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HomeMy WebLinkAboutResolution - 3770 - Lease Agreement - American Eagle - Operations Facilities, LIA - 12_12_1991Resolution No.3770 December 12, 1991 Item #11 HW:js 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 Lease Agreement by and between the City of Lubbock and Metroflight, Inc. d/b/a American Eagle, 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 12th day of December , 1991. InZ�---' lwm�pyljlll,.�. ATTEST: . VvJV,V.Y)V�..J�A"'PP"-'' ROVED AS TO CONTENT: i Bern Case, Director of Aviation APPROVED AS TO FORM: AL44auc� Haroldistan ty Attorney Resolution No. 3770 December 12, 1991 Item #11 AIRLINE LEASE AGREEMENT BY AND BETWEEN THE CITY OF LUBBOCK, TEXAS AND METROFLIGHT, INC. D/B/A AMERICAN EAGLE THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE TEXAS GENERAL ARBITRATION ACT (ART. 224, ET SEQ. V.A.T.S.) TABLE OF CONTENTS Page ARTICLE I - DEFINITIONS 2 1.01 - Definitions 2 ARTICLE II - LEASED PREMISES AND USES 5 2.01 - Description of Exclusive Leased Premises 5 2.02 - Description of Non -Exclusive Use Premises 5 2.03 - Exhibit Designating Non -Exclusive Use Premises 5 2.04 - Description of Privileges, Uses and Rights 6 2.05 - Rights and Privileges Specifically Excluded 10 2.06 - Right of Ingress and Egress 10 2.07 - Effect of Ordinances, Rules and Regulations to ARTICLE III - TITLE TO LESSEE 11 3.01 - Installed Improvements and Property 11 ARTICLE IV - OBLIGATIONS OF CITY 11 4.01 - Right to Lease Property 11 4.02 - Maintenance and Operation of Airport 11 4.03 - Governmental Facilities 12 4.04 - Restaurants 12 ARTICLE V - OBLIGATIONS OF LESSEE 12 5.01 - Porter Service 12 5.02 - Trash and Garbage 13 5.03 - Taxes and Licenses 13 5.04 - Rules and Regulations 13 5.05 - Duty to Prevent Unauthorized Access to the Premises 13 ARTICLE VI - TERM 14 6.01 - Term 14 ARTICLE VII - RENTALS AND FEES 16 7.01 - Landing Fee 16 7.02 - Rental for Common Use Area 16 7.03 - Rental for Public Address System 20 7.04 - Aircraft Storage 20 7.05 - Time of Payment 20 7.06 - Default for Failure to Pay Rentals, Fees and Charges 21 ARTICLE VIII - RIGHTS AND PRIVILEGES RESERVED BY CITY 21 8.01 - Right to Charge Use Fees to Others 21 8.02 - Right to Improve and Protect the Airport 22 ARTICLE I% - INDEMNIFICATION, INSURANCE AND BONDS 23 9.01 - Indemnification, Etc. 23 9.02 - Insurance 24 ARTICLE % - DAMAGE OR DESTRUCTION OF LEASED PREMISES 10.01 - Right to Recover Damages ARTICLE %I - TERMINATION OF LEASE, CANCELLATION, ASSIGNMENT AND TRANSFER 11.01 - Termination 11.02 - Cancellation by Lessee 11.03 - Cancellation by City 11.04 - Notice of Termination 11.05 - Assignment and Subletting ARTICLE %II - PROPERTY RIGHTS UPON TERMINATION 12.01 - Lessee's Right of Removal 12.02 - City's Rights at Termination ARTICLE %III - GENERAL PROVISIONS 13.01 - Other Ordinances 13.02 - Arbitration 13.03 - Nondiscrimination 13.04 - Rules and Regulations 13.05 - Interpretation of Lease 13.06 - Invalid Provisions 13.07 - Sponsor's Assurances 13.08 - Consent Not to be Unreasonably Withheld 13.09 - Nonexclusive 13.10 - Lease Made in Texas 13.11 - Successors 13.12 - Headings 13.13 - Time of Essence 13.14 - Notices 13.15 - Understanding of the Parties ARTICLE %IV - MISCELLANEOUS PROVISIONS 14.01 - Security Charges 14.02 - Miscellaneous Charges 14.03 - Quiet Enjoyment 25 25 25 25 25 27 28 28 29 29 29 29 29 30 30 31 31 32 32 32 32 32 32 33 33 33 33 34 34 35 35 HW:js THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE TEXAS GENERAL ARBITRATION ACT (ART. 224. ET SEO. V.A.C.S.) § CERTIFICATED PASSENGER AIRLINE LEASE Lubbock International Airport Lubbock, Texas THIS LEASE AGREEMENT, made this 12th day of December , 1991, by and between the City of Lubbock, Texas, (hereinafter re- ferred to as "CITY"), and Metroflight, Inc. d/b/a American Eagle, a corporation incorporated under the laws of the State of Delaware, with its principal office at One Metrocentre, 1700 West 20th Street, Dallas -Fort Worth Airport, Texas 75261-2626, (hereinafter referred to as "LESSEE"). WITNESSETH WHEREAS, CITY owns and operates Lubbock International Airport, located in Lubbock County, Texas, (hereinafter referred to as "Airport"); and WHEREAS, LESSEE is engaged in the business of air transporta- tion of persons, property and cargo, and is certificated by the Federal Aviation Administration to provide such services through Lubbock International Airport; and WHEREAS, CITY also owns and operates a terminal building at said Airport, which has been expanded and remodeled to provide additional space for airline ticketing and operations facilities; and WHEREAS, CITY and LESSEE both desire to execute a lease agree- ment whose terms and conditions are substantially comparable to the terms and conditions contained in leases executed by similarly sit- uated air carriers that may become tenants at the Airport; NOW THEREFORE, for and in consideration of the mutual covenants hereof, CITY hereby leases to LESSEE and LESSEE hereby hires and takes from CITY certain non-exclusive use premises, facilities, rights and privileges in connection with and on the Airport, as hereinafter described, upon the terms and conditions that follow: ARTICLE I DEFINITIONS Section 1.01 - Definitions. The following words, terms and phrases whenever used in this Lease shall, for the purposes of this Lease, have the following meanings: Adequate heating and air conditioning facilities - those heat- ing and air conditioning facilities necessary to maintain a more or less constant reasonable temperature throughout the terminal building. Approved maximum gross landing weight - the maximum landing weight for an aircraft approved by the Federal Aviation Administration for that aircraft. Certificated Passenger Air Transportation Company - for the purpose of this Lease shall be used interchangeably with the term "air carrier" and shall mean any commercial air carrier who on a regularly scheduled basis transports passengers, baggage and cargo either to or from the Air- port. Classification of air carriers - for the purpose of establish- ing different classes of air carriers as tenants at the Airport, the following classifications shall control: (a) standard long-term tenant - a Certificated Passenger Air Transportation Company which has a long-term lease with the CITY. (b) standard short-term tenant - a Certificated Passenger Air Transportation Company which has a short-term lease with the CITY. (c) month -to -month tenant - a Certificated Passenger Air Transportation Company that conducts business at the Airport but which has neither a standard long-term lease nor a standard short-term lease with the CITY. -2- Director of Aviation - the Director of Aviation of the City of Lubbock or his designated representative. Enplaned Passenger - any person that initially boards an airplane at the Airport or any person that leaves an airplane and reboards an airplane at the Airport. Federal Aviation Administration - the Federal Aviation Admin- istration created by the Federal Government under the Federal Aviation Act of 1958, or such other Federal Government authority as may be the successor thereto or be vested with the same or similar authority. ordinance - a legislative act enacted by the City Council of the City of Lubbock, Texas. Public airport facilities - include, but are not limited to, approach areas, runways, taxiways, aprons, aircraft parking areas, roadways, sidewalks, navigational and avigational aids, lighting facilities, terminal facili- ties and other public facilities appurtenant to the Airport. Regulation - any rule or order promulgated by any federal or state agency which has authority to promulgate such rule or order, or any regulation of the CITY or the Airport Board of the CITY which is enacted or promulgated for the health, safety or welfare of the general public, or any other such rule promulgated by the CITY or Airport Board as that term is herein defined. Relamp - the replacement of any bulb in light fixtures not functioning properly. Rule - any regulation, directive or order adopted by the Air- port Board of the City of Lubbock and applicable to the operation of the Airport, and any directive issued by the