent unauthorized entry to the airfield by persons, animals or vehicles. In the event that unauthorized access to the AOA is gained through the leased premises or area which Lessee controls or is obligated to control, any fines or penalties assessed by the Federal Aviation Administration shall be the responsibility of the Lessee and Lessee hereby agrees to pay all such fines and penalties without delay and make any and all requested changes in its operations or facilities necessary to maintain Airport security and prevent reoccurrence of any unauthorized entry. ARTICLE VI TERMINATION This Agreement is subject to termination for the reasons set forth below, provided that thirty (30) days written notice is given to the nonterminating party. 6.01. LESSEE'S RIGHT TO TERMINATE. The Lessee may terminate upon the happening of any of the following: A. The permanent abandonment of the Airport as an air terminal. B. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Airport, provided such injunction remains in force for at least thirty (30) days. C. The breach by the Lessor of any of the terms, covenants or conditions of this Agreement to be kept, performed or observed by the Lessor, and the failure of the Lessor to remedy such breach for a period of sixty (60) days after written notice from the Lessee of the existence of such breach. D. The assumption by the United States Government, or any authorized agency of same, of the operation, control or use of the Airport and its facilities in such a manner as to substantially restrict the Lessee from operating under the terms of this Agreement, if such restriction is - 12 - reasonably expected to continue or has continued for a period of three (3) months or more. 6.02. LESSOR'S RIGHT TO TERMINATE. The Lessor may terminate upon the happening of any of the following: A. If the Lessee files a voluntary petition of bankruptcy; if proceedings in bankruptcy are instituted against Lessee or Lessee is thereafter adjudicated as bankrupt pursuant to such proceedings; if a court takes jurisdiction of the Lessee and its assets pursuant to proceedings brought under the provisions of any federal reorganization act; if a receiver for Lessee's assets is appointed under State or Federal law; or if Lessee is divested of its rights, powers and privileges under this Agreement by other operation of law. B. If the Lessee abandons or discontinues operations under this Agreement. C. If the Lessee defaults in or fails to make any rental or fee payments either in the amount required or when due in accordance with this Agreement. D. If the Lessee fails to perform, keep and observe all of the covenants and conditions contained in this Agreement to be performed, kept or observed by Lessee. E. If the Lessee fails to abide by all applicable laws, ordinances and rules and regulations of the United States, State of Texas, City of Lubbock, Airport Board and Director of Aviation of the City of Lubbock. F. If the Lessor, acting in good faith, finds termination of the rights, privileges and interests of Lessee acquired under this Lease to be necessary to secure federal financial aid for the benefit or development of the Airport, or the benefit or development of aeronautical operations thereon. 6.03. FIRE DAMAGE. In the event the old Terminal Building at the Airport is damaged by fire or other accidental cause during the term of this Agreement so as to become - 13 - totally or partially untenantable, Lessor shall have the option to restore the Leased Premises to their former condition. If Lessor exercises its option to restore the Leased Premises, Lessor shall proceed with due diligence. If the damage is so extensive as to amount practically to the total destruction of the utility of the Leased Premises for the uses expressed in this Agreement, Lessee's obligation to pay rent hereunder shall abate for the time and to the extent that the Leased Premises have been rendered untenantable. Should Lessor not exercise its option to restore the Leased Premises, this Lease shall terminate, such termination to be effective on the date of damage by fire or other accidental cause, and rental and fee payments shall be apportioned to that date. ARTICLE VII MISCELLANEOUS PROVISIONS 7.01. NOTICES. Notices to City provided for herein shall be sufficient if sent by certified mail, postage prepaid, and addressed to the Director of Aviation, Route 3, Box 389, Lubbock, Texas 79401, and notices to Lessee, if sent by certified mail, postage prepaid, and addressed to FSI Corporation, 332 Lake Haseltine Drive, Chaska, Minnesota 55318, or to such other addresses as the parties may designate to each other in writing from time to time. 7.02. ATTORNEYS' FEES. Should Lessor institute legal action to collect the rental or fee due under this Agreement or damages for breach of any covenant made herein, a reasonable sum shall be added to the amount of recovery for attorneys' fees together with all costs of court. 7.03. HOLDING OVER NOT RENEWAL OF LEASE. In the event Lessee remains in possession of the Leased Premises after the expiration of this Lease Agreement without any written renewal or extension of this Lease, such holding over shall not be deemed as a renewal or extension of this Lease, but shall - 14 - create only a tenancy from day to day which may be terminated at any time by Lessor. Executed this (p day of ( p1_ (� , 1988. FSI, INC. BY: Title z c U. ATTEST: CITY OF LUBBOCK, TEXAS BY • •B.C. MCMINN, MAYOR EST: (:722L Rane to Boyd City Secretary APPROVED AS TO CONTENT: Marvin Coffee Director of Aviation APPROVED AS TO FORM: - 15 - arold Will rd Assistant City Attorney 3 47o i¢ ExN18lr-A - 2 90o tb - 7 70 Ltt