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HomeMy WebLinkAboutResolution - 460 - Cetrificated Passenger Airline Lease-Air Midwest, Inc.-Ticket Counter Space, LIA - 03_27_1980SMT:bs- RESOLUTION #460 - 3/27/80 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Certificated Passenger Airline Lease with Air Midwest, Inc. for ticket counter space and sundry rights and privileges at the Lubbock International Airport, a copy of which is attached herewith which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 2 tFi day of March ,1980. IRK WEST, MAYOR ATTEST: -.`velyn G �f " tary-Treasurer 'APPROVED,AS TO FORM: Susan M. Tom, Assistant City Attorney RESOLUTION ®•� 3/27/80 CERTIFICATED PASSENGER AIRLINE,LEASE Lubbock International Airport Lubbock, Texas THIS LEASE AGREEMENT, made this day of 19Ad, by and between the City of Lubbock (hereinafter referred to as "City"), and Air Midwest, Inc., a cor- poration incorporated under the laws of the State of Kansas with its principle office at Wichita, Kansas (hereinafter referred to as "Lessee"). WHEREAS, City owns and operates Lubbock International Airport, located in Lubbock County, State of Texas (hereinafter referred to as "Airport"), and WHEREAS, Lessee is engaged in the business of air transpor- tation with respect to persons, property, and cargo, and is certi- ficated by the Civil Aeronautics Board to furnish said service through Lubbock International Airport, and WHEREAS, City is currently operating a terminal building at said Airport and said building includes space for airline ticketing and operation facilities, and WHEREAS, Lessee desires to lease certain premises and faci- lities in the terminal building and to obtain certain rights in connection with and on the Airport, NOW THEREFORE, for and in consideration of the mutual cov- enants hereof, City hereby leases to Lessee and Lessee hereby hires and takes from City certain exclusive premises (hereinafter called "Leased Premises"), and certain non-exclusive use facilities, rights and privileges in connection with and on the Airport, as hereinafter described, upon the terms and conditions as follows: ARTICLE I LEASED PREMISES AND USES Section 1.01 - Description of Exclusive Leased Premises. The exclusive Leased Premises shall be comprised of 144 square feet, more or less, in the terminal building for ticket counter space. The location of the Leased Premises is designated in colors on Exhibit A attached hereto and by this reference made a part hereof. Section 1.02 - Description of Non-exclusive Use Premises. In addition to the exclusive Leased Premises hereinabove defined, Lessee is hereby granted the Non-exclusive use, in common with others authorized so to do, of such space and facilities as may be designated by City in and adjacent to the terminal building, which space and facilities, without limiting the generality hereof, shall consist of: (A) Ground area for the taxiing of aircraft. (B) Space for a reasonable amount of Lessee's apron equip- ment. (C) Loading gates. (D) Vehicular parking space, as available, in the Employee Parking Lot for the use by Lessee and its employees. Such space shall be at locations designated by City in common with other airport employees and the use thereof shall be provided at same charge per month as estab- lished for other airport employees. Section 1.03 - Description of Privileges, Uses and Rights. Lessee shall be entitled, in common with others authorized so to do, to the general use of all public airport facilities and im- provements which are now or may hereafter be connected with or appurtenant to the Airport, except as hereinafter provided. For the purpose of this lease, "public airport facilities" shall in- clude, but not be limited to, approach areas, runways, taxiways, aprons, aircraft parking areas, roadways, sidewalks, navigational and avigational aids, lighting facilities, terminal facilities, or other public facilities appurtenant to the Airport. Lessee's use of said public airport facilities shall be for the sole purpose of operating a transportation system by aircraft for the carriage of persons, property, and cargo, (hereinafter referred to as "Air Transportation"), which use, without limiting the generality hereof, shall include: -2- 1 (A) The handling, ticketing, billing and manifesting of passengers, baggage, and cargo, in air transportation by Lessee or on behalf of any other certificated pas- senger air transportation company having a valid lease with City. (B) The repairing, maintaining, conditioning, servicing, testing, parking or storage of aircraft or other equip- ment operated by Lessee, or of any other certificated passenger air transportation company. Such right and the rights referred to in Subparagraphs (C) and (D) below shall not be construed as authorizing the conduct of a separate business by Lessee, but shall permit Lessee to exercise such rights only in connection with its conduct of air transportation. (C) The training on the Airport of personnel in the employ of or to be employed by Lessee or any other certificated passenger air transportation company. (D) The sale, lease, transfer, disposal or exchange of Lessee's aircraft engines, accessories, and other equip- ment or supplies. Said right shall include the sale, lease, transfer or disposal of any article or goods used by or bought for use by Lessee in connection with its conduct of air transportation; provided however, that Lessee shall not: (1) Sell food or beverages, except for consumption by passengers on the aircraft and as provided in Subparagraph (I) of this Section 1.03. (2) Sell gasoline, fuel, propellants, greases or other lubricants. (E) The servicing by Lessee's employees or others under control of Lessee of aircraft and other equipment operated by Lessee on the apron, by truck or otherwise, with gasoline, oil, greases, lubricants and any other fuel or propellant or other supplies required by Lessee. -3- All of which shall include, without limiting the general- ity hereof, the right of Lessee to install and maintain on the Airport subject to terms and conditions mutually agreeable to the parties hereto adequate storage faci- lities for such gasoline, oil, greases, lubricants and other fuel or propellant or supplies, together with the necessary pipes, pumps, motors, filters and other ap- purtenances incidental to the use thereof, and the in- stallation and maintenance of pipes in connection with such facilities as well as a pipeline or lines between Lessee's source of supply and said storage facilities. Lessee shall submit to City for its written approval complete written plans and specifications for such storage facilities prior to installation. Lessee's exercise of its rights hereunder shall be subject to the execution by the parties hereto of a separate lease on such terms, conditions and consideration, as may be mutually agreed upon. In connection with the execution of any such lease, City now agrees and hereby becomes obligated to make available for Lessee's use adequate and convenient rights -of -way on the Airport for said pipelines; provided, however, that Lessee shall be responsible for the cost of all excavation, resurfacing, construction, instal- lation, maintenance and operation thereof and further provided that Lessee shall restore the surface of the Airport. In the event Lessee discontinues the use of said storage facilities or pipelines, Lessee agrees to remove said storage facilities