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HomeMy WebLinkAboutResolution - 2017-R0270 - Lease Agreement American Airlines - 08/10/2017Resolution No. 2017-_ R0270 Item No. 6.13 August 10, 2017 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Certificated Passenger Airline Operating Agreement and Terminal Building Lease, by and between the City of Lubbock and American Airlines Inc., and 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 City Council. Passed by the City Council on the ATTEST: Garza, City APPROVED AS TO CONTENT: IOth day of August , 2017. DANIEL M. POPE, MAYOR Kelly Campbell, AAE, Executive Director of Aviation Assistant City Attorney RES.Airport-American Airlines Agrmt. 7-24-1'7 Resolution No. 2017-R0270 CERTIFICATED PASSENGER AIRLINE OPERATING AGREEMENT AND TERMINAL BUILDING LEASE for Lubbock Preston Smith International Airport By and between City of Lubbock Lubbock, Texas AND AMERICAN AIRLINES INC. TABLE OF CONTENTS Certificated Passenger Airline Operating Agreement and Terminal Building Lease ........................................... I Article1. Definitions.................................................................................................................................... 2 1.01 Affiliated Airline............................................................................................................. 2 1.02 Agreement....................................................................................................................... 2 1.03 Air Transportation Business............................................................................................2 1.04 Air Transportation Company........................................................................................... 2 1.05 Aircraft Parking Charge.................................................................................................. 2 1.06 Airfield............................................................................................................................ 3 1.07 AIRLINE.........................................................................................................................3 1.08 Airline Premises.............................................................................................................. 3 1.09 Airport .............................................................................................................................3 1.10 Airport Affairs Committee (AAC).................................................................................. 3 1.11 Assigned Aircraft Parking Positions............................................................................... 3 1.12 Amortization....................................................................................................................3 1.13 Annual Rates and Charges Sheet..................................................................................... 3 1.14 Assigned Gates................................................................................................................ 3 1.15 Aviation Department....................................................................................................... 3 1.16 Bonds...............................................................................................................................4 1.17 Capital Expenditure.........................................................................................................4 1.18 Small Capital Expenditure...............................................................................................4 1.19 Large Capital Expenditure...............................................................................................4 1.20 Cargo Aircraft Aprons.....................................................................................................4 1.21 CITY.................................................................................................................................4 1.22 Cost Centers.................................................................................................................... 4 1.22.1 Direct Cost Centers............................................................................................ 4 1.22.2 Indirect Cost Centers: ........................................................................................ 5 1.23 Customer Facility Charge(CFC)..................................................................................... 5 1.24 Debt Service.................................................................................................................... 5 1.25 Deplaned Passenger......................................................................................................... 5 1.26 Director of Aviation........................................................................................................ 5 1.27 Enplaned Passenger.........................................................................................................6 1.28 Environmental Laws........................................................................................................ 6 1.29 FAA................................................................................................................................. 6 1.30 Fiscal Year....................................................................................................................... 6 1.31 Gates................................................................................................................................6 1.32 Ground Handling Services.............................................................................................. 6 1.33 Hazardous Material......................................................................................................... 6 1.34 Holdroom........................................................................................................................ 7 1.35 Joint Use Formula........................................................................................................... 7 mc 1.36 Landing Fee.....................................................................................................................7 1.37 Maximum Gross Landed Weight.................................................................................... 8 1.38 Non -Signatory Airline..................................................................................................... 8 1.39 Operation and Maintenance Expenses............................................................................. 8 1.40 O&M Expenses Reserve Requirement............................................................................ 8 1.41 Passenger Facility Charge(PFC)..................................................................................... 8 1.42 Per Day Fee - Aircraft Gate............................................................................................ 8 1.43 Per Day Fee - Operations................................................................................................ 9 1,44 Per Day Fee - Ticket Counter......................................................................................... 9 1.45 Preferential Use Premises................................................................................................ 9 1.46 Public Space.................................................................................................................... 9 1.47 Rates................................................................................................................................ 9 1.48 Revenue Landing............................................................................................................. 9 1.49 Revenues......................................................................................................................... 9 1.50 Rules and Regulations..................................................................................................... 9 1.51 Scheduled Air Carrier.................................................................................................... 10 1.52 Scheduled Landings......................................................................................................10 1.53 Signatory Airline...........................................................................................................10 1.54 Substantial Completion.................................................................................................10 1.55 Term..............................................................................................................................10 1.56 Terminal Building or Terminal.....................................................................................10 1.57 Terminal Aircraft Aprons..............................................................................................10 1.58 Terminal Rental Rate..................................................................................................... 10 1.59 TSA............................................................................................................................... 10 Article2. Term............................................................................................................................................12 2.01 Term..............................................................................................................................12 2.02 Renewal Option.............................................................................................................12 2.03 Holding Over.................................................................................................................12 Article 3. Rights and Privileges of Airline..................................................................................................13 3.01 AIRLINE Rights and Privileges.................................................................................... 13 3.02 Exclusions and Reservations.........................................................................................16 Article4. Premises...................................................................................................................................... 18 4.01 Terminal Building Space...............................................................................................18 4.02 Gates and Aircraft Parking Positions............................................................................18 4.03 Employee Parking Facilities..........................................................................................19 4.04 Construction and Airport Expansion and Inconvenience .............................................. 20 4.05 Surrender of Airline's Premises.................................................................................... 20 Article 5. Rentals, Fees, and Charges......................................................................................................... 21 BE 5.01 General . ......................................................................................................................... 21 5.02 Landing Fees................................................................................................................. 21 5.03 Terminal Rentals........................................................................................................... 21 5.04 Other Fees and Charges................................................................................................. 22 5.05 Information to be Supplied by AIRLINE...................................................................... 23 5.06 Payments.......................................................................................................................25 5.07 Security for Performance............................................................................................... 26 5.08 No Further Charges....................................................................................................... 27 Article 6. Changes in Rates for Rentals, Fees, and Charges....................................................................... 28 6.01 Annual Rate Changes....................................................................................................28 6.02 Other Rate Changes....................................................................................................... 29 6.03 Incorporation of Exhibit E............................................................................................. 29 6.04 Settlement......................................................................................................................29 6.05 City Covenants.............................................................................................................. 29 Article 7. Operation and Maintenance of airport ........................................................................................ 31 7.01 General..........................................................................................................................31 7.02 Terminal Building......................................................................................................... 31 7.03 CITY's Right to Inspect and Make Repairs.................................................................. 32 7.04 Alterations and Improvements...................................................................................... 32 7.05 Debts, Liens, Mortgages................................................................................................ 33 Article 8. Damage or Destruction of Airline's Premises............................................................................ 34 8.01 Minor Damage............................................................................................................... 34 8.02 Substantial Damage....................................................................................................... 34 8.03 Destruction....................................................................................................................34 8.04 Damage Caused By AIRLINE...................................................................................... 35 8.05 CITY's Responsibilities.................................................................................................35 Article 9. Insurance and Indemnification.................................................................................................... 36 9.01 Indemnification............................................................................................................. 36 9.02 Insurance....................................................................................................................... 37 Article 10. Transfer of Airline's Premises by Assignment or Subletting........................................................ 42 10.01 General..........................................................................................................................42 10.02 CITY Approval of Assignments.................................................................................... 42 10.03 CITY Approval of Subleases........................................................................................ 42 10.04 Reasons for Disapproval Not Comprehensive............................................................... 43 10.05 Method of Obtaining Approval..................................................................................... 43 10.06 Administrative Charge.................................................................................................. 43 10.07 AIRLINE to Remain Liable.......................................................................................... 43 10.09 CITY Determination of Type of Agreement................................................................. 43 Article 11. Relinquishment of Airline's Premises........................................................................................ 44 11.01 Notice of Intent to Relinquish Airline's Premises......................................................... 44 11.02 Non -Waiver of Responsibility....................................................................................... 44 11.03 Reduction of Rent, Fees, and charges........................................................................... 44 Article 12. Cancellation by City................................................................................................................... 45 12.01 Events of Default........................................................................................................... 45 12.02 Continuing Responsibilities of AIRLINE..................................................................... 46 12.03 CITY's Remedies........................................................................................................... 47 12.04 Remedies Under Federal Bankruptcy Laws..................................................................48 Article 13. Cancellation by Airline................................................................................................................ 49 13.01 Events of Default........................................................................................................... 49 13.02 AIRLINE's Remedy...................................................................................................... 49 Article14. Government Inclusion................................................................................................................. 49 14.01 Government Agreements............................................................................................... 49 14.02 Federal Government's Emergency Clause..................................................................... 50 14.03 Nondiscrimination.........................................................................................................50 14.04 Security..........................................................................................................................51 14.05 51 Article 15. General Provisions....................................................................................................................... 56 15.01 Nonwaiver.....................................................................................................................56 15.02 Passenger Facility Charge............................................................................................. 56 15.03 Rights Non-Exclusive.................................................................................................... 56 15.04 Quiet Enjoyment........................................................................................................... 56 15.05 Performance..................................................................................................................57 15.06 Aviation Rights............................................................................................................. 57 15.07 Rules and Regulations and Operational Directives....................................................... 57 15.08 Inspection...................................................................................................................... 57 15.09 No Individual Liability.................................................................................................. 58 15.10 Relationship of Parties................................................................................................... 58 15.11 Capacity to Execute....................................................................................................... 58 15.12 Savings..........................................................................................................................58 15.13 Successors and Assigns Bound..................................................................................... 58 15.14 Incorporation of Exhibits............................................................................................... 58 15.15 Titles..............................................................................................................................58 15.16 Severability....................................................................................................................58 15.17 Amendments..................................................................................................................58 -iv- 15.18 Other Agreements......................................................................................................... 59 15.19 Approvals......................................................................................................................59 15.20 Notice............................................................................................................................59 15.21 Agent for Service.......................................................................................................... 60 15.22 Governing Law and Legal Forum................................................................................. 60 15.23 Force Majeure............................................................................................................... 60 15.24 Most Favored Nation..................................................................................................... 60 15.25 Entire Agreement.......................................................................................................... 