HomeMy WebLinkAboutC2015-010 - 1/13/2015 - Approved ADDENDUM NO. 1 TO THE AMENDED AND RESTATED
HANGAR AND FIXED BASE OPERATOR'S LEASE
BETWEEN THE
CITY OF CORPUS CHRISTI AND ATLANTIC AVIATION
STATE OF TEXAS §
COUNTY OF NUECES §
WHEREAS, the City of Corpus Christi ("Lessor" or "City") and Mercury Air
Center—Corpus Christi, Inc., dba Atlantic Aviation ("Lessee") entered into an Amended
and Restated Hangar and Fixed Base Operator's Lease ("Lease"), approved by
Ordinance No. 030016, on November 19, 2013; and
WHEREAS, the parties mutually desire to modify the terms and conditions of the
Lease through execution of an addendum to the Lease ("Addendum No. 1") in order to
correct, clarify, and add specific provisions to the Lease for the benefit of the parties.
1. Atlantic Aviation FBO Holdings, LLC (formerly, Macquarie FBO Holdings, LLC)
(herein, "Atlantic"), a Delaware corporation legally authorized to transact business in
Texas, acting as lease guarantor for Lessee pursuant to an assignment and assumption
of guaranty agreement executed September 13, 2007, is added as a party to the Lease,
such addition to be retroactively effective as of the approval date of the Lease, which
was November 19, 2013. Atlantic, pursuant to a stock purchase agreement between
Atlantic and Lessee dated April 16, 2007, acquired all of the outstanding and issued
capital stock of Lessee and assumed all lease guarantees, in existence and continuing,
of Lessee. By execution of this Addendum No. 1, Atlantic ratifies all terms and
conditions of the Lease and continues the assumption of all lease guarantees pursuant
to the assignment and assumption of guaranty agreement dated September 13, 2007.
2. For purposes of the notice provisions under the Lease, the initial address of
Atlantic is added to the Lease as follows: Atlantic Aviation FBO Holdings, LLC, 6652
Pinecrest Drive, Suite 300, Plano, Texas, 75024.
3. For purposes of this Addendum No. 1, the parties acknowledge and agree that
the specific language included in this document modifies the terms and conditions of the
Lease as necessary and desired to effectuate the purposes and plans of the parties.
4. Article 3, section 3.01, first and second paragraphs of the Lease are deleted and
replaced with language to read as follows:
2015-010
1/13/15 Page 1 of 10
Ord. 030393
Atlantic Aviation INDEXED
"3.01 Lessee agrees to pay Lessor the rental as indicated on the tables
(entitled "Premises Rent" and "Fuel Farm Rent") below, monthly in
advance (without notice or demand, both of which are expressly waived)
for the use and occupancy of the Leased Premises, at the times and in the
manner hereinafter provided. During the Term, any change in rent will be
based on an Appraisal by a third party appraiser, pursuant to the Appraisal
process defined herein and described in section 3.03 herein. Initial values
will be determined by the amount set by the appraisal done by Aviation
Management Consulting Group, dated November 18, 2011, identified in
EXHIBIT 2, attached hereto and incorporated into this Lease.
"All rentals shall be calculated based on the Appraisal and shall be paid by
Lessee to Lessor in advance without invoicing, notice or demand, in equal
monthly installments on or before the first day of each calendar month
beginning on the Commencement Date and continuing throughout the
remainder of the term of this Lease and any extension(s) hereof. In the
event that the term of this Lease shall commence on the day other than
the first day of any calendar month or expire on a day other than the last
day of a calendar month, then, and in such event, the rent will be prorated
for the first or last month as the case may be."
5. Article 3, section 3.01 table, first line of the table in the Lease is deleted and
replaced with language to read as follows:
"From Commencement Date through January 19, 2019:"
6. Article 3, section 3.03, subsections (a) and (b) of the Lease are deleted and
replaced with language to read as follows:
"(a) At the City's sole expense, the Appraisal shall be updated by the City
approximately every five (5) years after the date of the previous Appraisal, to
arrive at an updated property rental valuation that will be utilized to set rental
rates for any subsequent five (5) year period, irrespective of whether or not one
or more Options are exercised by Lessee. Following the Commencement Date
of this Lease, any increase(s) will (i) be based on the most current Appraisal, (ii)
be implemented on a continuing five-year cycle, utilizing the 2011 Appraisal as
the base date for the five-year cycle, and (iii) take effect upon the date next
following 30-days advance notice, as set out in this paragraph. Such continuing
five-year cycle is unaffected by the exercise of an Option or by any number of
Options that may be exercised by Lessee at any one time. The City shall provide
Lessee with not less than 30 days advance written notice of the amount of the
increase(s) and the date the rental rate increase(s) will take effect.