or pipelines and restore the surface of the Airport affected by such removal to their original condition to the satisfaction of the City. (F) The landing, taking off, flying, taxiing, towing, parking, loading and unloading of Lessee's aircraft or other equipment operated by Lessee, used in the operation of scheduled, shuttle, courtesy, test, training, in- spection, emergency, special charter, sight-seeing and -4- other flights. All of which shall incidentally include, without limiting the generality hereof, the right to load and unload Lessee's aircraft, or the aircraft of any other certificated passenger air transportation company having a valid lease with City, adjacent to a convenient entrance to the terminal building at loading gates located on the loading apron at points to be de- signated by City; provided, however, that flights carrying cargo or freight only shall load and unload at convenient and accessible points to be designated by City. (G) The loading and unloading of property, and cargo, at said Airport by such motor vehicles or other means of conveyance as Lessee may desire or require in the operation of its air transportation system, with the right to designate the particular carrier or carriers who shall regularly transport Lessee's property, and cargo, to and from the Airport. (H) The right to install, maintain and operate, for its own use, either by Lessee alone, or by Lessee in conjunction with others who are Lessees at the Airport, or through a nominee, a message system or other communication systems between suitable locations. The installation, mainten- ance and operation of a message/communication system shall be without cost to City, and subject to reason- able rental payments by Lessee to the City for any space used, as well as the prior written approval of City as to location, plans and specifications. (I) The right to provide food and beverages for consumption aloft by passengers and crews of Lessee or by passengers and crews of any other certificated passenger airline or for consumption by said passengers and crews grounded at the Airport because of weather or mechanical con- ditions. Such food and beverages may be served only -5- t in Lessee's exclusive space when such food and beverages were originally scheduled to be served to such passengers and crews aloft. Except to the extent hereinabove speci- fically provided, nothing in the Subparagraph (I) shall be deemed to give Lessee the right on the Airport to maintain or operate a cafeteria, restaurant, vending machines, bar or cocktail lounge for the purpose of selling or in any manner otherwise providing for the sale of food or beverages to the public. (J) The right to place or replace existing signs identifying Lessee's business on and in the terminal building. Said signs shall be substantially similar to existing signs as to size, type and location. A change in existing signs as to number, general type, size, design, and location shall be subject to the written approval of City prior to installation. Such installation and op- eration shall be without cost to City. (K) The right to install, maintain and operate by Lessee alone, by Lessee in conjunction with any other certi- ficated passenger air transportation companies who are lessees at the Airport, or through a nominee, such radio communications, meterological and aerial navi- gation equipment and facilities in or on premises leased exclusively to Lessee, without cost to the City and sub- ject to the written approval of City as to location, method and type of installation prior to installation. (L) The right, except as herein otherwise specifically pro- vided, to purchase or otherwise obtain personal property of any nature (including, but not limited to, gasoline fuel, propellants, lubricating oil, grease, food, bev- erages and other materials, equipment and supplies) deemed by Lessee necessary or incidental to its operations, its exercise of the rights herein granted and its dis- charge of the obligations herein imposed. Said purchases -6- may be made through any person, partnership, firm, association or corporation lessee may choose. (M) The rights and privileges granted the Lessee under Sub- paragraph (E), (G), (H), and (K), of this Section 1.03 may be exercised by Lessee for and on behalf of any other certificated passenger air transportation company of by or through a nominee of Lessee. Said nominee shall be subject to the prior written approval of the City. It is specifically provided, however, that any such nominee shall have no greater rights than Lessee hereunder. Section 1.04 - Rights and Privileges Specifically Excluded. Except as specifically provided for in Section 1.03, nothing here- in shall be deemed to give Lessee any right or permission to sell at the Airport any goods or services to the public, other than related air transportation services. This prohibition includes, without limiting the generality of the foregoing, insurance sales except when not otherwise available to the Airport. Section 1.05 -Right of Ingress and Egress. City hereby grants the right of ingress to and egress from but not the use of, except as provided in this lease, the Leased Premises and facilities referred to in Sections 1.01 and 1.02 for Lessee, its employees, agents, passengers, guests, patrons, its suppliers of materials or furnishers of service, its air- craft. equipment, vehicles, machinery and other property. Said rights shall be subject to such ordinances, rules and regulations as may now or hereafter have application at the Airport and shall be without charge, except as herein otherwise provided. ARTICLE II TITLE TO LESSEE Section 2.01 - Installed Improvements and Property. All improvements, equipment and other property bought, installed, erected or placed by Lessee in, on or about the Airport and the Leased Premises shall be deemed to be personalty and remain the -7- property of Lessee, except as may constitute fixtures attached to the building or premises, which if removed would damage or impair the use of such building or premises. ARTICLE III OBLIGATIONS OF CITY Section 3.01 - Right to Lease Property. City represents that it has the full right to lease that portion of the Airport referred to herein, together with all the premises, facilities, rights, licenses, services and privileges herein granted, and has full power and authority to enter into this lease in respect thereof. City further represents that all things have happened and been done to make its granting of this lease effective and City warrants to Lessee peaceful possession and quiet enjoyment of the Leased Premises, appurtenances, facilities, rights, license and privileges during the term hereof, upon performance of Lessee's covenants herein. Section 3.02 - Maintenance and Operation of Airport. Except as otherwise specifically provided herein, City shall, during the term of this lease, operate, maintain and keep in good repair the terminal building, terminal apron and all public air- port facilities and services now or hereafter connected with the Airport, which City has agreed to furnish and supply hereunder. City shall not, however, be required to perform maintenance and make repairs occasioned by the negligence of Lessee or its employees, agents, servants, patrons, and invitees, in which case City may perform such maintenance or make such repairs as necessary and charge the cost of same to Lessee, provided Lessee has failed to perform such