Director of Aviation. Similarly situated air carriers - those Certificated Passenger Air Transportation Companies that fall within the same classification as herein defined, examples being as follows: -3- (a) all such air carriers which have a written lease agreement with the CITY whose initial term is three (3) or more years shall be deemed similarly situ- ated; (b) all such air carriers which have a written lease agreement with the CITY whose initial term is less than three (3) years (but who are not tenants at will or hold over tenants) shall be deemed similarly situated; (c) all such air carriers who are tenants at will shall be deemed similarly situated. Standard long-term lease - a written lease agreement with LESSEE or other similarly situated air carrier which establishes the business relationships between the CITY and LESSEE or other similarly situated air carrier and has an initial term of three (3) or more years. Standard short-term lease - a written lease agreement with an air carrier (other than a tenant at will or hold over tenant) which establishes the business relationships between the CITY and the air carrier and which has an initial term of less than three (3) years. Sterile area - any area at the Airport which LESSEE possesses or controls either singularly or in conjunction with other air carriers and to which access is controlled by the inspection of persons and property in accordance with any security program mandated by the Federal Aviation Administration. Tenant at will - a business relationship established between the CITY and an air carrier on a month -to -month basis which may or may not be in writing but which relationship shall not exceed a term of one (1) year. ac ARTICLE II LEASED PREMISES AND USES Section 2.01 - Description of Exclusive Leased Premises. Since LESSEE has a marketing agreement with another Certifi- cated Passenger Air Transportation Company that is a standard long-term tenant at the Airport, and that agreement affords LESSEE an opportunity to utilize such other tenant's Exclusive Leased Premises, LESSEE does not herein require any additional Exclusive Leased Premises. However, in the event LESSEE after execution of this Lease, desires additional Exclusive Leased Premises, this Lease may be amended to include such space, if available, on such terms and conditions as those contained in leases to other simi- larly situated air carriers. Section 2.02 - Description of Non -Exclusive Use Premises. LESSEE is hereby granted the non-exclusive use, in common with others elsewhere authorized, 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 equipment. (C) Loading gates. (D) Adequate and reasonably convenient vehicular parking space for 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 pro- vided at the same charge per month as established for other Airport employees. Section 2.03 - Exhibit Desianatina Non -Exclusive Use Premises. The location of the Non -Exclusive Use Premises herein leased to LESSEE is designated and set forth on Exhibit A attached hereto and by this reference made a part hereof for all purposes. -5- Section 2.04 - Description of Privileges. Uses and Rights. LESSEE shall be entitled, in common with others elsewhere autho- rized, to the general use of all public airport facilities and improvements which are now part of the Airport, except as here- inafter provided. LESSEE'S use of said public airport facilities shall be for the sole purpose of operating a transportation system for transporting by aircraft persons, property, cargo, express and mail (hereinafter referred to as "Air Transportation"), which use, without limiting the generality hereof, shall include: (A) The handling, ticketing, billing and manifesting of passengers, baggage, cargo, express and mail in Air Transportation by LESSEE or on behalf of any other Cer- tificated Passenger Air Transportation Company which has a 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 LESSEE to conduct a separate business, but shall permit LESSEE to exercise such rights only in connection with Air Transportation. (C) The training on Airport premises of personnel either employed by or to be employed by LESSEE or any other Cer- tificated Passenger Air Transportation Company. However, in all instances where such training involves aircraft either landing at or taking off from the Airport, LESSEE shall be required to pay CITY landing fees in accordance with Section 7.01. (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 Air Transportation; provided, however, that LESSEE shall not: -6- (1) Sell food or beverages other than for consumption by passengers on aircraft and as provided in Subpara- graph (I) of this Section 2.04. (2) Sell gasoline, fuel, propellants, grease or other lubricants except when said products are of a particular grade desired by others and are not otherwise available at the Airport (except to other Certificated Passenger Air Transportation Compa- nies). (E) Subject to approval of the Director of Aviation, the servicing by LESSEE'S employees or others under LESSEE'S control of aircraft and other equipment operated by LESSEE on the apron, by truck or otherwise, with gaso- line, oil, grease, lubricants and any other fuel or propellant or other supplies required by LESSEE, all of which shall include, without limiting the generality 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 facili- ties for such gasoline, oil, grease, lubricants and other fuel or propellant or supplies, together with the necessary pipes, pumps, motors, filters and other appurtenances incidental to the use thereof, and the installation and maintenance of pipes in connection with such facilities, as well as a pipeline or pipelines between LESSEE'S source of supply and said storage facilities. LESSEE shall submit to the Director of Aviation for his written approval complete written plans and specifications for such storage facilities and pipelines 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. This provision shall not be construed to require LESSEE to obtain approval from the Director of Aviation Mfj= each time LESSEE'S employees or others under LESSEE'S control refuels or performs routine maintenance on aircraft or other equipment operated by LESSEE on the apron. (F) The landing, taking off, flying, taxiing, towing, park- ing, loading and unloading of LESSEE'S aircraft or other Air Transportation equipment operated by LESSEE or used in connection with scheduled, shuttle, courtesy, test, training, inspection, emergency, special charter, sight- seeing and 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 Trans- portation Company having an existing lease with CITY, adjacent to a convenient entrance to the terminal building at common area loading gates located on the loading apron at points to be designated by CITY; pro- vided, 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, cargo, express and mail 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 which shall regularly transport LESSEE'S property, cargo, express and mail 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 other Lessees at the Airport, or through a nominee, a computer system, message system, or any other elec- tronic system used to transmit communications of any nature whatsoever. The installation, maintenance and operation of such systems as described above shall be without cost or expense to CITY, and shall be subject to -8- reasonable rental payments by LESSEE to the CITY for any space used, as well as prior written approval of the Director of Aviation as to location, plans and specifica- tions. Such approval shall not be unreasonably withheld. (I) The right to provide food and beverages for consumption in flight by passengers and crews of LESSEE or by passen- gers and crews of any other Certificated Passenger Air Transportation Companies. LESSEE shall also have the right to arrange for food and beverages to be provided to its passengers and crew members when said passengers or crew members are grounded at the Airport because of weather, mechanical conditions or other similar emergency conditions; provided, however, that if said passengers or crew members are to be given food and