61 LIST OF EXHIBITS Exhibit A: Airport Boundaries Exhibit B: Airline Premises Exhibit C: Summary of Terminal Areas Exhibit D: Responsibilities of CITY and AIRLINE for Operation and Maintenance of the Terminal Changes in Rates for Rentals and Fees and Charges Exhibit E: Changes in Rates for Rentals, Fees and Charges Exhibit F: Affiliate Identification and Requirements Exhibit G: Statistical Report -v- CERTIFICATED PASSENGER AIRLINE OPERATING AGREEMENT AND TERMINAL BUILDING LEASE THIS LEASE AGREEMENT, made this 1st day of _October , 2017, by and between the City of Lubbock, Texas, a municipal corporation organized and existing under the laws of the State of Texas, (hereinafter referred to as "CITY"), and American Airlines, Inc., a corporation incorporated under the laws of the State of Delaware, with its principal office at Fort Worth, Texas (as hereinafter defined and referred to as "AIRLINE") WITNESSETH WHEREAS, CITY owns and operates Lubbock Preston Smith International Airport, located in Lubbock, Lubbock County, Texas, (hereinafter referred to as "Airport"); and WHEREAS, AIRLINE is engaged in the business of air transportation of persons, property, cargo, small packages, and mail, and is certificated by the Federal Aviation Administration to provide such services through Lubbock Preston Smith International Airport; and WHEREAS, AIRLINE desires to lease certain premises, use certain facilities, and acquire certain rights and privileges from CITY in connection with its use of the Airport, and CITY is willing to lease and grant the same to AIRLINE upon the terms and conditions hereinafter stated; and WHEREAS, CITY and AIRLINE each certify that their corporation has the power and authority to enter into this Agreement; WHEREAS, AIRLINE and CITY agree to enter into this Agreement, specifying the rights and obligations of the parties with respect to the lease, use and occupancy or use of certain premises of the Airport by AIRLINE; NOW THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, CITY and AIRLINE do hereby mutually undertake, promise and agree, each for itself and its successors and assigns as follows: Article 1. DEFINITIONS 1.01 Affiliated Airline shall mean any Air Transportation Company that: (1) is a parent or subsidiary of Airline, a subsidiary of the parent of Airline or otherwise under common control with Airline; (2) shares an International Air Transport Association (IATA) code with Airline at the Airport; or (3) otherwise operates under essentially the same trade name as Airline or its parent or subsidiary at the Airport or uses essentially the same livery as Airline or its parent or subsidiary; provided that no "major" airline, as such term is defined by the FAA, shall be classified as an Affiliate of another "major" airline unless either clause (1) or (3) above defines the relationship between such airlines at the Airport. A Signatory Airline must designate in writing to the CITY any Air Transportation Company that will be an Affiliate of that Signatory Airline at the Airport. A Signatory Airline must also designate in writing to the City to terminate such Affiliate status of an Air Transportation Company. Affiliates shall have the rights afforded Airline without payment of any additional charges or premiums, provided Airline (a) remains a Signatory Airline to this Agreement; (b) agrees to be billed for Affiliate's activity at the Airport; and (c) agrees and shall be obligated to serve as a financial guarantor for all rentals, fees, and charges incurred by any Affiliate of Airline at the Airport. Airline shall be responsible for any and all unpaid rentals, fees, and charges of any such Affiliate while such Affiliate operates at the Airport as an Affiliate of Airline; provided however, Airline shall only be responsible for such payments as relate to any terminated Affiliate's operations before such termination as an Affiliate of Airline took effect. Termination as an Affiliate of Airline will not occur until Airline notifies the City in writing and such termination will be effective as of the date of such notification. 1.02 Agreement shall mean this Certificated Passenger Airline Operating Agreement and Terminal Building Lease between CITY and AIRLINE, as the same may be amended, modified or altered from time - to -time pursuant to the terms hereof. 1.03 Air Transportation Business shall mean that business operated by AIRLINE at the Airport for the commercial transportation by air of persons, property, mail, parcels and/or cargo and all associated reasonable activities. 1.04 Air Transportation CompM shall mean a legal entity engaged in the business of scheduled or non-scheduled commercial transportation by air of persons, property, mail, parcels and/or cargo. 1.05 Aircraft Parking Charge shall mean a fee assessed by the City for each aircraft parking operation that occurs on any portion of the Terminal Aircraft Apron located outside of an Air Transportation Company's Preferential Use Premises as designated in the Annual Rates and Charges Sheet. I&M 1.06 Airfield shall mean those portions of the Airport provided for the landing, taking off and taxiing of aircraft, including without limitation, approach and turning zones, aviation or other easements, runways, taxiways, runway and taxiway lights, and other appurtenances in connection therewith. 1.07 AIRLINE shall mean the Air Transportation Company executing this Agreement. 1,08 Airline Premises shall mean those areas in the Terminal leased to AIRLINE as Preferential Use Premises or Joint Use Premises, as defined herein, and shown in Exhibit B, attached hereto. 1.09 Airport shall mean Lubbock Preston Smith International Airport in Lubbock, Lubbock County, Texas, owned and operated by CITY, including all real property easements or any other interest therein as well as all improvements and appurtenances thereto, structures, buildings, fixtures, and all tangible personal property or interest in any of the foregoing, now or hereafter owned leased or operated by CITY. 1.10 Airport Affairs Committee (AAC) shall mean collectively the authorized representatives of each Signatory Airline that shall meet from time -to -time with representatives of CITY to receive information and provide input from/to the Signatory Airlines with regard to selected operation and development matters of the Airport. 1.11 Assigned Aircraft Parking Positions shall mean aircraft parking positions at the Airport that have been assigned by the Director of Aviation. 1.12 Amortization shall mean the amount to recover a Large Capital Expenditure which is not debt financed, and shall be calculated based on the expected useful life of the Large Capital Expenditure with a rate of return, equivalent to the City's cost of capital as of the date of Substantial Completion. Amortization will commence in the Fiscal Year immediately following date of Substantial Completion of any such Large Capital Expenditure. 1.13 Annual Rates and Charges She shall mean the notification sent by the CITY to Airline prior to start of Airport's fiscal year that includes a list of all rates and fees for the upcoming fiscal year. 1.14 Assigned Gates shall mean gates within the Terminal Building that have been assigned by the Director of Aviation to each Signatory Airline as identified in Exhibit B. 1.15 Aviation Department shall mean the Aviation Department of the City of Lubbock. --3-- 1.16 Bonds shall mean any bonds or other financing instrument or obligation of the CITY, issued for the purposes of improving the Airport, in which the Aviation Department is responsible for payment of the annual interest and principal associated with such bonds. 1.17 Capital Expenditure shall mean an expenditure, made to acquire, purchase or construct a single capital item or project for the purpose(s) of improving, maintaining or developing the Airport. 1.18 Small Capital Expenditure shall mean a Capital Expenditure funded with $100,000 or less of CITY funds (excluding (i) proceeds from Bonds; (ii) proceeds from insurance resulting from casualty damage to or destruction of improvements on the Airport; (iii) federal or state grant funds; and (iv) Passenger Facility Charges (PFCs)). 1.19 Large Capital Expenditure shall mean a Capital Expenditure funded with more than $100,000 of CITY funds (excluding (i) proceeds from Bonds; (ii) proceeds from insurance resulting from casualty damage to or destruction of improvements on the Airport; (iii) federal or state grant funds; and (iv) PFCs). 1.20 Cargo Aircraft Aprons shall mean those areas of the Airport that are designated for the parking of cargo aircraft and support vehicles, and the loading and unloading of cargo aircraft, as shown in Exhibit A, attached hereto. 1.21 CITY shall mean the City of Lubbock, who has the ownership, custody, control and management of the Airport. 1.22 Cost Centers shall mean those areas or functional activities of the Airport used for the purposes of accounting for Revenues, Operating and Maintenance (O&M) Expenses, O&M Expenses Reserve Requirement, Debt Service, Small Capital Expenditures and Amortization of Large Capital Expenditures, and for calculating and adjusting certain rentals, fees, and charges described herein, as they now exist or may hereafter be modified, changed, or developed, as more particularly described below: 1.22.1 Direct Cost Centers 1.22.1.1 Airfield Cost Center includes the Airfield, the Terminal Aircraft Aprons and the Cargo Aircraft Aprons. 1.22.1.2 Terminal Cost Center includes the Airport Terminal Building and associated curbside entrance areas and adjoining landscaped areas. --4-- 1.22.1.3 Other Cost Center includes all portions of the Airport provided for areas outside of Airfield and Terminal Cost Centers. 1.22.2 Indirect Cost Centers: 1.22.2.1 Administrative Cost Center includes the administrative functions of the Airport. 1.22.2.2 Aircraft Rescue and Fire Fighting (ARFF) Cost Center includes all rescue and firefighting functions at the Airport. 1.22.2.3 Airport Police Cost Center includes all police and law enforcement functions at the Airport. 1.22.2.4 Indirect Cost Center includes all additional miscellaneous expenses at the City related to the Airport's operation 1.22.2.5 Operations and Security Cost Center includes all functions of the Airport related to general operations and security. 1.22.2.6 Parking Cost Center includes all functions of the Airport related to the parking lots and garages. 1.23 Customer Facility Charge (CFC) shall mean the charge imposed by the City, which is collected and remitted by the Rental Car Agencies ("RACS"), upon a car rental customer arriving at the Airport and renting a vehicle and provided to the Airport for expenditure on car rental facilities improvements. 1.24 Debt Service shall mean with respect to any series of Bonds, as of any particular date of computation and for any particular period or year, of the aggregate amount required to be deposited during such period or year for interest and principal associated with such Bonds. 1.25 Deplaned Passenger shall mean any passenger disembarking an aircraft at the Terminal. 1.26 Director of Aviation shall mean the CITY's Director of Aviation or such other person designated by CITY to exercise functions with respect to the rights and obligations of CITY under this Agreement. 151M 1.27 Enplaned Passenger shall mean any passenger boarding an aircraft at the Terminal except for non -revenue passengers, including any such passenger that previously disembarked from another aircraft of the same or a different Air Transportation Company or from the same aircraft, previously operating under a different flight number. 1.28 Environmental Laws shall mean all applicable local, state, and federal laws, statutes, ordinances, rules, regulations, orders, and contracts, and with all applicable policies promulgated or sponsored by the insurance companies providing coverage required by this Contract, if any, concerning or relating to public health and safety, worker/occupational health and safety, and pollution or protection of the environment, including, but not limited to, the Clean Water Act, 33 U.S.C. Section 1251, et seq., the Solid Waste Disposal Act, 42 U.S.C. Section 6901, et seq., the Comprehensive Environmental Response; Compensation and Liability Act, 42 U.S.C. Section 9601, et seq.; 1.29 FAA shall mean the Federal Aviation Administration, or its authorized successor(s). 1.30 Fiscal Year shall mean the annual accounting period of CITY for its general accounting purposes which, at the time of entering into this Agreement, is the period of twelve consecutive months, ending with the last day of September of any year. 1.31 Gates shall mean those specific areas within the Terminal Building where passengers enplane and deplane aircraft. 1.32 Ground Handling Services shall mean services provided to an aircraft that prepares the aircraft for flight, such as the guiding and parking of aircraft, catering, loading and unloading of baggage, fuel arrangements, passengers, etc. and also activities such as ticketing and check -in. 1.33 Hazardous Material shall mean: (i) any oil petroleum products, flammable substances, explosives, radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other wastes, materials or pollutants which pose a hazard to the Airport premises or to the safety and/or health of persons on or about the Airport and /or cause Airline Premises to be in violation of any federal, state, or local laws governing or regulating hazardous materials; (ii) asbestos in any form, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric fluid containing regulated levels of polychlorinated biphenyls, or radon gas; (iii) any chemical, material or substance defined as or included in the definition of "hazardous substances", "hazardous waste", "hazardous material", "extremely hazardous waste", "restricted hazardous waste", "toxic substance" or similar words under any applicable local, state, or federal laws, or any regulations promulgated pursuant thereto, including, but not limited to: the !�'m Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. §§9601, et. seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S. U.S.C. §§1801, et seq.; the Federal Water Pollution Control Act (CWA), as amended, 33 U.S.0 §§1251 et seq.; The Resource Conservation and Recovery Act (RCRA), as amended, 42 U.S.C. §§6901, et seq.; the Toxic Substances Control Act (TSCA), as amended, 15 U.S.C. §§32601,et seq.; (iv) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by government CITY, and which may or could pose a hazard to the health and safety of occupants of the Airport, and or to any person entering upon the Airport or adjacent property; and/or (v) any other chemical, material or substance which may or could pose a hazard to the environment or a person. 1.34 Holdroom shall mean the seating area of the concourse at each gate. 1.35 Joint Use Formula shall mean that formula which prorates 20 percent (20%) of the cost of a service or space equally among all Scheduled Air Carriers using Joint Use Premises except those Scheduled Air Carriers whose annual enplanements are less than two percent (2%) of total enplanements for the year, and eighty percent (80%) based on the ratio of each Scheduled Air Carrier's Enplaned Passengers using the service or space at the Airport during the month, to the total of all Enplaned Passengers using the service or space at the Airport during the month. Notwithstanding the foregoing, CITY shall, adjust the computation to reflect enplanements of an additional Scheduled Air Carrier at the Airport or after the deletion of a Scheduled Air Carrier at the Airport. AIRLINE and Affiliated Airlines shall be considered the same Scheduled Air Carrier for purposes of this Joint Use Formula. At any time during the Term of this Agreement, if any Air Transportation Company meets or exceeds the two percent (2%) of the Airport's total Enplaned passengers threshold for a period of three (3) consecutive months, it shall then be obligated to pay pursuant to the calculation of the 20% amount under (1)as described above for the remainder of the Term, even if such Air Transportation Company's share has fewer than two (2%) of the Airport's total Enplaned passengers at the Airport drops below two percent (2%) subsequent to that period of time . Joint Use Premises shall mean that space in the Terminal Building used jointly by AIRLINE and other airlines using the space, such as baggage claim areas as reflected in Exhibits B and C. 1.36 LandinjZ Fee shall mean a fee per thousand pounds of the Maximum Gross Landed Weight of each type of AIRLINE's aircraft and shall be multiplied by the total of all Maximum Gross Landed Weight for all Revenue Landings of each type of aircraft landed at the Airport by AIRLINE. The calculation of the annual Landing Fee is set forth in Exhibit E. --7-- 1.37 Maximum Gross Landed Weiaht shall mean the maximum gross certificated landing weight in one thousand pound units for which each aircraft operated at the Airport by AIRLINE as certificated by the FAA or its successor. 1.38 Non -Signatory Airline shall mean any Air Transportation Company providing service at the Airport that has not signed this Agreement and is operating under the terms of a separate agreement that has terms that are not more favorable to this Agreement. Non -Signatory Airlines shall pay Non -Signatory rates, fees and charges presented in Exhibit E, which will include a premium that is determined by the Director of Aviation. 1.39 Operation and Maintenance Expenses shall mean O&M Expenses paid or accrued, of operation, maintenance, and ordinary current repairs of said Airport and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the CITY relating solely to the Airport, including engineering, architectural, legal, airport consultants, accounting fees and expenses and such other reasonable current expenses as shall be in accordance with sound accounting practice. O&M Expenses shall not include any allowance for depreciation or renewals or replacements or obsolescence of capital assets of the Airport, or any operation and maintenance expenses of Special Purpose Facilities buildings where the lessees thereof are obligated to pay such operation and maintenance expenses. 1.40 O&M Expenses Reserve Requirement shall mean an amount equal to 25 percent of the annual O&M Expenses for the current Fiscal Year less an amount equal to 25 percent of the O&M Expenses for the previous Fiscal Year. 1.41 Passenger Facility Charge (PFC) shall mean the fees authorized by 49 USC Appx. 1513 (e) and regulated by 14 CFR Part 158 as such statute and regulations currently exist or as they may be amended during the Term of this Agreement. 1.42 Per DU Fee — Aircraft Gate shall mean a charge assessed by the City for each use of an unassigned aircraft gate for a period not to exceed two (2) hours and calculated as shown in Exhibit E. The Per Use Fee - Aircraft Gate will include use of the holdroom, Loading Bridge, pre -conditioned air, and 400 Hertz systems. The Per Use Fee - Aircraft Gate shall not apply to the use of areas within the Terminal Building that are included in an Air Transportation Company's Preferential Use Premises pursuant to this Agreement with the City. The location of the aircraft gate to be used on a per -use basis will be assigned by the Director of Aviation. Any Air Transportation Company utilizing an unassigned aircraft gate will pay no more than one Per Day Fee — Aircraft Gate per calendar day, however, Air Transportation Company may be subject to additional charges as reflected in Section 5.04 A (5). --8-- 1.43 Per Dgy Fee — Operations shall mean a charge assessed by the City for each use of unassigned operations space for a period not to exceed two (2) hours and calculated as shown in Exhibit E. The location of the operations space to be used on a per -use basis will be assigned by the Director of Aviation. Any Air Transportation Company utilizing unassigned operations space will pay no more than one Per Day Fee — Operations per calendar day. 1.44 Per Day Fee — Ticket Counter shall mean a charge assessed by the City for each use of an unassigned ticket counter for a period not to exceed two (2) hours and calculated as shown in Exhibit E. The location of the ticket counter to be used on a per -use basis will be assigned by the Director of Aviation. Any Air Transportation Company utilizing an unassigned ticket counter will pay no more than one Per Day Fee — Ticket Counter per calendar day. 1.45 Preferential Use Premises shall mean those portions of the Terminal and Terminal Aircraft Aprons assigned to AIRLINE, as shown in Exhibit C, attached hereto, to which AIRLINE shall have priority over other users. 1.46 Public Space shall mean all utility rooms, duct ways, janitorial rooms and closets, stairways, hallways, elevators, escalators, entrance -ways, public or common use lobbies and areas, public toilet areas and other areas used for the operation, maintenance or security of the Terminal, even if used solely by CITY. 1.47 Rates shall mean the Landing Fee Rate and the Terminal Rental Rate. 1.48 Revenue Landing shall mean any aircraft landing by AIRLINE at the Airport for which AIRLINE receives revenue, including training flights and diversions by AIRLINE, but excluding any flight, that after having taken off from the Airport and without making a landing at any other airport, returns to land at the Airport because of meteorological conditions, mechanical or operating causes, or any other reason of emergency or precaution. 1.49 Revenues shall mean income accrued by CITY in accordance with generally accepted accounting practices, including investment earnings, from or in connection with the ownership or operation of the Airport or any part thereof, or the leasing or use thereof, but do not include PFCs. 1.50 Rules and Regulations shall mean reasonable and nondiscriminatory rules and regulations as may be established by the City of Lubbock for the Lubbock Preston Smith International Airport, and as may be amended from time -to -time. 1.51 Scheduled Air Carrier shall mean any Air Transportation Company performing or desiring to perform, pursuant to published schedules, seasonal or non -seasonal commercial air transportation services over specified routes to and from the Airport and holding the necessary authority from the appropriate federal or state agencies to provide such transportation. 1.52 Scheduled Landinas shall mean all Revenue Landings at the Airport published by AIRLINE in either the Official Airline Guide or on AIRLINE's Website. 1.53 Signatory Airline shall mean an Air Transportation Company that has executed an agreement with the CITY substantially similar to this Agreement, and that leases at least one holdroom in the Terminal Building and other space in the Terminal Building deemed sufficient by the Director of Aviation to support its operation. 1.54 Substantial Completion shall mean the date on which CITY's architects and/or engineers certify any premises, or project, at the Airport to be substantially complete as to permit use and occupancy by AIRLINE. 1.55 Term shall mean the period of time during which AIRLINE's activities at the Airport shall be governed by this Agreement. Said Term shall begin on the Effective Date, and, except as otherwise set forth herein, terminate on the date set forth in Article 2. 1.56 Terminal Building or Terminal shall mean the passenger terminal building and appending structures at the Airport. 1.57 Terminal Aircraft Aprons shall mean those areas of the Airport that are designated for the parking of commercial passenger aircraft and support vehicles, and the loading and unloading of passenger aircraft. 1.58 Terminal Rental Rate shall mean fees and charges imposed by City on a per square foot basis for the use of the Airline Premises. The calculation of the annual Terminal Rental Rate is set forth in Exhibit E. 1.59 TSA shall mean the Office of Homeland Security and Transportation Security Administration, or their authorized successor(s). Words and phrases used in this Agreement but not defined herein shall have their usual and --10-- customary meaning. Article 2. TERM 2.01 Term. The Term of this Agreement shall be for five (5) years beginning on OCTOBER 1, 2017 (hereinafter the "Effective Date"), and ending SEPTEMBER 30, 2022 (hereafter the "Term"), and the rentals, fees, and charges established in this Agreement shall apply to said Term regardless of the executed date of this Agreement. 2.02 Renewal Option. This Agreement shall renew automatically under the same terms and conditions for two separate two-year periods effective October 1, 2022 and October 1, 2024, unless either party provides the other party written notice 120 days prior to the then current expiration date of its intent not to renew this Agreement. 