maintenance or make such repairs within a reason- able time after a request in writing from City so to do. City shall keep the Airport free from obstructions, including the clearing and removal of grass, stones, snow and ice, or other foreign matter as reasonably necessary and with reasonable prompt- ness from the runways, taxiways and loading areas in order to insure the safe, convenient and proper use of the Airport by U. Lessee. City shall maintain and operate the Airport in all respects in a manner at least equal to the standards or rating issued by the Federal Aviation Administration for airports substantially similar in size and character and in accordance with all rules and regulations of the Federal Aviation Administration and any other governmental agency having jurisdiction thereof. Nothing herein contained shall be deemed to require City to enlarge the Airport or to make the extensions or additions to the landing areas, runways, taxiways or other appurtenances of the Airport. It is further understood and agreed that City may abandon certain facilities which are no longer reasonably justified for proper and adequate operation of the Airport. The obligations assumed by City under this Article III shall not obligate City, except as provided in Article X hereof, to repair or rebuild any of said facilities at said Airport in the event of damage by the elements, fire, explosion, or other causes beyond the control of City. City shall keep the public and pas- senger space in the terminal building adequately supplied, equip- ped, furnished and decorated and shall operate or cause to be operated and maintained adequate directional signs in said spaces and in all other public spaces on the Airport. Said signs shall include, but not be limited to, signs indicating the location of all public restaurants, rest rooms, newsstands, telegraph offices, baggage counters and all other facilities for passenger or public use in the terminal building or elsewhere on the Airport. City shall provide and supply adequate heat, conditioned air, light and water for the public and passenger space in the terminal building. City shall also provide and supply adequate lighting for vehicular parking spaces and aircraft loading ramp and adequate field lighting including, without limiting the generality hereof, landing lights and beacons. S2 City shall also provide janitors and other cleaners necessary to keep the public and passenger space, including that exclusive leased area in front of the ticket counters, and the landing area of the Airport clean, neat, orderly, sanitary and presentable at all times. Section 3.03 - Maintenance and Services in Lessee's Exclusive Space. City shall be responsible for and shall perform exterior building maintenance and structural maintenance throughout the Leased Premises and, at no additional charge, provide the following services to Lessee in the Leased Premises: (A) Building heat and air conditioning (during the period of the year when such service is provided in the public areas of the terminal building). (B) Exterior window washing at periodic intervals, as re- quired to provide a clean attractive appearance. (C) Maintenance of mechanical and electrical systems in- stalled by City, excluding relamping behind and above ticket counter. Section 3.04 - Governmental Facilities. It is expressly agreed that if funds for the provision; mainten- ance and operation of the Control Tower, Instrument Landing System, and/or other air navigation aids or other facilities required or permitted by the United States Government and needed by Lessee or Lessee's operation at the Airport and which are now or may hereafter be furnished by the United States Government are dis- continued by the United States Government, City shall not be re- quired to furnish said facilities. Section 3.05 - Restaurants. City agrees to provide space in the terminal building for a rest- aurant or coffee shop for the purpose of selling food and bever- ages to the general public. City agrees to require the operator of said restaurant or coffee shop to furnish employees of Lessee and air passengers food and beverages of good quality and reason- able rates. -10- ARTICLE IV OBLIGATIONS OF LESSEE Section 4.01 - Maintenance of Leased Premises. Except for exterior building and structural maintenance by City, as provided in Section 3.03, Lessee shall be obligated, without cost to City, to maintain its exclusive Leased Premises and every part thereof including, but not limited to, the Counter shell and the outbound baggage system in good order, repair and safe condition. Lessee shall, at its own expense, provide janitorial services in the Leased Premises. Said services may be provided by Lessee alone, by Lessee in conjunction with other certificated passenger air transportation companies who may hereafter be lessees at the Airport, or a nominee of Lessee who shall be approved by the Director of Aviation. Lessee shall relamp light fixtures as necessary, and shall repaint the interior of the Leased Premises as necessary but not less than once every three years. All such maintenance, repairs, and replacements shall be of quality equal to the original condition in materials and workmanship. All paint colors or schemes shall harmonize with the decor of the passenger terminal area subject to the prior approval of Director of Aviation. Section 4.02 - Porter Service. Lessee may, at its option, provide porter service for the con- venience of its passengers in and adjacent to the baggage claim area of the terminal building. Said service may be provided by Lessee alone, by Lessee in conjunction with other certificated passenger air transportation companies who may hereafter be Lessees at the Airport, or a nominee of Lessee who shall be approved by the Director of Aviation. Section 4.03 - Alterations, Additions or Replacements. During the term of this Lease, Lessee shall make no alterations, additions, or replacements in the leased premises without the prior written approval of City. Lessee shall likewise obtain prior approval from City before installing, at its own expense, any additional equipment which requires new electrical or plumbing connections or changes in those already installed on the Leased Premises. Section 4.04 - Removal and Demolition. Lessee shall not remove or demolish, in whole or in part, any im- provements that already exist on the Leased Premises without the prior written consent of City which may, at its discretion, con- dition such consent upon the obligation of Lessee to replace the same improvements specified in such consent upon termination of this lease. City shall not withhold consent unreasonably and shall not impose unreasonable condition in its consent. Section 4.05 - Trash and Garbage. Lessee shall provide at its expense a complete and proper arrange- ment for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse caused as a result of its operations on the Airport. Lessee shall provide and use suitable covered metal receptacles for all garbage, trash and other refuse on or in connection with Lessee's areas. Piling of boxes, cartons, barrels or other similar items in an unsafe manner in or about Lessee's premises shall not be permitted. Section 4.06 - Taxes and Licenses. Lessee shall pay all taxes of whatever character that may be law- fully levied or charged upon Lessee's Leasehold improvements or operations hereunder and upon Lessee's rights to use the