beverages at the Airport, LESSEE shall arrange for this service from the person, firm or corporation holding concession rights from the CITY for food and beverage service at the Air- port. In addition, LESSEE may furnish, free of cost, coffee and doughnuts to its passengers, provided such items are purchased through the person, firm or corpora- tion holding concession rights from the CITY for food and beverage service at the Airport. Except to the extent hereinabove specifically provided, nothing in this sub- paragraph (I) shall be deemed to give LESSEE the right to maintain or operate at the Airport a cafeteria, restau- rant, bar, cocktail lounge or vending machines or in any manner otherwise providing for the sale of food or bever- ages to the public. (J) 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, bever- ages and other materials, equipment and supplies deemed by LESSEE necessary or incidental to its operations, its exercise of the rights herein granted, and its discharge -9- of the obligations herein imposed. Said purchases may be made through any person, partnership, firm, association or corporation LESSEE may choose. (K) The rights and privileges granted the LESSEE under sub- paragraphs (E), (G) and (H) of this Section 2.04 may be exercised by LESSEE for and on behalf of any other cer- tificated Passenger Air Transportation Company operating at the Airport of, by or through a nominee of LESSEE, but said nominee shall be subject to the prior written ap- proval of the Director of Aviation. It is specifically provided, however, that any such nominee shall have no greater rights than LESSEE hereunder, except as otherwise granted in this Agreement. Section 2.05 - Rights and Privileges Specifically Excluded. Except as specifically provided for in Section 2.04, nothing herein shall be deemed to give LESSEE any right or permission to sell at the Airport any goods or services to the public other than Air Transportation services. Without limiting the generality of the foregoing, this prohibition includes insurance sales (except when not otherwise available at the Airport). Section 2.06 - Right of Ingress and Egress. CITY hereby grants to LESSEE, its employees, agents, passengers, guests, patrons, suppliers of materials and furnishers of service the right of ingress to and egress from, but not the use of, except as other- wise provided in this Lease, the non-exclusive use premises described in Section 2.02. Section 2.07 - Effect of Ordinances. Rules and Regulations. This Lease is subject to such ordinances, rules and regulations duly enacted or adopted for the operation, maintenance and existence of the Airport, and all such ordinances, rules and regulations enacted or adopted which relate to the health, safety or welfare of the general public shall always take precedence over the terms of this Lease. Such ordinances, rules and regulations enacted or adopted which do not affect the health or safety of the general public shall take precedence over this Lease only when such -10- ordinances, rules and regulations are not in direct conflict with the terms of this Lease. This Lease shall never be understood or construed as a delegation or surrender of the City of Lubbock's governmental authority. ARTICLE III TITLE TO LESSEE Section 3.01 - Installed Improvements and Property. All im- provements, equipment and property installed, erected or placed by LESSEE in, on or about the Airport shall be deemed to be personalty and remain the property of LESSEE, save and except those improve- ments, equipment and property which are so attached to Airport premises so as to damage the premises upon removal or impair the functional or operational use thereof. Said improvements, equipment and property so attached shall be deemed permanent im- provements and shall become the property of CITY upon installation. ARTICLE IV OBLIGATIONS OF CITY Section 4.01 - 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. Section 4.02 - 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 airport facilities uti- lized by the general public, as well as the improvements, machinery and equipment placed by CITY in these areas. CITY shall not, how- ever, be required under this Lease to perform any maintenance or effect any repairs necessary due to misuse or abuse or the negli- gence of LESSEE, its sublessees, employees, agents, servants, patrons or invitees. However, 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 -11- make such repairs to the satisfaction of the Director of Aviation within a reasonable time after receiving a written request from said Director of Aviation. In all areas utilized by the general public, CITY shall pro- vide janitorial and cleaning services, including window washing, lighting and adequate heating and air conditioning facilities. The CITY shall be responsible for structural, exterior and roof maintenance and exterior window washing in all portions of the terminal building. CITY shall also provide and supply adequate lighting for vehicular parking spaces and aircraft loading ramps and adequate field lighting. The obligations assumed by CITY under this Article IV shall not obligate CITY to repair or rebuild any of the facilities at said Airport in the event of damage by the elements, fire, explo- sion or other causes beyond the control of CITY. CITY shall deliver to LESSEE all of the premises leased here- under in a condition which complies with the CITY'S Building Code and other applicable CITY ordinances. Section 4.03 - Governmental Facilities. It is expressly agreed that if funds provided by the United States Government for the construction, maintenance and operation of the Control Tower, Instrument Landing System, and/or other air navigation aids are discontinued even though needed for LESSEE'S operations at the Airport, CITY shall not be required to provide said facilities. Section 4.04 - Restaurants. CITY agrees to provide space in the terminal building for a restaurant or coffee shop for the pur- pose of selling food and beverages to the general public. ARTICLE V OBLIGATIONS OF LESSEE Section 5.01 - Porter Service. LESSEE may, at its option, provide porter service for the convenience 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 -12- with other Certificated Passenger Air Transportation Companies which may now or hereafter be Lessees at the Airport, or by a nominee of LESSEE if approved by the Director of Aviation. Section 5.02 - Trash and Garbage. LESSEE shall provide at its own expense a complete and proper arrangement for the adequate san- itary handling and disposal, away from the Airport, of all trash, garbage and other refuse resulting from LESSEE'S operations on the Airport. LESSEE shall provide and use suitable covered metal re- ceptacles for all garbage, trash and other refuse in the areas leased by LESSEE. Piling of boxes, cartons, barrels or other simi- lar items in an unsafe manner in or about Airport premises shall not be permitted. Section 5.03 - Taxes and Licenses. LESSEE shall pay all taxes of whatever character that may be lawfully levied or charged upon LESSEE'S leasehold improvements or operations hereunder and upon LESSEE'S rights to use Airport property. LESSEE shall obtain and pay for all licenses or permits necessary or required by law for the construction of any improvements, additions or alterations, or the installation of equipment and furnishings, and any other licenses necessary to conduct its Air Transportation business. Section 5.04 - Rules and Regulations. In conducting its oper- ations 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 pertaining to aviation and air navigation, and all reasonable and applicable rules, reg- ulations and ordinances of the CITY now in force or hereafter prescribed or promulgated by authority or by law, provided that such rules, regulations and ordinances of the CITY shall be in conformity with Section 2.07 hereof. Section 5.05 - Duty to Prevent Unauthorized Access to the Premises. LESSEE shall prohibit access or entry into any sterile area (as herein defined in Section 1.01) by any person or property whose access or entry is not authorized, and LESSEE agrees that in the event that a civil