2.03 Holdiniz Over. Holding over by AIRLINE after the expiration of the Agreement without the consent of CITY shall not operate to extend or renew this Agreement. Any such holding over shall be construed as a tenancy from month -to -month, provided, however, that AIRLINE shall enjoy signatory rentals, rates and charges up to one year after expiration of this Agreement or for such longer period during which good faith negotiations have been started, or as may be agreed in writing by the CITY and AIRLINE. Thereafter, upon thirty (30) days advance written notice by the CITY, AIRLINE will pay non -signatory rentals, rates and charges until a new agreement is executed. --12-- Article 3. RIGHTS AND PRIVILEGES OF AIRLINE 3.01 AIRLINE Rights and Privileges. In addition to all rights granted elsewhere in this Agreement, AIRLINE shall have the right to use, in common with others so authorized by CITY, areas, other than areas leased preferentially to others, facilities, equipment, and improvements at the Airport for the operation of AIRLINE's Air Transportation Business and all activities reasonably necessary to such operations, including but not limited to: A. The landing, taking off, flying over, taxiing, towing, and conditioning of AIRLINE's aircraft and, in areas designated by CITY, the extended parking, servicing, deicing, loading or unloading, storage, or maintenance of AIRLINE's aircraft and support equipment subject to Sections 3.01E, 3.01F, and 3.02C, and to the availability of space, and subject to such reasonable charges and regulations as CITY may establish; provided, however, AIRLINE shall not permit the use of the Airfield by any aircraft operated or controlled by AIRLINE which exceeds the design strength or capability of the Airfield as described in the then -current FAA -approved Airport Layout Plan (ALP) or other engineering evaluations performed subsequent to the then -current ALP, including the then -current Airport Certification Manual. B. The sale of air transportation tickets and services, the processing of passengers and their baggage for air travel, the sale, handling, and providing of mail, freight, and express services, and reasonable and customary airline activities. C. The training of personnel in the employ of or to be employed by AIRLINE and the testing of aircraft and other equipment being utilized at the Airport in the operation of AIRLINE's Air Transportation Business; provided, however, said training and testing shall be directly related, but incidental to the use of the Airport in the operation by AIRLINE of its Air Transportation Business and shall not unreasonably hamper or interfere with the use of the Airport and its facilities by others entitled to the use of same. CITY reserves the right to restrict or prohibit such training and testing operations which it deems to interfere with the use of the Airport, including excessive noise as reasonably determined by CITY. D. The purchase at the Airport of fuels, lubricants, and any other supplies and services, from any person or company, subject to CITY's right to require that each provider of services and/or supplies to AIRLINE secures a permit from CITY to conduct such activity at the Airport, pays required fees, and abides by all reasonable rules and regulations established by CITY. No discriminatory limitations or --13-- restrictions shall be imposed by CITY that interferes with such purchases; provided, however, nothing herein shall be construed to permit AIRLINE to store aviation fuels at the Airport. The granting of the right to store aviation fuels shall be subject to the execution of a separate agreement between AIRLINE or Airline Fuel Facility Corporation and CITY. E. The servicing by AIRLINE or its suppliers of aircraft and other equipment being utilized at the Airport by AIRLINE on the Terminal Aircraft Aprons or such other locations as may be designated by the Director of Aviation. F. The loading and unloading of persons, property, cargo, parcels and mail by motor vehicles or other means of conveyance reasonably approved by CITY at Terminal Aircraft Aprons or such other locations as may be designated by the Director of Aviation; provided AIRLINE shall not use Terminal Aircraft Aprons immediately adjacent to the passenger Terminal to load or unload all -cargo aircraft unless otherwise authorized in writing by CITY. G. The provision, either alone or in conjunction with other Air Transportation Companies or through a nominee, of skycap service for the convenience of the public, at no cost to CITY. H. The installation and maintenance, at AIRLINE's sole cost and expense, of identifying signs in AIRLINE's Preferential Use Premises. Installation shall be subject to the prior written approval of the Director of Aviation. The general type and design of such signs shall be in compliance with CITY's rules and regulations regarding tenant signage. All identifying signage previously approved by the Director and installed as of the Effective Date is deemed to be approved. Signage will not be permitted in areas other than AIRLINE's Preferential Use Premises. I. The installation, maintenance, and operation, at no cost to CITY, of such radio communication, company telephone system, computer, meteorological and aerial navigation equipment, and facilities on AIRLINE's Preferential Use Premises as may be necessary or convenient for the operation of its Air Transportation Business; provided, however, that except for equipment and facilities already in place, such installations shall be subject to the prior written approval of the Director of Aviation. Prior to any written approval, AIRLINE shall provide the Director of Aviation with all reasonably necessary supporting documentation related to such installations. Installation, maintenance, and operation, of such radio communication, company telephone system, computer, meteorological and aerial navigation equipment, and facilities will not be permitted in areas other than AIRLINE's Preferential Premises. --14-- J. Such rights of way as may reasonably be required by AIRLINE for communications, computer equipment, teletype, telephone, interphone, conveyor systems and power, and other transmission lines in AIRLINE's Preferential Use Premises, subject to the availability of space and/or ground areas as determined by the Director of Aviation. AIRLINE shall provide CITY with an engineer's or architect's drawing depicting the routing of such cabling for approval by CITY prior to engaging in any such work. CITY reserves the right to require the execution of a separate agreement between CITY and AIRLINE for the lease and use of such space and/or ground area outside Terminal areas or to provide such service directly to AIRLINE. K. The installation of personal property, including furniture, furnishings, computers, supplies, machinery, equipment, computers, and supplies in AIRLINE's Preferential Use Premises as AIRLINE may deem necessary, useful or prudent for the operation of its Air Transportation Business. Title to such personal property shall remain with AIRLINE, subject to the provisions of this Agreement. Installation of personal property, including furniture, furnishings, computers, supplies, machinery, equipment, computers, and supplies will not be permitted in areas other than AIRLINE's Preferential Premises. L. The construction of modifications, finishes, and improvements in AIRLINE's Preferential Use Premises as AIRLINE may deem necessary or prudent for the operation of its Air Transportation Business. M. AIRLINE shall have the right to ingress to and egress from the Airport and Airline Premises for AIRLINE's officers, employees, agents, and invitees, including passengers, suppliers of materials, furnishers of services, aircraft, equipment, vehicles, machinery and other property. Such right shall be subject to CFR Part 1542, applicable laws, and the CITY's right in accordance with its applicable law to establish reasonable and nondiscriminatory Rules and Regulations and Operating Directives governing (i) the general public, including AIRLINE's passengers, and, (ii) access to non- public areas at the Airport by AIRLINE's employees, suppliers of materials, and furnishers of services; provided, however, any such Rules and Regulations and Operating Directives of CITY shall not unreasonably interfere with the operation of AIRLINE's Air Transportation Business. CITY may at any time temporarily or permanently close, re-route, or consent to or request the closing or re-routing of any roadway or access to the Airport, so long as a means of ingress and egress reasonably equivalent is concurrently made available to AIRLINE. AIRLINE hereby releases and discharges CITY from any and all claims, demands, or causes of action which AIRLINE may now or at any time hereafter have arising or alleged to arise out of such a closing or re-routing. --15-- N. Subject to any restrictions in CITY's agreement with its food and beverage concessionaire, nothing in this paragraph shall prohibit AIRLINE from (i) providing food and beverages, at AIRLINE's sole cost and expense, and (ii) providing under a separate agreement with CITY for its own flight kitchen located at the Airport for catering services to its passengers and crews for consumption aboard aircraft. AIRLINE shall not install vending machines of any type in its Airline Premises without obtaining written approval of the Director of Aviation, however, all vending machines previously approved by the Director and installed as of the Effective Date are hereby deemed to be approved. O. The rights and privileges granted to AIRLINE pursuant to this Article 3 may be exercised on behalf of AIRLINE by other Signatory Airlines or contractors authorized by CITY to provide such services at the Airport, subject to the prior written approval of CITY and further subject to all laws, rules, regulations, fees, and charges as may be applicable to the activities undertaken. P. AIRLINE may exercise on behalf of any other Air Transportation Company having an operating agreement or permit with CITY any of the rights granted AIRLINE herein, so long as AIRLINE is concurrently exercising those same rights in the operation of AIRLINE's own Air Transportation Business at the Airport, subject to other provisions of this Agreement with respect to CITY Rules and Regulations and Operating Directives for the Airport and provided AIRLINE notifies CITY of such arrangement. 3.02 Exclusions and Reservations. A. Nothing in this Article 3 shall be construed as authorizing AIRLINE to conduct any business separate and apart from the conduct of its Air Transportation Business. B. AIRLINE shall not knowingly interfere or permit interference with the use, operation, or maintenance of the Airport, including but not limited to, the effectiveness or accessibility of the drainage, sewerage, water, communications, fire protection, utility, electrical, or other systems installed or located from time -to -time at the Airport; and AIRLINE shall not engage in any activity prohibited by CITY's noise abatement procedures as implemented, amended, or supplemented from time -to -time. C. As soon as possible after release from proper authorities, AIRLINE shall remove any of its disabled aircraft from the Airfield or Terminal Aircraft Aprons, shall place any such disabled aircraft only in such storage areas as may be reasonably designated by the Director of Aviation, or at AIRLINE's discretion, to an off -Airport location, and shall store such disabled aircraft only upon such terms and conditions as may be reasonably established by the Director of Aviation. In the event AIRLINE shall --16-- fail to remove any of its disabled aircraft as expeditiously as possible, CITY may, but shall not be obligated to, cause the removal of such disabled aircraft. AIRLINE shall pay to CITY, upon receipt of invoice, the costs incurred for such removal plus fifteen percent (15%). Nonpayment of such invoice shall be deemed an event of default of this Agreement. D. AIRLINE shall not do or permit to be done anything, either by act or failure to act, that shall cause the cancellation or violation of the provisions, or any part thereof, of any policy of insurance for the Airport, or that shall cause a hazardous condition so as to increase the risks normally attendant upon operations permitted by this Agreement. If AIRLINE shall do or permit to be done any act not permitted under this Agreement, or fail to do any act required under this Agreement, regardless of whether such act shall constitute a breach of this Agreement, which act or failure, in and of itself, causes an increase in CITY's insurance premiums, AIRLINE shall immediately remedy such actions and/or pay the increase in premiums, upon notice from CITY to do so. E. AIRLINE shall not maintain or operate in the Terminal or elsewhere at the Airport a cafeteria, restaurant, bar, or cocktail lounge for the purpose of selling food and beverages to the public or to AIRLINE's employees and passengers, except as may be permitted under Section 3.0IN, above. F. CITY may, at its sole option, install or cause to be installed advertising and revenue generating devices, including vending machines, in Joint Use Premises provided, however, that such installations shall not unreasonably interfere with AIRLINE's operations authorized hereunder or substantially diminish the square footage contained in Airline Premises. CITY may also, at its sole option, install pay telephones in any part of the Terminal. CITY shall be entitled to reasonable access upon Airline Premises to install or service such telephones and devices. G. The rights and privileges granted AIRLINE pursuant to this Article 3 shall be subject to any and all reasonable and nondiscriminatory Rules and Regulations and Operating Directives established by CITY, as may be amended from time -to -time. H. AIRLINE shall not use any Airline Premises as office space unless not more than a de minimus amount of the functions to be performed at such office is not directly related to the AIRLINE'S day-to-day operations at the Airport. I. Any and all rights and privileges not specifically granted to AIRLINE for its use of and operations at the Airport pursuant to this Agreement are hereby reserved for and to CITY. --17-- J. AIRLINE shall not conduct political activities on Airline Premises except as allowed by CITY in free speech designated areas within the Airport. Article 4. PREmins 4.01 Terminal Building_ Space. For the Term of this Agreement, AIRLINE shall lease or use the areas in the Terminal Building as shown in Exhibits B and C. A. In the event that changes to Exhibits B or C are made to reflect changes in the leased premises of others, or to reflect other space changes in public -use and common -use areas, then in such event said revised exhibits may be substituted herein without the necessity for amendment of this Agreement. In the event of any changes to Exhibits B or C, CITY will provide thirty (30) days' advanced written notice to AIRLINE before the changes take effect. If the changes modify the current Fiscal Year Rates, AIRLINE will be permitted to comment on the changes prior to them being adopted. Revised Exhibits B and/or C will need to be dated and signed by an authorized representative of the CITY and the AIRLINE. 4.02 Gates and Aircraft Parking Positions. A. Assigned Gates. Gates shall be assigned to Signatory Airlines and leased on a Preferential Use basis in accordance with reasonable and non-discriminatory Aviation Department policy. Only Signatory Airlines are eligible for preferential gate assignments. Gate assignments for each Signatory Airline are identified in C. AIRLINE will have the sole right to the use of Assigned Gates for scheduled and unscheduled flights. Use of an Assigned Gate shall include use of any existing podium, loading bridge and/or associated gate facilities. AIRLINE may install additional gate facilities at its own cost, subject to the approval of the Aviation Department which shall not be unreasonably withheld, conditioned or delayed. Seating in the gate area shall be available to all users of the Terminal Building regardless of AIRLINE association. B. Unassigned Gates. Unassigned gates are available for use by Signatory and Non -Signatory Airlines. Use of Unassigned Gates shall be coordinated in advance with the Aviation, Department. --18-- Approval for such use shall not be unreasonably withheld, conditioned or delayed. Use of unassigned gates shall be subject to the fees and charges specified in Article 5. C. Temporary Reassignment of Gates. The Aviation Department may re -assign gates on a temporary basis to accommodate emergency or extraordinary situations. Such temporary reassignment shall be coordinated with AIRLINE as far in advance as practicable, and shall be accomplished in a manner that has the least possible impact on AIRLINE's operation. D. Permanent Reassignment of Gates. The Aviation Department reserves the reasonable right to permanently reassign gates. Prior to making a decision regarding an involuntary gate reassignment, the Director of Aviation shall consult with the affected AIRLINE or AIRLINES. In the event that AIRLINE does not concur with the reassignment, the decision may be appealed to the Lubbock Preston Smith International Airport Board at its first available regular meeting following notification of the reassignment by the Director of Aviation. The decision of the Lubbock Preston Smith International Airport Board will be final and binding on all parties. In the event of an involuntary gate reassignment, the Aviation Department or instigating AIRLINE, shall be responsible for all costs associated with the relocation of the affected AIRLINE or Signatory Airlines to include but not be limited to cost for relocating and reinstallation of podium, backwall, signage, telecommunication and technology, and associated operations area. E. Termination of Gate Assignments. Subject to interruption in service resulting from events stipulated in Section 15.23, in the event that AIRLINE discontinues use of a gate or gates for scheduled airline service for more than 30 consecutive days, the Aviation Department reserves the right to terminate such assignment(s) and reassign the gate(s) at its discretion. F. Aircraft Parking. AIRLINE shall be entitled to park aircraft at its Assigned Gates or its Shared Gates without prior coordination with the Aviation Department. AIRLINE shall be entitled to park aircraft at Unassigned Gates on a first come/first served basis, subject to the advance coordination requirements outlined in Section 4.02(C) of this Agreement. Aircraft parking at all other locations on the Airport shall be approved by the Aviation Department on a case -by -case basis. 4.03 Employee Parking Facilities. AIRLINE shall, subject to reasonable and non-discriminatory charges as defined in Section 5.04(B), have the right to use the automobile parking facilities for its employees. Such facilities are located in an area designated by the Director of Aviation, however, such area(s) shall not be used for the long-term storage of vehicles or trailers. Long-term shall mean periods greater than two (2) weeks. --19-- 4.04 Construction and Airport Expansion and Inconvenience. Subject to the requirements of Section 4.02(E), CITY shall have the right, at such times as may be reasonable under the circumstances, to close, relocate, reconstruct, change, alter, or modify Airline's Premises and/or the means of access to Airline's Premises pursuant to this Agreement or otherwise, either temporarily or permanently for purposes of maintaining or constructing improvements, modifications, or expansions to the Terminal Building, including construction of Capital Improvements; provided, however, that CITY shall provide: (1) reasonable notice of the construction activities to AIRLINE and (2) adequate means of ingress and egress for Airline's Premises or, in lieu thereof, alternate premises of comparable size and finish to the extent possible with adequate means of ingress and egress, and reimbursements as provided in Section 4.02(E). 4.05 Surrender of Airline's Premises. A. Surrender of Airline's Premises. AIRLINE covenants and agrees that on expiration of the Term of this Agreement, or earlier termination as hereinafter provided, it will peaceably surrender possession of Airline's Premises leased hereunder in the condition in which they existed at the commencement of this lease, normal wear and tear excepted. B. Removal of Trade Fixtures, Equipment and Personal Property. AIRLINE shall have the right, on expiration or early termination of this Agreement and within thirty (30) consecutive calendar days thereafter, to remove or dispose of all trade fixtures and equipment and other personal property placed or installed by it at its expense, in, on, or about the Airport. AIRLINE shall not be entitled to remove permanent or non -trade fixtures without the advance written consent of CITY which consent shall not be unreasonably withheld, conditioned or delayed. C. Removal Damages. In the event AIRLINE removes its trade fixtures and equipment and other personal property described in Section 4.05(B), and/or is allowed to remove its non -trade fixtures and removes such fixtures, AIRLINE shall repair any damage caused by such removal, reasonable wear and tear excepted. Removal and repair shall be at AIRLINE's expense. D. Ownership of Trade Fixtures, Equipment and Personal Property Not Removed. In the event AIRLINE fails to remove its property within thirty (30) consecutive calendar days of the effective date of termination of this Agreement, or such other period of time agreed to in writing by the parties, CITY shall have the option of (1) removing and disposing of AIRLINE property at AIRLINE's expense; or (2) taking title to AIRLINE property. Article 5. RENTALS, FEES, AND CHARGES 5.01 General. AIRLINE shall pay CITY rentals for use of Airline Premises, and fees and charges for the other rights, licenses, and privileges granted hereunder during the Term of this Agreement. The rentals, fees, and charges payable by all Signatory Airlines for the Airfield and, with respect to the Terminal, the rentals, fees, and charges payable by Signatory Airlines leasing space in the Terminal, shall be as set forth in Exhibit E. 5.02 Landiniz Fees. AIRLINE shall pay monthly to CITY fees for Revenue Landings for the preceding month. AIRLINE's Landing Fees shall be determined as the product of the Landing Fee rate for the period, as presented in Exhibit E, attached hereto, and AIRLINE's total Maximum Certificated Gross Landing Weight for the month. AIRLINE's Maximum Certificated Gross Landing Weight for the month shall be determined as the sum of the products obtained by multiplying the Maximum Certificated Gross Landing Weight of each type of AIRLINE's aircraft by the number of Revenue Landings of each said aircraft during such month. 