Leased Premises. Lessee shall obtain and pay for all licenses or permits necessary or required by law for the construction of any additional improvements, the installation of equipment and furnishings, and any other licenses necessary for the conduct of its air transpor- tation services. City shall assist Lessee where necessary in ob- taining said permits. -12- Section 4.07 - Rules and Regulations. In conducting its operations hereunder, Lessee shall comply with all applicable laws of the United States of America and the State of Texas; the rules and regulations promulgated by their authority with reference to aviation and air navigation; and all reasonable and applicable rules, regulations and ordinances of City now in force or hereafter prescribed or promulgated by authority or by law. ARTICLE V TERM Section 5.01 - Term. The term of this Lease shall be for a period of sixteen (16) years commencing on the day of , 19_, or date of beneficial occupancy subject, however, to earlier termi- nation as hereinafter provided under Article XI and Sections 6.07 and 10.03, and to the renegotiation of the Maintenance and Operation portion of the rentals and fees hereinafter provided ninety (90) days prior to the third anniversary year of this Lease. In the event that no written demand for renegotiation is made by either party at least ninety (90) days prior to the third anniversary year, the rentals and fees then current shall apply for the succeeding three-year period.. ARTICLE VI RENTALS AND FEES Section 6.01 - Rental for Exclusive Terminal Building Space. Rental for the leased premises in the terminal building as de- scribed in Section 1.01, shall be as follows: Exclusive Area: 144 Sq. Ft. of exclusive leased space at the rate of $8.25 per sq. ft. per year or $1,188.00 per year. The aforesaid rental rate of $8.25 is broken down as follows: $5.63 fixed fee to cover debt service and $2.62 for maintenance and operation. The $2.62 Maintenance and Operation portion is subject to adjustment every three years to reflect actual cost, however, in no event shall it exceed the CPI changes for the same three year period. -13- Lessee shall, within six (6) months of date of execution of this lease, complete arrangements to provide a permanent ticket counter and other agreed upon office and operational facilities. Section 6.02 - Landing Fee. The fee for the use of the landing area and facilities necessary therefor as granted hereunder, except those for which rentals are specifically provided elsewhere herein, shall be as follows: 25 cents effective October 1, 1976 30 cents effective October 1, 1979 32.5 cents effective October 1, 1981 35 cents effective October 1, 1983 40 cents effective October 1, 1986 45 cents effective October 1, 1989 50 cents effective October 1, 1992 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Five hundred (500) pounds or any larger part of one thousand (1,000) pounds shall be counted as a whole one thousand (1,000) pounds and anv smaller part shall be disregarded. Lessee shall file with the City, acting by and through its Director of Aviation, not later than the fifth day of each month, lessee's actual landings at the airport for the preceding month, which shall include the number and type of aircraft making such landings. The term "approved maximum gross landing weight" for any air- craft, as used herein, shall be the maximum landing weight ap- proved by the Federal Aviation Administration for landing such aircraft at the airport. Lessee shall provide the City such "approved maximum gross landing weights" for each type of aircraft it operates at the airport. Section 6.03 - Rental for Common Use Area. (A) Common Bag Claim Area The bag claim area comprises a total of approximately 8,316 sq. ft., as shown on Exhibit B attached hereto and by the reference made a part hereof and the air carriers have jointly agreed to accept responsibility for payment of rent on the bag claim area. Rent shall be charged jointly to all certificated passenger air transportation companies which now or may hereafter have valid leases at the Airport at the rate of $8.25 per sq. ft. per year or $68,607,00 per year. Lessee, in conjunction with other certificated passenger air transportation companies which now or may hereafter have valid leases at the airport, shall provide City in writing a schedule of the pro rata rental due by each Lessee hereunder and Lessee agrees to pay its stated pro rata amount monthly. Such pro rata agreement will become a part of this lease and will be attached hereto. The pro rata schedule so furnished to City shall remain in effect until such time as City is provided a revised schedule of the pro rata rental amounts executed by all said Lessees which revised schedule shall remain in effect until similarly modified. The aforesaid rental rate of $8.25 is broken down as follows: $5.63 fixed fee to cover debt service and $2.62 for maintenance and operation. The $2.62 Main- tenance and Operation portion is subject to adjustment every three years to reflect actual cost, however, in no event should it exceed the CPI changes for the same three year period. (B) Common Boarding Lounge Area The common boarding lounge area comprises a total of approximately 27,284 sq. ft. as shown on Exhibit B attached hereto and by this reference made a part here- of shall be charged jointly to all certificated passenger air transportation companies which now or may hereafter have valid leases at the airport at the rate of $2.62 per sq. ft. per year or $71,484.08 per year. Lessee, in conjunction with other certificated passenger air transportation companies which now or -15- may hereafter have valid leases at the Airport, shall provide City in writing a schedule of the pro rata rental due by each Lessee hereunder and Lessee agrees to pay its stated pro rata amount monthly. Such pro rata agree- ment shall become a part of this lease and will be at- tached hereto. The pro rata schedule so furnished to City shall remain in effect until such time as City is provided a revised schedule of the pro rata rental amounts executed by all said Lessees, which revised schedule shall remain in effect until similarly modified. The aforesaid rental rate of $2.62 covers the main- tenance and operation and is subject to adjustment every three years to reflect actual cost, however, in no event shall it exceed the CPI changes for the same three year period. Section 6.04 - Rental for Public Address System. Lessee shall pay a rental rate of $5.00 per month per microphone connection located in the exclusive leased area or common lease area. The rental rate per month will be adjusted when required to reflect the charges imposed on the City to provide this service. The microphone located in the common leased area will be provided for use in conjunction with other certificated passenger air transportation companies which now or may hereafter have valid leases at the Airport. These companies shall provide City in writing a schedule of the pro rata rental due by each Lessee here- under and Lessee agrees to pay its stated pro rata amount monthly. Such pro rata agreement shall become a part of this lease and will be attached hereto. The pro rata schedule so furnished to City shall remain in effect until such time as City is provided a re- vised schedule of the pro rata rental amounts executed by all said Lessees which revised schedule shall remain in effect until similarly modified. Section 