penalty or fine is levied against the Air- port or CITY as a result of LESSEE'S failure to comply or act in -13- accordance with this provision, or any other applicable federal, state or local statutes, ordinances, rules and regulations affect- ing the use, occupancy or operation of any such sterile area, LESSEE shall immediately reimburse the Airport or CITY the full amount of the penalty or fine and correct the act or omission lead- ing to, causing or contributing to the violation. In the event LESSEE is responsible in whole or in part for a civil penalty or fine under this Section 5.05, LESSEE shall have the exclusive right to defend and compromise the matter in LESSEE'S discretion to the extent of its interest. ARTICLE VI TERM Section 6.01 - Term. A. The initial term of this Lease shall commence on the 15th day of November, 1991, and end on the 14th day of November, 1992. Upon written application of LESSEE, delivered to the office of the Director of Aviation of CITY within twenty (20) days prior to the expiration of the initial term of this Lease, the Director of Aviation may extend this Lease for a period of thirty (30) days, provided LESSEE is negotiating with CITY for a new lease when such initial term expires. During such negotia- tions, LESSEE may apply for as many thirty (30) day extensions of this Lease as LESSEE deems necessary, which may or may not be granted by the Director of Aviation in his discretion, but in no case shall this Lease be extended more than twelve (12) months beyond its initial term. Any extension of this Lease granted under this Section 6.01 shall be in writing and signed by the LESSEE and the Director of Aviation. During any extension, LESSEE shall be subject to the rates, fees, rentals and other charges established by the Airport Board for Certificated Passenger Air Transportation Companies that are month -to -month tenants. Both CITY and LESSEE herein agree, however, that all negotiations for any new lease shall be conducted in good faith. -14- B. Notwithstanding any provision of this Section 6.01, this Lease is also subject to earlier termination as hereinafter pro- vided under Article XI. C. On or before thirty (30) days prior to the expiration of the initial term of this Lease, or any extension of said term, as provided in this Article, the Director of Aviation may notify LESSEE in writing that this Lease shall terminate at the end of said thirty (30) day period. LESSEE agrees and hereby acknowledges that it is an essential term of this Lease that before the end of said thirty (30) day period LESSEE will vacate all of the premises leased hereunder, will remove all of its property and improvements (other than permanent improvements) from same, and will restore said premises to the condition in which they existed at the com- mencement of the initial term of this Lease, damage by the elements, fire, explosion or other casualty excepted unless such damage results from act or omission of LESSEE. All such restora- tion shall be done in a manner satisfactory to the Director of Aviation and shall be completed within said thirty (30) day period. If LESSEE fails to vacate said premises within said thirty (30) days after the date of written notice from CITY of termination, or if LESSEE fails to complete such restoration within said thirty (30) day period, the CITY shall have the right to remove from said premises any and all of LESSEE'S property and improvements remain- ing thereon, to restore said portion of the terminal building and land adjacent thereto to the condition specified above, and to charge all costs incurred by CITY in so doing to LESSEE. LESSEE agrees to pay such costs of removal and restoration incurred by CITY. Failure by the Director of Aviation to notify LESSEE of when this Lease shall terminate shall not extend the initial term of this Lease, or any extension of said term granted in accordance with this Article. -15- ARTICLE VII RENTALS AND FEES Section 7.01 - Landing Fee. Effective October 1, 1991, the fee for the use of the landing area and facilities necessary there- for as granted hereunder, except those for which rentals are specifically provided elsewhere herein, shall be 6.625 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Notwithstanding the date on which this Lease is signed, LESSEE herein agrees to pay CITY landing fees in accordance with this Section 7.01 as though this Lease was executed and became effective on November 15, 1991. Not later than the fifth (5th) day of each month, LESSEE shall file with the Director of Aviation a report of LESSEE'S actual landings at the Airport for the preceding month, which report shall include the number and type of aircraft making such landings. LESSEE shall further provide the CITY with a summary of the ap- proved maximum gross landing weights for each type of aircraft it operates at the Airport. Section 7.02 - Rental for Common Use Area. A. Common Sag Claim Area. As a result of expansion and remodeling of the terminal build- ing at the Airport, there is now approximately 16.939 square feet of common bag claim area within the terminal building, as shown on Exhibit A attached hereto and by reference made a part hereof. Rental for the 16,939 sq. ft. common bag claim area shall be charged jointly to LESSEE and all other Certificated Passenger Air Transportation Companies which now or may hereafter have valid leases at the Airport according to the common bag claim area for- mula, as hereinafter defined, and LESSEE herein agrees to pay its pro rata portion of such rental, which shall consist of a fixed fee of $5.63 per sq. ft. per year (to cover debt service) and a vari- able sum for Maintenance and Operation (M & O) costs. The M & O portion of the common bag claim area rental shall be subject to -16- adjustments as follows: Effective October 1, 1991, the M & O por- tion of the rental shall be $6.70 per sq. ft. per year. Effective October 1, 1992, and each year thereafter on the same month and day for the remainder of this Lease, the M & O portion of the rental shall be adjusted upward or downward in accordance with the in- crease or decrease for the preceding twelve (12) months in the Consumer Price Index published by the Bureau of Labor Statistics of the United Stated Government, hereinafter called "CPI." Notwithstanding the date on which this Lease is signed, LESSEE herein agrees to pay CITY rentals for use of the common bag claim area in accordance with this Section 7.02 as though this Lease was executed and became effective on November 15, 1991. The total common bag claim area charges shall be prorated among all Certificated Passenger Air Transportation Companies at the Airport based on the following formula: Twenty (20%) of the total charges shall be divided equally among all Certificated Pas- senger Air Transportation Companies and the remaining eighty (80%) prorated based on each such carrier's percentage of enplanements in the preceding month. Not later than the fifth (5th) day of each month, the LESSEE shall file with the Director of Aviation a sum- mary of the actual number of passenger enplanements on LESSEE'S aircraft and the actual number of departures of LESSEE'S aircraft from the Airport for the preceding month. LESSEE agrees to pay its calculated pro rata amount of common bag claim area rental monthly in accordance with the above common bag claim area formula. B. Common Boarding Lounge Area. Prior to expansion and remodeling of the terminal building at the Airport, there were 26,789 square feet of space and six (6) loading gates available for use as common boarding lounge area by Certificated Passenger Air Transportation Companies. However, as a result of expansion and remodeling of the terminal building at the Airport and negotiations with air carriers that provide Air Trans- portation services at the Airport, approximately 51.,685 square feet of space and nine (9) loading gates are now available for use as common boarding lounge area. Both CITY and LESSEE agree that for -17- purposes of this Lease the common boarding lounge area shall con- sist of those six (6) gates designated as common boarding lounge area on Exhibit A attached hereto and by this