"(b) The appraiser shall be a qualified and impartial member of the Appraisal
Institute or a person with equivalent credentials, experienced in airport property
appraisals."
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7. Article 5, section 5.01 of the Lease is deleted and replaced with language to read
as follows:
"The initial term of this Lease shall be five (5) years ("Initial Term") that shall
commence on the sixty-first (61st) day following passage of an Ordinance by the
City Council of Corpus Christi approving this Lease ("Commencement Date") and
shall terminate at midnight of the last day of the 5-year term unless earlier
terminated in accordance with this Lease or extended for additional periods as
provided in section 5.02 below. Together the Initial Term and any extension shall
collectively be referred to as the Term of this Lease."
8. Article 5, section 5.02, first paragraph, next to last sentence of this first sectional
paragraph of the Lease is deleted and replaced with language to read as follows:
"Upon satisfaction of the foregoing three conditions, the Term of this Agreement
shall be extended by amendment to be promptly issued by the City and
countersigned by the Lessee. Failure to meet any of the three conditions stated
herein will invalidate the Option."
9. Article 5, section 5.02, third paragraph of the Lease is deleted and replaced with
language to read as follows:
"Subject to the requirements set forth in Article 13 herein, Lessee will submit the
above-referenced Capital Improvement Plan to the Aviation Director before the
end of the thirtieth (30th) month after the Commencement Date of the Initial Term
(or current Option period, in the case of exercise of the first, second or third
Option). The Aviation Director shall have thirty (30) calendar days after receipt of
the Capital Improvement Plan, to approve or to object in writing to any matter
referenced within. If the Aviation Director objects within such 30-day period in
writing to any matter contained within such Plan (including its budget), the
Aviation Director and Lessee agree to work together in good faith to resolve any
such objections to the reasonable satisfaction of both parties. Subject to the
approval by the Aviation Director of the Capital Improvement Plan,
Commencement of Construction of such Capital Improvements shall begin no
later than the end of the sixth (6th) month of the fourth (4th) year after the
Commencement Date of the Initial Term (or current Option period, in the case of
exercise of the first, second or third Option). "Commencement of Construction"
means (i) to commence the work of constructing the Capital Improvements or
features with all approvals thereof required by applicable governmental
authorities obtained as necessary; (ii) a notice to proceed has been issued to the
contractor; and (iii) onsite construction of the site development components (such
as drainage, extensive grading or utilities) is underway and being pursued."
10. Article 5, section 5.02, fourth paragraph of the Lease is deleted and replaced with
language to read as follows:
"As security for full and faithful Completion of such Capital Improvements
required for each Option, before the end of the thirtieth (30th) month after the
Commencement Date of the Term (or current Option period, in the case of
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exercise of the first, second or third Option), Lessee must furnish to the Aviation
Director a performance bond or irrevocable standby letter of credit in the face
amount of the agreed upon budget for the Capital Improvement Plan referenced
above, but in no event less than One Million One Hundred Thousand dollars
($1,100,000), issued by a surety company or bank authorized and licensed to
transact business in the State of Texas, with the City of Corpus Christi Aviation
Department as obligee, or beneficiary, respectively, and, if a bond, not subject to
reduction or cancellation except after thirty (30) days' written notice by certified
mail, return receipt requested, to the Aviation Director. Said performance bond or
irrevocable standby letter of credit shall be kept in force until Completion of the
above-referenced Capital Improvement. "Completion" means issuances of
Certificates of Occupancy for the Capital Improvement(s) have been issued or a
determination by an engineering or architectural firm that the Capital
Improvement Plan is substantially complete and Lessee may safely use and
occupy the improvements."
11. Article 5, section 5.02 of the Lease is modified by the insertion of a new fifth
paragraph to read as follows:
"A bond or irrevocable letter of credit, as described above, must be valid for six
(6) months or more and require, as documentation for payment, a statement in
writing from the Aviation Director, and such other documentation as may
reasonably be required by the surety or bank, setting forth (i) the circumstances
giving rise to the call on the bond or giving rise to the draft on a letter of credit or
(ii) a statement of the failure to furnish proof of renewal or replacement of the
bond or letter of credit, as applicable, no less than thirty (30) days prior to the
expiration of the then current bond or letter of credit and, if a letter of credit was
posted, accompanied by a properly drawn draft in an amount not to exceed the
face value of the letter of credit."