6.05 - Aircraft Storage. City shall have the right to designate apron parking areas for the storage of Lessee's aircraft. k -16- Section 6.06 - Time of Payment. Lessee agrees to pay City the rentals and fees due hereunder at such place as City may from time to time designate. All rentals and fees shall be payable in monthly installments covering the preceding calendar month of operation. In the event that the commencement or termination of this Lease falls on any date other than the first or last day of a calendar month, the applicable rentals, fees and charges (except landing fees) for that month shall be paid on a pro rata basis according to the number of days during which said particular pre- mises, facilities, rights, licenses, services and privileges were enjoyed. City shall, after the end of each calendar month, transmit to Lessee a statement of the rentals, fees and charges incurred by Lessee during said month as hereinabove provided. Payment shall be made by Lessee within thirty (30) days after receipt of such statement. Section 6.07 - Default for Failure to Pay Rentals, Fees and Charges. It is expressly agreed that time of payment of the rentals and fees hereinabove provided is of the essence in this entire Lease. Therefore, if Lessee fails to pay any rentals, charges and fees due hereunder within thirty (30) days after City transmits a statement therefor to Lessee, City may, at its option, upon fifteen (15) days written notice to Lessee (unless in such fifteen -day period Lessee shall have corrected such failure to pay) immediately or at any time thereafter, enter into and upon the Leased Premises, or any part thereof in the name of the whole, and repossess said premises. In said event, City may expel Lessee and those claiming by, through or under it and remove its effects forcibly, if nec- essary, without being deemed guilty of trespass and without pre- judice to any remedy which otherwise might be used for arrears of rent or preceding breach of covenant. Upon such re-entry this Lease shall terminate. -17- s , r READJUSTMENT OF RENTALS, FEES, AND OTHER CHARGES Section 7.01 - Basis for Readjusting Charges. Three (3) calendar years after the effective date of this lease, charges for the use of any one or all of the premises and faci- lities leased hereunder for the succeeding three-year period shall be subject to renegotiation upon written notice by either party hereto ninety (90) days prior to the beginning of the next three- year period. Either party giving notice shall, at the time, fur- nish the other party with a reasonably detailed statement sup- porting the proposed adjustment. The following factors, among others, shall be considered in determining adjustment of rental, fees and other charges: (A) The actual costs of providing the buildings or facility during the preceding three-year rental period, and the actual revenue derived therefrom during said period. For this purpose, any and all revenue, including con- cession revenue applicable to said buildings and fac- ility, shall be included. (B) City's estimated costs for the succeeding three-year period of providing the buildings or facility. Such estimate shall take into account: (1) The actual costs as shown by City's books. (2) The necessary increased costs resulting from: (a) Technical advances requiring additional ex- penditures by City. (b) Expenditures incurred by City pursuant to orders or requirements of governmental authority. (c) Additional expenditures of City required for for the prudent operation of the buildings or facility. (3) Extraordinary expenditures for maintenance and re- newals and replacements. Such expenditures shall be equalized over a reasonable period of succeeding years. -18- (C) Buildings and facilities, the charges for the use of which are made the basis for the adjustment pursuant to this Article VII shall be the following: (1) Passenger terminal building means the building proper, including vehicular parking space and road- ways in connection therewith. There shall be in- cluded all concessions operated in or in conjunction with the passenger termi^al building, such as, but not limited to, restaurant, cocktail lounge, baggage, newstands, ground transportation of passengers, automobile parking, and all other building and area concessions and operations in the passenger terminal area. (2) Aircraft storage shall mean the areas, other than hangars, designated by City for storage of aircraft. (3) Any other buildings, appurtenances, facilities or services, requested by Lessee or City and not covered by separate agreement. (D) In the event a governmental order or requirement results in increased costs, Lessee shall be advised and shall have an opportunity to oppose same, if it desires. (E) The depreciation of the City's investment and/or the annual debt service requirements on all bonds issued and outstanding at the time of the adjustment. (F) In allocating costs and revenues to the various faci- lities as hereinabove defined, City will observe sound accounting principles and shall include interest charges which are no greater than the maximum of those paid by the City on bond issues or other loans for Airport purposes. Section 7.02 - Costs Excluded. Costs of facilities and improvements paid for by Federal or State gifts or grants-in-aid, and depreciation, amortization and interest charges thereon, shall not be included in the cost factors herein. -19- ARTICLE VIII RIGHTS AND PRIVILEGES RESERVED BY CITY Section 8.01 - Right to Charge Use Fees to Others. Nothing in this Lease shall be deemed to restrict in any manner City's right to charge any person, partnership, firm, association or corporation fees and rentals for the use of City's property or any improvements thereon where such use of said property or im- provements is of a regular or permanent nature, as distinguished from a temporary or transitory nature, or where such use is such a nature as to constitute the performance of a commercial business at the Airport. In addition, City shall have the right to charge persons, partnerships, firms, associations or corporations a fee no less than that set forth in mutual assistance ground services agreement approved by CAB, and as revised from time to time. This fee shall be applicable to, but not limited to, fees for ramp use, jetway use, gate use, training flights and aircraft storage, and landing fees which shall never be less than 125% of the landing fee charged Lessee as set out in Section 6.02 hereof. Section 8.02 - Right to Improve and Protect the Airport. In addition to any other rights herein retained by it, City speci- fically reserves the following privileges: (A) The right to further develop or improve the landing area and other portions of the Airport as it deems necessary, regardless of the desires or views of Lessee and without interference or hindrance therefrom. If feasible, such improvements shall be made in a manner which will cause Lessee as little inconvenience as possible. (B) The right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from erecting or permitting to be erected any building or other structure on the Airport which, in the opinion of City, would limit the usefulness of the Airport or constitute a hazard to aircraft. -20- A (C) The right during the time of war or national emergency to lease the Airport or any part thereof to the United States Government for military use. In the event any such lease is executed, the