reference made a part hereof, but such common area shall be enlarged to include an addi- tional gate for each Certificated Passenger Air Transportation Company that either begins or has already begun providing Air Transportation services at the Airport after January 1, 1987, and continues providing such services. Effective October 1, 1991, the base rental rate for the common boarding lounge area shall be $6.70 per sq. ft. per year. Effec- tive October 1, 1992, and each year thereafter on the same month and day for the remainder of this Lease, the base rental rate for the common boarding lounge area shall be adjusted upward or down- ward in accordance with the increase or decrease for the preceding twelve (12) months in the CPI. Rental of the common boarding lounge area shall be charged jointly to all Certificated Passenger Air Transportation Companies which now or may hereafter have leases at the Airport according to the common boarding lounge area formula, as hereinafter defined, and in accordance with the following calculation, and LESSEE herein agrees to pay its pro rata portion of such rental: (6/9 X base rental rate X 51,685 square feet = annual rental) However, the fraction in the above calculation shall be enlarged by one -ninth each time that a Certificated Passenger Air Transpor- tation Company either has begun or does begin providing Air Transportation services at the Airport after January 1, 1987. In like manner, the fraction shall be reduced by one -ninth whenever any Certificated Passenger Air Transportation Company ceases pro- viding Air Transportation services at the Airport after January 1, 1987. Except, however, such fraction shall not be reduced if any Certificated Passenger Air Transportation Company with an unexpired lease takes bankruptcy and refuses to surrender its lease or allow the CITY to reclaim the space so occupied by such Air Transporta- tion Company for any reason whatsoever. -18- CITY and LESSEE hereby agree that LESSEE and one (1) other Certificated Passenger Air Transportation Company commenced provid- ing Air Transportation services at Lubbock International Airport after January 1, 1987, and were providing such services when this Lease was executed, and that the fraction in the formula as above set forth shall be adjusted in accordance with the above described procedure from the dates LESSEE and such other Company commenced services, which dates were May 1, 1990 (for such other Company), and November 15, 1990 (for LESSEE). Two other Certificated Passen- ger Air Transportation Companies commenced providing services at the Airport after January 1, 1987, but ceased providing services prior to execution of this Lease. Notwithstanding the date on which this Lease is signed, LESSEE herein agrees to pay CITY in accordance with this Section 7.02 its pro rata portion of the common boarding lounge area rental as though this Lease was executed and became effective on November 15, 1991. The total common boarding lounge area charges shall be pro- rated among all Certificated Passenger Air Transportation Companies at the Airport based on the following formula: Twenty (20%) of the total charges shall be divided among all Certificated Passenger Air Transportation Companies based on the percentage of departures in the previous month, and eighty (80%) shall be prorated based on each such carrier's percentage of enplanements in the previous month. LESSEE agrees to pay its calculated pro rata amount of common boarding lounge area rental monthly in accordance with the above common boarding lounge area formula. Loading gates which have not been designated as common board- ing lounge area shall not be considered as such unless added to the common area in accordance with this Section 7.02. However, LESSEE may at no additional charge utilize the loading gates not included in the common area for diversion or off -schedule operations. LESSEE may similarly use these loading gates for charter flights -19- after negotiating a use fee with the Airport Board of CITY. CITY herein agrees to train LESSEE'S personnel to operate such loading gates for these purposes. Section 7.03 - Rental for Public Address System. LESSEE shall pay a rental rate of $5.00 per month per microphone connection lo- cated on the non-exclusive use premises. The rental rate will be adjusted when necessary to reflect the charges imposed on the CITY to provide this service. Microphones located on the non-exclusive use premises are to be used in conjunction with other Certificated Passenger Air Trans- portation Companies which now or may hereafter have valid leases at the Airport. These companies shall provide CITY with a written schedule of the pro rata rental due by each LESSEE hereunder and LESSEE agrees to pay its stated pro rata amount monthly. 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. section 7.04 - Aircraft Storage. CITY shall have the right to designate apron parking areas for the storage of LESSEE'S aircraft. Section 7.05 - Time of Payment. LESSEE agrees to pay CITY the rentals, fees and charges due hereunder at such place as CITY may from time to time designate. Unless otherwise herein stated, all rentals, fees and charges shall be payable in monthly installments covering the preceding calendar month of operation. In the event that the commencement or termination of this agreement falls on any date other than the first or last day of a calendar month, the applicable rentals, fees and charges (except landing fees and rentals, fees and charges that are pro rated on the basis of passenger enplanements, aircraft departures and/or other such use measurements) for that month shall be paid on a pro rata basis according to the number of days during which said par- ticular premises, facilities, rights, licenses, services and privileges were enjoyed. -20- 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 on or before the twenty-fifth (25th) day of the month in which such statement is transmitted. LESSEE shall pay CITY a late payment charge of five percent (5%) of the total amount of rentals, fees and other charges payable if payment is not made when due. Section 7.06 - Default for Failure to Pay Rentals, Fees and Charges. It is expressly agreed that time of payment of the rentals, fees and charges hereinabove provided is of the essence in this entire Lease. Therefore, if LESSEE fails to pay any rentals, fees or charges due hereunder within thirty (30) days after CITY transmits a statement therefor to LESSEE, CITY may, at its option, upon ten (10) working days written notice to LESSEE (unless in such ten (10) day period LESSEE shall have corrected such failure to pay) immediately, or at any time thereafter, expel LESSEE and those claiming by, through or under LESSEE and remove LESSEE'S effects from Airport property forcibly, if necessary, without being deemed guilty of trespass and without prejudice to any remedy which other- wise might be used for breach of covenant or to collect rentals, fees and charges in arrears. Upon such expulsion this Lease shall terminate. 