5.03 Terminal Rentals. A. For the Term of this Agreement, AIRLINE's Terminal rentals shall be determined as the sum of AIRLINE's rentals for Preferential Use and Joint Use Premises. AIRLINE's rental payment for Preferential Use Premises shall be determined as the sum of the products obtained by multiplying the rental rate for the period, as presented in Exhibit E, by the amount of the corresponding type of space leased by AIRLINE as Preferential Use Premises as set forth in Exhibits B and C. B. Total Terminal rentals for Joint Use Premises shall be calculated as the product of the Terminal rental rates for the period calculated in accordance with Exhibit E, and the amount of each category of Joint Use Premises. AIRLINE's share of the total Terminal rentals due each month for Joint Use Premises shall be determined in accordance with the Joint Use Formula. C. For inclusion in the Joint Use Formula, AIRLINE shall include in its monthly report of Enplaned Passengers and Deplaned Passengers the total number of Enplaned Passengers and Deplaned Passengers handled or otherwise accommodated by AIRLINE for its Affiliated Airline Companies and other Air Transportation Companies handled by AIRLINE and not having an agreement with CITY that provides for the direct payment to CITY of appropriate charges for the use of Joint Use Premises. --21-- 5.04 Other Fees and Charges. A. CITY expressly reserves the right to assess and collect the following: (1) Reasonable and non-discriminatory fees for services subject to the requirements of Section 3.01P provided by AIRLINE to Air Transportation Companies that are not Signatory Airlines or to AIRLINE by Air Transportation Companies that are not Signatory Airlines subject to requirements of Section 3.010 of this Agreement, if such services or concessions would otherwise be available from a concessionaire or licensee of CITY. (2) Pro rata shares of any charges for the provision of any services or facilities which CITY is required or mandated to provide by any governmental entity (other than CITY acting within its proprietary capacity) having jurisdiction over the Airport. (3) A fuel flowage fee for fuel delivered to AIRLINE's aircraft. Prior to charging the AIRLINE a fuel flowage fee, the Director of Aviation shall consult with AIRLINE or AIRLINES. In the event that AIRLINE does not concur with the fee, the decision may be appealed to the Lubbock Preston Smith International Airport Board at its first available regular meeting following notification of the fee assessment. The decision of the Lubbock Preston Smith International Airport Board will be final and binding on all parties. (4) An aircraft parking charge for aircraft remotely parked for extended periods of time (more than 24 hours) and away from the Terminal Aircraft Aprons. (5) An aircraft parking charge for aircraft parked remotely overnight away from the Terminal Aircraft Aprons. (6) Additional charges for extraordinary usage of electricity or other utilities, facilities, or services provided at the Airport that are greater than the basic utilities, facilities, or services provided that are included in the normal rental rates and landing fees. MOM (7) CITY shall have the right to assess and collect Passenger Facility Charges in accordance with applicable laws and regulations. Proceeds of Passenger Facility Charges shall be used for projects which have been approved through the procedures established by the FAA B. CITY reserves the right to charge AIRLINE or its employees a reasonable and non- discriminatory fee for the employee parking area(s) provided at the Airport and for issuance of Airport identification badges required by 49 CFR Part 1542 of Federal Aviation Regulations. C. AIRLINE shall pay all applicable sales, use, intangible and ad valorem taxes of any kind, against Airline Premises, the real property and any improvements thereto or leasehold estate created herein, or which result from AIRLINE's occupancy or use of Airline Premises whether levied against AIRLINE or CITY. AIRLINE shall also pay any other taxes or assessments against Airline Premises or leasehold estate created herein. CITY agrees to immediately forward to AIRLINE any notices of such taxes and assessments due upon receipt of same. 5.05 Information to be Supplied by AIRLINE. A. Not later than ten (10) days after the end of each month, AIRLINE shall file with CITY separate written reports on forms provided by CITY and included as samples in Exhibit G, attached hereto, for activity conducted by AIRLINE during said month, and for activity handled by AIRLINE for each Air Transportation Company not having an agreement with CITY providing for its own submission of activity data to CITY. Such activity reporting shall include, but not be limited to (1) AIRLINE's total number of aircraft arrivals for the month by type of aircraft, the Maximum Certificated Gross Landing Weight of each aircraft and the total landed weight for the month; (2) total number of enplaned and deplaned passengers, including connecting passengers; (3) the amount of enplaned and deplaned cargo (mail, freight, and express — in pounds) for such month; and (4) the amount of de-ice fluid (in gallons) for such month. B. CITY shall have the right to rely on said activity reports in determining rentals and charges due hereunder. AIRLINE shall have full responsibility for the accuracy of said reports. Payment deficiencies due to incomplete or inaccurate activity reports shall be subject to charges as set forth in Section 5.06E and F. C. AIRLINE shall at all times maintain and keep records reflecting the activity statistics of AIRLINE's activities at the Airport to be reported pursuant to Article S. Such records shall be retained by AIRLINE for a period of three (3) years subsequent to the activities reported therein, or such other retention period as set forth in FAR Part 249, and upon prior written notice to AIRLINE shall be made available at Lubbock, Texas for audit and/or examination by CITY or its duly authorized representative during all normal business hours. AIRLINE shall produce such books and records at Lubbock, Texas within thirty (30) calendar days of CITY's notice to do so or pay all reasonable expenses, including but not limited to transportation, food, and lodging, necessary for an auditor selected by CITY to audit said books and records. D. The cost of audit, with the exception of the aforementioned expenses, shall be borne by CITY; provided, however, the total out-of-pocket cost of said audit shall be borne by AIRLINE if either or both of the following conditions exist: (1) The audit reveals an underpayment of more than ten percent (10%) in aggregate of rentals, fees, and charges due on an annual basis hereunder, as determined by said audit; (2) AIRLINE has failed to maintain true and complete records in accordance with Section 5.05C. E. Whenever AIRLINE or airlines handled by AIRLINE or a ground handling services company add or delete service or adjust the times of flight arrivals or departures, AIRLINE shall promptly provide CITY with a new gate operations schedule no later than the twenty-fifth (25) day of the month on a monthly basis. 5.06 Payments. A. Payments of one -twelfth (1/12) of the total annual rentals for AIRLINE's Preferential Use Premises shall be due in advance, without demand or invoice, on the first day of each month. Said rentals and charges shall be deemed delinquent if payment is not received by the tenth (10) day of the month. B. Payment of AIRLINE's Landing Fees shall be due twenty-five (25) days from CITY's issuance of invoice. C. Payment for Joint Use Premises shall be due twenty-five (25) days from CITY's issuance of invoice. D. Payment for all other fees and charges due hereunder, shall be due twenty-five (25) days from CITY's issuance of invoice. E. CITY shall provide notice of any and all payment delinquencies, including payments of any deficiencies which may be due as a result of CITY's estimates of activity pursuant to Section F below, or due to an audit performed pursuant to Section 5.06C, herein; provided, however, interest at a rate of five percent (5%) annually shall accrue against any and all delinquent payment(s) from the due date until the date payments are received by CITY. This provision shall not preclude CITY from canceling this Agreement for default in the payment of rentals, fees, or charges, or from exercising any other rights contained herein or provided by law. F. In the event AIRLINE fails to submit its monthly activity reports as required in Section 5.05A, CITY may assess to AIRLINE a penalty fee of Two Hundred Fifty Dollars ($250.00) for each day a report is past due. G. In the event AIRLINE's obligations with respect to Airline Premises or rights, licenses, or privileges granted hereunder shall commence or terminate on any date other than the first or last day of the month, AIRLINE's rentals, fees, and charges shall be prorated on the basis of the number of days such premises, facilities, rights, licenses, services, or privileges were enjoyed during that month. H. All payments due and payable hereunder shall be paid in lawful money of the United States of America, without set off, by check made payable to Lubbock Preston Smith International Airport and delivered to: Via U.S. Mail or Express Mail Director of Aviation Lubbock Preston Smith International Airport 5401 N. Martin Luther King Blvd. Unit 389 Lubbock, TX 79403 Payment may be sent electronically to: Wells Fargo Bank ABA #121000248 Bank Acct. #4000047951 5.07 Security for Performance. A. Unless AIRLINE or an Affiliate Airline has provided regularly scheduled flights to and from the Airport during the eighteen (18) months prior to the effective date of this Agreement without the occurrence of any act or omission that would have been an event enumerated in Section 12.01 of this Agreement, if this Agreement had been in effect during that period, and any such act or omission remains uncured, AIRLINE shall provide CITY on the Effective Date of this Agreement with a contract bond, irrevocable letter of credit or other similar security acceptable to CITY ("Contract Security") in an amount equal to the estimate of three (3) months' rentals, fees, and charges payable by AIRLINE (excluding PFCs) pursuant to this Article 5, to guarantee the faithful performance by AIRLINE of its obligations under this Agreement and the payment of all rentals, fees, and charges due hereunder. AIRLINE shall be obligated to maintain such Contract Security in effect until the expiration of twelve (12) consecutive months during which period AIRLINE commits no event enumerated in Section 12.01 of this Agreement. Such Contract Security shall be in a form and with a company reasonably acceptable to CITY and licensed to do business in the State of TEXAS. In the event that any such Contract Security shall be for a period less than the full period required by this Section 5.07A or if Contract Security shall be canceled, AIRLINE shall provide a renewal or replacement Contract Security for the remaining required period at least sixty (60) days prior to the date of such expiration or cancellation. B. In the event CITY is required to draw down or collect against AIRLINE's Contract Security for any reason, AIRLINE shall, within ten (10) business days after CITY's written demand, take such action as may be necessary to replenish the existing Contract Security to its original amount (three months' estimated rentals, fees, and charges) or to provide additional or supplemental Contract Security from another source so that the aggregate of all Contract Security is equal to three months' estimated rentals, fees, and charges payable by AIRLINE pursuant to this Article 5. C. In addition to the foregoing, upon the occurrence of any AIRLINE act or omission that is an event enumerated in Section 12.01, or upon AIRLINE's election to assume this Agreement under Federal Bankruptcy Rules and Regulations and Federal Judgeship Act of 1984 or any successor statute, as such may be amended, supplemented, or replaced, CITY, by written notice to AIRLINE given at any time within ninety (90) days of the date such event becomes known to CITY, may impose or reimpose the requirements of Section 5.07A on AIRLINE. In such event, AIRLINE shall provide CITY with the required Contract Security within ten (10) days from its receipt of such written notice and shall thereafter maintain such Contract Security in effect until the expiration of a period of twelve (12) consecutive months during which AIRLINE commits no additional event enumerated in Section 12.01 or the termination of bankruptcy proceedings, whichever is later. D. If AIRLINE shall fail to obtain and/or keep in force such Contract Security required hereunder, such failure shall be grounds for immediate cancellation of this Agreement pursuant to Section 12.01. CITY'S rights under this Section 5.07 shall be in addition to all other rights and remedies provided to CITY under this Agreement. E. AIRLINE and CITY agree that this Agreement constitutes an `executory contract' for the purposes of Section 365 of the United States Bankruptcy Code (Title 11 USC) subject to assumption or rejection, and subject to the terms and conditions of assumption or rejection, as provided in said Section 365. Furthermore, AIRLINE and CITY agree that any Contract Security provided by AIRLINE are not `property of the estate' for purposes of Section 541 of the United States Bankruptcy Code (Title 11 USC), it being understood that any Contract Security is property of the third party providing it (subject to CITY's ability to draw against the Contract Security) and that all PFCs collected by AIRLINE with respect to Enplaned Passengers at the Airport, are property of CITY. 5.08 No Further Char es. Except as provided in this Agreement, or as may be permitted by any governmental entity (other than CITY, acting within its proprietary capacity) having jurisdiction over the Airport, no further rentals, fees, or charges shall be charged against or collected from AIRLINE, its passengers, its shippers and receivers of freight, its suppliers of material, its contractors or furnisher of services, by CITY, acting in its capacity as Airport proprietor, for the premises, facilities, rights, licenses, and privileges granted to AIRLINE herein. Article 6. CHANGES IN RATES FOR RENTALS, FEES, AND CHARGES 6.01 Annual Rate Changes. No later than sixty (60) days prior to the end of each Fiscal Year, CITY shall, in writing, notify AIRLINE of the proposed Annual Rates and Charges Schedule for the ensuing Fiscal Year. Said rates shall be determined and presented to AIRLINE in conformance with the methods and format set forth in Exhibit E, attached hereto. The Signatory Airlines through the AAC shall have the right to review and comment upon the proposed operating and capital budget and proposed Annual Rates and Charges Sheet. No later than thirty (30) days after the forwarding of the proposed schedule of rates for rentals, fees, and charges, and at the request of one or more of the Signatory Airlines, CITY agrees to meet with the AAC at a mutually convenient time for the purpose of discussing such rentals, fees, and charges. In advance of said meeting, CITY shall make available to the AAC any reasonably requested additional information relating to the determination of the proposed rates. CITY agrees to fully consider the comments and recommendations of the Signatory Airlines prior to finalizing its schedule of rates for rentals, fees, and charges for the ensuing Fiscal Year. Following said meeting and upon approval by the City of Lubbock City Council, but prior to the end of the then current Fiscal Year, CITY shall notify AIRLINE in writing of the Rates for rentals, fees, and charges to be established for the ensuing Fiscal Year, which notifications shall include AIRLINE's monthly fixed costs. If calculation of the new rates for rentals, fees, and charges is not completed by CITY or not given on or prior to the end of the then current Fiscal Year, the rates for rentals, fees, and charges then in effect shall continue to be paid by AIRLINE until such calculations are concluded and such notice is given. Upon the completion of such calculations and the giving of such notice, CITY shall determine the difference(s), if any, between the actual rentals, fees, and charges paid by AIRLINE to date for the then current Fiscal Year and the rates for rentals, fees, and charges that would have been paid by AIRLINE if said rates had been in effect beginning on the first day of the Fiscal Year. Said differences shall be applied to the particular rentals, fees, or charges for which a difference(s) in rates resulted in an overpayment or underpayment, and shall be remitted by AIRLINE or credited or refunded by CITY in the month immediately following the calculation of the new Fiscal Year rates and the giving of written notice to AIRLINE by CITY. CITY shall use its best efforts to finalize its budget on a timely basis. 6.02 Other Rate Changes. Rates for rentals, fees, and charges may be changed if unaudited monthly CITY financial data indicates that total rentals, fees, and charges payable pursuant to the then current rate schedules are reasonably estimated and anticipated by CITY to increase or decrease by more than ten percent (10%) from the total rentals, fees, and charges that would be payable based upon the use of the monthly financial data then available for said Fiscal Year. 6.03 Incorporation of Exhibit E. Adjustments to rates for rentals, fees, and charges but not the methodology of calculating them shall apply without the necessity of formal amendment of this Agreement. Upon each adjustment pursuant to this Article 6, a revised Exhibit E, showing the calculation of adjusted rates for rentals, fees, and charges, shall be prepared by CITY and transmitted to AIRLINE. Said exhibit shall then be deemed part of this Agreement without formal amendment thereto. 6.04 Settlement. Within one hundred eighty (180) days following the close of each Fiscal Year, or as soon as audited financial data for said Fiscal Year is available, rates for Landing Fees and Terminal Rentals for the preceding Fiscal Year shall be recalculated using audited financial data and the methods set forth in this Agreement. Upon the determination of any difference(s) between the actual Landing Fees and Terminal Rentals paid by Signatory Airlines (including Affiliates) during the preceding Fiscal Year and the Landing Fees and Terminal Rentals that would have been paid by Signatory Airlines (including Affiliates) using said recalculated rates, City shall, in the event of overpayment, promptly credit to Airline the amount of such overpayment, reduced by any accounts receivable due City greater than sixty (60) days, and in the event of underpayment, invoice Airline for the amount of such underpayment. Said invoiced amount shall be due within thirty (30) days of invoice mailing date. 6.05 City Covenants. A. CITY covenants that for purposes of assigning and allocating costs, it shall utilize generally accepted accounting practices utilized for airports operating as an enterprise fund, and include only those charges properly attributable to the Airport. B. CITY shall operate the Airport in a manner so as to produce Revenues from concessionaires, tenants, and other users of the Airport of a nature and amount which would be produced by a reasonably prudent operator of an Airport of substantially similar size, use, and activity, with due regard for the interests of the public, tenants and other users, subject to existing leases. C. CITY, to the extent authorized by the laws governing CITY along with all applicable tax laws, will use its best efforts to use tax-exempt sources for financing the Airport and modifications and alterations thereto. D. All rates and charges shall be at reasonable and non-discriminatory rates based on CITY's cost, as defined in this Agreement, of the facility or service provided to and used by AIRLINE. E. Indirect and general administrative costs shall be allocated in a reasonable, transparent cost allocation formula calculated consistently for all Cost Centers . Article 7. OPERATION AND MAINTENANCE OF AIRPORT 7.01 General. CITY agrees that it will, with reasonable diligence, prudently develop, improve, and at all times maintain and operate with adequate, efficient and qualified personnel and keep the Airport in good repair including, without limitation, the Terminal Building, Loading Bridges, Terminal Apron and Airfield, and all appurtenances, facilities, and services now or hereafter connected therewith as the same relate to AIRLINE's air transportation system; will keep the Airport and its aerial approaches free from obstruction and interference for the safe and proper use thereof by AIRLINE; and will develop, maintain, and operate the Airport in all respects in a manner at least equal to the standards or rating established by the FAA and any other governmental agency having jurisdiction thereof, except for conditions beyond the control of CITY. In addition to the obligations of AIRLINE and CITY set forth in this Article 6, responsibilities for maintenance, cleaning, and operation of the Airport shall be as set forth in Exhibit D, attached hereto and made a part hereof. 7.02 Terminal Building. A. CITY shall operate and maintain and keep in good condition and repair the Terminal Building, loading bridges and all additions, improvements, facilities, and other equipment now or hereafter provided by CITY at or in connection with the Terminal Building and loading bridges, except any improvements, facilities, and equipment constructed or installed by AIRLINE. CITY agrees in the event that an assigned loading bridge becomes inoperable during the Term of this Agreement, and CITY is unable to repair it within a reasonable amount of time, CITY will replace such loading bridge at its own cost, or reassign the loading bridge in accordance with Section 4.02E. B. CITY shall at all times maintain the public area of the Terminal Building in a neat, orderly, sanitary, and presentable condition, and shall keep such area adequately supplied, equipped (including directional signs), furnished, and decorated. C. CITY shall supply or cause to be supplied appropriate and adequate equipment and maintenance for air conditioning, electrical power, ventilation, heat, water, and sewerage facilities for Terminal Building public use areas, AIRLINE's Preferential Use Space and Joint Use Premises; adequate illumination in Joint Use Premises; and janitorial service in Terminal Building public use areas and Joint Use Premises. D. AIRLINE shall at all times keep its Preferential Use Space and Joint Use Premises neat, --31-- orderly, sanitary, and presentable. AIRLINE shall pay for all extraordinary electric power and shall be responsible for relamping its Preferential Use Space. AIRLINE shall furnish its own janitorial service for such Preferential Use Space and shall cause to be removed at AIRLINE's own expense from such Preferential Use Space all waste, garbage, and rubbish, and agrees not to deposit the same on any part of the Airport, except where designated by CITY in connection with collection for removal. AIRLINE shall, at its own expense, transport all refuse from temporary storage to designated depositories at locations on the Airport as established by CITY. E. AIRLINE shall maintain the Terminal Aircraft Apron contiguous to its assigned gates and such other apron areas used by AIRLINE from time -to -time in a neat, clean, and orderly condition, free from litter, debris, refuse, petroleum products, or grease that may result from activities of its passengers, employees, agents, suppliers or contractors, and remove all oil and grease spillage, as is reasonably possible, that is attributable to AIRLINE's aircraft or equipment from its aircraft parking positions. F. AIRLINE shall perform, at its sole expense, ordinary preventive maintenance and ordinary upkeep and repair of all facilities, personal property, trade fixtures, and equipment located in its Preferential Use Space, excluding structural and roof repairs and including, but not limited to, fixtures, interior doors and windows, baggage conveyors and belts, floor coverings, and ticket counters. 