12. Article 6, section 6.01 of the Lease is deleted and replaced with language to read
as follows in bold print and set off in a larger font size:
"Lessee shall indemnify, hold harmless and defend the City, its
officers, officials, employees, and agents ("Indemnitees") from and
against any and all liability, loss, damages, claims, demands, causes
of action, and judgments of any nature on account of personal
injuries, property loss, or damage (including, without limitation to the
foregoing, workers' compensation and death claims) which arise out
of or in connection with this Lease Agreement or the performance of
this Lease Agreement, regardless of whether the injuries, death, loss,
or damage are caused by or are claimed to be caused by the
concurrent or contributory negligence of Indemnitees, but not by the
sole negligence of Indemnitees unmixed with the fault of any other
person. Lessee must, at its own expense, investigate all claims and
demands, attend to their settlement or other disposition, defend all
actions based thereon with, to the extent permitted by insurance
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coverage maintained by the Lessee under this Lease Agreement,
counsel reasonably satisfactory to Indemnitees, and pay all charges
of attorneys and all other costs and expenses of any kind arising
from any liability, loss, damages, claims, demands, or actions. The
indemnification obligations of Lessee under this section shall survive
the expiration or earlier termination of this Lease Agreement."
13. Article 6, section 6.02 of the Lease is deleted and replaced with language to read
as follows: "Intentionally left blank."
14. Article 7, section 7.02, subsection (b) of the Lease is deleted and replaced with
language to read as follows:
"Property insurance coverage on an "All Risk of Physical Loss" form for 100% of
the replacement value of all improvements constructed by or for Lessee on the
Leased Premises. Coverage shall include, but not be limited to, fire, wind, hail,
theft, vandalism, and malicious mischief. The coverage shall be written on a
replacement cost basis. The proceeds from such insurance shall be used to
restore the improvements to their original condition in the event of a covered
loss. Lessee is responsible for insuring their own interests. City must be included
as an additional insured on all property insurance policies. Lessee is responsible
for deductibles for any loss."
15. Article 7, section 7.02, subsection (c)(i)(2) of the Lease is deleted and replaced
with language to read as follows:
"(2) Thirty (30) day written notice of cancellation or material change in favor of
the City of Corpus Christi."
16. Article 7, section 7.02, second subsection (c) of the Lease is deleted and
replaced with a corrected subsection "(d)" designation and language to read as follows:
"(d) Environmental impairment liability to include remediation and spill/leakage
clean-up with minimum limits of$2,000,000 each incident/ $2,000,000 policy
aggregate limit issued on a claims made policy with extended reporting coverage
of 24 months post-lease termination/expiration. By offer of Lessee and specific
acceptance by City, Lessee shall provide the 24 months post-lease
termination/expiration coverage of environmental impairment liability insurance
by renewal of the policy in effect during the Term, with proof of renewal provided
to the City's Risk Manager and Aviation Director upon each successive renewal
for a period of 24 months following the termination or earlier expiration of the
Lease. This provision, providing for extended environmental coverage post-
lease, survives the termination or earlier expiration of this Lease."
17. Article 7, section 7.04, first line of the Lease is deleted and replaced with
language to read as follows:
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"7.04 Motor Vehicle Requirements. For Lessee's vehicles operated on the
Lease Premises and in the AOA the following conditions apply:"
18. Article 7, section 7.04, subsection (c) of the Lease is deleted and replaced with
language to read as follows:
"(c) Thirty (30) day written notice of cancellation or material change in favor of the
City of Corpus Christi."
19. Article 8, section 8.01 of the Lease is modified by inserting additional language at
the end of the existing paragraph to read as follows:
"An irrevocable letter of credit, as described above, must be valid for six (6)
months or more and require, as documentation for payment, a statement in
writing from the Aviation Director, and such other documentation as may
reasonably be required by the surety or bank, setting forth (i) the circumstances
of a valid declaration of default giving rise to the call on the letter of credit or (ii) a
statement of the failure to furnish proof of renewal or replacement of the letter of
credit no less than thirty (30) days prior to the expiration of the then current letter
of credit, and accompanied by a properly drawn draft in an amount not to exceed
the face value of the letter of credit."
20. Article 13, section 13.02 of the Lease is modified by changing the time period
stated in this section from "thirty (30) business days" to read "thirty (30) calendar days".
21. Article 14, section 14.02 of the Lease is deleted and replaced with language to
read as follows: "Intentionally left blank."