privileges of this instru- ment insofar as they are inconsistent with the privileges of the Lease to the government shall be suspended. A T M 7T y C T V INDEMNIFICATION, INSURANCE AND BONDS Section 9.01 - Indemnification, Etc. The parties agree that Lessee is and shall always be deemed to be an independent contractor and operator and not an agent or employee of City with respect to its acts or omissions hereunder. Lessee shall indemnify fully and save harmless City, its officers, agents and employees from any and all claims and actions and any and all expenses incidental to the investigation and de- fense thereof, based upon or arising out of damages or injuries to third persons or their property, caused by the fault or negligence of Lessee, its agents or employees in the use or occupancy of the premises and privileges hereunder. Provided, however, that the City shall indemnify fully and save harmless Lessee, its officers, agents, and employees from any and all claims and actions and any and all expenses incidental to the investigation in defense there- of based upon or rising out of damages or injuries to third persons or their property caused by the fault or negligence of the City, its agents and employees, or rising out of or as a result of the condition of any of the publicly used premises in or about said airport. City shall give to Lessee prompt and reasonable notice of any claims or actions against it and failure to so notify Lessee shall relieve Lessee of its obligations to indemnify the City therefor. Lessee shall have the rights to investigate, com- promise and defend any such claims or actions to the extent of its own interest. -21- Section 9.02 - Insurance. Lessee shall procure and keep in effect at all times during the term of the Lease, the forms of insurance set forth in this Section 9.02. All policies or certificates shall contain a pro- vision that written notice of cancellation or of any material change in said policy by the Insurer shall be delivered to City thirty (30) days in advance of the effective date thereof. All policies shall contain an agreement on the part of the respective insurers, waiving the right of such insurers to subrogation. Lessee shall maintain all insurance hereunder with insurance underwriters authorized to do business in the State of Texas satisfactory to City. All policies shall name City, its officers, servants, agents, and employees as additional insureds. Lessee shall furnish City with certificates from the insurance carrier showing all insurance required hereunder to be in full force and effect during the entire term of this Lease or shall deposit with City certified copies of said policies. (A) Fire Insurance - Lessee shall insure for fire and ex- tended coverage risks all Lessee's improvements on the Leased Premises. Such insurance shall be in an amount equal to the full insurable replacement value of such improvements. All fire insurance policies shall contain loss payable endorsements in favor of the parties as their respective interests may appear hereunder. City agrees that any payments received from such insuring companies by reason of loss under such policy or policies shall be applied toward repair and reconstruction of said Leasehold im- provements. (B) Public Liability and Property Damage Insurance - Promptly after the execution of this Lease, Lessee shall provide comprehensive general liability insurance in protection of City, its officers, agents, and employees. Lessee shall provide public liability insurance for personal injuries or death growing out of any one -22- accident or event in a minimum sum of One Hundred Thou- sand Dollars ($100,000.00) for one person and Two Mil- lion Dollars ($2,000,000.00) for any one accident, and in addition, shall provide property damage liability insurance in a minimum sum of Two Hundred Fifty Thou- sand Dollars ($250,000.00) for property damage growing out of any one accident or event. Insurance coverages required of Lessee shall be subject to adjustment from time to time to comply with any changes in minimum re- quirements determined necessary by City. ARTICLE X DAMAGE OR DESTRUCTION OF LEASED PREMISES Section 10.01 - Partial Damage. If the Leased Premises are partially damaged by fire, explosion, the elements, the public enemy, or other casualty, but not ren- dered untenantable, the same will be repaired with due diligence by City at its own cost and expense; provided, however, that if the damage is caused by an act or omission of Lessee, its sub- lessees, agents, or employees, Lessee shall be responsible for repairing with due diligence said Premises and shall pay the cost therefor. Section 10.02 - Extensive Damage. If the damage shall be so extensive as to render the Leased Pre- mises untenantable, but capable of being repaired in thirty (30) days, the same shall be repaired with due diligence by City at its own cost and expense, and the rent payable herein with re- spect to Lessee's exclusive space shall be paid proportionately to the time of such damage and thereafter cease until such time as the Premises are fully restored, provided, however, that if the damage is caused by an act or omission of Lessee, its sub- lessees, agents or employees, Lessee shall be responsible for repairing said Premises and shall pay the costs therefor. During any such period where Lessee repairs said Premises under the terms of this paragraph, the usual rental shall be payable. -23- f The abatement of rental for the Leased Premises, as afore- said, shall not be construed as a waiver of other fees due and payable under the terms of Article VI. Section 10.03 - Complete Destruction. In the event the Leased Premises are completely destroyed by fire, explosion, the elements, the public enemy or other casualty, or so damaged that they will remain untenantable for more than thirty (30) days, City shall be under no obligation to repair and recon- struct said Premises, and rent payable hereunder shall be paid proportionately to the time of such damage or destruction and shall thenceforth cease until such time as the Premises are fully restored. If within twelve (12) months after the time of such damage or destruction said Premises shall not have been repaired or reconstructed, or other reasonable facilities provided in lieu thereof, Lessee may give City written notice of its intention to cancel this Lease in its entirety or to cancel as of the date of such damage or destruction such part of this Lease as related to the Leased Premises. Notwithstanding the foregoing, if the leased premises and adjoining premises are completely destroyed as a result of an act or omission by Lessee, City may, in its discretion, require Lessee to repair and reconstruct the leased premises and adjoining pre- mises and pay the costs therefor. During any such period where Lessee repairs said Premises under the terms of this Paragraph, the usual rental shall be payable. Section 10.04 - Right to Recover Damages. Nothing in this Lease shall be construed as a waiver of the right of either City of Lessee to recover damages from the other arising out of the fault or negligence of the other. Section 10.05 - Limit of City's Obligations Defined. It is understood that, in the application of the foregoing Section 10.01, 10.02 and 10.03, City's obligations shall be limited to repair or reconstruction of the terminal building to the same extent and of equal quality as obtained at the commencement of the