7.03 CITY's Right to Inspect and Make Repairs. CITY, by its authorized officers, employees, agents, contractors, subcontractors, and other representatives, shall have the right (upon prior notice and at such times as may be reasonable under the circumstances and with as little interruption of AIRLINE's operations as is reasonably practicable) to enter upon the AIRLINE's Preferential Use Space, accompanied by an authorized AIRLINE representative, if practicable, for the following purposes: A. CITY shall have the right, but not the obligation, to inspect such space to determine whether AIRLINE has complied and is in compliance with the terms and conditions of this Agreement. Such inspections shall not constitute an inspection for safety, fire protection or security purposes. B. Upon thirty (30) consecutive calendar days' notice, to perform such maintenance, cleaning, or repair as CITY reasonably deems necessary, if AIRLINE fails to perform its obligations under this Article 7. CITY shall be entitled to recover the reasonable cost of such maintenance, cleaning, or repair from AIRLINE, plus a fifteen percent (15%) administrative charge from AIRLINE on the next rent date. 7.04 Alterations and Improvements. A. Alterations and Improvements. AIRLINE shall make no alterations, additions, improvements to, or installations on Airline's Premises under this Agreement without the prior written approval of Director of Aviation; provided that such approval shall not be unreasonably withheld, conditioned or delayed. Plans and specifications for such work shall be filed with and subject to the approval of the Director of Aviation and all work shall be done in accordance with local ordinances and state law. Subject to Sections 4.05(B) and (C), all alterations and improvements to Airline's Premises inclusive of outbound baggage system and ticket counter shall become part of the realty and title shall vest with CITY upon completion of the installation or construction of such alterations and/or improvements. Removal of trade fixtures shall be allowed only pursuant to Sections 4.05(B) and (C). B. Payment for Alterations and Improvements. AIRLINE shall be solely responsible for payment for all Leasehold Improvements made by AIRLINE. 7.05 Debts, Liens, Mortgages. AIRLINE shall pay promptly when due, all bills, debts and obligations incurred by AIRLINE in connection with its operations or activities on the Airport, and shall not permit the same to become delinquent. AIRLINE shall not permit any mechanics' or materialmen's or any other lien to be attached to or be foreclosed upon Airline's Premises or improvements thereto. AIRLINE shall suffer no lien, mortgage, judgment or execution to be filed and remain undischarged against Airline's Premises or improvements thereon. Article & DAMAGE OR DESTRUCTION OF AIRLINE'S PREMISES 8.01 Minor Damage. If any part of Airline Premises, or adjacent facilities directly and substantially affecting the use of Airline Premises, shall be partially damaged by fire or other casualty, but said circumstances do not render Airline Premises untenable as reasonably determined by CITY, the same shall be repaired to usable condition with due diligence by CITY as hereinafter provided. No abatement of rentals shall accrue to AIRLINE so long as Airline Premises remain tenantable. 8.02 Substantial Damage. If any part of Airline Premises, or adjacent facilities directly and substantially affecting the use of Airline Premises, shall be so extensively damaged by fire or other casualty as to render any portion of said Airline Premises untenable but capable of being repaired within a reasonable period of time, as reasonably determined by CITY, the same shall be repaired to usable condition with due diligence by CITY as hereinafter provided. If such repairs have not been completed by CITY within one hundred eighty (180) days of such damage, AIRLINE shall have the option to terminate its agreement related to those facilities so damaged. In such case, the rentals payable hereunder with respect to AIRLINE's affected Airline Premises shall be paid up to the time of such damage and shall thereafter be abated equitably in proportion as the part of the area rendered untenable bears to total Airline Premises until such time as such affected Airline Premises shall be restored adequately for AIRLINE's use. CITY shall use its best efforts to provide AIRLINE with alternate facilities acceptable to AIRLINE to continue its operation while repairs are being completed, at a rental rate not to exceed that provided for in this Agreement for comparable space; provided that Airline's rental fees shall in no event increase as a result of increased square footage unless Airline requests additional space. 8.03 Destruction. If any part of Airline Premises, or adjacent facilities directly and substantially affecting the use of Airline Premises, shall be damaged by fire or other casualty, and is so extensively damaged as to render any portion of said Airline Premises not economically feasible to repair, as reasonably determined by CITY, CITY shall notify AIRLINE within a period of sixty (60) days after the date of such damage of its decision whether to reconstruct or replace said space; provided, however, CITY shall be under no obligation to replace or reconstruct such premises. The rentals payable hereunder with respect to affected Airline Premises shall be paid up to the time of such damage and thereafter shall abate in the same manner as set forth in Article 10.02 until such time as replacement or reconstructed space becomes available for use by AIRLINE. In the event CITY elects to reconstruct or replace affected Airline Premises, CITY and AIRLINE will coordinate and agree on a reasonable schedule for reconstruction or replacement. CITY shall use its best efforts to provide AIRLINE with alternate facilities reasonably acceptable to AIRLINE to continue its operation while reconstruction or replacement is being completed at a rental rate not to exceed that provided for in this Agreement for comparable space. In the event CITY elects to not reconstruct or replace affected Airline Premises, the agreement for the affected premises shall be terminated, and CITY shall meet and consult with AIRLINE on ways and means to permanently provide AIRLINE with adequate replacement space for affected Airline Premises. In such event, CITY agrees to amend this Agreement to reflect related additions and deletions to Airline Premises. If AIRLINE and CITY are unable to reach an agreement on providing adequate replacement space to AIRLINE, and the remaining tenable portion of Airline Premises is not sufficient to permit AIRLINE to maintain its current operations at the Airport, AIRLINE may terminate this entire Agreement upon at least sixty (60) days advance written notice given after receipt by AIRLINE of notice of termination of the Agreement as to the damaged facilities. 8.04 Damage Caused By AIRLINE. Notwithstanding the provisions of this Article 10, in the event that due to the negligence or willful act or omission of AIRLINE, its employees, its agents, or licensees, Airline Premises shall be damaged or destroyed by fire, other casualty or otherwise, there shall be no abatement of rent during the repair or replacement of said Airline Premises. To the extent that insurance does not apply, coverage is denied, or the costs of repairs shall exceed the amount of any insurance proceeds paid to CITY by reason of such damage or destruction, AIRLINE shall pay to CITY the amount of CITY's cost to repair or rebuild the AIRLINE premises less the amount of the insurance proceeds paid to CITY. 8.05 CITY's Responsibilities. CITY shall maintain adequate, reasonable and customary levels of insurance with no less restrictive coverage than that provided by standard extended coverage endorsements on the "all risk" form, for the full replacement costs thereof as determined from time -to -time by the CITY's insurance consultant; provided, however, that CITY's obligations to repair, reconstruct, or replace affected premises under the provisions of this Article 10 shall in any event be limited to restoring affected Airline Premises to substantially the same condition that existed at the date of damage or destruction, including any subsequent improvements made by CITY, and shall further be limited to the extent of insurance proceeds and other funds available to CITY for such repair, reconstruction, or replacement; provided further that CITY shall in no way be responsible for the restoration or replacement of any equipment, furnishings, property, real improvements, signs, or other items installed and/or owned by AIRLINE in accordance with this Agreement, unless such damage is caused by negligence or willful act or omission of CITY, its officials, agents, contractors or employees acting within the course or scope of their employment. Article 9. INSURANCE AND INDEMNIFICATION 9.01 Indemnification. Except where, and to the extent, it is caused by the negligence or willful misconduct of CITY, or its agents, employees, contractors, officers or board of the CITY, AIRLINE and its Affiliates agree to protect, defend, reimburse, indemnify and hold CITY, its agents, employees, board members and elected officers and each of them, free and harmless at all times from and against any and all claims, liability, expenses, losses, costs, fines and damages (including actually incurred reasonable attorney's fees and costs, as well as fees and costs of consultants and experts reasonably and actually incurred in connection with the indemnified incident) and causes of action of every kind and character, whether or not meritorious, against or from CITY by reason of any damage to property , or bodily injury (including death) incurred or sustained by any party hereto, any agent or employee of any party hereto, and any third or other party whomsoever, or any governmental agency, arising out of or incident to or in connection with AIRLINE's negligent performance under this Agreement, AIRLINE's or an officer, employee, agent, licensees, or contractor of AIRLINE's use or occupancy of the Airline Premises, AIRLINE's compliance with Title 49 CFR, Part 1541 requirements, AIRLINE's negligent acts, omissions or operations hereunder or the performance, non-performance or purported performance of AIRLINE or any breach of the terms of this Agreement by AIRLINE. AIRLINE shall indemnify, save, hold harmless, reimburse and defend CITY, its officer, directors, employees and agents, its successors and assigns, individually or collectively, from and against any and all actions, all reasonable expenses, and any fines which in any way arise from or are based upon the violation of any federal, state, or municipal laws, statutes, ordinances, or regulations, by AIRLINE, its officers, directors, agents, employees, licensees, successors and assigns, or those under its control. Provided, however, that upon the filing by anyone of a claim with the CITY for damages arising out of incidents for which AIRLINE herein agrees to indemnify and hold the CITY harmless, the CITY shall promptly notify AIRLINE of such claim and, in the event that AIRLINE does not settle or compromise such claim, then AIRLINE shall undertake the legal defense, with legal counsel reasonably approved by the CITY, of such claim both on behalf of AIRLINE and on behalf of the CITY. It is specifically agreed, however, that the CITY, at its option and at its own expense, may participate in the legal defense of such claim. Any final judgment rendered against the CITY for any cause for which CITY provided the required notice and for which AIRLINE is liable hereunder shall be conclusive against AIRLINE as to liability and amount upon the expiration of the time for appeal there from. AIRLINE recognizes the broad nature of this indemnification and hold harmless clause, and voluntarily makes this covenant and expressly acknowledges the receipt of Ten Dollars ($10.00) and such other good and valuable consideration provided by CITY in support of this indemnification in accordance with laws of the State of Texas. To the extent permitted by law, CITY shall indemnify, save, hold harmless, and defend AIRLINE, its officials, agents and employees, its successors and assigns, individually or collectively, from and against any claim action, loss, damage, injury, liability, and the cost and expense of whatsoever kind or nature (including, but not limited to reasonable attorneys' fees, disbursements, court costs, and expert fees) based upon injury to persons, including death, or damage to property arising out of or resulting from CITY's failure to perform its obligations under this Agreement, except to the extent that such injury, death or damage is caused by the negligence or willful misconduct of AIRLINE, its officers, employees or agents. This clause shall survive the termination of this Agreement as to claims arising during the Term thereof. Compliance with the insurance requirements of this Article 8 shall not relieve AIRLINE of its liability or obligation to indemnify CITY as set forth in this Article 8. Notwithstanding the foregoing or any other provision in this Agreement, the liability of the CITY, as set forth in this Article or otherwise set forth in this Agreement, is intended to be consistent with limitations of Texas law, including without limitation the state's waiver of sovereign immunity pursuant to Texas Statutes. No obligation imposed by this Agreement shall be deemed to alter said waiver or to extend the liability of the CITY beyond such limits, nor shall any such obligation be deemed or construed as a waiver of any defense of sovereign immunity to which the CITY may be entitled. 9.02 Insurance. A. During the Term of this Agreement, AIRLINE shall provide, pay for and maintain with companies, reasonably satisfactory to CITY, the types of insurance described herein. All insurance shall be issued by responsible insurance companies reasonably acceptable by the CITY and eligible to do business in the State of Texas. B. The insurance coverage and limits required shall be evidenced by providing City with properly executed certificates of insurance. These certificates shall be signed by the authorized representative of the insurance company shown on the certificate. In addition, if reasonably requested, insurance policies shall be made available to CITY for review, but not for copying, at AIRLINE's offices, on a timely basis. The required policies of insurance shall be construed in accordance with the laws of the State of Texas. C. If at any time CITY requests a written statement as to any impairments to the aggregate limit, AIRLINE shall promptly authorize and have delivered such statement to CITY. AIRLINE authorizes CITY and its insurance consultant to confirm with AIRLINE's insurance agents, and brokers all information furnished CITY, as to its compliance with its insurance requirements. D. All required liability insurance coverages of AIRLINE shall be primary and non- contributory to any insurance or self-insurance program of CITY. E. The acceptance of delivery to CITY of any certificate of insurance evidencing the insurance coverages and limits required in this Agreement does not constitute approval or acceptance by CITY that the insurance requirements in this Agreement have been met. F. No operations shall commence at the Airport unless and until the required insurance is in effect and the required certificates (s) of insurance has been approved by CITY. G. The insurance coverages and limits required of AIRLINE and its Affiliates under this Agreement are designed to meet the minimum requirements of CITY. They are not designed as a recommended insurance program for AIRLINE. AIRLINE is responsible for insuring its real and personal property located at the Airport. AIRLINE, alone, shall be responsible for the sufficiency of its own insurance program and its Affiliates' programs. Should AIRLINE have any question concerning its exposures to loss under this Agreement, or the possible insurance coverages needed therefore, it should seek professional advice. H. AIRLINE and CITY understand and agree that the minimum limits of the insurance herein required may from time -to -time become inadequate, and AIRLINE agrees that it will increase such minimum limits as reasonably required by CITY upon receipt of written notice. AIRLINE shall furnish CITY, within sixty (60) days of the effective date thereof, a certificate of insurance evidencing such insurance is in force for itself and its Affiliates. I. AIRLINE's insurance companies or its authorized representative shall give CITY thirty (30) days prior written notice by regular mail of any cancellation, intent not to renew in any policy's coverage, except in the application of the Aggregate Limits Provisions. In the event of a reduction to the Aggregate Limit, it is agreed that immediate steps will be taken to have it reinstated. Said notices shall be sent to the addresses indicated in Article 14 of this Agreement. J. Certificates of Insurance must be provided to CITY as soon as practical but no later than 30 days after coverage is effective but in every instance proof of insurance must be provided prior to commencement of operations by AIRLINE and its Affiliates and prior to expiration of current coverages. The wording of all policies, forms, and endorsements must be reasonably acceptable to the CITY. (1) Workers Compensation — Policy shall include a waiver of subrogation. (2) Liability Insurance —All policies (except Terrorism/War and Environmental) shall include a waiver of subrogation and City shall be named an additional insured on a primary and non-contributory basis K. .Should at any time AIRLINE not, in the opinion of CITY's insurance consultant, provide or maintain the insurance coverages required in this Agreement, CITY may terminate or suspend this Agreement. L. The amounts and types of insurance shall conform to the following minimum requirements. (1) Workers Compensation and Employer's Liability Insurance shall be maintained in force by AIRLINE during the Term of this Agreement for all employees engaged in the operations under this Agreement. AIRLINE shall elect to obtain workers' compensation coverage pursuant to Section 406.002 of the Texas Labor Code. Further, AIRLINE shall maintain said coverage throughout the term of this contract and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure that the AIRLINE maintains said coverage. Any termination of workers' compensation insurance coverage by AIRLINE or any cancellation or non -renewal of workers' compensation insurance coverage for the AIRLINE shall be a material breach of this contract. The policy must be endorsed to include a waiver of subrogation in favor of the City of Lubbock. The minimum limits of Workers' Compensation/Employer's Liability insurance (inclusive of any amount provided by an umbrella or excess policy) are: Worker's Compensation Texas Statutory Employer's Liability $1,000,000 Limit Each Accident $1,000,000 Limit Disease Aggregate $1,000,000 Limit Disease Each Employee (2) Aviation Liability Insurance shall be maintained by AIRLINE for the life of this Agreement. Coverage shall include, but not be limited to, Premises and Operations, Personal Injury, Contractual for this Agreement, Independent Contractors, Broad Form Property Damage, Products and completed Operations Coverage and shall not exclude the (XCU) Explosion, Collapse and Underground Property Damage Liability Coverage. Coverage shall be applicable to the operation of all mobile and ground equipment at the Airport. The Completed Operations Coverage shall be maintained for a period of not less than two (2) years following final operations of AIRLINE under this Agreement. The limits of coverage shall not be less than: Airlines Operating Aircraft with fifty (50) or more seats: Bodily & Personal Injury $250,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate $25,000,000 Aggregate sublimit for personal injury to non -passengers Airlines Operating Aircraft with less than fift (50) seats: Bodily & Personal Injury $25,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate (3) Aircraft Liability Insurance shall be maintained by AIRLINE during the Term of this Agreement for all owned, non -owned, leased or hired aircraft, including passenger coverage. The limits of coverage shall not be less than: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate $25,000,000 Aggregate sublimit for personal injury to non -passengers (4) Business Automobile Liability Insurance shall be maintained by AIRLINE during the Term of this Agreement as to the ownership, maintenance, and use of all owned, non -owned, leased or hired licensed vehicles. The limits of coverage shall not be less than: Bodily & Personal Injury $5,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate MEAKE (5) Umbrella Liability Insurance or Excess Liability Insurance may be used to reach the limits of liability required for the Airport Liability Policy, Aircraft Liability and the Business Automobile Liability Policy. The limits of coverage shall not be less than: Umbrella or Excess Liability Policy $100,000,000 Combined Single Limit Each Occurrence & Aggregate -Specific for this Agreement $200,000,000 Combined Single Limit Each Occurrence & Aggregate -Not Specific for this Agreement Primary Liability Limits for the underlying Airport General Liability Coverage: Bodily & Personal Injury $10,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate (6) Terrorism/War coverage with a $25,000,000 limit (7) With regard to Environmental Liability, AIRLINE must meet one of the following requirements: a. AIRLINE has Environmental Liability (pollution liability) with a $5,000,000 limit; OR b. AIRLINE may self -insure the Environmental Liability if AIRLINE complies with all state requirements. If Airline violates any aspect of its responsibilities as a self -insurer, the City reserves the right to, and may, in its sole discretion, immediately rescind acceptance of such self- insurance and Airline will be required to purchase Environmental insurance in the amount identified in Article 8.02.1, (7) a and provide the City proof of such insurance within thirty (30) calendar days. --41-- Article 10. TRANSFER OF AIRLINE'S PREMISES BY ASSIGNMENT OR SUBLETTING 10.01 General. AIRLINE, except to assign or sublet to Affiliate Airline (or except as otherwise provided in Section 10.02), shall not assign, transfer, convey, sell, mortgage, pledge or encumber (hereinafter collectively referred to as "assignment") or sublet Airline's Premises without the advance written approval of CITY, which approval shall not be unreasonably withheld, conditioned or delayed. If AIRLINE fails to obtain advance written approval of any such assignment or sublease, CITY, in addition to the rights and remedies set forth in Article 12, shall have the right to refuse to recognize such agreement, and the assignee or sublessee shall acquire no interest in this Agreement or any rights to use Airline's Premises. 