22. Article 17, section 17.05, first paragraph of the Lease is deleted and replaced
with language to read as follows in bold print and set off in a larger font size:
"Lessee agrees to defend, indemnify and hold harmless Lessor, its
elected and appointed officials, officers, agents and employees, from
and against any and all reasonable losses, claims, liability, damages,
injunctive relief, injuries to person, property or natural resources,
costs, expenses, enforcement actions, actions or causes of action,
fines and penalties, arising as a result of action or inaction of Lessee,
its officers, employees, sublessees, guests, invitees, agents or
contractors, in connection with the release, threatened release or
presence of any hazardous material, contaminants, or toxic
chemicals at, on, under, over or upon the Leased Premises or Airport,
whether or not foreseeable. The foregoing indemnity includes,
without limitation, all reasonable costs at law or in equity for removal,
clean-up, remediation and disposal required to bring the Leased
Premises or Airport to be in compliance with, all applicable
environmental laws and regulations and all reasonable costs
associated with claims for damages to persons, property or natural
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resources arising out of Lessee's use and occupancy of the Leased
Premises or its operations at the Airport. In the event that Lessor is
named in any enforcement action or lawsuit by any party in
connection with the environmental condition of the Leased Premises
caused by the action or inaction of the Lessee, its officers,
employees, sublessees, guests, invitees, agents or contractors,
Lessee shall defend Lessor and indemnify and hold harmless Lessor
from any reasonable costs, damages, fines and penalties resulting
therefrom."
21. Article 22, section 22.02 of the Lease is deleted and replaced with language to
read as follows:
"Lessor shall have the right to recapture any or all of the Leased Premises to the
extent that such are necessary for the City's development, improvement, and or
maintenance of the Airport's runways and taxiways; for protection or
enhancement of flight operations; or for other development in compliance with
any current or future Airport Master Plan and Airport layout plan. In the event of
any such recapture, Lessee and Lessor shall execute an amendment reflecting a
corresponding adjustment to the Leased Premises and rent, according to the
then applicable rental rates. In the event Lessee has made an investment in
accordance with an approved Capital Improvement Plan during the Initial Term of
this Agreement or any extension thereof and a portion or all of the Leased
Premises are recaptured, the total Direct Construction Costs for the approved
Capital Improvement Plan associated with said Option shall be amortized on a
straight line basis over the term of that Option and a payment issued by the City
to the Lessee for the unamortized amount of the Direct Construction Costs for
the approved Capital Improvement Plan for the remaining balance of that Option
term, with payment to be made within sixty (60) days of such amendment."
22. Article 23, section 23.03 of the Lease is deleted and replaced with language to
read as follows in bold print and set off in a larger font size:
"Lessee shall indemnify and hold harmless Lessor, its officers,
officials, employees, and agents from any charges, fines or penalties
that may be assessed or levied by any department or agency of the
United States or State of Texas, by reason of Lessee's failure to
comply with any applicable security provision or requirement for
compliance set forth herein. Lessee is responsible for payment of all
such fines and penalties."
23. Article 24, section 24.01, subpart (j) of the Lease is deleted and replaced with
language to read as follows:
"If Lessee sells, transfers or assigns this Lease to or is sold, transferred or
assigned a lease from any entity or organization that has an interest in any other
FBO operating at the Airport."
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24. Article 25 of the Lease is deleted and replaced with language to read as follows:
"It is agreed and understood that any holding over by Lessee or sub lessee, with
Lessor's written consent, at sole discretion of Lessor, after the termination of this
Lease, shall not renew and extend same, but shall operate and be construed as
a tenancy from month-to-month, not to exceed six (6) months, upon all the terms
and conditions set forth herein, except that rental shall be paid to Lessor by
Lessee for all buildings on the Leased Premises at one hundred twenty-five
percent (125%) of the then current rents, fees and charges in effect as of the end
of the Initial Term of this Lease or the ground rental rate established through
appraisal, whichever is greater. Lessee shall be liable to Lessor for all loss or
damage resulting from such holding over against Lessor's will after the
termination of this Lease, whether such loss or damage may be contemplated at
this time or not. It is expressly agreed that acceptance of the foregoing rental by
Lessor, in the event that Lessee fails or refuses to surrender possession, shall
not operate to give Lessee any right to remain in possession beyond the period
for which such amount has been paid nor shall it constitute a waiver by Lessor of
its right to immediate possession thereafter."
25. Article 28 of the Lease is deleted and replaced with language to read as follows:
"Lessee agrees to comply promptly with all applicable laws, ordinances, orders
and regulations affecting the Leased Premises, including, but not limited to, those
related to its cleanliness, safety, operation, security, environmental, use and
business operations. Lessee shall comply with all Federal, State and local
regulations concerning its operation on the Airport and shall indemnify and
hold harmless Lessor, its officers and employees, from any charges,
fines or penalties that may be assessed or levied by any department
or agency of the United States, the State of Texas, or any other
governmental agencies, or their successor agencies, with jurisdiction
over the Airport by reason of Lessee's failure to comply with the
terms of this Article or with any other terms set forth in this Lease."