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 improvements is of a regular or permanent nature, as distinguished from a temporary or transitory nature, or where such use is of such a nature as to con- stitute the performance of a commercial business at the Airport. -21- In addition, CITY shall have the right to charge persons, partner- ships, firms, associations and corporations a fee no less than that set forth in mutual assistance ground services agreements, as re- vised 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. Section 8.02 - Right to Improve and Protect the Airport. In addition to any other rights herein retained, CITY specifically reserves the following rights and privileges: (A) The right to further develop or improve the landing area and other portions of the Airport as CITY deems ne- cessary. CITY agrees to advise LESSEE of any proposed capital expenditure in excess of $100,000 and to consult with LESSEE prior to undertaking such capital expendi- ture. However, nothing in this Section 8.02 or elsewhere in this Lease shall be construed as a delegation of the CITY'S authority to determine when such capital expen- ditures are deemed necessary. If feasible, such improvements shall be made in a manner which will cause LESSEE as little inconvenience as possible. LESSEE shall not be assessed any rentals, fees or other charges for such improvements unless LESSEE occupies or utilizes such improvements either exclusively or in conjunction with other air carriers, or the improvements are required by the Federal Aviation Administration or for the safe oper- ation of the Airport. (B) The right to take any action CITY 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 con- stitute a hazard to aircraft. -22- (C) The right during 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 rights and privileges granted LESSEE in this instrument insofar as they are inconsis- tent with the rights and privileges granted to the Government shall be suspended. ARTICLE I% INDEMNIFICATION, INSURANCE AND BONDS Section 9.01 - Indemnification. Etc. The parties agree that LESSEE is and shall always be deemed to be an independent contrac- tor and operator and not an agent or employee of CITY with respect to LESSEE'S acts and omissions hereunder. The LESSEE agrees that it will indemnify and save the CITY harmless from all claims arising out of any demands of contractors, subcontractors, laborers, workers, suppliers, mechanics, material - men and furnishers of equipment or parts thereof, which claims may be incurred by the activities of LESSEE at the Airport. LESSEE shall indemnify fully and save harmless the 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, and caused by the fault or negli- gence of LESSEE, its contractors, agents or employees in the construction, use or occupancy of the facilities, premises and privileges hereunder; provided, however, that the CITY shall in- demnify 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 and defense thereof, based upon or arising out of damages or injuries to third persons or their property, and caused by the fault or negligence of the CITY, its agents or employees, or arising out of or as a result of the condition of any of the publicly used premises in or about said Airport, but such indemnification shall never exceed the limits of -23- exposure set forth in the Texas Tort Claims Act when such claims or actions fall within the terms of said Act. CITY shall give to LESSEE prompt and reasonable notice of any claims or actions against CITY, and failure to so notify LESSEE shall relieve LESSEE of its obligations to indemnify the CITY therefor. In all cases where LESSEE is obligated to indemnify and save harmless the CITY as hereinabove provided, LESSEE shall have the right to investi- gate, compromise and defend any such claims or actions to the extent of its own interest, and LESSEE shall cooperate with CITY and protect CITY'S interest to this end. In all cases where CITY is required to indemnify and save harmless LESSEE as hereinabove provided, CITY shall have the right to investigate, compromise and defend any such claims or actions to the extent of its own inter- est, and CITY shall cooperate with LESSEE and protect LESSEEIS interest to this end. Section 9.02 - Insurance. LESSEE shall procure and keep in effect at all times during the term of this Lease the forms of insurance set forth in this Section 9.02. All policies or certifi- cates shall contain a provision requiring the insurers to give the CITY written notice of cancellation or of any material change in said policies or certificates at least thirty (30) days in advance of the effective date of such cancellation or material change. Each policy shall also contain a provision waiving the right of such insurers to subrogation. LESSEE shall maintain all insurance required hereunder with insurance underwriters authorized to do business in the State of Texas and satisfactory to CITY. All policies shall name the CITY, its officers, servants, agents and employees as additional in- sureds. Before the initial term of this agreement commences, LESSEE shall furnish CITY with certificates of insurance which indicate that all insurance and provisions required hereunder are in full force and effect or shall provide CITY with certified copies of said policies. -24- Public Liability and Property Damage Insurance - Prior to undertaking any activities at the Airport, LESSEE shall obtain comprehensive general liability insurance for the protection of the CITY, its officers, agents and employ- ees. LESSEE shall provide public liability insurance for personal injuries or death arising out of any one acci- dent or event in a minimum sum of THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00) for one person and TWO MILLION AND NO/100 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 THOUSAND AND NO/100 DOLLARS ($250,000.00) for property damage arising out of any one accident or event. Insur- ance coverages required of LESSEE shall be subject to adjustment from time to time to comply with any changes in minimum requirements determined by CITY to be neces- sary. ARTICLE X DAMAGE OR DESTRUCTION OF LEASED PREMISES Section 10.01 - Right to Recover Damages. Nothing in this Lease shall be construed as a waiver of the right of either CITY or LESSEE to recover damages from the other arising out of the fault or negligence of the other. ARTICLE RI TERMINATION OF LEASE CANCELLATION, ASSIGNMENT AND TRANSFER Section 11.01 - Termination. This Lease shall terminate at the end of the full term hereof, or earlier as provided in Sections 11.02 and 11.03, and LESSEE shall have no further right or interest in the non-exclusive use premises, except as provided in Article VI and in Article XII. Section 11.02 - Cancellation by LESSEE. This Lease shall be subject to cancellation by LESSEE after the occurrence of any one or more of the following events: -25- (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 a manner as to substantially restrict LESSEE for a period of at least ninety (90) days from operating thereon. (C) The issuance of an injunction by any court of competent jurisdiction which prevents or restrains the use of the Airport, or any substantial part thereof, for Airport purposes, provided such injunction remains in force for a period of at least ninety (90) days. (D) The inability of LESSEE to use the Airport for a period in excess of ninety (90) days or to enjoy any of the rights, licenses, services or privileges granted to LESSEE hereunder as a result of fire, explosion, earth- quake or other casualty or act of God or a public enemy, provided that the same is not caused by negligence or willful acts or failure to act on the part of LESSEE, its sublessees, agents or employees. (E) Any failure or refusal by the Federal Aviation Adminis- tration which prevents LESSEE from operating into, from or through said Airport such aircraft as LESSEE may rea- sonably 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, however, that no notice of cancellation, as below required, shall be of any force or effect if CITY shall have remedied the default prior to the receipt of LESSEE'S notice of cancellation. -26- LESSEE may exercise such right of cancellation by giving the Director of Aviation sixty (60) days advance written notice at any time after the lapse of the applicable period of time herein stated, and this Lease shall terminate at the end of such sixty (60) day period. 