10,02 CITY Approval of Assignments. Notwithstanding the foregoing, this Section shall not be interpreted to preclude the assignment, in whole or in part, of this Agreement and AIRLINE's rights and obligations hereunder to a parent, subsidiary, merged company or any purchaser of all or substantially all of AIRLINE'S assets if such parent, subsidiary, merged company or any purchaser of all or substantially all of AIRLINE'S assets continues, after such assignment, to conduct an air transportation business at the Airport and assumes all rights and obligations consistent with the provisions of this Agreement. Written notice of such assumption shall be provided by the parent, subsidiary, merged company or any purchaser of all or substantially all of AIRLINE'S assets thirty (30) consecutive calendar days after the effective date of such assignment. 10.03 CITY Approval of Subleases. It shall not be unreasonable for CITY to disapprove or condition a sublease of Airline's Premises under any or all of the following circumstances, among others: A. If the sublessee is an air transportation company other than an Affiliated Airline who is not, and is not willing to become, a Signatory Airline. B. If a Signatory Airline is, in the determination of CITY, in need of Airline's Premises proposed to be subleased (where CITY"s consent is otherwise required); provided, however, that such Signatory Airline is willing to take such Airline's Premises on substantially the same terms and conditions as proposed in the sublease and is willing to (i) provide AIRLINE with a reasonable security deposit not to exceed one month's rentals, fees, and charges and (ii) otherwise enter into a sublease agreement with Airline in form and substance reasonably acceptable to Airline. 10.04 Reasons for Disapproval Not Comprehensive. The circumstances under which CITY may determine to disapprove or condition assignments and subleases set forth in this Article 10 are not intended to be a comprehensive list of all those which CITY may impose under Article 10. 10.05 Method of Obtaining Approval. AIRLINE, when requesting an approval of an assignment or sublease required under Section 10.01, shall include with its request a copy of the proposed agreement, if prepared, or a detailed summary of the material terms and conditions to be contained in such agreement. Any proposed agreement or detailed summary thereof shall provide the following information: (1) Airline's Premises to be assigned or sublet; (2) the terms; (3) if a sublease, the rentals and fees to be charged; and (4) all material terms and conditions of the assignment or sublease CITY may reasonably require. If approved, AIRLINE shall submit a fully executed copy of such agreement to CITY within thirty (30) consecutive calendar days prior to the commencement of the assignment or sublease. 10.06 Administrative Charge. In the event AIRLINE is authorized by CITY to sublease any portion of Airline's Premises, AIRLINE may charge such sublessee, in addition to a reasonable charge for any services and AIRLINE -owned property provided by AIRLINE or actual costs other than rental costs incurred by AIRLINE, reasonable rentals not to exceed one hundred fifteen percent (115%) of AIRLINE's rental for such portion of Airline's Premises. 10.07 AIRLINE to Remain Liable. AIRLINE shall remain fully and primarily liable during the Term of this Agreement for the payment of all of the rental due and payable to CITY for the Airline's Premises that are subject to a sublease under this Article 10, and fully responsible for the performance of all the other obligations hereunder, unless otherwise agreed to by CITY. 10.08 CITY Determination of Type of Agreement. CITY shall have the right to examine the terms of any agreement or arrangement submitted to it for approval pursuant to this Article 10 and determine whether such agreement or arrangement is most appropriately characterized as an assignment or sublease, regardless of AIRLINE's characterization of such agreement or arrangement. Article 11. RELINQUISI LUENT OF AIRLINE'S PREMISES 11.01 Notice of Intent to Relinquish Airline's Premises. In the event AIRLINE desires to relinquish any of Airline's Premises, AIRLINE shall provide written notice to CITY thirty (30) consecutive calendar days in advance of such relinquishment and shall identify in such notice all areas it wishes to relinquish. CITY shall make its best efforts to lease such areas to another airline, to the extent the proposed relinquished Airline's Premises are suitable for another airline, and subject to the limitations of Article 10. 11.02 Non -Waiver of Responsibility. AIRLINE shall continue to be solely responsible pursuant to this Agreement for the payment of all rentals, fees, and charges related to Airline's Premises until another airline commences payment for the relinquished part of Airline's Premises as provided in Section 11.03. 11.03 Reduction of Rent, Fees, and charges. AIRLINE's rentals, fees, and charges related to that portion of Airline's Premises taken by another airline, pursuant to such airline's agreement with CITY, shall be reduced in the amount of the rentals, fees, and charges payable by such other airline. This reduction shall begin only when the new airline that contracts with CITY for its use of the relinquished part of Airline's Premises begins payment for such relinquished part of Airline's Premises. Article 12. CANCELLATION BY CITY 12.01 Events of Default The events described below shall be deemed events of default by AIRLINE hereunder: A. Upon the occurrence of any one of the following events of default, CITY may give thirty (30) days written notice as provided in Section 12.03. (1) The conduct of any business or performance of any acts at the Airport not specifically authorized herein or by other agreements between CITY and AIRLINE, and said business or acts do not cease within thirty (30) days of receipt of CITY's written notice to cease said business or acts. (2) The failure to cure a default in the performance of any of the terms, covenants, and conditions required herein (except Contract Security requirements, insurance requirements, and payment of rentals, fees, and charges, all as provided for in Section 11.01(B) within thirty (30) days of receipt of written notice by CITY to do so; or if by reason of the nature of such default, the same cannot be remedied within thirty (30) days following receipt by AIRLINE of written demand from CITY to do so, AIRLINE fails to commence the remedying of such default within said thirty (30) days following such written notice, or having so commenced, shall fail thereafter to continue with diligence the curing thereof. AIRLINE shall have the burden of proof to demonstrate (i) that the default cannot be cured within thirty (30) days, and (ii) that it is proceeding with diligence to cure said default, and that such default will be cured within a reasonable period of time. (3) The failure by AIRLINE to remit PFCs in accordance with Article 15. B. Upon the occurrence of any one of the following events of default, CITY may immediately issue written notice of default. (1) The failure by AIRLINE to pay any part of the rentals, fees, and charges due hereunder and the continued failure to pay said amounts in full within thirty (30) days of CITY's written notice of payments past due. Provided, however, if a dispute arises between CITY and AIRLINE with respect to any obligation or alleged obligation of AIRLINE to make payments to CITY, payments under protest by AIRLINE of the amount due shall not waive any of AIRLINE's rights to contest the validity or amount of such payment. In the event any court or other body having jurisdiction determines all or any part of the protested payment shall not be due, then CITY shall promptly reimburse AIRLINE any amount determined as not due plus interest on such amount at the lesser of one and one-half percent (1-1/2%) per month or the maximum permitted by law. (2) The failure by AIRLINE to provide and keep in force Contract Security in accordance with Section 5.07. (3) The failure by AIRLINE to provide and keep in force insurance coverage in accordance with Article 9. (4) The appointment of a trustee, custodian, or receiver of all or a substantial portion of AIRLINE's assets. (5) The divestiture of AIRLINE's estate herein by operation of law, by dissolution, or by liquidation, (not including a merger or sale of assets). (6) The insolvency of AIRLINE; or if AIRLINE shall take the benefit of any present or future insolvency statute, shall make a general assignment for the benefit of creditors, or shall seek a reorganization or the readjustment of its indebtedness under any law or statute of the United States or of any state thereof including the filing by AIRLINE of a voluntary petition of bankruptcy or the institution of proceedings against AIRLINE for the adjudication of AIRLINE as a bankrupt pursuant thereto. (7) The abandonment by AIRLINE of the Airline Premises, or its conduct of business at the Airport; and, in this connection, suspension of operations for a period of sixty (60) days will be considered abandonment. 12.02 Continuing Responsibilities of AIRLINE. Notwithstanding the occurrence of any event of default, AIRLINE shall remain liable to CITY for all rentals, fees, and charges payable hereunder and for all preceding breaches of any covenant of this Agreement. Furthermore, unless CITY elects to cancel this Agreement, AIRLINE shall remain liable for and promptly pay all rentals, fees, and charges accruing hereunder until termination of this Agreement as set forth in Article 5 or until this Agreement is canceled by AIRLINE pursuant to Article 13. 12.03 CITY's Remedies. Upon the occurrence of any event enumerated in Sections 12.01 A, or 12.01 B, including applicable notice and cure periods, the following remedies shall be available to CITY: A. CITY may exercise any remedy provided by law or in equity, including but not limited to the remedies hereinafter specified. B. CITY may cancel this Agreement, effective upon the date specified in the notice of cancellation. For events enumerated in Section 12.01 A, such date shall be not less than thirty (30) days from said notice. Upon such date, AIRLINE shall be deemed to have no further rights hereunder and CITY shall have the right to take immediate possession of AIRLINE's Airline Premises. C. CITY may reenter the Airline Premises and may remove all AIRLINE persons and property from same upon the date of reentry specified in CITY's written notice of reentry to AIRLINE. For events enumerated in Section 11.01 A, reentry shall be not less than thirty (30) days from the date of notice of reentry. Upon any removal of AIRLINE property by CITY hereunder, AIRLINE property may be stored at a public warehouse or elsewhere at AIRLINE's sole cost and expense. D. CITY may relet Airline Premises and any improvements thereon or any part thereof at such rentals, fees, and charges and upon such other terms and conditions as CITY, in its sole discretion, may deem advisable, with the right to make alterations, repairs of improvements on said Airline Premises. In reletting the Airline Premises, CITY shall be obligated to make a good faith effort to obtain terms comparable to those contained herein and otherwise seek to mitigate any damages it may suffer as a result of AIRLINE's event of default. E. In the event that CITY relets Airline Premises, rentals, fees, and charges received by CITY from such reletting shall be applied: (i) to the payment of any indebtedness other than rentals, fees, and charges due hereunder from AIRLINE to CITY; (ii) to the payment of any cost of such reletting; and (iii) to the payment of rentals, fees, and charges due and unpaid hereunder. The residue, if any, shall be held by CITY and applied in payment of future rentals, fees, and charges as the same may become due and payable hereunder. If that portion of such rentals, fees, and charges received from such reletting and applied to the payment of rentals, fees, and charges hereunder is less than the rentals, fees, and charges as would have been payable during applicable periods by AIRLINE hereunder, then AIRLINE shall pay such deficiency to CITY. AIRLINE shall also pay to CITY, as soon as ascertained, any reasonable costs and expenses incurred by CITY in such reletting not covered by the rentals, fees, and charges received from such reletting. F. No reentry or reletting of Airline Premises by CITY shall be construed as an election on CITY'S part to cancel this Agreement unless a written notice of cancellation is given to AIRLINE. G. AIRLINE shall pay to CITY all other costs, incurred by CITY in the exercise of any remedy in this Article 12, including, but not limited to, reasonable attorney fees, disbursements, court costs, and expert fees. 12.04 Remedies Under Federal Bankruptcy Laws. Notwithstanding the foregoing, upon the filing by or against AIRLINE of any proceeding under Federal bankruptcy laws, if AIRLINE has defaulted in the performance of any provision of this Agreement within the six (6) months preceding such filing, CITY shall have the right to cancel this Agreement, in addition to other remedies provided under provisions of the Federal Bankruptcy Rules and Regulations and Federal Judgeship Act of 1984, as such may be subsequently amended, supplemented, or replaced. Such cancellation shall be by written notice to AIRLINE within sixty (60) days from the date of AIRLINE's initial filing in bankruptcy court. Article 13. CANCELLATION BY AIRLINE 13.01 Events of Default. The events described below shall be deemed events of default by CITY hereunder: A. CITY fails to keep, perform, or observe any material term, covenant, or condition herein contained, to be kept, performed, or observed by CITY and such failure continues for thirty (30) days after receipt of written notice from AIRLINE; or, if by its nature such default cannot be cured within such thirty (30) day period, CITY shall not commence to cure or remove such default within said thirty (30) days and to cure or remove the same as promptly as reasonably practicable; provided, however, CITY's performance under this Section. B. Airport is closed to flights in general or to the flights of AIRLINE, for reasons other than those circumstances within AIRLINE's control, and Airport fails to be reopened to such flights within sixty (60) consecutive days from such closure. C. The United States Government or any authorized agency of the same (by executive order or otherwise) assumes the operation, control, or use of the Airport in such a manner as to substantially restrict AIRLINE from conducting its operations, if such restriction be continued for a period of sixty (60) consecutive days or more. 13.02 AIRLINE's Remedy. So long as AIRLINE is not in default as set forth in Section 12.01 of this Agreement, including but not limited to payments due to CITY hereunder, AIRLINE may cancel this Agreement upon the occurrence of an event of default, as set forth in Section 13.01. In such event, AIRLINE shall serve thirty (30) day advance written notice of cancellation to CITY. All rentals, fees, and charges payable by AIRLINE shall cease as of the date of such cancellation and AIRLINE shall surrender the Airline Premises in accordance with Section 4.05 hereof. Article 14. GOVERNMENT INCLUSION 14.01 Government Agreements. A. This Agreement shall be subordinate to the provisions of any existing or future agreements between CITY and the United States Government or State of Texas, relative to the operation or maintenance of the Airport, the execution of which has been or will be required as a condition precedent to the granting of Federal or other governmental funds for the development of the Airport, to the extent that the provisions of any such existing or future agreements are generally required by the United States or other governmental CITY of other civil airports receiving such funds. CITY agrees to provide AIRLINE written advance notice of any provisions that would adversely modify the material terms of this Agreement. B. Nothing contained in this Agreement is intended, nor shall be construed, as a waiver by either party of any right to assert any claim or defense, or raise any issue in any context or forum including, but not limited to, a court or administrative forum, regarding the preemption by federal law, including but not limited to the Airline Deregulation Act (49 U.S.C. §41713), any state or local law or ordinance, or the Airport Rules and Regulations or the Operating Directives described in Article 14.07. 14.02 Federal Government's Emergency Clause. All provisions of this Agreement shall be subordinate to the rights of the United States of America to operate the Airport or any part thereof during time of war or national emergency. Such rights shall supersede any provisions of this Agreement inconsistent with the operations of the Airport by the United States of America. 14.03 Nondiscrimination. A. AIRLINE for itself, its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby agree as a covenant running with the land that (i) no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of Airline Premises, (ii) in the construction of any improvements on, over, or under Airline Premises and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination, and (iii) AIRLINE shall use the Airline Premises in compliance with all other requirements imposed by or pursuant to 14 CFR 152 and Title VI of the Civil Rights Act of 1964 and 49 CFR, Subtitle A, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said Title and Regulations may be amended. B. In conducting or engaging in any aeronautical activity for furnishing services to the public at the Airport, AIRLINE shall furnish said services on a fair, equal, and not unjustly discriminatory basis to all users thereof, and shall charge fair, reasonable, and not unjustly discriminatory prices for each unit or service as required pursuant to 14 CFR 152. AIRLINE may make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. C. AIRLINE acknowledges that the provisions of 49 CFR, Part 23, Disadvantaged Business Enterprises (DBE), as said regulations may be amended, and such other similar regulations may be enacted, may be applicable to the activities of AIRLINE under the terms of this Agreement, unless exempted by said regulations, and AIRLINE hereby agrees to comply with the regulatory agencies, in reference thereto. These requirements may include, but not be limited to, compliance with DBE participation goals, the keeping of certain records of good faith compliance efforts, which would be subject to review by the various agencies, the submission of various reports and, if so directed, the contracting of specified percentages of goods and services contracts to DBEs. D. In the event of breach of any of the above nondiscrimination covenants pursuant to 49 CFR Part 21 of the Regulations of the Office of the Secretary of Transportation, as amended, if applicable, CITY will have the right to terminate the Agreement and to re-enter as if said Agreement had never been made or issued. Said termination provision will not be effective until the procedures of 49 CFR part 21 are followed and completed, including exercise or expiration of appeal rights. 14.04 Securi1y. AIRLINE shall not bring or operate any vehicle or motorized equipment into or within any air operations area, unless having first complied with all insurance provisions and requirements specified in this Agreement, as well as the Airport Driver Training Program and the Airport's Security Program. When operating within any air operations area, AIRLINE shall cause its vehicles and equipment to move directly to and from the entrance gate or Airline Premises and the aircraft, and shall not enter or move about in any other non -movement area. AIRLINE, its officers, employees, agents, and those under its control, shall comply with security measures required of AIRLINE or CITY by the FAA, TSA, U. S. Department of Transportation, or contained in any Airport master security plan approved by the FAA or TSA to include an Airport Tenant Security Program as outlined in CFR Part 1542 respective to AIRLINE's non-public Preferential Use Premises. If AIRLINE, its officers, employees, agents, or those under its control shall fail or refuse to comply with said measures and such non-compliance results in a monetary penalty being assessed against CITY, then AIRLINE shall be responsible and shall reimburse CITY in the full amount of any such monetary penalty or other damages, including attorney fees and other costs to defend CITY against such claims. Environmental. A. General Conditions. Notwithstanding any other provisions in this AGREEMENT, and in addition to any and all other requirements of this AGREEMENT or any other covenants, representations or warranties 151E of AIRLINE, AIRLINE hereby agrees to the following, in connection with AIRLINE's operations at the Airport: AIRLINE shall comply with all applicable Environmental Laws, AIRLINE agrees to notify CITY and promptly begin to mitigate any damages occurring as a result of non-compliance with any Applicable Environmental Law by AIRLINE, its employees, licensees, or contractors and AIRLINE agrees to promptly and at its own expense initiate investigation, to the extent required under applicable Environmental Law, and remediation (but AIRLINE shall not commence active remediation, except to the extent time is of the essence or emergency conditions otherwise exist requiring immediate remediation measures, without advanced review and written approval by applicable regulatory agency and CITY of any remediation plan) of any such potential or actual non-compliance with any Applicable Environmental Law which AIRLINE shall continue until remediation has been completed to the extent required under, and in accordance with, Applicable Environmental Law and no further action is necessary. Except where, and to the extent, it is caused by the negligence of willful misconduct of the agents, employees, contractors, officers, officials, or City Council of the CITY , AIRLINE agrees to hold harmless and indemnify CITY, its agents, employees, officials, City Council, and elected officers for any violation by AIRLINE, its officer, employee, agent, licensee or contractor of such Applicable Environmental Law and for any non- compliance by AIRLINE with any permits issued to AIRLINE pursuant to Applicable Environmental Laws which hold harmless and indemnity will include but not be limited to, enforcement actions to assess, abate, remediate, undertake corrective measures, or monitor environmental conditions damages (including actually incurred reasonable attorney's fees and costs as well as reasonable fees and costs of consultants, experts, contractors, and laboratories reasonably incurred in connection with the indemnified incident to the extent required to reach compliance with Applicable Environmental Laws) and for