26. Article 30, subsection 30.02 of the Lease is deleted and replaced with language
to read as follows:
"30.02 Lessee for itself, its successors and assigns, as a part of the
consideration hereof, does hereby covenant and agree, as a covenant running
with the Lease, that in the event facilities are constructed, maintained or
otherwise operated on the Leased Premises, for a purpose for which a DOT
program or activity is extended or for another purpose involving the provision of
similar services or benefits, Lessee shall maintain and operate such facilities and
services in compliance with all other requirements imposed pursuant to 49 CFR
pt 21, Nondiscrimination in Federally Assisted Programs of the Department of
Transportation, and as said Regulations may be amended."
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27. Article 30, subsection 30.03 of the Lease is deleted and replaced with language
to read as follows:
"30.03 Lessee for itself, its successors and assigns, as a part of the
consideration hereof, does hereby covenant and agree, as a covenant running
with the Lease, that: (a) no person, on the grounds of race, color, creed, sex,
age, religion, national origin or handicap, shall be excluded from participation in,
denied the benefits of, or be otherwise subjected to discrimination, in the use of
said facilities; (b) that in the construction of any improvements on, over or under
such land and the furnishing of services thereon, no person on the grounds of
race, color, creed, sex, age, religion, national origin or handicap shall be
excluded from participation, denied the benefits of, or otherwise be subjected to
discrimination; and (c) that Lessee shall use the Leased Premises in compliance
with all other requirements imposed by or pursuant to 49 CFR pt 21,
Nondiscrimination in Federally Assisted Programs of the Department of
Transportation, and as said Regulations may be amended."
28. Article 31 of the Lease is deleted and replaced with language to read as follows:
Lessee shall comply with all federal, state and local wage and employment laws,
ordinances, rules and regulations. All employees must be legally employable in
the United States.
29. Article 33 of the Lease is deleted and replaced with language to read as follows:
Excluding an action to enforce the indemnification provisions of this Lease
Agreement, in the event that Lessor or Lessee brings an action under this Lease
to enforce this Lease, each party shall be responsible for their own attorneys'
fees incurred in the defense or prosecution thereof.
30. Article 39 of the Lease is deleted and replaced with language to read as follows:
"Lessee warrants and certifies, and this contract is made in reliance thereon, that
it, its officers, employees and agents are neither officers nor employees of the
City. Lessee further warrants and certifies that is has tendered to the City a true
and correct Disclosure Statement in compliance with Section 2-349 of the City's
Ethics Code."
31. Article 40, section 40.11 of the Lease is deleted and replaced with language to
read as follows:
"40.11 Authority of the Aviation Director. The Aviation Director shall administer
this Lease on behalf of Lessor. Whenever this Lease calls for approval by
Lessor, such approval shall be evidenced, in writing, by either the Aviation
Director or the City Manager of the City of Corpus Christi or his designee, in
accordance with the requirements of the City Charter. In no event shall this
language be considered a waiver by Lessee to object to decisions by the Aviation
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Director which it considers to be arbitrary, capricious or inconsistent with any
express obligations to act reasonably set forth herein."
32. Atlantic Aviation FBO Holdings, LLC ("Atlantic"), by its execution of this
Addendum No. 1 to the Lease, ratifies all terms and conditions of the Lease,
such ratification made retroactively effective as of November 19, 2013, the date
of original approval of the Lease by the City Council of the City of Corpus Christi
and, Atlantic acknowledges and agrees that Atlantic continues to provide the
lease guarantees under this Lease as if joined on the date of initial execution of
the Lease by Lessee.
33. The parties agree that all other terms and conditions of the Lease not changed
by execution of this Addendum No. 1 to the Lease remain in full force and effect.
Executed in triplicate originals:
ATTEST: CITY OF CORPUS CHRISTI
Tit_ ck-t."-E"361-. ihairgC•
Rebecca Huerta, City Secretary 41/ Ronald L. Olson, ity Manager
Date: Date:
Approved as to legal form: —' ,SSI • / V , 2014
4110
I ; , I .0D3utrluK
Elizab- '1 Hundley 4T OOUNCIL._..1.. ..,.1
Assist City Attorney I,
for the City Attorney •-•--•
SMINTAR
LESSEE: Mercury Air Center—Corpus Christi, Inc., doing business as Atlantic Aviation
Louis Pepper, ief Executive Officer
(
Date: -I • I
LEASE GUARANTOR: Atlantic Aviation FBO Holdings, LLC
Louis Pepper, ident
Date: •id
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