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 failure of the CITY to perform any of the terms, covenants and conditions herein contained shall not be deemed a waiver of any right LESSEE has to cancel this Lease for any subsequent failure by CITY to so 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 after the occurrence of any one or more of the following events: (A) 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. (B) The appointment of a receiver of LESSEE'S assets. (C) The divestiture of LESSEE'S assets herein by other opera- tion of law. (D) The abandonment by LESSEE of its Air Transportation busi- ness at the Airport for a period of thirty (30) days or more. (E) The default by LESSEE in the performance of any covenant or agreement herein required to be performed by LESSEE 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, except that default for failure to pay any rentals, fees or charges shall be governed by Section 7.06. (F) The lawful assumption by the United States Government, of the operation, control or use of the Airport, or any sub- stantial part or parts thereof, or any authorized agency -27- thereof, in such a manner as to substantially restrict LESSEE for a period of at least ninety (90) days from operating thereon. (G) In addition to the foregoing, all rights, privileges and interests acquired hereunder by LESSEE may, at the option of CITY and following written notice of ninety (90) days, be suspended or finally terminated if such suspension or termination is found by CITY, acting in good faith, to be necessary to enable the CITY to undertake construction for expansion of the terminal building, or to secure federal financial aid for the development of the Airport, or for the development or promotion of aeronautical oper- ations thereon. If any of the aforesaid events occur, CITY may terminate this Lease and 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 in section 7.06 hereof shall not operate to bar or destroy the right of CITY to declare this Lease null and void as a result of any subsequent violation of the terms of this Lease. Section 11.04 - Notice of Termination. If any of the events enumerated in Section 11.03 shall occur, CITY may cancel and termi- nate this Lease by giving LESSEE five (5) working days written notice, such cancellation and termination to be effective upon the date specified in such notice. Rental due shall be payable only to the date of cancellation. Section 11.05 - Assignment and Subletting. LESSEE shall not sell, assign or transfer this Lease, or any part thereof; provided, however, that LESSEE shall have the right to assign all or any part of its rights and interests under this Agreement to any affiliated Air Transportation Company, or any successor to its business through merger, consolidation, voluntary sale, or transfer of sub- stantially all of LESSEE'S assets, and the consent of the Lessor -28- thereto shall not be required, but due notice of any such assign- ment shall be given to the Lessor within ten (10) working days prior to such assignment hereunder. ARTICLE XII PROPERTY RIGHTS UPON TERMINATION Section 12.01 - LESSEE'S Right of Removal. Upon cancellation or termination of this Lease for any reason, LESSEE shall have the right for a period of thirty (30) days after the date on which notice of termination is placed in the United States mail, as pro- vided in Article XIII, Section 13.14 hereinafter, to remove any or all of its property from the Airport. Furthermore, within said thirty (30) day period, LESSEE shall restore said premises to the condition in which they existed at the commencement of this Lease, damage by the elements, fire, explosion or other casualty excepted, unless such damage occurs as a result of an act or omission of LESSEE, its sublessees, agents or employees, in which event LESSEE shall repair and restore said premises as aforesaid. Section 12.02 - CITY'S Rights at Termination. Title to any and all improvements and property not removed by LESSEE prior to the expiration of the aforesaid thirty (30) 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 a reasonable rental for any period of continued occupancy by LESSEE after cancellation or termination of this Lease. ARTICLE XIII GENERAL PROVISIONS Section 13.01 - Other Ordinances. This Lease supersedes all prior ordinances and any amendments thereto passed by the City Council of CITY and which pertain to rental rates and landing fees at the Airport. -29- Section 13.02 - Arbitration. In any event, and notwith- standing any provisions made in this Lease, CITY and LESSEE agree to submit to arbitration any question or dispute, except nonpayment of rentals, fees or other charges, arising between said parties and requiring an interpretation of any term, condition or covenant herein contained, or concerning any matter of compliance or noncom- pliance with the terms of this Lease. Before submitting any question or dispute to arbitration, CITY and LESSEE shall each select one arbitrator and the two so chosen shall then select a competent and disinterested third arbitrator; and the three arbi- trators collectively shall then consider the question or dispute submitted to them in writing by the parties hereto. The decision in writing of any two arbitrators shall determine the particular question or dispute under consideration. The parties hereto shall bear equally the expense of said arbitration. Section 13.03 - Nondiscrimination. The LESSEE for itself, its personal representatives, successors in interest and assigns, as a part of the consideration hereof, does hereby covenant and agrees as a covenant running with the land that: (1) no person on the grounds of race, color, national origin or sex shall be excluded from participation in, denied the benefits of, or be otherwise sub- jected to discrimination in the use of said Airport facilities; (2) that in the construction of any improvements on, over or under such land and the furnishing of services thereon, no person on the grounds of race, color, national origin or sex shall be excluded from participation in, denied the benefits of, or otherwise be sub- jected to discrimination; (3) that the LESSEE shall use the premises in compliance with all other requirements imposed by or pursuant to 49 CFR Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said Regula- tions may be amended. The LESSEE assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to ensure that no person shall on the grounds of race, color, national origin or sex be excluded from participating in any employment activities -30- covered in 14 CFR Part 152, Subpart E. The LESSEE assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity cov- ered by this subpart. The LESSEE assures that it will require that its covered suborganizations provide assurances to the LESSEE that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as re- quired by 14 CFR Part 152, Subpart E, to the same effect. Each party hereto will comply with all federal, state and local laws and executive orders and regulations issued pursuant thereto including, without limitation, and to the extent applicable to this Agreement, the provisions contained within Section 202 of Executive Order 11246, as amended, and the implementing regulations of the Office of Federal Contract Compliance Programs, 41 CFR Parts 60-1, et sea., which provisions are incorporated herein by refer- ence as if set forth in full. In the event of breach of any of the preceding nondiscrimina- tion covenants, CITY shall have the right to terminate this Lease, and to reenter and repossess said land and the facilities thereon, and hold the same as if said Lease had never been made or issued. Section 13.04 - Rules and Regulations. CITY shall have the right to and may from time to time adopt and enforce reasonable rules and regulations, which LESSEE agrees to observe and obey, pertaining to the use of the Airport, public terminal building and appurtenances, provided that such rules and regulations shall not be inconsistent with rules, regulations or orders of the Federal Aviation Administration pertaining to aircraft operations at the Airport, or with the procedures prescribed or approved from time to time by the Federal Aviation Administration pertaining to the oper- ation of LESSEE'S aircraft at the Airport. Section 13.05 - Interpretation of Lease. Nothing in this Lease shall be construed or interpreted in any manner whatsoever as limiting, relinquishing or waiving any rights or ownership enjoyed by CITY in the Airport property, or in any manner waiving or limit- ing CITY'S control over the operation, maintenance, improvement or -31- alteration of Airport property, or in derogation of such governmen- tal rights as CITY possesses, except as specifically provided for herein. 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; pro- vided that the invalidity of such covenant, condition or provision does not materially prejudice either CITY or LESSEE in its respec- tive rights and obligations contained in the valid covenants, conditions or provisions of this Lease. 