operations hereunder. Redecoration and replacement of furn- iture, equipment, and supplies shall be the responsibility of -24- Lessee and any such redecoration and refurnishing/re-equipping shall be of equivalent quality to that originally installed here- under within Lessee's exclusive area. TERMINATION OF LEASE CANCELLATION, ASSIGNMENT AND TRANSFER Section 11.01 - Termination This Lease shall terminate at the end of the full term hereof, and Lessee shall have no further right or interest in the Leased Premises, except as provided in Article XII. Section 11.02 - Cancellation by Lessee. This Lease shall be subject to cancellation by Lessee after the happening of one or more of the following events: (A) The permanent abandonment of the Airport as an airline terminal or the permanent removal of scheduled airline service from the Airport. (B) The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the Airport, or any 'substantial part or parts thereof, in such manner as substantially to restrict Lessee for a period of at least ninety (90) days from operating thereon for the carrying of pass- engers, cargo, and property. (C) Issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Airport or any part thereof for Airport purposes, and the remaining in force of such injunction for a period of at least ninety days. (D) The suspension, or substantial modification, for a period of ninety (90) days or the revocation of the operating authority of the Lessee to serve the Lubbock area through the Airport by final order of the Civil Aero- nautics Board or other governmental agency, Federal or State, having jurisdiction over Lessee. -25- (E) Any failure or refusal by the Federal Aviation Adminis- tration to prevent Lessee to operate into, from or through said airport such aircraft as Lessee may reason- ably desire to operate. (F) The default by City in the performance of any covenant or agreement herein required to be performed by City and the failure of City to remedy such default for a period of ninety (90) days after receipt from Lessee of written notice to remedy the same; provided, how- ever, that no notice of cancellation following the ninety (90) day period above shall be of any force or effect if City shall have remedied the default prior to the receipt of the Lessee's notice of cancellation. Lessee may exercise such right of termination by giving City sixty (60) days advance written notice at any time after the lapse of the applicable periods of time and this lease shall terminate as of the sixtieth (60th) day. Rental due hereunder shall be payable only to the date of said termination. Lessee's performance of all or any part of this Lease for or during any period(s) after a default by City of any of the terms, covenants, and conditions herein contained to be kept by City shall not be deemed a waiver of any right on the part of Lessee to cancel this Lease for any subsequent failure by City so to perform, keep or observe any of the terms, covenants, or conditions hereof. Section 11.03 - Cancellation by City. This Lease shall be subject to cancellation by City upon the happening of any one of the following events: (A) The filing by Lessee of a voluntary petition in bank- ruptcy. (B) The institution of bankruptcy proceedings against Lessee and the adjudication of Lessee as a bankrupt pursuant to such proceedings. (C) The taking by a court of competent jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any federal reorganization act. -26- (D) The appointment of a receiver of Lessee's assets. (E) The divestiture of Lessee's estate herein by other operation of law. (F) The abandonment by Lessee of its conduct of air trans- portation at the Airport for a period of ninety (90) days. (G) The default by Lessee in the performance of any covenant or agreement herein required to be performed by Lessee (except rental payments for which provision is made in Section 6.07) and the failure of Lessee to remedy such default for a period of sixty (60) days after receipt of written notice by City to remedy same. (H) The lawful assumption by the United States Government F or any authorized agency thereof of the operation con- trol or use of the Airport and facilities, or any sub- stantial part or parts thereof, in such manner as sub- stantially to restrict Lessee, for a period of at least ninety (90) days, from operating thereon for the carry- ing of passengers, cargo, and property. (I) In addition to the foregoing, all rights, privileges or interests acquired hereunder by Lessee may, at the option of City and following written notice of thirty (30) days, be suspended or finally terminated if such sus- pension or termination is found by City, acting in good faith, to be necessary to secure federal financial aid for the development of the Airport or for the develop- ment or promotion of aeronautical operation thereon. In any of the aforesaid events, City may take immediate pos- session of the Leased Premises and remove Lessee's effects. Upon said entry, this Lease shall terminate. Any rental due hereunder shall be payable to said date of termination. It is agreed that failure to declare this Lease terminated upon the default of Lessee for any of the reasons set forth above or Section 6.07 shall not operate to bar or destroy the right of -27- City to declare this Lease null and void by reason of any sub- sequent violation of the terms of this Lease. Section 11.04 - Assignment and Subletting. Lessee shall not sell, assign, or transfer this Lease or any part thereof and shall not sublease all or any portion of the Leased Premises without the prior written consent of City; provided, however, that Lessee may assign this Lease to any corporation with which Lessee may merge or consolidate or which may succeed to the air transportation business of Lessee. ARTICLE XII PROPERTY RIGHTS UPON TERMINATION Section 12.01 - Lessee's Right of Removal. Upon termination of this Lease for any reason, Lessee shall have the right for a period of sixty (60) days after the date of ter- mination, to remove any or all of its property from the Airport; provided, however, that Lessee shall not be in default in its payments to City hereunder and provided that Lessee shall restore said premises to their original condition as of the beginning of occupancy, ordinary wear and tear, damage by the elements, fire, explosion or other causes beyong control of Lessee excepted. Section 12.02 - City's Rights at Termination. Title to any and all property not removed by Lessee prior to the expiration of .the aforesaid sixty-day period shall vest in City; provided, however, that City reserves the right to require Lessee to remove such improvements and property, the cost of which shall be borne by Lessee in the event City removes same on failure of Lessee to perform its obligation hereunder. City also reserves the right to charge reasonable rental for the sixty-day period of continued occupancy by Lessee; pro- vided, however, that no charge shall be made to Lessee if Lessee shall remove its property from the Leased Premises within the first thirty (30) days of said sixty-day period. -28- GENERAL PROVISIONS Section 13.01 - Arbitration. In any event and notwithstanding any provisions made in this Lease, the parties agree to submit to arbitration any question or dis- pute, except non-payment of rentals, arising between said parties with respect to the interpretation of any term, condition or covenant herein contained