any monetary penalties, costs, expenses, or damages, including natural resource damages, imposed against AIRLINE, its employees, , suppliers, or service providers or against CITY by reason of AIRLINE's violation or non-compliance. Claims for environmental matters shall be covered exclusively under this Article 14.05 and shall not be subject to any other indemnities provided in this Agreement, including without limitation the general indemnity herein. Sym AIRLINE agrees to reasonably cooperate with any investigation, audit, or inquiry by CITY regarding any federal or state environmental regulatory enforcement action or investigation, which is against City but arises from AIRLINE's activities hereunder. AIRLINE agrees that any spill, leak, or permit exceedance by AIRLINE (and to the extent required to be reported pursuant to Applicable Environmental Law), or notice of violation, notice of non-compliance, or other enforcement action related to AIRLINE's operation at the Airport described herein will be promptly reported to CITY . In entering into this Agreement, CITY expressly relies on the covenants, representations, and warranties of AIRLINE as stated herein. Except for above -ground deicing fluid storage tanks, or such other tanks as approved by CITY in writing, AIRLINE shall not install or allow to be installed any above or underground storage tanks on any Airport premises. For above -ground deicing fluid storage tanks and required containment, AIRLINE must obtain CITY's written approval and obtain all necessary federal, state, and local licenses. B. Environmental Considerations (1) If AIRLINE is deemed to be a generator of hazardous waste, as defined by applicable federal, state, or local law, AIRLINE will obtain, if required by Applicable Environmental Law, a generator identification number from the U.S. Environmental Protection Agency (EPA) and the appropriate generator permit and will comply with all Applicable Environmental Laws including but not limited to, ensuring that the transportation, storage, handling, and disposal of such hazardous wastes are conducted in full compliance with Applicable Environmental Law. (2) AIRLINE agrees to make available for review by CITY, CITY, within fourteen (14) days after CITY's request, copies of all hazardous waste permit application documentation, permits, monitoring reports, transportation, responses, storage and disposal plans, material safety data sheets and waste disposal manifests prepared or issued in connection with AIRLINE's use of Airport. (3) At the end of the Agreement, AIRLINE will dispose of all of AIRLINE's solid and hazardous wastes and containers in compliance with all Applicable Environmental Laws. Copies of all waste manifests related to the disposal of such wastes will be provided to CITY within 30 days. C. Prior Contamination Nothing in this article will be construed to make AIRLINE liable in any way for any contamination or release of Hazardous Materials, as defined herein, affecting Airport that occurred prior to AIRLINE's entry upon or operations at Airport or that occurred as a result of the actions or inaction of CITY or any of its employees, agents, contractors or anyone other than AIRLINE at the Airport, except that AIRLINE shall use commercially reasonable efforts not to exacerbate, relocate, distribute, spread or otherwise move said contamination or Hazardous Materials. D. Off -Site Contamination Nothing in this article will be construed to make AIRLINE liable in any way for any contamination or release of Hazardous Materials affecting Airport that occurs by reason of the migration or flow to Airport from verifiable or documented off -site contamination that is not attributable to AIRLINE's activities at Airport. E. Stormwater. Notwithstanding any other provisions or terms of this Agreement, AIRLINE acknowledges that certain properties within the Airport, or on CITY owned land, are subject to stormwater rules and regulations. AIRLINE agrees to observe and abide by such stormwater rules and regulations as may be applicable to AIRLINE, and, if applicable hereby agrees to the following in connection with AIRLINE's operations on Airport: (1) AIRLINE acknowledges that any stormwater discharge permit issued to the CITY may name AIRLINE as a co-permitee. CITY and AIRLINE both acknowledge that close cooperation is necessary to ensure compliance with any stormwater discharge permit terms and conditions, as well as to ensure safety and to minimize cost of compliance. AIRLINE acknowledges further that it may be necessary to undertake such actions to minimize the exposure of stormwater to "significant materials" generated, stored, handled or otherwise used by AIRLINE, as such term may be defined by applicable stormwater rules and regulations, by implementing and maintaining "best management practices" (as that term may be defined in applicable stormwater rules and regulations). (2) AIRLINE will comply with any stormwater discharge permit requirements applicable to AIRLINE. To the extent a submittal of a Notice of Intent will be made by AIRLINE to the Texas Commission on Environmental Quality; a copy will be submitted to CITY. AIRLINE will comply with all applicable stormwater requirements including but not limited to: certification of non-stormwater discharges; CITY's Stormwater Pollution Prevention Plan or similar plans; implementation of best management practices; and maintenance and submittal of records required by CITY's Stormwater Pollution Prevention Plan. In complying with such requirements, AIRLINE will observe applicable deadlines set by the regulatory agency that has jurisdiction over the permit. AIRLINE agrees to undertake, as its sole expense, those applicable stormwater permit requirements for which it has received written notice from the regulatory agency and that apply to its operations at the Airport, and AIRLINE agrees that it will hold harmless and indemnify CITY, in accordance with Article 13.05(A)(3), for any violations or non- compliance with any such applicable permit requirements. Article 15. GENERAL PROVISIONS 15.01 Nonwaiver. No waiver of default by either party of any of the terms, covenants, or conditions of this Agreement to be performed, kept, and observed by the other party shall be construed to be or act as a waiver of any subsequent default of any of the terms, covenants, and conditions to be performed, kept, and observed by the other party and shall not be deemed a waiver of any right on the part of the other party to cancel this Agreement as provided herein. 15.02 Passenger Facili1y Charge. CITY reserves the right to assess and collect PFCs subject to the terms and conditions set forth in the Aviation Safety and Capacity Expansion Act of 1990, Section 9110 (the "PFC Act") and implementing regulations as may be supplemented or amended from time -to -time. AIRLINE shall collect and pay all PFCs for which it is responsible under the provisions of 14 CFR Part 150. Failure by AIRLINE to remit PFCs within the time frame required by 14 CFR Part 158 shall be grounds for cancellation of this Agreement. 15.03 Rights Non -Exclusive. Notwithstanding anything herein contained that may be or appear to the contrary, the rights, privileges, and licenses granted under this Agreement, are "non-exclusive" and CITY reserves the right to grant similar privileges to others, provided that in doing so, CITY does not interfere nor alter, or purport to alter, AIRLINE's rights and privileges hereunder. 15.04 Quiet Enjoyment. A. CITY agrees that, so long as AIRLINE's payment of rentals, fees, and charges is timely and AIRLINE keeps all covenants and agreements contained herein, AIRLINE shall peaceably have and enjoy its Airline Premises and all rights, privileges, and licenses of the Airport, its appurtenances and facilities granted herein, subject to the terms and conditions herein contained. B. Consistent with the nature of AIRLINE's business, AIRLINE agrees that occupancy of its Airline Premises will be lawful and quiet and that it will not knowingly use or permit the use of Airline Premises in any way that would violate the terms of this Agreement, create a nuisance, or disturb other tenants or the general public. AIRLINE shall be responsible for the activity of its officers, employees, agents, and others under its control with respect to this provision. 15.05 Performace. The parties expressly by a party to complex Performance within the etime specifiede that time , orfWh essence in this Agreement. Failure specified herein, sha)�elieve the other a y within a reasonable time if no time is party, without liability, of an obligation to accept such performance. 15.06 Aviation lights CITY reserves unto itself, its successors, and assigns for the use and benefit the public, a right of fght for the passage of aircraft in the airspace above the surface of the Airport, including Airline Premises; �fortavigation or flight in the said airspace for landing on, taking off from, or operating the Airport. P g at 15.07 Rules anQZe ulations and O erational Directives. A. AIRHNE, its officers, employees, agents, and others under its control shall observe and obey all laws, regdations, and orders of the federal, state, county governments and CITY (actin in its governmental capcity) which may be applicable to AIRLINE'S operations at the Airport. g B. CITI acting in its governmental capacity, may from time -to -time adopt, amend, or revise the Airport's Ruls and Regulations and Operating Directives governing the conduct of operations at the Airport, for rasons of safety, health, preservation of the property, or for the maintenance of the good and orderly Ppearance of the Airport. AIRLINE, its officers, employees, agents, and others under its control shall falhfully comply with and observe such reasonable and non-discriminatory Rules an Regulations and Operating Directives, except as they may conflict with the terms and provisions of this Agreement, or thtregulations of another governmental entity having appropriate jurisdiction. CITY shall notify AIRLINE in advance of any amendments or supplements to such Rules and Regulations and Operating Diwctives that would materially alter the terms of this Agreement adversely. C. AIRUNE shall be strictly liable and responsible for obtaining, maintaining current, and fully complying with, any and all permits, licenses, and other governmental authorizations, however designated, as mal, be required at any time throughout the entire Term of this Agreement by any federal state, or local gomnmental entity or any court of law having jurisdiction over AIRLINE or A RLINE's operations and advities. 15.08 Ins ectia, AIRLINE shall allow CITY's authorized representatives access to Airline Premises for the purpose of exinining and inspecting said premises; for purposes necessary, incidental to, or connected with the performance®f its obligations under this Agreement; or, in the exercise of its governmental functions. Except in the case Ofan emergency, CITY shall conduct such inspections during reasonable business hours, after reasonable priomotice to AIRLINE and in the presence of AIRLINE' representative. urs 15.09 No Individual Liability. No member, officer, agent, director, or employee of CITY or AIRLINE shall be charged personally or held contractually liable by or to the other party under the terms or provisions of this Agreement or because of any breach thereof or because of its or their execution or attempted execution. 15.10 Relationship of Parties. Nothing contained herein shall be deemed or construed by the parties hereto, or by any third party, as creating the relationship of principal and agent, partners, joint venturers, or any other similar such relationship between the parties hereto. It is understood and agreed that neither the method of computation of rentals, fees, and charges, nor any other provisions contained herein, nor any acts of the parties hereto, creates a relationship other than the relationship of landlord and tenant. 15.11 Capacity to Execute. The individuals executing this Agreement personally warrant that they have full authority to execute this Agreement on behalf of the entity for whom they are acting herein. 15.12 Savings The parties hereto acknowledge that they have thoroughly read this Agreement, including any exhibits or attachments hereto and have sought and received whatever competent advice and counsel was necessary for them to form a full and complete understanding of all rights and obligations herein. The parties further acknowledge that this Agreement is the result of extensive negotiations between the parties and shall not be construed against CITY by reason of the preparation of this Agreement by CITY. 15.13 Successors and Assigns Bound. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 15.14 Incorporation of Exhibits. All exhibits and attachments referred to in this Agreement are intended to be and are hereby specifically made a part of this Agreement. 15.15 Titles. Section titles are inserted only as a matter of convenience and for reference, and in no way define, limit, or describe the scope or extent of any provision of this Agreement. 15.16 Severability. In the event that any covenant, condition, or provision of this Agreement is held to be invalid by any court of competent jurisdiction, the invalidity of such covenant, condition, or provision shall not materially prejudice either CITY or AIRLINE in their respective rights and obligations contained in the valid covenants, conditions, or provisions of this Agreement. 15.17 Amendments. No amendment, modification or alteration of the terms of this Agreement shall be binding unless the same be in writing, dated subsequent to the date hereof, and duly executed by the parties hereto with the same formality as required for this Agreement. 15.19 Other Agreements. Other than as set forth herein, nothing contained in this Agreement shall be deemed or construed to nullify, restrict, or modify in any manner the provisions of any other lease or contract between CITY and AIRLINE authorizing the use of the Airport, its facilities, and appurtenances. 15.19 Approvals. A. Unless otherwise stated, whenever this Agreement calls for approval by CITY, such approval shall be evidenced by the written approval of the Director of Aviation. B. Any approval required by either party to this Agreement shall not be unreasonably withheld, conditioned or delayed. 15.20 Notice. A. All notices, requests, consents, and approvals served or given under this Agreement shall be served or given in writing with proof of delivery or by electronic transmission. If intended for CITY, notices shall be delivered to: Director of Aviation Lubbock Preston Smith International Airport 5401 N. Martin Luther King Blvd. Unit 389 Lubbock, TX 79403 Telephone: (806) 775-3126 Or to such other address as may be designated by CITY by written notice to AIRLINE. B. Notices to AIRLINE shall be delivered to: American Airlines Inc. VP Corporate Real Estate 4333 Amon Carter Blvd. MD 5317 Ft. Worth, TX 76155 Or to: [insert email address if electronic transmission is allowed] Or to such other address as may be designated by AIRLINE by written notice to CITY. If notice, consent or approval is given in any other manner or at any other place, it shall also be given at the place and in the manner specified above. 15.21 Agent for Service. It is expressly understood and agreed that if AIRLINE is not a resident of the State of Texas, or is an association or partnership without a member or partner resident of said state, AIRLINE shall appoint an agent for the purpose of service of process in any court action between it and CITY arising out of or based upon this Agreement. AIRLINE shall immediately, within ten (10) days of execution of this Agreement, notify CITY, in writing, of the name and address of said agent, if applicable. Such service shall be made as provided by the laws of the State of Texas for service upon a non-resident engaging in business in the State. It is further expressly agreed, covenanted, and stipulated that, if for any reason, such service of process is not possible, as an alternative method of service of process, AIRLINE may be personally served out of the State of Texas by the registered mailing of such service at the address set forth in Section 15.20. 15.22 Governing Law and Legal Forum. This Agreement is to be read and construed in accordance with the laws of the State of Texas. All litigation concerning this Agreement by either party shall be instituted in Lubbock, Texas. The provisions of this section shall survive the termination of this Agreement. 15.23 Force Majeure. Except as herein provided, neither CITY nor AIRLINE shall be deemed to be in default hereunder if either party is prevented from performing any of the obligations, other than the payment of rentals, fees, and charges hereunder, by reason of strikes, boycotts, labor disputes, embargoes, shortages of energy or materials, acts of God, acts of the public enemy, terrorism, weather conditions, riots, rebellion, or sabotage, or any other circumstances for which it is not responsible or which are not within its control. 15,24 Most Favored Nation. CITY agrees not to enter into any Agreement with any other 14 CFR Part 121 Air Transportation companies conducting similar operations at the Airport after the date of this Agreement which contains more favorable terms and conditions, landing fees, space rentals or other charges than those provided in this Agreement. Such "similar operations at the Airport" means regularly scheduled commercial service that shall be conducted at the Airport.. 15.25 Entire Agreement. It is understood and agreed that this instrument contains the entire agreement between the parties hereto. It is further understood and agreed by AIRLINE that CITY and CITY's agents have made no representations or promises with respect to this Agreement or the making or entry into this Agreement, except as in this Agreement expressly set forth, and that no claim or liability or cause for termination shall be asserted by AIRLINE against CITY for, and CITY shall not be liable by reason of, the breach of any representations or promises not expressly stated in this Agreement. IN WITNESS WHEREOF, the Parties hereto have caused these presents to be executed on the day and year first above written. CITY OF LUBBOCK, TEXAS By. -- DANIEL M. POPE, MAYOR ATTEST: Rebecca Gaza, City Secretary APPROVED AS TO CONTENT: �Kel'IyUC% ellAAE, txecutive Director of Aviation --61-- � 11: I"�' it 1•' 1 [this will be an aerial of the airport boundaries] MrYpm No Text No Text EXMBIT B: AIRLINE PREMISES [insert RS&H drawings of terminal here] via 1 1 t 0 = . Z IT t r� EXHIBIT B: AIRLINE PREMISES AA 2,045 SWA 2.534 s4.ft. dll� II�I�I,riI i�� ifrwrrrf^•,.- �/ LEGEND %�/✓//`� i SOUTHWEST AIRLINES (2,502 SF) ® AMERICAN AIRLINES (1,555 SF) ® VACANT (1.959 SF) UNITED AIRLINES (1,648 SF) RENTAL CAR COUNTERS (2,159 SF) — TSA SECURITY SCREENING (1,089 SF) C� TSA OFFICE AREA (1,730 SF) * SECURE EXITS (837 SF) AIRSERVICE OFFICE (137 SF) REPUBUC PARKING OFFICE (145 SF) ® FOOD COURT (5,497 SF) ELECTRIC STORAGE ROOMS (294 SF) * ® STORAGE / OTHER (158 SF) * NON —LEASABLE CIRCULATION (18,358 SF) LEASING HOLDROONS AND CIRCULATION (42,609 SF) RESTAURANT OFFICES (1,098 SF) * ENTRIES (5,888 SF) ® VACANT LEASABLE (16,653 SF) BAGGAGE CLAIM (14.727 SF) STARBUCKS (267 SF) BAR h GRILL (1,5DB SF) COMPUTER LOUNGE (721 SF) SHOESHINE STATION (77 SF) I NEWS EXCHANGE (1,040 SF) *' ® RESTROOMS (3,155 SF) C _ J TOTAL CONCOURSE AREA (125,887 SF) NORTH * Non -Rentable PRaecT No ,., Lubbock Preston International Airport DATE „naza,6 TERMINAL AREA FLOOR MAP LubbockDRAWN 9YIREVIENkD BY PTIA O CONCOURSE LbbXk, I t: SCALE 1172' - 1'.1 ' EXHIBIT B: AIRLINE PREMISES `k a f, 0 fit Lubbock Preston International Airport DATEE1111 16 GATE ttlt U'1018 Lubbock I IUWUCk Itxatl JRSW I SCALE V4HEVIEwE08Y FTIA Ilt,t SCALE Ii49'.1'�0' LEGEND AIRPORT POLICE (1,005 SF) * CIRCULATION (4,558 SF) AIRPORT OPERATIONS (1,526 SF) * WOMEN'S RESTROOM (571 SF) PORTS —TO —PLAINS (943 SF) * MEN'S RESTROOM (571 SF) AMBASSADOR CONFERENCE ROOM (1,237 SF) * ® AMERICAN (182 SF) BLUE CONFERENCE ROOM (1,242 SF) * STORAGE / OTHER (802 SF) AIRPORT ADMINISTRATION (4,596 SF) TOTAL MEZZANINE AREA (17,233 SF) * Non -Rentable TERMINAL AREA FLOOR MAP MEZZANINE NORTH IEXHIBIT B: AIRLINE PREMISES LEGEND • *'O ABANDONED BAG BELT (467 SF) *� CIRCULATION (9,445 SF) ®BAGGAGE CLAIM /RETURN (15,418 SF) *M AIR HANDLER (316 SF) - • ® VACANT (4,047 SF) *® BOILER ROOM (1,335 SF) MAINTENANCE OFFICE (850 Y) *= CHILLER ROOM (1,412 SF) f CUSTODIAN BREAKRDOM/OFFICE (298 SF) *® GENERATOR ROOM (597 SF) SOUTHWEST (5,963 SF) *' � PA EQUIPMENT ROOM (185 SF) ®AMERICAN (1.226 SF) * SWITCHGEAR ROOM (516 SF) UNITED (2,635 SF) *M TELEPHONE EQUPWNT ROOM (231 SF) • ' ® ELECTRICAL TECH SHOP (306 SF) *' ELEVATOR MECHANICAL (175 SF) SHOP (2,981 SF) *' MECHANICAL ROOMS (8,282 SF) y FOOD COURT FREIGHT DOCK (1,518 SF) *' WOMEN'S RESTROOM (321 SF) ® FOOD COURT STORAGE (1,079 SF) *_ MEN'S RESTROOM (413 SF) NEWS EXCHANGE STORAGE (766 SF) * ® STORAGE / OTHER (3,150 SF) TSA STORAGE (520 SF) C ] TOTAL RAMP AREA (66.528 SF) N® *® STORM SHELTER (1,277 SF) _ * Non -Rentable #"`"' ( (Ltu-bb" Ck Lubbock Preston International Airport IR PROJECT No vv.v ( DATE nl,ypD,B DRAWN BYIRE VIEWED BY RTIAJO TERMINAL AREA FLOOR MAP 11111 LWLxKX, tC%JS SCALE 1177•i'.17 RAMP EXIIIBIT C: SUMMARY OF TERMINAL AREAS [this will be the space exhibits for each airline that presents total airline space plus each airline's preferential space] (Fiscal Year Beginning October 1) Preferential Leased Space Ramp Level (Apron) - Southwest Operations Ramp Level (Apron) - American Operations Ramp Level (Apron) - United Operations Concourse Level (Main) - Southwest Ticket Counters Concourse Level (Main) - American Ticket Counters Concourse Level (Main) - United Ticket Counters Concourse Level (Main) - Southwest Gates #6, #7, #8 Concourse Level (Main) - American Gates #4, #5 Concourse Level (Main) - United Gates #2, #3 Mezzanine Level (Upper) - Southwest Mezzanine Level (Upper) - American Mezzanine Level (Upper) - United Total Preferential Leased Space Preferential Unleased Space PROJECTED FY 2016-17 5,963 2,225 2,635 2,582 1,555 1,648 7,602 4,395 4,706 0 182 0 33,493 Ramp Level (Apron) - Vacant Operations 4,047 Concourse Level (Main) - Vacant Ticket Counter 1,959 Concourse Level (Main) - Gate #1 2,356 Concourse Level (Main) - Gate #9 1,351 Mezzanine Level (Upper) 0 Total Preferential Unleased Space 9,713 Total Preferential Space Ramp Level (Apron) 14,870 Concourse Level (Main) 28,153 Mezzanine Level (Upper) 182 Total Preferential Space 43,205 Joint Use Space Ramp Level (Apron) - Bag Claim 1 0 Ramp Level (Apron) - Bag Claim 2 0 Ramp Level (Apron) - Baggage Claim / Return 15,418 Concourse Level (Main) - Bag Claim 1 7,309 Concourse Level (Main) - Bag Claim 2 7,418 Concourse Level (Main) - Holdrooms and Circulation 22,200 Total Joint Use Space 52,345 Total Airline Space 95,550 NOTE: 1/ Numbers reflect space audit performed by RS&H in August 2016. Source: City of Lubbock, Texas (Actual and Budget), Ricondo & Associates, Inc. (Projection), January 2017. Prepared by: Ricondo & Associates, Inc., February 2017 (Fiscal Year Beginning October 