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 violate any of the provisions of said Sponsor's Assurances Agreement, 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 delayed for an unreasonable period of time. Section 13.09 - Nonexclusive. It is hereby agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right prohibited by Section 308 of the Federal Aviation Act of 1958, 49 U.S.C.S. §1349, as amended, and CITY reserves the right to grant to others the privilege and right of conducting any one or all of the aeronautical activities listed herein, or any other activity of an aeronautical nature. Section 13.10 - Lease Made in Texas. This Lease has been executed in and shall be construed in accordance with the laws of the State of Texas, and venue of any lawsuit filed by either party concerning this Lease shall be in Lubbock County, Texas. Section 13.11 - Successors. This Lease shall bind and inure to the benefit of any successor of CITY and any successor, assignee or sublessee of LESSEE. -32- Section 13.12 - Headinc;s. The article and section headings contained herein are for convenience in reference and are not intended to define or limit the scope of any provision of this Lease. Section 13.13 - Time of Essence. Time is of the essence of this Lease. Section 13.14 - Notices. Notices to CITY provided for herein shall be sufficient if sent by certified mail, postage prepaid, and addressed to: Director of Aviation, Lubbock International Airport, Route 3, Box 389, Lubbock, Texas 79401, and notices to LESSEE, if sent by certified mail, postage prepaid, and addressed to: Metroflight, Inc., One Metrocentre, 1700 West 20th Street, Dallas - Fort Worth Airport, Texas 75261-2626, or to such other addresses as the parties may designate to each other in writing from time to time. Section 13.15 - Understanding of the Parties. A. Both parties to this Lease agree and understand that the City of Lubbock has created three classifications of Certificated Passenger Air Transportation Companies that may provide Air Trans- portation services at the Airport and that this Lease (with its deleted provisions pertaining to Exclusive Leased Premises) is the standard lease for such air carriers that desire a short-term lease with the CITY as defined in Section 1.01. The parties hereto rec- ognize each of the different classifications as defined in Section 1.01 of this Lease and that the CITY of Lubbock may apply or agree to different terms and conditions in creating business relation- ships with Certificated Passenger Air Transportation Companies that fall into a different classification than LESSEE so long as the terms and conditions agreed to, as to such other classified air carriers, are consistent and uniform within each classification. It is further understood that any Certificated Passenger Air Trans- portation Company which desires a lease at the Airport with an initial term of less than three (3) years will execute a standard short-term lease and that the terms and conditions of that short- term lease shall not change or be modified unless herein stated or -33- agreed to in writing by all Certificated Passenger Air Transporta- tion Companies at the Airport classified as holders of standard short-term leases. B. It is the further understanding of the parties hereto that the CITY has classified Certificated Passenger Air Transporta- tion Companies who desire to conduct business at the Airport in accordance with the term of their lease or business relationship with the CITY in order to provide the broadest possible Air Trans- portation services to the general public, to encourage new air carriers to test the market for these services in the Lubbock area and to maintain a fee and rental structure for the facilities and services being provided by the CITY through its Lubbock Interna- tional Airport which will make the Airport as self-sustaining as possible. C. It is the further understanding of the parties that the CITY reserves the right to offer different terms and conditions to Certificated Passenger Air Transportation Companies in different classifications as herein defined so long as the terms and condi- tions offered to the air carriers are the same or substantially similar within each classification. However, notwithstanding anything set forth in this Section 13.15, the formulas for calcu- lating rental for the common boarding lounge area and common bag claim area will be followed by the CITY for all classifications of Certificated Passenger Air Transportation Companies doing business at the Lubbock International Airport. This Lease shall be executed in triplicate and each executed document shall be deemed to be an original document. ARTICLE %IV MISCELLANEOUS PROVISIONS Section 14.01 - Security Charges. Notwithstanding anything to the contrary contained in this Lease, a charge of twenty-five cents (250) shall be assessed to LESSEE for each of LESSEE'S enplaned passengers at the Airport for backup security reimbursement. -34- Section 14.02 - Miscellaneous Charges. No rentals, fees or charges other than those herein expressly stated shall be assessed to LESSEE save and except those miscellaneous fees and charges that are assessed to all other similarly situated air carriers at the Airport such as, but not necessarily limited to, dump station ser- vice charges and reasonable fees for the use of dumpsters, and costs incurred as a result of FAA -mandated security procedures or other requirements which are likewise assessed to all such simi- larly situated air carriers. Section 14.03 - Ouiet Enjoyment. Lessor covenants that on paying the rentals, fees and other charges and performing the covenants herein contained, LESSEE shall peacefully and quietly have, hold and enjoy the rights granted herein for the agreed term. IN WITNESS WHEREOF, the Parties have hereunto set their hands this 12th day of December , 1991. LESSOR: CITY OF LUBBOCK, TEXAS C C. MCMI N, MAYOR ATTEST: Ran tte Boyd, Ci6ty Secretary APPROVED AS TO CONTENT: Bern E. Case, Director of Aviation APPROVED AS TO FORM: a old Willard, Assistant City Attorney LESSEE: METROFLIGHT, INC. D/B/A AMERICAN EAGLE ATTEST: -35- THE STATE OF TEXAS COUNTY OF LUBBOCK BEFORE ME, the undersigned authority, a Notary Public in and for Lubbock County, Texas, on this day personally appeared B. C. McMINN, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same as the act and deed of the CITY OF LUBBOCK and as MAYOR, for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS �� — day of 1991. 1 OTkR1' Pl),yt IC. ;tat' of Texas My Commission Expires NOVEMEER 30, 1993 1'l � :�✓.rll.I.IJlJ JyS�iyYlr✓.�! THE STATE OF TEXAS COUNTY OF k._I d�� R)�'L Notary Public in and for the State of Texas My Commission Expires: BEFORE ME, a Notary Public in and for said County, Texas, on this day personally appeared O&S:s r. A.491-1- , known to me to be the person whose name is subscribed to the fore- going instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated as the act and deed of METROFLIGHT, INC. D/B/A AMERICAN EAGLE. G VEN UNDER MY HAND AND SEAL OF OFFICE THIS day of .c J , 1991. COOOOO � GhC)OC700�G900000D�OOOOfm SHERRY C. JAMES A� Notary Public, Stata of Texas My Commission Expires 02 14 1995 OO o000 CO 00 �Cp � p �O CO C1000 � Notary MbliW in and for the State of Texas My Commission Expires: -36- American?a? December 9, 1991 Mr. Rod Paine Deputy Director of Aviation Lubbock International Airport Route 3, Box 389 Lubbock, TX 79401 Re: Airlines Lease Agreement Lubbock International Airport Dear Mr. Paine: I am writing to confirm that Mr. Jess E. Hall, Vice President of Metroflight, Inc. is authorized to execute the above -referenced lease on behalf of Metroflight. The execution of such lease is not affected by our bankruptcy proceedings and no approval from the Bankruptcy Court is necessary. Please call me if you have any questions regarding this information at (214) 453-4403. BKM/sj cc: Jess Hall Very truly yours, Brian K. Miller Senior Vice President Chief Financial Officer Operated by Metroflight, Inc. A Metro Airlines Company 1 Metro Centre 1700 W. 20th 6 DFW Airport, Texas 75261 • (214) 453-4400