or with respect to any matter of com- pliance or noncompliance with the terms hereof. City and Lessee shall each select one arbitrator and the two so chosen shall then select a competent and disinterested third arbitrator; and the arbitrators together shall then consider the question(s) or dis- pute(s) submitted to them in writing by the parties hereto. The decision in writing of any two shall determine the particular question or dispute under consideration. The parties hereto shall bear equally the expense of said arbitration. Section 13.02 - Non Discrimination. The Lessee, its agents and employees will not discriminate against any person or class of persons by reason of age, sex, race, color, creed or national origin in providing any services or in the use of any of its facilities provided for the public. The Lessee further agrees to comply with such enforcement procedures as the United States might demand that the City take in order to comply with the Sponsor's Assurances. Lessee agrees to not discriminate against any employee or applicant for employment because of race, creed, color, age, sex or national origin. The Lessee agrees to take affirmative action to insure that applicants are employed and that employees are tested during employment without regard to their race, creed, color, age, sex or national origin. Such action shall include, but not be limited to, employment, upgrading, demotion, or transfer, recruitment, layoff, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Section 13.03 - Rules and Regulations. City shall have the right to and shall adopt from time to time and enforce reasonable rules and regulations, which Lessee agrees -29- to observe and obey, with respect to the use of the Airport, public terminal building and appurtenances; provided that such rules and regulations shall not be inconsistent with safety and with rules, regulations, and orders of the Federal Aviation Administration with respect to aircraft operations at the Airport, and with the procedures prescribed or approved from time to time by the Federal Aviation Administration with respect to the operation of Lessee's aircraft at the Airport. Section 13.04 - Interpretation of Lease. Nothing in this Lease shall be construed or interpreted in any manner whatsoever as limiting, relinquishing, or waiving of any rights or ownership enjoyed by City in the Airport property, or in any manner waiving or limiting its control over the operation and maintenance of Airport property or in derogation of such govern- mental rights as City possesses, except as is specifically provided for herein. Section 13.05 - Conformity of Lease. In the event that City shall enter into a Lease, contract or agreement for use of the Airport with any other certificated passenger air transportation company having aircraft of substan- tially similar size as that operated by Lessee and said Lease, contract or agreement contains more favorable terms, rights, or privileges than this Lease, then the same shall be concurrently and automatically made available to Lessee, at its option. Section 13.06 - Invalid Provisions. In the event any covenant, condition or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of any such covenant, condition or provision shall in no way affect any other covenant, condition or provision herein contained; provided that the invaliditv of such covenant, condition or provision does not materially prejudice either City or Lessee in its respective rights and obligations contained in the valid covenants, conditions or provisions of this Lease. -30- Section 13.07 - Sponsor's Assurances, This Lease shall be subject to the terms of the City's Sponsor's Assurances Agreement as amended. City represents that none of the provisions of this Lease violates any of the provisions of said Sponsor's Assurances, as amended. Section 13.08 - Consent Not to be Unreasonably Withheld. Whenever consent is required hereunder by either City or Lessee, such consent is not to be unreasonably withheld or to be delayed for an unreasonable period of time. Section 13.09 - Redelivery of Premises. Lessee shall, upon termination of this Lease, quit and deliver up the Leased Premises to City peaceably, quietly and in as good order and condition as the same now are or may hereafter be im- proved by Lessee or City, reasonable use and wear thereof excepted. Section 13.10 - Holding Over. In the event Lessee remains in possession of the Leased Premises after the expiration of this Lease without any written renewal thereof, such holding over shall not be deemed as a renewal or extension of this Lease, but shall create only a tenancy from day to day which may be terminated at any time by City. Section 13.11 - Federal Aviation Administration. Whenever the term "Federal Aviation Administration" is used in this Lease it shall. mean the Federal Aviation Administration created by the Federal Government under the Federal Aviation Act of 1958, or to such other Federal Government authority as may be the successor thereto or be vested with the same or similar authority. Section 13.12 - Inspection. City through its authorized agent shall have the right at all reasonable times to enter upon the Leased Premises to inspect said Premises, to observe the performance by Lessee of its obli- gations hereunder, and to do any act which City may be obligated or have the right to do under this Lease. -31- Section 13.13 - Non Exclusive. It is hereby agreed that nothing herein contained shall be con- strued to grant or authorize the granting of an exclusive right prohibited by Section 308 of the Federal Aviation Act of 1958, as amended, and City reserves the right to grant to others the nrivileae and right of conducting any one or all of the aeronau- tical activities listed herein, or any other activity of an aero- nautical nature. Section 13.14 - Lease Made in Texas. This Lease has been made in and shall be construed in accordance with the laws of the State of Texas. Section 13.15 - Successors. This Lease shall bind and inure to the benefit of any successor of City and any successor, assignee or sublessee of Lessee. Section 13.16 - Headings. The article and section headings contained herein are for conven- ience in reference and are not intended to define or limit the scope of any provision of this Lease. Section 13.17 - Time of Essence. Time is of the essence of this Lease. Section 13.18 - Notices. Notices to City provided for herein shall be sufficient if sent by registered mail, postage paid, addressed to: Lubbock International Airport, Route 3, Box 389, Lubbock, Texas 79401 and notices to Lessee, if sent by registered mail, postage prepaid, addressed to: President, Air Midwest, Hangar 20-West, Wichita Mid -Continent Airport, Wichita, Kansas, or to such other addresses as the parties may designate to each other in writing from time to time. -32- IN WITNESS WHEREOF, the Parties have hereunto set their C_ hands this o5day of 196d � . ATTEST: Eve yn Ga ga-= � ty\_Sed5prtary-Treas er APPROVED --AS TO FORM: Assistant City Attorney Date / - I le - 'p"6 ATTEST: La nce Asst. Secretary APPROVED: S J. Beilkarf, General Counsel CITY OF LUBBOCK, TEXAS .1 WTI WEST, MAYOR Date ,3-_-2 7-& APPROVED AS TO CONTENT: 1_• Marvin uorree Director of Aviation Date 3 LESSEE President Title Date January 24, 1980 'too =4cw Pec.'r't C. �AYS T� .,r,t C. �3 LAN THIS 5 MENT SELO POW C yG. R7R 18,8C. 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