1) PROJECTED FY 2016-17 Other Rentable Space Ramp Level (Apron) - Maintenance Office 650 Ramp Level (Apron) - Concession Area 3,363 Ramp Level (Apron) - Break Room Custodial 298 Ramp Level (Apron) - Electrical Tech Shop 306 Ramp Level (Apron) - Maintenance Shop 2,981 Concourse Level (Main) - Rental Car Space 2,159 Concourse Level (Main) - TSA Space / Checkpoint 2,819 Concourse Level (Main) - Computer Lounge 721 Concourse Level (Main) - Shoeshine Station 77 Concourse Level (Main) - Vacant Leasable 16,653 Concourse Level (Main) - Brickside Common 0 Concourse Level (Main) - News Exchange 1,040 Concourse Level (Main) - Food Court 5,497 Concourse Level (Main) - Starbucks 267 Concourse Level (Main) - Bar & Grill 1,508 Concourse Level (Main) - Air Service Office 137 Concourse Level (Main) - Restaurant Offices 1,096 Concourse Level (Main) - Republic Parking Office 145 Mezzanine Level (Upper) - Total Office Space 8,070 Mezzanine Level (Upper) - Total Room Space 2,479 Total Other Rentable Space 50,266 Total Rentable Space 145,816 Non -Rentable Space Ramp Level (Apron) - HMS Host 0 Ramp Level (Apron) - Mechanical 0 Ramp Level (Apron) - Vacant Circulation 9,445 Ramp Level (Apron) - Storm Shelter 1,277 Ramp Level (Apron) - Total Storage Rooms 3,670 Ramp Level (Apron) - Total Equipment / Miscellaneous 13,049 Ramp Level (Apron) - Restrooms 734 Ramp Level (Apron) - Abondoned Bag Belt 467 Concourse Level (Main) - HMS Host 0 Concourse Level (Main) - Circulation 18,356 Concourse Level (Main) - Entries 5,888 Concourse Level (Main) - Secure Exits 837 Concourse Level (Main) - Restrooms 3,155 Concourse Level (Main) - Storage / Other 158 Concourse Level (Main) - Electric Storage 294 Mezzanine Level (Upper) - Restrooms 1,142 Mezzanine Level (Upper) - Ports -to -Plains 0 Mezzanine Level (Upper) - Storage / Other 802 Mezzanine Level (Upper) - Circulation 4,558 Total Non -Rentable Space 63,832 Total Terminal Space 209,648 Source: City of Lubbock, Texas (Actual and Budget), Ricondo & Associates, Inc. (Projection), January 2017. Prepared by. Ricondo & Associates, Inc., February 2017 Concourse Level Mezzanine Level Ramp Level Joint Use Space Total Southwest Leased Space American 10,184 0 5,963 24,974 41,121 Concourse Level 5,950 Mezzanine Level 182 Ramp Level 2,225 Joint Use Space 17,249 Total American Leased Space 25,606 United Concourse Level 6,354 Mezzanine Level 0 Ramp Level 2,635 Joint Use Space 10,121 Total United Leased Space 19,110 Total Airline Preferential Leased Space 33,493 Total Airline Preferential Unleased Space 9,713 Total Joint Use Space 52,345 Total Airline Space 95,550 Source: City of Lubbock, Texas. Prepared by: Ricondo & Associates, Inc., February 2017 (Fiscal Year Beginning October 1) PROJECTED FY 2016-17 Joint Use Space 52,345 Enplanements by Airline Southwest 242,192 American 155,108 United 74,759 Total Enplanements Percent of Total Enplanements Southwest American United Total Enplanement Allocation Fixed Allocation Space by Airline - Enplanement Allocation Southwest American United Total Joint Use Space - Enplanement Allocation Space by Airline - Fixed Allocation Southwest American United Total Joint Use Space - Fixed Allocation Total Joint Use Space Source: City of Lubbock, Texas. Prepared by: Ricondo & Associates, Inc., February 2017 472,059 51% 33% 16% 100% 80% 20% 21,485 13,760 6,632 41,876 3,490 3,490 3,490 10,469 52,345 (Fiscal Year Beginning October 1) PROJECTED FY 2016-17 Airline Preferential Leased Space 33,493 Airline Preferential Unleased Space 9,713 Joint Use Space 52,345 Total Airline Space 95,550 Other Rentable Space 50,266 Non -Rentable Space 63,832 Total Non -Airline Space 114,098 Total Airline Space 95,550 Total Non -Airline Space 114,098 Total Terminal Space 209,648 Percent Airline and Non -Airline Space Total Airline Space 45.6% Total Non -Airline Space 54.4% Total Terminal Space 100.0% Source: City of Lubbock Texas (Actual and Budget), Ricondo & Associates, Inc. (Projection), January 2017. Prepared by. Ricondo & Associates, Inc., February 2017 EXHIBIT D: RESPONSIBILITIES OF CITY AND AIRLINE FOR OPERATION AND MAINTENANCE OF THE TERMINAL This is an exhibit that identifies who is responsible for O&M throughout the terminal building mfim EXHIBIT D RESPONSIBILITIES OF LBB & AIRLINES FOR OPERATION & MAINTENANCE OF TERMINAL COMPLEX Air Conditioning 6 Heating Lighting a. Bulb & Tube Replacement' b. Maintenance 1 Electrical Maintenance 2 Water a. Distribution b. Fixtures Sewage a. Distribution Maintenance a. Other than Structure b. Structure 3 c. Exterior ° Custodial Service Window Cleaning a. Exterior b. Interior Ramp - Concrete Repair Snow Removal a. Larger ramp area 6 b. Gate areas & walkway to aircraft Airline - Airline is responsible LBB - Lubbock Preston Smith International Airport is responsible Not applicable ' AIRLINE shall be responsible for any light fixtures installed by AIRLINE. 2 AIRLINE shall be responsible for any electrical fixtures or services installed by AIRLINE. 3 AIRLINE shall be responsible for any structure constructed by AIRLINE (including ticket counter, back wall, and gate podiums). ° AIRLINE shall be responsible for any exterior maintenance required from actions of AIRLINE, its employees, or subcontractors (including aircraft apron lead in lines). 5 AIRLINE shall be responsible for coordinating removal of aircraft to allow for snow removal on airline ramp by CITY; and, AIRLINE shall be responsible for snow removal around the Gate Areas/walkways/work areas, and shall be responsible for determining safety of passages for use by passengers/employees. 6 Note: All areas not part of AIRLINE'S Preferential Premises shall be CITY'S responsibility; provided, however, CITY shall not be responsible for any systems or services installed by AIRLINE, or systems and services installed by CITY, but modified or used by AIRLINE, unless otherwise agreed to by the parties hereto. Example: jetbridge power units, ticket kiosks, gate podiums, ticket counters and associated back walls, and airline signage/insignia. EXHIBrr E: CHANGES IN RATES FOR RENTALS, FEES, AND CHARGES This will include the various rate calculations EXHIBIT E: CHANGES IN RATES FOR RENTALS, FEES, AND CHARGES SECTION I - RATE CALCULATIONS E.01 Rates for Landing Fees, Terminal Rental Rates, and Per Day Fees — The Landing Fees, Terminal Rental Rates, and Per Day Fees shall be calculated in accordance with Exhibits E-1, E-2, E-3A, E-313, and E-3C, respectively. E.02 Summary of Rates for Rate Setting Period — From the Effective Date, October 1, 2016, through September 30, 2017, the rates will be as follows: • Landing Fee Rate - The Airfield Cost Center Signatory Landing Fee Rate shall be $2.53 per 1,000 pounds of Maximum Gross Landed Weight (MGLW) as calculated and presented on Exhibit E-1. The Airfield Cost Center Nonsignatory Landing Fee Rate shall be $3.17 per 1,000 pounds of MGLW. • Terminal Rental Rate - The Terminal Cost Center Signatory Terminal Rental Rate shall be $29.34 per square foot as calculated and presented on Exhibit E-2. The Terminal Cost Center Nonsignatory Terminal Rental Rate shall be $36.67 per square foot. • Per Day Fees — • Signatory Per Day Fee — Aircraft Gate shall be $148.95 per turn as calculated and presented on Exhibit E-3A. Nonsignatory Per Day Fee — Aircraft Gate shall be $186.18. • Signatory Per Day Fee — Operations shall be $325.26 per turn as calculated and presented on Exhibit E-313. Nonsignatory Per Day Fee — Operations shall be $406.57. • Signatory Per Day Fee — Ticket Counter shall be $157.45 per turn as calculated and presented on Exhibit E-3C. Nonsignatory Per Day Fee — Ticket Counter shall be $196.81. E-1 E.03 Calculation of Landing Fee Rate — Exhibit E-1 (Fiscal Year Beginning October 1) PROJECTED FY 2016-17 Airfield Expenses A) O&M Expenses $3,144,228 B) O&M Expenses Reserve Requirement 33,539 C) Debt Service 0 D) Small Capital Expenditures 77,270 E) Amortization of Capital Expenditures 67,934 F) Total Airfield Requirement $3,322,971 G) Less: Airfield Non -Airline Revenue $747,070 H) Net Airfield Requirement $2,575,901 D Total Landed Weight 924,984 J) Average Landing Fee (per thousand pounds) $2.78 iq Signatory Landing Fee (per thousand pounds) $2.53 L) Nonsignatory Landing Fee (125%) (per thousand pounds) $3.17 Source: Ricondo & Associates, Inc. (Projection), March 2017. Prepared by. Ricondo & Associates, Inc., March 2017 Exhibit E-1 Line Items: A. O&M Expenses - The current expenses, paid or accrued, of operation, maintenance, and ordinary current repairs related to the Airfield Cost Center. B. O&M Expenses Reserve Requirement — Amounts to fund the O&M Reserve Account equal to 25 percent of the annual Airfield O&M Expenses for the current FY less an amount equal to 25 percent of the Airfield O&M Expenses for the previous FY. C. Debt Service — Any principal, interest, premium, and other fees and amounts either paid or accrued for Bonds, exclusive of amounts funded by PFC collections or other reimbursements, attributable to the Airfield Cost Center. D. Small Capital Expenditures — Amount of Capital Expenditures for capital projects funded with less than $100,000 of City funds attributable to the Airfield Cost Center. E-2 E. Amortization of Capital Expenditures — Amount to recover Capital Expenditures of $100,000 or more attributable to the Airfield Cost Center which are not debt financed, and shall be calculated based on the expected useful life of the Large Capital Expenditure with a rate of return, equivalent to the City's cost of capital as of the date of beneficial occupancy. F. TOTAL AIRFIELD REQUIREMENT— Sum of A through E. G. Credit for Airfield Non -Airline Revenues — Total amounts of Non -Airline revenues attributable to the Airfield Cost Center in the current Fiscal Year. H. NET AIRFIELD REQUIREMENT— F minus G. I. Total Landed Weight (thousand pounds) —Total MGLW of all airlines in current Fiscal Year. J. Average Landing Fee Rate (per thousand pounds) — H divided by I. K. SIGNATORY LANDING FEE RATE (per thousand pounds) — Landing fee rate charged to signatory air carriers after 25 percent premium is applied to nonsignatory air carriers and credited against the Net Airfield Requirement. L. NONSIGNATORY LANDING FEE RATE (12S%) (per thousand pounds) — Landing fee rate charged to nonsignatory air carriers after 25 percent premium is applied to the Signatory Landing Fee Rate. E-3 E.04 Calculation of Terminal Rental Rate — Exhibit E-2 (Fiscal Year Beginning October 1) Terminal Expenses PROJECTED FY 2016-17 A) O&M Expenses $3,468,446 B) O&M Expenses Reserve Requirement 37,606 C) Debt Service 1/ 240,908 D) Small Capital Expenditures 0 E) Amortization of Capital Expenditures 530,578 F) Total Terminal Requirement $4,277,538 G) Rentable Space 145,816 H) Average Terminal Rental Rate (per square foot) $29.34 I) Signatory Terminal Rental Rate (per square foot) $29.34 J) Nonsignatory Terminal Rental Rate (125%) (per square foot) $36.67 NOTES: 1/ Does not include PFC-Supported Debt Service Source: Ricondo & Associates, Inc. (Projection), March 2017. Prepared by. Ricondo & Associates, Inc., March 2017 Exhibit E-2 Line Items A. O&M Expenses - The current expenses, paid or accrued, of operation, maintenance, and ordinary current repairs related to the Terminal Cost Center. B. O&M Expenses Reserve Requirement — Amounts to fund the O&M Reserve Account equal to 25 percent of the annual Terminal O&M Expenses for the current FY less an amount equal to 25 percent of the Terminal O&M Expenses for the previous FY. C. Debt Service — Any principal, interest, premium, and other fees and amounts either paid or accrued for Bonds, exclusive of amounts funded by PFC collections or other reimbursements, attributable to the Terminal Cost Center. D. Small Capital Expenditures — Amount of Capital Expenditures for capital projects funded with less than $100,000 of City funds attributable to the Terminal Cost Center. E-4 E. Amortization of Capital Expenditures — Amount to recover Capital Expenditures of $100,000 or more attributable to the Terminal Cost Center which are not debt financed, and shall be calculated based on the expected useful life of the Large Capital Expenditure with a rate of return, equivalent to the City's cost of capital as of the date of beneficial occupancy. F. TOTAL TERMINAL REQUIREMENT— Sum of A through E. G. Rentable Space (square feet) — Total Terminal Square Feet available to be leased by Airport users. H. Average Terminal Rental Rate (per square foot) — F divided by G. L SIGNATORY TERMINAL RENTAL RATE (per square foot) — Terminal rental rate charged to signatory air carriers after 25 percent premium is applied to nonsignatory air carriers and credited against the Net Terminal Requirement. J. NONSIGNATORY TERMINAL RENTAL RATE (12596) (per square foot) — Terminal rental rate charged to nonsignatory air carriers after 25 percent premium is applied to the Signatory Terminal Rental Rate. E-5 E.05 Calculation of Per Day Fees — Exhibits E-3A, E-313, and E-3C (Fiscal Year Beginning October 1) PROJECTED FY 2016-17 Calculation of Per Day Fee - Aircraft Gate: Airline Vacant Gates Space A) Concourse Level (Main) - Gate #1 (Per Day) 2,356 B) Concourse Level (Main) - Gate #9 (Per Day) 1,351 C) Total Airline Vacant Gates Space 3,707 D) Number of Vacant Gates 2 E) Average Airline Vacant Gates Space 1,853 F) Average Terminal Rental Rate (Per Square Foot) $29.34 G) Total Cost of Airline Vacant Gates Space $54,365 H) Days in Year 365 I) Signatory Per Day Fee - Aircraft Gate $148.95 J) Nonsignatory Per Day Fee - Aircraft Gate (125%) $186.18 Source: Ricondo & Associates, Inc. (Projection), April 2017. Prepared by: Ricondo & Associates, Inc., April 2017 Exhibit E-3A Line Items (Per Day Fee — Aircraft Gate): A. Concourse Level (Main) — Gate #1 (Per Day) — total square feet of Gate #1 on the Concourse Level on the Terminal B. Concourse Level (Main) — Gate #9 (Per Day) — total square feet of Gate #9 on the Concourse Level on the Terminal C. Total Airline Vacant Gates Space — sum of A and B D. Number of Vacant Gates —total number of gates available for leasable airlines in current Fiscal Year E. Average Airline Vacant Gates Space — C divided by D F. Terminal Rental Rate (Per Square Foot) — Terminal Rental Rate calculated for the Terminal Cost Center in current Fiscal Year G. Total Cost of Airline Vacant Gates Space — E times F E-6 H. Days in Year-365 days in year I. SIGNATORY PER DAY FEE —AIRCRAFT GATE — G divided by H J. NONSIGNATORY PER DAY FEE —AIRCRAFT GATE (12596) — I times 125 percent (Fiscal Year Beginning October 1) PROJECTED FY 2016-17 Calculation of Per Day Fee - Operations: Airline Vacant Operations Space A) Ramp Level (Apron) - Vacant Operations 4,047 B) Total Airline Vacant Operations Space 4,047 C) Average Terminal Rental Rate (Per Square Foot) $29.34 D) Total Cost of Airline Vacant Operations Space $118,719 E) Days in Year 365 F) Signatory Per Day Fee - Operations $325.26 G Nonsignatory Per Day Fee - Operations (125%) $406.57 Source: Ricondo & Associates, Inc. (Projection), April 2017. Prepared by: Ricondo & Associates, Inc., April 2017 Exhibit E-3113 Line Items (Per Day Fee - Operations): A. Ramp Level (Apron Level) Vacant Operations — total square feet of vacant leasable operations space on the Ramp Level of the Terminal B. Total Airline Vacant Operations Space — sum of A C. Terminal Rental Rate (Per Square Foot) — Terminal Rental Rate calculated for the Terminal Cost Center in current Fiscal Year D. Total Cost of Airline Vacant Operations Space — B times C E. Days in Year— 365 days in year F. SIGNATORY PER DAY FEE - OPERATIONS — D divided by E G. NONSIGNATORY PER DAY FEE — OPERATIONS (125%) — F times 125 percent. E-7 Exhibit E-3C Line Items Fee - Ticket Counter): (Fiscal Year Beginning October 1) Calculation of Airline Vacant Ticket Counter - Per Day Fee: Airline Vacant Ticket Counters Space A) Concourse Level (Main) - Vacant Ticket Counter B) Total Airline Vacant Ticket Counters Space C) Number of Vacant Ticket Counter D) Average Airline Vacant Ticket Counter Space E) Average Terminal Rental Rate (Per Square Foot) F) Total Cost of Airline Vacant Ticket Counter Space G) Days in Year H) Signatory Per Day Fee - Ticket Counter I) Nonsignatory Per Day Fee - Ticket Counter (125%) PROJECTED FY 2016-17 1,959 1,959 1 1,959 $29.34 $ 57,468 365 $157.45 $196.81 Source: Ricondo & Associates, Inc. (Projection), April 2017. Prepared by: Ricondo & Associates, Inc., April 2017 A. Concourse Level (Main) — Vacant Ticket Counter — total square feet of vacant leasable ticket counter space on the Concourse Level of the Terminal B. Total Airline Vacant Ticket Counters Space — sum of A C. Number of Vacant Ticket Counters — total number of ticket counters available for lease by the airlines in current Fiscal Year D. Average Airline Vacant Ticket Counter Space — B divided C E. Terminal Rental Rate (Per Square Foot) — Terminal Rental Rate calculated for the Terminal Cost Center in current Fiscal Year F. Total Cost of Airline Vacant Ticket Counter Space — D times E G. Days in Year— 365 days in year H. SIGNATORY PER DAY FEE -TICKET COUNTER — F divided by G E-8 I. NONSIGNATORY PER DAY FEE -TICKET COUNTER (125%) — H times 125 percent SECTION II — COST CENTERS E.6 Direct Cost Centers. The Direct Cost Centers include, but are not limited to, those Cost Centers listed in Exhibit E-4 below. Airfield The Airfield Cost Center includes the portion of the Airport provided for the landing, taking off, and taxiing of aircraft, including runways, taxiways, approach and runway protection zones, safety areas, infield areas, landing and navigational aids, and land areas required by or related to aeronautical use of the Airports. This cost center also includes the aircraft aprons at the terminal. Terminal The Terminal Cost Center includes the Airport terminal passenger building and associated curbside entrance areas and adjoining landscaped areas. Other The Other Cost Center includes all portions of the Airport provided for areas outside of Airfield and Terminal cost centers. Costs associated with and allocated to the Other Cost Center will be recovered entirely with Airport funds. EJ Indirect Cost Centers. The Indirect Cost Centers are Cost Centers to which only Operation and Maintenance Expenses are assigned; no Revenues are attributable to the Indirect Cost Centers. The Indirect Cost Centers include, but are not limited to, those Cost Centers listed in Exhibit E-5 below. Airport Police The Airport Police Cost Center includes all police and law enforcement functions of the Airport. Parking The Parking Cost Center includes all functions of the Airport related to the parking lots and garages. Administrative The Administrative Cost Center includes the administrative functions of the Airport. Operations and Security The Operations and Security Cost Center includes all function of the Airport related to general operations and security. ARFF The ARFF Cost Center includes all functions of operation at the Airport related to aircraft rescue and firefighting. Indirect Costs The cost center for Indirect Costs includes all additional miscellaneous expenses at the City related to the Airport's operation. E-9 E.8 Cost Center Allocations. Expenses for each Cost Center shall be allocated to the Direct Cost Centers as follows: B. Terminal. Expenses for the Terminal Cost Center shall be allocated to Direct Cost Centers as presented below in Exhibit E-7. Airfield 0% Terminal 100% Other 0% C. Airport Police. Expenses for the Airport Police Cost Center shall be allocated to Direct Cost Centers as presented below in Exhibit E-8. Airfield 25% Terminal 65% Other 10% D. Parking. Expenses for the Parking Cost Center shall be allocated to Direct Cost Centers as presented below in Exhibit E-9. Airfield 0% Terminal 0% Other 100% E. Administrative. Expenses for the Administration Cost Center shall be allocated to Direct Cost Centers based on each Direct Cost Center's proportionate share of operating expenses after allocation of all other indirect operating expenses. E-10 F. Operations and Security. Expenses for the Operations and Security Cost Center shall be allocated to Direct Cost Centers based on each Direct Cost Center's proportionate share of operating expenses after allocation of all other indirect operating expenses. G. ARFF. Expenses for the ARFF Cost Center shall be allocated to Direct Cost Centers as presented below in Exhibit E-10. MEMMMMOMMIM Airfield 100% Terminal 0% Other 0% H. Indirect Costs. Expenses for the Indirect Costs Cost Center shall be allocated to Direct Cost Centers based on each Direct Cost Center's proportionate share of operating expenses after allocation of all other indirect operating expenses. E-11 ExHwiT F: AFFILIATE IDENTIFICATION AND REQmEMENTS AIRLINE is affiliated with the following airlines: Envoy Airlines PSA Airlines Piedmont Airlines Mesa Airlines Skywest Airines Express Jet Airlines Trans States Airlines Compass Airlines Republic Airways ExtmiT G: STATISTICAL REPORT EXHIBIT G: MONTHLY STATISTICAL REPORT Scheduled: Charters/Diversions/Emerg TOTAL LANDINGS: SCHEDULED 0 0 0 Month / Year: Maximum Aircraft Type Landing Weight Landings Gross Weight Rate: $ per 1,000 Ibs (enter aircraft type) (enter weight) (enter #) 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 Total 0 0 $0.00 CHARTERS / DIVERSIONS / EMERGENCIES (enter aircraft type) (enter weight) (enter #) 0 0.00 0 0.00 0 0.00 0 0.00 Total Charters/Diversions/Emergencies 0 0 $0.00 Total Landing Weight 0 $0.00 ENPLANEMENTS Passengers (w/ Charters) Mail (Ibs.) Cargo (Ibs.) DEPLANEMENTS Passengers (w/ Charters) Mail (Ibs.) Cargo (Ibs.) De -Ice (gallons) NUMBER OF AIRCRAFT PARKED OVERNIGHT: CERTIFICATE OF INTERESTED PARTIES FORM 1295 1 of 1 Complete Nos. 1- 4 and 6 if there are interested parties. OFFICE USE ONLY Complete Nos.1, 2, 3, 5, and 6 if there are no interested parties. CERTIFICATION OF FILING Certificate Number: 1 Name of business entity filing form, and the city, state and country of the business entity's place of business. 2017-243443 American Airlines Ft. Worth TX, TX United States Date Filed: 07/31/2017 2 Name of governmental entity or state agency that is a party to the contract for which the form is being filed. City of Lubbock / Lubbock Preston Smith International Airport Date Acknowledged: 3 Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a description of the services, goods, or other property to be provided under the contract. LBB4000 , bb3� Facility Lease 4 Name of Interested Party City, State, Country (place of business) Nature of interest (check applicable) Controlling I Intermediary American Airlines Inc. Ft. Worth, TX United States X 5 Check only if there is NO Interested Party. ❑ 6 AFFIDAVIT I swear, or affir tan ere an 1� of perjury, that the above disclosure is true and correct. O�Pxv'P Brittany Carer f a. 5/N1C state \ tlliltlC. 1 £f Of Expires: 10-17-2018 ignat re of � e agent of contracting business entity I AFFIX NOTARY STAMP / SEAL ABOVE `n �/ t Swo n to and subscribed before me, by the said Get 1,{ fl �� _ this the 20, to certify which, witness my hand and seal of office. day of , Signature of officer administering oath Printed name of officer administering oath Title of officer administering oath Forms provided by Texas Ethics Commission www.ethics.state.tx.us Versinn V1_0.883